UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-KSB

--------------------------------------------------------------------------------


(Mark one)

[X]      Annual Report Under Section 13 or 15(d) of The Securities  Exchange Act
         of 1934

          For the fiscal year ended December 31, 2002

[ ]      Transition Report Under Section 13 or 15(d) of The Securities  Exchange
         Act of 1934

          For the transition period from ______________ to _____________

--------------------------------------------------------------------------------


                        Commission File Number: 000-21627
                                                ---------

                 Safe Alternatives Corporation of America, Inc.
        (Exact name of small business issuer as specified in its charter)

        Florida                                                06-1413994
------------------------                                ------------------------
(State of incorporation)                                (IRS Employer ID Number)

                      440 Main Street, Ridgefield, CT 06877
                      -------------------------------------
                    (Address of principal executive offices)

                                 (203) 438-4918
                                 --------------
                           (Issuer's telephone number)

--------------------------------------------------------------------------------


      Securities registered under Section 12 (b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:
                        Common Stock - $0.001 par value

--------------------------------------------------------------------------------


Check  whether  the issuer  has (1) filed all  reports  required  to be files by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period the Company 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 no disclosure  will be contained,  to
the best of Company's knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [ ]

The issuer's revenues for the fiscal year ended December 31, 2002 was $33,147.

The aggregate market value of voting common equity held by  non-affiliates as of
December 31, 2002 was approximately $39,222.

As of March 18, 2003, there were  165,853,058  shares of Common Stock issued and
outstanding.

Transitional Small Business Disclosure Format : Yes    No X
                                                   ---   ---
<PAGE>

                 Safe Alternatives Corporation of America, Inc.

                                Index to Contents

                                                                     Page Number
                                                                     -----------
Part I

Item 1     Description of Business                                         3
Item 2     Description of Property                                        11
Item 3     Legal Proceedings                                              11
Item 4     Submission of Matters to a Vote of Security Holders            11

Part II

Item 5     Market for Company's Common Stock and
              Related Stockholders Matters                                12
Item 6     Management's Discussion and Analysis or Plan of Operation      15
Item 7     Financial Statements                                           F-1
Item 8     Changes in and Disagreements with Accountants
              on Accounting and Financial Disclosures                     18

Part III

Item 9     Directors, Executive Officers, Promoters and Control Persons;
              Compliance with Section 16(a) of the Exchange Act           19
Item 10    Executive Compensation                                         19
Item 11    Security Ownership of Certain Beneficial Owners
              and Management and Related Stockholder Matters              22
Item 12    Certain Relationships and Related Transactions                 23
Item 13    Exhibits and Reports on 8-K                                    26
Item 14    Controls and Procedures                                        27

Signatures                                                                27

Certification pursuant to Sarbanes-Oxley Act of 2002                      29






                                                                               2

<PAGE>

                  Caution Regarding Forward-Looking Information

Certain  statements  contained  in  this  annual  filing,   including,   without
limitation, statements containing the words "believes", "anticipates", "expects"
and  words  of  similar  import,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

Such factors include, among others, the following:  international,  national and
local general economic and market conditions:  demographic  changes; the ability
of the Company to sustain,  manage or  forecast  its growth;  the ability of the
Company to successfully make and integrate acquisitions;  raw material costs and
availability;  new product  development and  introduction;  existing  government
regulations  and  changes  in,  or  the  failure  to  comply  with,   government
regulations;  adverse publicity;  competition; the loss of significant customers
or suppliers;  fluctuations  and  difficulty in forecasting  operating  results;
changes in business strategy or development  plans;  business  disruptions;  the
ability  to attract  and  retain  qualified  personnel;  the  ability to protect
technology; and other factors referenced in this and previous filings.

Given  these  uncertainties,  readers  of this Form  10-KSB  and  investors  are
cautioned not to place undue reliance on such  forward-looking  statements.  The
Company  disclaims  any  obligation  to update any such  factors or to  publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.


                                     PART I

Item 1 - Description of Business

History
-------

Safe  Alternatives  Corporation  of  America,  Inc.  (the  Company" or SACA) was
organized  in 1976,  under  the name  Knight  Airlines,  Inc.,  to engage in the
commuter  airline  business.  In October 1978, the Company engaged in an initial
public  offering of its Common Stock in Florida,  pursuant to an exemption  from
registration under Regulation A promulgated under the Securities Act of 1933, as
amended (the Securities  Act").  To the Company's best  knowledge,  there was no
market for trading of the Common  Stock  until the  Company's  Common  Stock was
included for trading on the NASD's Electronic  Bulletin Board in March 1997. The
Company  operated as a commuter  airline from its inception  through April 1983,
when it ceased  operations  and all of the  assets of the  Company  were sold to
satisfy all outstanding  indebtedness.  From April 1983, through September 1995,
the Company  was  dormant.  In May 1994,  the name of the Company was changed to
Portsmouth Corporation.

On September 15, 1995,  pursuant to the terms of an Asset Purchase Agreement and
Plan of  Reorganization  dated as of August 21, 1995 (the  "Agreement")  between
Safe  Alternatives   Corporation  of  America,   Inc.,  a  Delaware  corporation
("SAC-Delaware")  and the  Company,  the Company  purchased  the  business  (the
"Business"),  including,  without limitation, all of the assets of SAC-Delaware,
and assumed all of the liabilities of SAC-Delaware  (the  Reorganization"),  and
commenced operations. Prior to the Reorganization, the Company had no meaningful
operations.  On March 4, 1996, the Company changed its name to Safe Alternatives
Corporation of America, Inc. (a Florida corporation).

In  connection  with  the  Reorganization,   SAC-Delaware  was  liquidated,  and
SAC-Delaware  distributed  to each  stockholder  0.2736  shares of the Company's
Common Stock for each share of SAC-Delaware that was owned. Consequently, all of
the share and per-share figures included herein reflect the Reorganization.  The
Agreement provided for the Company's purchase of all of SAC-Delaware's assets in
consideration   for,   among  other  things,   (i)  the  assumption  of  all  of
SAC-Delaware's  liabilities,  (ii) the issuance and delivery to  SAC-Delaware of
8,000,000 shares of the Common Stock, representing approximately 94% of the then
issued and outstanding shares of Common Stock as of the date of the Closing; and

                                                                               3

<PAGE>

(iii) a six percent royalty (the "Royalty") on the gross revenues of the Company
attributable to the assets acquired by the Company  pursuant to the terms of the
Agreement, payable on a pro rata basis to the stockholders of SAC-Delaware.  The
Royalty obligation has now expired.

In January  1997,  the Board  authorized  an agreement  with M & A  Acquisitions
whereby M & A Acquisitions would receive a finder's fee of 3% of gross sales for
the Company  acquiring the  worldwide  manufacturing  and marketing  rights from
Natural  Cool,  Inc. The Company  acquired  Natural  Cool,  Inc. in its entirety
during the first half of 1998.

On July 15, 1998, the Company  entered into an agreement for the purchase of the
assets of  Norfield  Corporation,  a  Connecticut  corporation  with  offices in
Danbury, Connecticut ("Purchase Agreement").  Norfield Corporation had filed for
Chapter 11 Bankruptcy  Protection in June 1996,  and the Purchase  Agreement was
subject to the approval of the Bankruptcy Court, which was received on September
14,  1998.  On  September  18,  1998,  in order to obtain  financing  to acquire
Norfield's  assets,  the Company assigned the Norfield Purchase Agreement to the
Norfield  Investor  Group (which  consisted of Nicky Hunt and Sean McNamara) and
agreed to issue options to purchase  1,000,000  shares of the  Company's  Common
Stock at a price of ten cents ($.10) per share  exercisable for a period of five
(5) years from September 18, 1998. The Norfield Investor Group agreed to pay all
amounts due under the Nor field Purchase Agreement at Closing, including the sum
of $235,000 and the Company received a license and lease  ("Norfield  Lease") of
all the assets so acquired by the Norfield Investor Group. Pursuant to the terms
of the Norfield Lease,  the Company was to have made a payment of  approximately
$250,000 in December 1998.  Because the Company was unable to make that payment,
the Norfield  Corporation declared a default on the Norfield Lease and exercised
its  security  interest  in the Lease held by the  Company and all of the assets
that were  subject to the Lease were  returned  to  Norfield  Corporation  as of
December  31,  1998.  The Company did not receive any revenue or pay any sums of
money as a result of this transaction.

During 2001 and until mid-2002, the Company's business operations were conducted
from Derby, Vermont, and the Company greatly reduced overhead.

Since July 1, 2002, the Company has had no operations or assets.

On September 17, 2002,  The Company's  Board of Directors  agreed to sell, as of
June 30, 2002, all of the Company's assets to Environmental  Alternatives,  Inc.
(EAI), a privately held Vermont corporation, in exchange for EAI's assumption of
and agreement to indemnify and hold the Company harmless from paying any and all
claims,  causes of action,  or other  liabilities,  including but not limited to
interest, costs, expenses, disbursements and attorneys' fees, that could, may or
do attach to the  Company  as of June 30,  2002 as a result of, or is in any way
related to any of the  Company's  obligations  to its  creditors and all adverse
judgments  entered  against the Company except any obligations to the following:
(A) Continental Stock Transfer and Trust Company,  the Company's transfer agent;
Green Holman Frenia & Company,  L.L.P., the Company's former auditors;  (C) Arab
Commerce  Bank, a holder of a Company 6%  Convertible  Note;  and (D) Settlement
amounts due upon the  completion of a merger or other  combination  between SACA
and another  company.  Except as provided  above,  the  agreement  to assume the
Company's liabilities and to indemnify and hold the Company harmless from paying
the same is unlimited as to amount or as to time.

EAI is owned by Mr. Kenneth  Hodgdon,  a former employee who was responsible for
the Company's daily operations. Shareholders holding a majority of the Company's
common stock approved the Agreement by written action in lieu of a shareholder's
meeting.

Business
--------

The  Company  marketed  AmeriStrip(TM),  a paint  stripper,  and  assembled  and
marketed  NaturalCool(TM),  an air circulation  system. The Company's  Agreement
with EAI included the AmeriStrip(TM) and  NaturalCool(TM)  patents,  the formula
for a water-based  foam product,  furniture and fixtures,  equipment,  leasehold
improvements,  accounts  receivable,  works in  progress,  and  ultimately,  the
Company's  name.  Accordingly,  as of July 1, 2002, the Company has no assets or


                                                                               4

<PAGE>

operations.  The  Company  intends  to  locate  and  combine  with an  existing,
privately-held  company which is profitable or, in management's view, has growth
potential,  irrespective  of the industry in which it is engaged.  A combination
any be structured as a merger,  consolidation,  exchange of the Company's common
stock for stock or assets or any other form which  will  result in the  combined
enterprise's becoming a publicly-held corporation.  Private companies wishing to
become  publicly  trading  may  wish to  merge  or  other  combine  whereby  the
shareholders of the private  Company become the majority of the  shareholders of
the combined Company. The private Company may purchase for cash all or a portion
of the common shares of the Company from its major shareholders.  Typically, the
Board and officers of the private  Company  become the new Board and officers of
the combined  Company and often the name of the private Company becomes the name
of the combined Company.

Pending  negotiation  and  consummation  of a merger or other  combination,  the
Company  anticipates  that it will have, aside from carrying on its search for a
combination  partner,  no business  activities and, thus, will have no source of
revenue.  Should the Company incur any significant liabilities prior to a merger
or other combination, it may not be able to satisfy such liabilities as they are
incurred.

If the  Company's  management  pursues one or more  merger or other  combination
opportunities  beyond the preliminary  negotiation stage and those  negotiations
are  subsequently  terminated,  it is foreseeable that such efforts will exhaust
the  Company's  ability  to  continue  to seek  such  opportunities  before  any
successful  merger or other  combination can be consummated.  In that event, the
Company's common stock will become worthless and holders of the Company's common
stock  will  receive  a  nominal  distribution,   if  any,  upon  the  Company's
liquidation and dissolution.

There can be no assurance  that the Company will identify or consummate any such
merger or other  combination.  The Company has not, at the present time, reached
any  agreement  or  definitive  understanding  with any other  company or person
concerning a merger or other combination. Furthermore, no assurance can be given
that any merger or other  combination,  which does occur,  will be on terms that
are  favorable  to the Company or its current  stockholders  or that the Company
will be able to profitably manage the business,  product,  technology or company
it acquires.

Investigation and Selection of Business Opportunity
---------------------------------------------------

The Company's search is directed toward small and medium-sized  enterprises that
have a desire to become public  corporations.  In addition these enterprises may
wish to satisfy,  either currently or in the reasonably near future, the minimum
tangible  asset  requirement in order to qualify shares for trading on NASDAQ or
on an exchange  such as the American  Stock  Exchange.  (See  investigation  and
Selection of Business Opportunities).  The Company anticipates that the business
opportunities presented to it will (A) either be in the process of formation, or
be  recently  organized  with  limited  operating  history or a history of loses
attributable  to   under-capitalization   or  other  factors;  (B)  experiencing
financial  or  operating  difficulties;  (C) be in need of funds to develop  new
products or  services  or to expand  into a new market,  or have plans for rapid
expansion  through  acquisition  of competing  businesses;  (D) or other similar
characteristics.  Given the above  factors,  investors  should  expect  that any
acquisition  candidate may have little or no operating history,  or a history of
losses or low profitability.

To a large extent, a decision to participate in a specific business  opportunity
may be made upon management's  analysis of the following factors,  among others:
the quality of the other  company's  management and personnel;  the  anticipated
acceptability of new products or marketing concepts;  the merit of technological
changes;  the  perceived  benefit  the  business  opportunity  will  derive from
becoming a publicly held entity; the potential for growth,  profitability market
expansion  and/or new products;  the Company's  perception of how any particular
business  opportunity  will be received by the  investment  community and by the
Company's  shareholders;  capital  requirements and anticipated  availability of
required  funds, to be provided by the Company or from  operations,  through the
sale of additional  securities,  through joint ventures or similar arrangements,
or from other sources;  competitive  position as compared to other  companies of
similar  size and  experience  with the  industry  segment as well as within the
industry as a whole;  and numerous  other  factors which are  difficult,  if not
impossible, to analyze through the application of any objective criteria.

                                                                               5

<PAGE>

No one of the factors  described above will be controlling in the selection of a
business  opportunity,  and  management  will  attempt  to analyze  all  factors
appropriate to each  opportunity and make a determination  based upon reasonable
investigative measures and available data. In many instances,  it is anticipated
that the  historical  operations  of a  specific  business  opportunity  may not
necessarily  be indicative of the potential for the future  because of a variety
of  factors,  including,  but not  limited  to,  the  possible  need  to  expand
substantially,  shift marketing approaches,  change product emphasis,  change or
substantially augment management, raise capital and the like.

It is anticipated  that the Company will  essentially be limited to one business
opportunity   because  of  the  Company's  limited   financing.   This  lack  of
diversification  will not permit the Company to offset potential losses from one
business  opportunity against profits from another,  and should be considered an
adverse factor affecting any decision to purchase the company's securities.

The  Company  is  unable  to  predict  when  it may  participate  on a  business
opportunity.  The selection and consummation of a business  opportunity may take
several months or more.

Prior to making a decision to participate in a business opportunity, the Company
will generally investigate relevant information  including,  but not limited to,
such  items  as  a  description  of  products,  services  and  company  history;
management resumes; financial information;  available projections,  with related
assumptions;  an explanation of proprietary  products and services;  evidence of
existing patents,  trademarks,  or service marks, or rights thereto; present and
proposed  forms of  compensation  to management;  a description of  transactions
between  such  company  and  its  affiliates  during  the  relevant  periods;  a
description  of present  and  required  facilities;  and  analysis  of risks and
competitive  conditions;  a financial  plan of operation and  estimated  capital
requirements,   audited  or  unaudited  financial   statements,   together  with
reasonable  assurance  that  audited  financial  statements  would be able to be
produced  within a  reasonable  period of time not to  exceed 60 days  following
completion of a merger or other combination.

The Company may meet with  management and key  personnel,  may visit and inspect
material  facilities,  obtain  independent  analysis or  verification of certain
information provided,  check references of management and key personnel and take
other reasonable investigative measur3es, to the extent of the Company's limited
financial resources and management expertise.

Form of Business Opportunity
----------------------------

It is impossible to predict the manner in which the Company may participate in a
business opportunity.  Specific business  opportunities will be reviewed as well
as the  respective  needs and desires of the Company  and the  promoters  of the
opportunity  and,  upon the basis of the  review  and the  relative  negotiating
strength of the Company and such promoters, the legal structure or method deemed
by the Company to be suitable sill be selected.  Such structure may include, but
is not limited to leases, purchase and sale agreements, licenses, joint ventures
and other contractual  arrangements.  The Company may act directly or indirectly
through an interest in a partnership, corporation or other form of organization.
Implementing   such   structure  may  require  the  merger,   consolidation   or
reorganization  of the  Company  with other  corporations  or forms of  business
organization.  In  addition,  the present  management  and  stockholders  of the
Company  most likely will not have  control o a majority of the voting  stock of
the  Company   following  a  merger,   consolidation,   other   combination   or
reorganization  transaction.  As  part  of  such a  transaction,  the  Company's
existing  directors may resign and new  directors  may be appointed  without any
vote by stockholders.

During July 2002, in order to facilitate the Company's  merger or other business
combination  transaction  with another  company,  the Company issued to total of
84,720,733 shares of the Company's  unregistered,  restricted common stock to be
held in escrow for the benefit of the Company's  merger or combination  partner.
The issuance of these shares has and will cause dilution of other  shareholder's
interest in the Company.


                                                                               6

<PAGE>

The  Company  will  participate  in  a  business   opportunity  only  after  the
negotiation  and  execution of a written  agreement.  Although the terms of such
agreement  cannot  be  predicted,  generally  such an  agreement  would  require
specific  representations and warranties by all of the parties thereto,  specify
certain events of default,  detail the terms of closing and the conditions which
must be  satisfied  by each of the parties  prior to such  closing,  outline the
manner of bearing costs if the  transaction  is not closed,  set forth  remedies
upon default, and include miscellaneous other terms.

As a general  matter,  the Company  anticipates  that it,  and/or its  principal
stockholder(s)  will  enter  into  a  letter  of  intent  with  the  management,
principals or owners of a prospective  business  opportunity  prior to signing a
binding  agreement.  Such a letter  of  intent  will set  forth the terms of the
proposed  acquisition  but will not bind any of the  parties to  consummate  the
transaction.  Execution  of a letter of intent  will by no means  indicate  that
consummation  of an acquisition is probable.  Neither the Company nor any of the
other  parties  to the  letter  of  intent  will  be  bound  to  consummate  the
acquisition  unless and until a definitive  agreement is executed.  Even after a
definitive  agreement is executed,  it is possible that the transaction will not
be  consummated  should any party  elect to exercise  any right  provided in the
agreement to terminate it on specific grounds.

It is anticipated that the investigation of specific business  opportunities and
the  negotiation,  drafting  and  execution of relevant  agreements,  disclosure
documents and other instruments will require  substantial time and attention and
substantial  costs for accountants,  attorneys and others. If a decision is made
not to participate in a specific business opportunity, the costs incurred in the
related investigation would not be recoverable. Moreover, because many providers
of goods and services  require  compensation at the time or soon after the goods
or  services  are  provided,  the  inability  of the  Company  to pay  until  an
indeterminate  future time may make it  impossible  to produce such goods and/or
services.

Competition
-----------

The  Company  expects to  encounter  substantial  competition  in its efforts to
locate attractive  business  combination  opportunities.  The competition may in
part come from business development companies,  venture capital partnerships and
corporations, small investment companies, brokerage firms, and the like. Some of
these  types of  organizations  are likely to be in a better  position  than the
Company to obtain access to attractive  business  opportunities  either  because
they have greater  experience,  resources and managerial  capabilities  than the
Company,  because they are able to offer immediate  access to limited amounts of
cash,  or for a variety  of other  reasons.  The  Company  also will  experience
competition from other public companies with similar business purposes,  some of
which may also have  funds  available  for used by  another  company  within the
business opportunity.

Employees
---------

As of  December  31,  2002,  and  subsequent  thereto,  the  Company has no paid
employees and two (2) non-paid  employees,  including two (2) officers.  None of
the Company's employees is represented by a labor organization,  and the Company
considers its relationship with employees to be satisfactory. Due to the lack of
ongoing business operations,  the Company's two (2) officers spend approximately
4 hours each per month managing the Company's affairs.

The Company expects to use consultants, attorneys and accountants, as necessary,
and does not anticipate a need to engage any other  full-time  employees so long
as it is seeking and evaluating business  opportunities.  The need for employees
and their availability will be addressed in connection with the decision whether
or not to participate in specific business opportunities.

Risk Factors
------------

Conflicts of Interest.  Certain  conflicts of interest exist between the Company
and its officers and directors. They have other business interests to which they


                                                                               7

<PAGE>

currently devote attention,  and are expected to continue to do so. As a result,
conflicts of interest may arise that can be resolved only through their exercise
of judgment in a manner which is consistent with their  fiduciary  duties to the
Company. (See Management, Conflicts of Interest.)

It is  anticipated  that  the  Company's  principal  shareholders  may  actively
negotiate  or  otherwise  consent to the  purchase  of a portion or all of their
common stock as a condition  to, or in  connection  with,  a proposed  merger or
other combination.  In this process,  the Company's  principal  shareholders may
consider their own personal  pecuniary  benefit rather than the best interest of
other Company shareholders. Depending upon the nature of a proposed transaction,
Company  shareholders other than the principal  shareholders may not be afforded
the opportunity to approve or consent to a particular transaction.

Possible Need for Additional Financing.  The Company has very limited funds, and
such funds may not be  adequate  to take  advantage  of any  available  business
opportunities.  Even if the  Company's  currently  available  funds  prove to be
sufficient to pay for its operations until it is able to acquire an interest in,
or complete a transaction with, a business opportunity,  such funds will clearly
not be sufficient to enable it to exploit the  opportunity.  Thus,  the ultimate
success of the Company  will depend,  in part,  upon its  availability  to raise
additional  capital.  In the event that the Company  requires  modest amounts of
additional  capital  to fund  its  operations  until  it is able to  complete  a
business  transaction,  such funds are expected to be provided by the  principal
shareholder(s).  The Company has not,  however,  investigated the  availability,
source,  or terms that might govern the  acquisition of the  additional  capital
which is expected to be required to exploit a business opportunity, and will not
do so until it has determined the level of need for such  additional  financing.
There is no assurance that  additional  capital will be available for any source
or, if available, that it can be obtained on terms acceptable to the Company. If
not  available,  the Company's  operations  will be limited to those that can be
financed with its modest capital.

No Assurance of Success or Profitability. There is no assurance that the Company
will be able to participate  in a favorable  business  opportunity.  Even if the
Company should become involved in a business opportunity,  there is no assurance
that it will  generate  revenues  or  profits,  or that the market  price of the
Company's outstanding shares will be increased thereby.

No Current  Agreement with Specific  Business and Highly Risky.  The Company has
not  entered  into  an  agreement  with a  specific  company  with  regard  to a
particular  business  opportunity.  As a result, it is only able to make general
disclosures  concerning  the risks  and  hazards  of  engaging  in a  particular
business opportunity,  rather than providing disclosure with respect to specific
risks and hazards relating to a particular  business  opportunity.  As a general
matter,  shareholders can expect any potential business  opportunity to be quite
risky.

Type of Business  Opportunity.  The type of business opportunity may be one that
involves a company that desires to avoid effecting its own public offering,  and
the  accompanying   expense,   delays,   uncertainties  and  federal  and  state
requirements  which  purport to  protect  investors.  Because  of the  Company's
limited capital,  it is more likely than not that any transaction by the Company
will involve other parties whose primary  interest is the acquisition of control
of a publicly traded company. Moreover, any business opportunity acquired may be
currently unprofitable or present other negative factors.

Impracticability  of Exhaustive  Investigation.  The Company's limited funds and
lack of full-time  management will make it  impracticable  to conduct a complete
and exhaustive  investigation and analysis of a business  opportunity before the
Company commits its capital or other resources  thereto.  Management  decisions,
therefore, will likely be made without detailed feasibility studies, independent
analysis,  market  surveys  and the like  which,  if the  Company had more funds
available to it, would be desirable.  The Company will be particularly dependent
in making decisions upon information provided by the promoter,  owner,  sponsor,
or  others  associated  with the  business  opportunity  seeking  the  Company's
participation.  A significant  portion of the Company's  available  funds may be
expended for  investigative  expenses and other expenses  related to preliminary
aspects of completing a merger or other business combination, whether or not any
business opportunity investigated is eventually consummated.


                                                                               8

<PAGE>

Lack of  Diversification.  Because of the limited  financial  resources that the
Company  has, it is  unlikely  that the Company  will be able to  diversify  its
business  opportunities  or  operations.  The  Company's  probable  inability to
diversify  its  activities  into more than one area will  subject the Company to
economic  fluctuations  within a particular  business or industry and  therefore
increase the risks associated with the Company's operations.

Need  for  Audited  Financial  Statements.  The  Company  will  require  audited
financial statements from any business opportunity.  Because the Company will be
subject to the  reporting  provisions  the  Securities  Exchange Act of 1934, as
amended (the  Exchange  Act), it will be required to include  audited  financial
statements in its periodical reports for any existing business. In addition, the
lack of audited financial statements would prevent the securities of the Company
from becoming  eligible for listing of NASDAQ,  the automated  quotation  system
sponsored by the  Association  of Securities  Dealers,  Inc., or on any existing
stock  exchange.  Moreover,  the lack of such financial  statements is likely to
discourage  broker-dealers from becoming or continuing to serve as market makers
in the securities of the Company. Finally, without audited financial statements,
the  Company  would  almost  certainly  be  unable to offer  securities  under a
registration  statement  pursuant to the Securities Act of 1933, and the ability
of the Company to raise capital would be  significantly  limited.  Consequently,
business  opportunity  prospects  that do not have,  or are  unable  to  provide
reasonable  assurances  that they will be able to obtain,  the required  audited
statements  will not be considered by the Company to be appropriate for a merger
or other combination.

Other  Regulation.  The merger or other  combination  by the Company may be of a
business that is subject to regulation or licensing by federal,  state, or local
authorities.  Compliance with such  regulations and licensing can be expected to
be  a   time-consuming,   expensive  process  and  may  limit  other  investment
opportunities of the Company.

Dependence upon Management;  Limited  Participation  of Management.  The Company
will be entirely  dependant upon the experience of its officers and directors in
seeking,  investigating,  and entering into a business opportunity and in making
decisions regarding the Company's operations.  It is possible that, from time to
time,  such  persons  will be  unable to devote  their  full time and  attention
potential business opportunities.

Lack of Continuity in Management. The Company does not have a current employment
agreement  with any of its officers or directors,  and as a result,  there is no
assurance  that they will  continue  to manage  the  Company in the  future.  In
connection  with  engaging in a business  opportunity,  it is likely the current
officers and  directors of the Company may resign.  A decision to resign will be
based  upon the  identity  of the  business  opportunity  and the  nature of the
transaction,  and is  likely  to  occur  without  the  vote  or  consent  of the
stockholders of the Company.

Indemnification of Officers and Directors. The Company's By-Laws provide for the
indemnification,  to the full extent  allowed by Florida law, of its  directors,
Officers,  employees and agents who are or were a party, or are threatened to be
made a party to any  threatened,  pending or  completed  legal  action,  suit or
proceeding  by reason of the fact that he or she is or was  serving a  director,
officer,  employee or agent of the Company or is or was serving in such capacity
at another entity at the Company's request.  The extent,  amount and eligibility
for such  indemnification  are  determined  by a  majority  vote of a quorum  of
disinterested  directors,  or by a  majority  vote of a quorum of  disinterested
shareholders.

Section  607.0850 of the Florida  Business  Corporation  Act  empowers a Florida
corporation to indemnify any person who is a party to any proceeding (other than
an  action by or in the  right of such  corporation)  by reason of the fact that
such  person  is  or  was  a  director,  Officer,  employee  or  agent  of  such
corporation,  or is or was  serving  at the  request  of such  corporation  as a
director,  officer,  employee  or agent of another  corporation  or  enterprise,
provided that he acted in good faith and in a manner he  reasonably  believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal  action or  proceeding,  had no reasonable  cause to believe his
conduct was unlawful.  A Florida  corporation  may indemnify any person who is a
party to any  proceeding  by or in the right of the  corporation  under the same
conditions,  except  that  no  indemnification  is  permitted  without  judicial
approval if the officer or director is adjudged to be liable in the  proceeding.
Where an officer, director,  employee or agent of a corporation is successful on
the merits or  otherwise  in the defense of any action  referred  to above,  the
corporation  must  indemnify  him against  the  expenses  which he actually  and
reasonably incurred in connection therewith.


                                                                               9

<PAGE>

Insofar as indemnification  for liabilities arising under the Securities Act may
be  permitted to  directors,  officers  and  controlling  persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the  Commission  such  indemnification  is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.

This  indemnification  policy could result in  substantial  expenditures  by the
Company, which it may be unable to recoup.

Dependence upon Outside Advisors.  To supplement the business  experience of its
officers  and  directors,  the Company  may be  required to employ  accountants,
technical experts, appraisers,  attorneys, or other consultants or advisors. The
selection of any such advisors will be made by the Company's  officers,  without
any input by shareholders.  Furthermore, it is anticipated that such persons may
be  engaged  on an as needed  basis  without  a  continuing  fiduciary  or other
obligation to the Company.  In the event the officers of the Company consider it
necessary  to hire  outside  advisors,  the may  elect to hire  persons  who are
affiliates, if those affiliates are able to provide the required services.

Leveraged  Transactions.  There is a possibility  that any business  opportunity
engaged in by the Company  may be  leveraged,  i.e.  the Company may finance the
business opportunity by borrowing against the assets of the business opportunity
to be  acquired,  or against  the  projected  future  revenues or profits of the
business  opportunity.  This could  increase  the  Company's  exposure to larger
lasses.  A business  opportunity  acquired  through a leveraged  transaction  is
profitable  only if it generates  enough  revenues to cover the related debt and
expenses.  Failure  to make  payments  on the debt  incurred  to  engage  in the
business  opportunity could result in the loss of a portion or all of the assets
acquired. There is no assurance that nay business opportunity acquired through a
leveraged  transaction  will generate  sufficient  revenues to cover the related
debt and expenses.

Competition.  The search for potentially  profitable  business  opportunities is
intensely  competitive.  The  Company  expects  to  be  at a  disadvantage  when
competing  with  many  firms  that  have  substantially  greater  financial  and
management  resources  and  capabilities  than the  Company.  These  competitive
conditions  will  exist  in  any  industry  in  which  the  Company  may  become
interested.

No Foreseeable Dividends. The Company has not paid dividends on its Common Stock
and does not anticipate paying such dividends in the foreseeable future.

Loss of Control by Present  Management  and  Stockholders.  During July 2002, in
order  to  facilitate  the  Company's  merger  or  other  business   combination
transaction  with another  company,  the Company  issued to total of  84,720,733
shares of the  Company's  unregistered,  restricted  common  stock to be held in
escrow for the  benefit of the  Company's  merger or  combination  partner.  The
issuance  of these  shares has and will cause  dilution  of other  shareholder's
interest in the Company.  In  conjunction  with the  consummation  of a business
transaction with another company, the Company's current officers, directors, and
principal  shareholders could also sell all, or a portion,  of their controlling
block of stock to the  acquired  Company's  stockholders.  The  issuance  of the
foregoing  shares  and such a  transaction  would  result in a  greatly  reduced
percentage of ownership of the Company by its current shareholders. As a result,
the acquired Company's  stockholders would control the Company, and it is likely
that they would replace the Company's management with persons who are unknown at
this time.

Rule 144 Sales. Of the 165,853,058 presently outstanding shares of the Company's
stock,  approximately  101,972,098  shares are restricted  securities within the
meaning of Rule 144 under the Securities Act of 1933, as amended.  As restricted
shares,  these shares may be resold only  pursuant to an effective  registration
statement or under the requirements of Rule 144 or other  applicable  securities
law.  Rule 144  provides,  in  essence,  that a person  who has held  restricted
securities for a prescribed  period,  may under certain  conditions,  sell every
three months, in brokerage transactions, a number of shares that does not exceed
the  greater of 1.0% of a  company's  outstanding  common  stock or the  average


                                                                              10

<PAGE>

weekly trading volume during the four calendar weeks prior to sale.  There is no
limit on the amount of restricted securities that may be sold by a non-affiliate
after the restricted  securities have been held by the owner, for a period of at
least two years.  A sale under Rule 144,  or under an other  exemption  from the
Act, if available,  or pursuant to subsequent  registrations  of common stock of
present  shareholders,  may have a depressive effect upon the price of the Price
of the Common  Stock in the market.  As of the date hereof,  the current  owners
have held approximately 54,580,960 of the outstanding shares of the common stock
of the Company  thereof for a period of more than two years.  Accordingly,  such
shares are currently  available  for resale in accordance  with the provision of
Rule 144.

Reports Filed with the SEC
--------------------------

The  Company  is a  reporting  company.  The public may read and copy the Annual
Report (Form 10-KSB) and any other  materials  filed by the Company at the SEC's
Public  Reference Room at 450 Fifth Street N.W.,  Washington,  D.C.  20549.  The
public may obtain  information on the operation of the Public  Reference Room by
call the SEC at 1-800-SEC-0330. The SEC maintains an internet site that contains
reports,  proxy and  information  statements,  and other  information  regarding
issues at http://www.sec.gov.


Item 2 - Properties

The Company does not own any real property. In September 1998, the Company moved
its corporate offices to 440 Main Street, Ridgefield Connecticut 06877, which is
the law office of the Company's  President,  Richard J. Fricke.  Other than this
mailing  address,  the Company  does not  currently  maintain  any other  office
facilities,  and does not anticipate the need for maintaining  office facilities
at any time in the  foreseeable  future.  The Company pays no rent or other fees
for the use of the mailing address as these offices are used virtually full-time
by the law practice of the Company's President.

It is likely that the Company will not  establish  any  additional  or different
office space until it has completed a business opportunity  transaction,  but it
is not possible to predict what  arrangements will actually be made with respect
to future office facilities.

Prior to June  30,  2002,  the  Company  was  leasing  manufacturing  facilities
consisting of approximately  1,500 square feet of space for $600 per month, , on
a month to month basis,  at P.O. Box 625,  Derby Road,  Newport,  Vermont 05855.
This lease was assigned to EAI as of June 30, 2002.

As of December 31, 2002, the Company had no interest in any real property.


Item 3 - Legal Proceedings

An adversary  proceeding  was brought  against the Company in July 1997, in U.S.
Bankruptcy Court for the District of Connecticut,  by Richard Coan,  Trustee for
the Bankruptcy Estate of Samuel E. Bernstein (U.S. Bankruptcy Court, Dist. Conn.
Adversary  Proceedings File No. 97-5078).  The suit sought a judgment to recover
accrued but unpaid wages  totaling  approximately  $100,000 for 1995,  which the
Company  contended that Mr. Bernstein had waived his right to receive.  Judgment
against the Company and in favor of the Trustee was entered in this matter on or
about April 5, 2000 in the amount of $140,000. On or about October 23, 2001, the
Bankruptcy  Court  approved a settlement  agreement  whereby a  Satisfaction  of
Judgment will be entered in this matter upon the Trustee's receipt of $10,000 to
be paid on behalf of the  Company.  The  settlement  payments to the  Bankruptcy
Trustee  were  completed on behalf of the Company on or about March 27, 2002 and
the Satisfaction of Judgment was filed on April 2, 2002.

In  October  2000,  Seaco  Insurance  Company  filed an  action  entitled  Seaco
Insurance Company v. Safe Alternatives of America,  Inc. (Vermont Orleans County
Court Docket No.  274-10-000SCV)  alleging  non-payment  of insurance  premiums.


                                                                              11

<PAGE>

Default  judgment  was entered  against the Company on November  21, 2000 in the
total amount of $10,792.36.  Interest  accrued on this judgment at a rate of 12%
per annum and was in the amount of approximately $1,295 as of June 30, 2002. EAI
assumed the liability and agreed to indemnify  the Company  against  paying this
judgment as of June 30, 2002.

Other than as set forth herein,  there are no legal actions  pending against the
Company  nor  to  the  knowledge  of  the  Company  are  any  such   proceedings
contemplated.

Pending Governmental Agency Proceedings
---------------------------------------

There are no known  proceedings  by any  governmental  agency that are currently
pending  against the Company.  The State of Vermont claims that the Company owes
an estimated  $6,372.66  in Sales and Use taxes and in  Withholding  taxes.  The
Company  claims  that  the  payment  of any such  taxes  that may be due are the
responsibility  of EAI as a component of the June 30, 2002 asset acquisition and
assumption of liabilities.


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

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter of the fiscal year ending December 31, 2002.




























                                                                              12

<PAGE>

                                     PART II

Item 5 - Market for Common Equity and Related Stockholder Matters

Market Price of Common Stock:
-----------------------------

There has not been an active  market for the Company's  securities.  On March 6,
1997,  the  Company's  Common Stock was  accepted for trading on the  Electronic
Bulletin  Board of the NASD under the symbol  SACA.  The Common  Stock traded in
very  limited  volumes,  and the  Company has not been able to obtain any quoted
prices for the stock prior to June 24, 1997.  The limited  market has caused the
securities to be subject to significant price fluctuations.

On March 27, 2002,  the  Company's  Common Stock was accepted for trading on the
NASD Over the Counter Bulletin Board.

The  range of high and low bid and asked  quotations  for the  Company's  Common
Stock for fiscal years 2001 and 2002 are not  available to the Company as of the
date of filing this report due to the Company's lack of funds.  After reasonable
inquiry,  the  Company  was not able to find  the  requested  information  at an
economically feasible cost.

A range of high and low  quotations  for each quarter for the  Company's  Common
Stock for fiscal  years  2001 and 2002 are listed  below.  The  information  was
obtained from the NASDAQ web site (www.nasdaq.com).  The prices reported may not
be  indicative  of the value of the Common  Stock or the  existence of an active
trading  market.  The Company does not know  whether  these  quotations  reflect
inter-dealer  prices  without retail  mark-up,  markdown or  commissions.  These
quotations may not represent actual transactions.

                                         2001                      2002
                                    --------------            --------------
                                   Low         High          Low           High
                                 -------      ------       -------        ------

       First Quarter             $0.006       $0.015       $0.002         $0.009
       Second Quarter            $0.006       $0.009       $0.004         $0.006
       Third Quarter             $0.006       $0.007       $0.0001        $0.005
       Fourth Quarter            $0.005       $0.006       $0.0001        $0.002

The Company had approximately  1,334 holders of record of its Common Stock as of
December 31, 2002.

The Transfer  Agent is Continental  Stock  Transfer & Trust Company,  17 Battery
Place South,  8th Floor, New York, NY 10004, and their telephone number is (212)
845-3245.

Dividend Policy
---------------

It is the policy of the Board of Directors to retain  earnings,  if any, for use
in the maintenance and expansion of the Company's business.  The Company has not
declared  any cash  dividends  to the holders of its capital  stock and does not
anticipate declaring or paying dividends in the foreseeable future.

Recent Sales of Unregistered Securities
---------------------------------------

During 1997 and the first half of 1998,  Messrs.  Sean McNamara,  Nicky Hunt and
Richard Hill (hereinafter "the Investor  Group"),  who are current  shareholders
and who were  Directors  of the  Company  for part of 1997  and  1998,  advanced
working  capital  loans  and  committed  to make  loans  to the  Company  in the
aggregate  amount of  approximately  $1.0  million.  During the first quarter of
1998,  in  consideration  for,  among  other  things,  not  demanding  immediate
repayment of the loans,  the Company and the  Investor  Group agreed to exchange
all of such  outstanding  indebtedness  for a convertible  promissory  note (the
"Investor Note"),  2,000,000 shares of the Company's Common Stock with piggyback
registrations  rights (but which may not be traded until the $1,300,000  note is


                                                                              13

<PAGE>

converted) and stock options.  The Investor Note was in the aggregate  principal
amount of $1.3 million, and accrued interest at a rate of 8% per annum beginning
January 1, 1998.  The Board  authorized  the issuance of warrants in  connection
with the  Investor  Note  that are  exercisable  for a period  of five  years to
acquire  1,500,000 shares of Common Stock at $.25 per share and 1,500,000 shares
of Common Stock at $.50 per share.  In connection  with the Investor  Note,  the
Company  also issued  options to acquire  Common  Stock as  follows:  options to
purchase 2.6 million shares at an exercise price of $.01 per share, 1.95 million
shares at an exercise  price of $.25 per share,  and 1.95  million  shares at an
exercise price of $.50,  all of which were  exercisable at any time between June
30, 1999 and June 30, 2003,  the  expiration  date of the options.  The Investor
Note was repayable as follows:  $433,333 in principal amount, plus interest, was
due and  payable on or before  September  9, 1998;  an  additional  $433,333  in
principal amount,  plus interest,  was due on or before January 9, 1999; and any
unpaid principal balance, plus interest,  was due on or before March 9, 1999. In
addition to any other  remedies they may have if the Company  failed to make the
principal payment on the shareholder loans on September 9, 1998, the Company was
obligated to issue to the lender options to acquire an additional  75,000 shares
of Common Stock, exercisable at a price of $.01 per share, for each 30 days that
the  principal  payments  are in  default.  The  Company did not make any of the
payments required under these Investor Notes and was in default.

On May 29,  1999,  in  exchange  for the  issuance  of  1,000,000  shares of the
Company's  restricted  Common Stock,  Nicky Hunt released the Company from:  (1)
paying any sums due to him,  including  amounts  due to him under the  foregoing
$1.3 million Note; (2) issuing any additional  stock then due or becoming due to
him; and (3) any and all rights he had,  including any right under any option or
warrant, to receive any additional Common Stock from the Company that arose as a
result of his association with the Company.  Messrs.  McNamara and Hill released
the same  obligations  in October 2001 in exchange for the issuance of 4,000,000
shares of the Company's restricted Common Stock.

In March and April,  1998,  the  Company  issued its 6%  Convertible  Notes (the
"Notes") in the aggregate  principal  amount of $726,500 in a private  placement
under Rule 505 of Regulation D. Interest on the Notes is payable  semi-annually.
The principal amount of the Notes, together with unpaid interest thereon, is due
and  payable,  if not  earlier  converted,  on  March 3,  1999.  The  Notes  are
convertible  into shares of Common Stock at the option of the holder at any time
following  the  earlier  of (i) 90  days  after  the  filing  of a  registration
statement  with the SEC covering the shares to be received  upon  conversion  or
(ii)  the date the SEC  declares  such  registration  statement  effective.  The
conversion  price per share is the lesser of (i) 70% of the average  closing bid
price  per  share  of  Common  Stock  for the  five  trading  days  prior to the
conversion date or (ii) $0.25. Upon conversion,  any accrued and unpaid interest
is waived by the holder. The Company has the option to repurchase the Notes from
the holder prior to  registration  of the underlying  shares at a premium of 10%
over the purchase  price of the Notes.  The Company  agreed to file with the SEC
not later than June 3, 1998, and use its best efforts to have declared effective
not later than July 3, 1998, a  registration  statement  registering  for resale
them shares that would be issued upon  conversion of the Notes.  The Company has
made no payments on these notes;  has not  repurchased  these  Notes,  and is in
default with regard to its registration obligation.

As of December  31, 2002,  nine (9) holders  have  released the Company from all
obligations  to them under or as a result of the  Convertible  Notes in exchange
for the issuance of a total of  17,178,264  shares of the  Company's  restricted
Common  Stock.  In  addition,  on August 23, 2002,  the Company  entered into an
agreement with one holder to exchange its Convertible  Note for 4,125,000 shares
of the  Company's  Common Stock to be issued  pursuant to 15 U.S.C.A  ss.77c and
Rule 144 with an issue date of March 10, 1998.  This  settlement was consummated
with the  issuance  of these  shares  during the fourth  quarter of 2002.  As of
December 31, 2001,  the Company had also been informed  that two (2)  additional
holders,  representing  a total  of  $50,000  in  principal  and  not  including
interest,  have written off their interests in the Convertible  Notes.  Finally,
the Company  believed  that it had entered into a settlement  with the remaining
holder of a Convertible Note and issued 124,618 shares of its restricted  Common
Stock to consummate that  settlement.  The holder  disclaimed the settlement and
the Company has  requested  that the transfer  agent place a stop order on those
shares.  Consequently,  one  note  held  by (1)  holder  remains  unpaid  in the
principal amount of $25,000.


                                                                              14

<PAGE>

As  compensation  to the placement  agent,  Alexander,  Wescott & Co, Inc.,  the
Company paid cash fees of 10% of the gross proceeds from the Investor  Notes. In
addition,  the  Company  paid a 3%  nonaccountable  expense  reimbursement,  and
certain other  out-of-pocket  expenses of the agent.  The Company also issued to
the agent  Warrants  exercisable  for  284,600  shares of  Common  Stock,  at an
exercise  price of $.30 per share,  expiring  June 28, 2003. On August 22, 2002,
the Company  entered  into an  agreement  to exchange  this  Warrant for 800,000
shares of the Company's  Common Stock to be issued pursuant to 15 U.S.C.A ss.77c
and  Rule  144  with an  issue  date of March  10,  1998.  This  settlement  was
consummated with the issuance of these shares during the fourth quarter of 2002.

In lieu of cash  payments for their service as members of the Board of Directors
and committee  members,  The Company agreed to issue stock and/or options to the
members of the Board of Directors. .In 1997, the Company agreed to issue to each
of Messrs.  Sean McNamara and Richard Hill 200,000  shares of restricted  Common
Stock  for  their  services.  On  January  16,  1998  and in  lieu  of  monetary
compensation,  the Board of  Directors  authorized:  (1) the  issuance  of stock
options to the members of the Management Committee (Messrs.  McNamara,  Hunt and
Hill) to purchase 100,000 shares of the companies  restricted  Common Stock at a
price of $.01 per share and  exercisable  for a period  of five  years;  (2) the
issuance  of  stock  options  to the  members  of the  Management  Committee  to
purchase,  at $.01 per share,  $2,500  worth of stock (with the number of shares
being  determined by the last per share sales price of the month) for each month
and  exercisable  for a period  of five  years;  and (3) the  issuance  of stock
options to each member of the Board of Directors (Messrs.  McNamara,  Hunt, Hill
and Fricke) to  purchase,  at $.01 per share,  $500.00  worth of stock (with the
number of shares  being  determined  by the last per  share  sales  price of the
month) for each board meeting and  exercisable  for a period of five years.  The
Company's obligation to issue these options was released by Mr. Hunt in May 1999
and by Messrs. McNamara and Hill in October 2001.

On June 1, 1998,  Nicky Hunt was granted options to purchase up to 40,000 shares
of the Company's  restricted Common Stock at a price of $.01 per share for doing
the due diligence in connection with Norfield Corporation. Mr. Hunt released the
Company's obligation to issue these options in May 1999.

During 1998, the Company issued options to purchase 234,000 shares of restricted
Common Stock exercisable for a period of 5 years at a price of $.01 per share to
Robert Percheski.  In May, 2002, the Company entered into a settlement agreement
with Mr.  Percheski  whereby  he  released  all  obligations  owed to him by the
Company and waived the exercise and/or issuance of these options in exchange for
412,000  shares of the  Company's  restricted  Common  Stock and the  payment of
$1,200 payable upon the completion of a merger or other combination of SACA with
another  company.  These shares were issued  during the second  quarter of 2002.
During the first  quarter of 2001,  the  Company  issued  250,000  shares of the
Company's  restricted  Common Stock to Michael Mareneck for services rendered to
the Company.

On December 21, 1998, the Board granted options to purchase  2,500,000 shares of
the Company's  Common Stock to Mr. Fricke and 500,000 shares to Ms.Yrizarry (Mr.
Fricke's  former  spouse) at an  exercise  price of $.01 per share,  exercisable
until  December 21, 2008 for  remaining and serving as a Director and Officer of
the Company, together with the attendant liability,  after the rest of the Board
and management had resigned.  In 1999, the Company substituted  2,500,000 shares
and  500,000  shares  of  its  Common  Stock  to Mr.  Frick  and  Ms.  Yrizarry,
respectively, in place of these options.

In lieu of cash payment for serving as a member of the Board of  Directors,  the
Board  authorized,  but did not  issue,  options to  purchase  400 shares of the
Company's restricted Common Stock for each meeting attended.  These options were
exercisable  for a period of five (5) years from the date of the  meeting at the
price of $.001 per share.  All three (3) members of the Company's Board attended
each of the  fifteen  (15)  meeting  that were held  during  1999 for options to
purchase a total of 18,000  shares of the  Company's  restricted  Common  Stock.
During 2000,  each of the members of the Company's  Board of Directors  attended
the ten (10)  meetings  for options to purchase a total of 12,000  shares of the
Company's  restricted  Common Stock. No such options were issued in 2001or 2002.
Each  member of the Board has  waived  his  rights to these  options,  to become
effective upon the  consummation of a merger or other  combination  between SACA
and another company.

                                                                              15

<PAGE>

In lieu of  receiving  cash  payments  for his  services  as an  Officer  of the
Company,  in  exchange  for salary  arrearages,  and in exchange  for rent,  the
Company issued 18,500,000 shares of its restricted Common Stock in 2000.

During 2000, Mr. Parisi purchased  5,750,000 shares of the Company's  restricted
Common Stock for a purchase price of $37,500.  During the first quarter of 2002,
Mr. Parisi  informed the Company that he had previously  purchased an additional
total of 308,804  shares of the  Company's  Common  Stock on the  market.  These
shares are held in brokerage accounts.  Mr. Parisi did not make any filings with
the SEC with respect to these shares.

During the second quarter of 2002, in order to facilitate  the Company's  merger
or  other  combination  with  another  company,  the  Company  issued a total of
84,720,733  shares of the Company's  restricted Common Stock to Loper & Seymour,
P.A.  to be held in escrow  for the  benefit  of the  Company's  merger or other
combination partner.

During 2002, the Company issued 36,101 shares of its restricted  Common Stock in
settlement or partial  settlement of trade debt. The settlement of certain trade
debt  also or  exclusively  involves  the  payment  of  cash  payable  upon  the
consummation of a merger or other combination of SACA and another company in the
amount of $2,578.90.  The total trade debt that has been settled  during 2002 is
in the total amount of $41,888.22.

No  filings  have  been  made  with  the  SEC  with  respect  to  the  foregoing
transactions.


Item 6 - Management's Discussion and Analysis or Plan of Operation

General

On September 17, 2002,  The Company's  Board of Directors  agreed to sell, as of
June 30, 2002, all of the Company's assets to Environmental  Alternatives,  Inc.
(EAI), a privately held Vermont corporation, in exchange for EAI's assumption of
and agreement to indemnify and hold the Company harmless from paying any and all
claims,  causes of action,  or other  liabilities,  including but not limited to
interest, costs, expenses, disbursements and attorneys' fees, that could, may or
do attach to the  Company  as of June 30,  2002 as a result of, or is in any way
related to any of the  Company's  obligations  to its  creditors and all adverse
judgments  entered  against the Company except any obligations to the following:
(A) Continental Stock Transfer and Trust Company,  the Company's transfer agent;
Green, Holman, Frenia & Company, L.L.P., the Company's former auditors; (C) Arab
Commerce  Bank, a holder of a Company 6%  Convertible  Note;  and (D) Settlement
amounts due upon the  completion of a merger or other  combination  between SACA
and another  company.  Except as provided  above,  the  agreement  to assume the
Company's liabilities and to indemnify and hold the Company harmless from paying
the same is unlimited as to amount or as to time.

EAI is owned by Mr. Kenneth  Hodgdon,  a former employee who was responsible for
the Company's daily operations. Shareholders holding a majority of the Company's
common stock approved the Agreement by written action in lieu of a shareholder's
meeting.

The Company currently has no operations.

The Company's future  operating  results may be affected by a number of factors,
including  general  economic  conditions,  the  Company's  ability to settle its
remaining  debt, and its ability to find a suitable  company for merger or other
combination.  The settlement of the Company's  debt and the Company's  merger or
other  combination  with  another  company,  will cause  dilution of the current
shareholders' interest in the Company.

Mr. Fricke,  a Director and Officer of the Company,  has agreed,  effective upon
completion of a merger or other combination,  to forgive all sums owed to him be
the Company,  to waive his right to all his  outstanding  stock options,  and to
assume and hold the Company  harmless from paying certain tax  liabilities.  Mr.
Parisi,  a Director and Officer of the Company,  effective  upon  completion  of
merger  or  other  combination,  has  agreed  to  waive  his  right  to all  his
outstanding stock options.

                                                                              16

<PAGE>

The report of the Company's  independent  auditor contains a paragraph as to the
Company's ability to continue as a going concern. Among the factors cited by the
auditors as raising substantial doubt as to the Company's ability to continue as
a going concern are: (i) the Company has incurred  recurring  operating  losses;
and,  (ii) the  Company  has a  working  capital  deficiency.  See Note C to the
Financial Statements included herein.

Results of Operations for the Fiscal Years Ended December 31, 2002 and 2001

During  2001 and the first half of 2002,  the  Company  continued  to attempt to
manufacture, assemble and market the following products:

     o    AmeriStrip(TM)  -  Paint  Stripping  Chemicals  (world-wide  license).
          AmeriStrip was marketed and sold in limited sample quantities.
     o    NaturalCool(TM)  Systems - Ambient Air Exchanger  (worldwide marketing
          and  manufacturing  rights).  The  NaturalCool  system is a  patented,
          energy-saving air circulation system,  designed to supplement existing
          refrigeration  systems  for  commercial  refrigeration  units  such as
          walk-in and reach-in  coolers.  The product was  assembled and sold in
          limited quantities from the Company's facilities in Vermont.

These efforts proved to be  unsuccessful  and the Company sold its assets to EAI
in exchange for the assumption and indemnification of the Company's liabilities,
with certain  exceptions.  Therefore,  as of June 30,  2002,  the Company has no
operations.

Sales;  Gross Margins;  Net Losses. For the fiscal year ended December 31, 2001,
sales  decreased to $88,286 from $93,510 in the prior year, a decrease of $5,233
due to reduced sales of the Company's  paint  stripping  product line and modest
initial sales of the Company's NaturalCool product.

For the year  ended  December  31,  2001,  the  Company  reported  a net loss of
$(129,135),  or $(.0023) per share,  as compared with $(258,552) or $(.0061) per
share in the prior year, a decreased loss of $129,417.  The Company continued to
incur net losses as sales of its products  through the June 30, 2002 disposition
date did not sustain levels  sufficient to cover the Company's cost of marketing
and selling,  which has included  substantial  non-cash expenses associated with
compensating,  marketing and selling personnel in shares of the Company's Common
Stock.

Research and  Development.  Through June 30, 2002,  the Company did not have any
research and development expenses. The research and development of the Company's
product lines were terminated in 1998 due to the Company's financial  condition.
The research  facility in Brookfield,  CT was also closed in 1998.  Calculations
with respect to the percentage of research and development  expenses relative to
sales are not meaningful.

Liquidity and Capital Resources

The Company has never  generated  sufficient  revenues to finance its operations
and has been able to remain in business  solely as a result of raising  capital.
At  December  31,  2002,  the  Company  had  current  assets of $-0- and current
liabilities of $53,155.  At December 31, 2001, the Company had current assets of
$15,707 and current  liabilities of $893,031.  The Company's ability to continue
as a going  concern  in the near term is  dependent  upon  obtaining  additional
financing.

As of  December  31, 2002 and 2001,  respectively,  the Company did not have the
financial  resources to operate its business,  continue research and development
or market its products.

The Company has been financing its operations  through loans from  shareholders,
which  aggregated  approximately  $926,900  as of  December  31,  2000  and from
approximately  $726,500 in net proceeds from a private  placement of convertible
notes  completed  in April,  1998.  See "Item 5.  Market For  Common  Equity And
Related Stockholder Matters - Recent Sales Of Unregistered Securities."


                                                                              17

<PAGE>

By the end of 1998, those investors who had previously  provided capital for the
Company were  unwilling to advance any further  funds.  As of year-end 1998, the
Company had not identified any prospects for raising additional  capital. By the
end of 1999,  the Company had  basically  moved its scaled  down  operations  to
Vermont.  During 2000 and 2001, the Company  continued to reduce its overhead by
reducing the square footage and rent at its Vermont facility.

It  is  the  intent  of  management  and  significant  stockholders  to  provide
sufficient  working  capital to preserve the integrity of the corporate  entity,
however,  there are no commitments to provide additional funds have been made by
management  or other  stockholders,  and the  Company  has no plans,  proposals,
arrangements  or  understandings  with  respect  to  the  sale  or  issuance  of
additional  securities  prior  to  the  location  of  a  merger  or  acquisition
candidate. Accordingly, there can be no assurance that any additional funds will
be available to the Company to allow it to cover its  expenses.  Notwithstanding
the forgoing,  to the extent that  additional  funds are  required,  the Company
anticipates  receiving  such  funds in the  form of  advancements  from  current
shareholders  without  issuance of  additional  shares or other  securities,  or
through private placement of restricted  securities rather than through a public
offering.  The Company  does not  currently  contemplate  making a  regulation S
offering.

Regardless of whether the  company's  cash assets prove to be inadequate to meet
the Company's  operational needs, the Company might seek to compensate providers
of services by issuances  of stock in lieu of cash.  For  information  as to the
Company's  policy in regard to payment  for  consulting  services,  see  Certain
Relationships and Transactions.

Plan of Business

General
-------

The  Company  intends to locate and  combine  with an  existing,  privately-held
company which is profitable  or, in  management's  view,  has growth  potential,
irrespective  of the  industry  in which it is  engaged.  A  combination  may be
structured as a merger,  consolidation,  exchange of the Company's  common stock
for stock or  assets  or any  other  form  which  will  result  in the  combined
enterprise's becoming a publicly-held corporation.

Pending  negotiation and consummation of a combination,  the Company anticipates
that it will have, aside from carrying on its search for a combination  partner,
no business  activities,  and, thus, will have no source of revenue.  Should the
Company incur any significant  liabilities prior to a combination with a private
company, it may not be able to satisfy such liabilities as are incurred.

If the Company's management pursues one or more combination opportunities beyond
the  preliminary  negotiations  stage and those  negotiations  are  subsequently
terminated,  it is  foreseeable  that such efforts  will  exhaust the  Company's
ability to continue to seek such combination opportunities before any successful
combination can be consummated.  In that event,  the Company's Common Stock will
become  worthless  and  holders of the  Company's  Common  Stock will  receive a
nominal distribution, if any, upon the Company's liquidation and dissolution.

Combination Suitability Standards
---------------------------------

In its pursuit for a combination  partner,  the Company's  management intends to
consider only  combination  candidates  which are profitable or, in management's
view, have growth potential.  The Company's management does not intend to pursue
any  combination  proposal  beyond  the  preliminary  negation  stage  with  any
combination  candidate which does not furnish the Company with audited financial
statements  for at least its most  recent  fiscal year and  unaudited  financial
statements for interim periods  subsequent to the date of such audited financial
statements, or is in a position to provide such financial statements in a timely
manner.  The Company will, if necessary  funds are available,  engage  attorneys
and/or accountants in its efforts to investigate a combination  candidate and to
consummate a business  combination.  The Company may require  payment of fees by
such combination  candidate to fund the investigation of such candidate.  In the
event such a combination candidate is engaged in a high technology business, the


                                                                              18

<PAGE>

Company may also obtain  reports from  independent  organizations  of recognized
standing  covering the technology  being developed and/or used by the candidate.
The  Company's  limited  financial  resources may make the  acquisition  of such
reports  difficult  or even  impossible  to obtain  and,  thus,  there can be no
assurance  that the Company  will have  sufficient  funds to obtain such reports
when considering combination proposals or candidates.  To the extent the Company
is unable to obtain the advice or reports from exerts, the risks of any combined
enterprise's being unsuccessful will be enhanced.  Furthermore, to the knowledge
of the Company's  officers and  directors,  neither the candidate nor any of its
directors, executive officers, principal shareholders or general partners:.

     1.   will have been convicted of securities  fraud,  mail fraud, tax fraud,
          embezzlement,   bribery,   or  similar  criminal   offense   involving
          misappropriation  or theft of funds,  or be the  subject  of a pending
          investigation or indictment involving any of those offenses;

     2.   will have been  subject to a  temporary  or  permanent  injunction  or
          restraining  order arising from unlawful  transactions  in securities,
          whether as issuer, underwriter, broker, dealer, or investment advisor,
          may be the subject of any pending  investigation  or a defendant  in a
          pending  lawsuit  arising from or based upon  allegations  of unlawful
          transactions in securities; or,

     3.   will have been a defendant in a civil action which resulted in a final
          judgment  against it or him awarding  damages or rescission based upon
          unlawful practices or sale of securities.

The Company's  officers and directors will make these  determinations  by asking
pertinent  questions of the  management of prospective  combination  candidates.
Such persons will also ask pertinent  questions of others who may be involved in
the combination proceedings.  However, the officers and directors of the Company
will not generally take other steps to verify independently information obtained
in this manner which is favorable.  Unless  something  comes to their  attention
which  puts  them on  notice  of a  possible  disqualification  which  is  being
concealed  from them,  such persons will rely on  information  received from the
management of the prospective  combination  candidate and from others who may be
involved in the combination proceedings.


Item 7 - Financial Statements

The required financial statements begin at Page F-1 of this document.


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

On August 15, 2002, the Company was informed by its independent auditors,  Green
Holman Frenia and Company,  L.L.P., that it is resigning its engagement with the
Registrant  because it is no longer  accepting  engagements  for publicly traded
companies.

The  reports  of Green  Holman  Frenia  and  Company,  L.L.P.  on the  Company's
financial statements for fiscal years ended December 31, 2000 and 2001 contained
no adverse opinion or disclaimer of opinion,  and were not qualified or modified
as to uncertainty, audit scope or accounting principles except that Green Holman
Frenia & Company,  L.L.P.'s most recently issued  Independent  Auditor's  Report
dated January 28, 2002 concluded that  substantial  doubts were raised about the
Registrant's  ability to  continue as a going  concern as a result of  recurring
operating losses and a working capital deficiency.

During the Company's  two most recent fiscal years (ended  December 31, 2002 and
2001) and from December 31, 2001 to the date of this Report,  the Company had no
disagreement  with  Green  Holman  Frenia &  Company,  L.L.P.  on any  matter of
accounting principles or practices,  financial statement disclosure, or auditing
scope or  procedure.  There were no  reportable  events,  as  described  in Item
304(a)(1)(v)  of  Regulation  S-K,  during the  Company's two most recent fiscal
years (ended  December 31, 2001 and 2000) and from December 31, 2001 to the date
of this Report.


                                                                              19

<PAGE>

The  Company  approved  Green  Frenia  and  Company,  L.L.P.'s  resignation  and
authorized it to respond fully to the inquiries of its successor.

On September 30, 2002, the Company's  Board of Directors  approved the retention
of  the  accounting  firm  of S.  W.  Hatfield,  CPA  of  Dallas,  Texas  as its
independent  auditors for the fiscal year ending  December 31, 2002.  During the
Company's  two most  recent  fiscal  years and the interim  period  prior to its
agreement to engage S. W. Hatfield,  CPA as the Company's principal accountants,
neither the Company nor anyone on its behalf has consulted S. W.  Hatfield,  CPA
on either  (i) the  application  of  accounting  principles  to any  transaction
(completed  or proposed) or (ii) the type of audit report that might be rendered
on the Registrant's financial statements or (iii) any matter that was either the
subject of a  disagreement,  as such term is defined  in Item  304(a)(1)(iv)  of
Regulation  S-K,  or a  reportable  event  as  such  term  is  defined  in  Item
304(a)(1)(v)of Regulation S-K.

























                                                                              20

<PAGE>

                                    PART III

Item  9  -  Directors,   Executive  Officers,  Promoters  and  Control  Persons;
Compliance with Section 16(a) of the Securities Exchange Act of 1934

The Company's Officers and Directors during 2002 are as follows:

      Name                         Age                  Position Held and Tenure
      ----                         ---                  ------------------------

Richard J. Fricke                  58                          President,
                                                         Chief Executive Officer
                                                         Chief Financial Officer
                                                              and Director

Dominic G. Parisi                  72                    Secretary and Director

The  directors  named  above will  serve  until the next  annual  meeting of the
Company's  stockholders  or until  their  successors  are duly  elected and have
qualified.  Officers  hold  their  positions  at the  pleasure  of the  board of
directors, absent any employment agreement, of which none currently exists or is
contemplated.  There are no family relationships between the Company's directors
or its officers.

The directors and officers will devote their time to the Company's affairs on an
as needed  basis,  which,  depending  on the  circumstances,  could amount to as
little as no hours per month,  or more than forty hour per month,  but more than
likely encompass less than ten hours per month.

Biographical Information
------------------------

Mr.  Richard J.  Fricke has served as  President  and Chief  Executive  Officer,
except for a short period as set forth below, of the Company since January 1998.
He is also a Director of the Company.  He has been a practicing general practice
attorney in the State of Connecticut  since 1970 and was admitted to the bar the
same year.  From  1970-73,  he worked  with the law firm of Gregory & Adams,  in
Wilton,  Connecticut.  From 1973 to 1990,  he was a  partner  in the Law Firm of
Crehan & Fricke,  in  Ridgefield,  Connecticut.  Mr. Fricke filed for protection
under Chapter 7 of the federal  bankruptcy  laws in 1996. In addition to private
practice,  Mr. Fricke was Town Counsel for the town of Ridgefield,  Connecticut.
From 1973-81,  he served as Director of Village Bank & Trust Company and for the
Ridgefield  Community Center and the Ridgefield  Montessori  School.  Mr. Fricke
received his undergraduate  and law degrees from Cornell  University in 1967 and
1970,  respectively.  Mr. Fricke's biographies can be found in Marquis Who's Who
in America, Who's Who in the World, Who's Who in Business and Finance, and Who's
Who in the East.

Mr. Dominic Parisi is a self-employed  consultant regarding business management,
development and training. He has an MBA from the University of Chicago, Chicago,
Illinois and a Ph.D. from Northwestern  University,  Evanston,  Illinois.  He is
Professor  Emeritus and past Chairman of the  Department of  Management,  DePaul
University,  Chicago,  Illinois.  Mr.  Parisi serves as a member of the Board of
Directors of First  Frontier  Holdings,  Inc.,  SOBRO GROUP,  Inc. and San Diego
Downtown Residents (Non-profit).

Board Committees
----------------

The Board had no Committees during 2002.


Item 10- Executive Compensation


                                                                              21

<PAGE>

As of December 31, 2002, and subsequent thereto,  the Company's officers receive
no compensation.  Due to the lack of ongoing business operations,  the Company's
two (2)  officers  spend  approximately  4 hours  each per  month  managing  the
Company's affairs.

Although the Members of the Board of Directors did not receive any cash fees for
the  service on the Board,  they are  entitled  to be  reimbursed  for  expenses
incurred in  attending  Board  meetings.  In 1999,  the Company  authorized  the
issuance of four hundred (400) shares of the Company's  restricted  Common Stock
to each member of the Board for each  meeting  attended.  Under this plan,  each
Director is entitled to the  issuance of 6,000  shares of the  Company's  Common
Stock for  1999,  0 shares  for 2000,  0 shares  for  2001,  and 0 for 2002.  On
December 21, 1998, the Board granted options to purchase 2,500,000 shares of the
Company's  Common Stock to Mr.  Fricke and 500,000  shares to Ms.  Yrizarry (Mr.
Fricke's  former  spouse) at an  exercise  price of $.01 per share,  exercisable
until  December 21, 2008 for  remaining and serving as a Director and Officer of
the Company, together with the attendant liability,  after the rest of the Board
and management had resigned.  In 1999, the Company substituted  2,500,000 shares
and  500,000  shares  of  its  Common  Stock  to Mr.  Frick  and  Ms.  Yrizarry,
respectively, in place of these options.

M. Fricke,  a Director and Officer of the Company,  has agreed,  effective  upon
completion of a merger or other combination,  to forgive all sums owed to him be
the Company,  to waive his right to all his  outstanding  stock options,  and to
assume and hold the Company  harmless from paying certain tax  liabilities.  Mr.
Parisi, a Director and Officer of the Company, agreed, effective upon completion
of merger or other combination,  to waive his right to all his outstanding stock
options.

Compliance With Section 16(A) Of The Exchange Act
-------------------------------------------------

Based  solely  upon a  review  of  Forms  3, 4 and 5,  and  amendments  thereto,
furnished to the Company with respect to fiscal years 2002 and 2001, the Company
believes that (1) Mr.  Dominic Parisi file any Forms 4 or a Form 5 reporting the
acquisition from the Company of shares of Common Stock.

The Company did not receive any Form 3, 4 or 5 from any of its present or former
Officers or Directors  during 2002 or 2001. Thus, the Company believes that: (1)
Mr. Parisi failed file a Form 4 or Form 5 reporting  transactions  involving the
acquisition of shares of the Company's Common Stock;  and (2) Messrs.  Percheski
and Berger failed to file a Form 4 or Form 5 reporting one transaction involving
the acquisition of shares of the Company's Common Stock.

Other Officer Compensation and Benefits
---------------------------------------

The Company  established a Medical and Dental  Reimbursement Plan for Richard J.
Fricke  providing  for  reimbursement  of up to $10,000  of  medical  and dental
expenses annually.  The Company has not received any requests for reimbursements
under this plan.

The Company paid no "Other Annual Compensation" in 2002 or in 2001.

Employment Agreements
---------------------

The Company does not have any  employment  agreements,  termination  agreements,
change-in-control  agreements or change in responsibilities  agreements with any
of its employees.

Conflicts of Interest
---------------------

None of the  officers of the Company will devote more than a portion of his time
to  the  affairs  of  the  Company.  There  will  be  occasions  when  the  time
requirements of the Company's business conflict with the demands of the officers
other  business and investment  activities.  Such conflicts may require that the
Company attempt to employ additional  personnel.  There is no assurance that the
services of such persons  will be  available  or that they can be obtained  upon
short notice.

                                                                              22
<PAGE>

The  officers,  directors  and/or  principal  shareholders  of the  Company  may
actively negotiate for the purchase of a portion or all of their common stock as
a condition  to or in  connection  with a proposed  merger or other  combination
transaction.  It is  anticipated  that a substantial  premium may be paid by the
purchase  in  conjunction  with any sale of  shares by the  Company's  officers,
directors and/or principal shareholders made as a condition to, or in connection
with,  a  proposed  merger  or other  combination  transaction.  The fact that a
substantial  premium  may be  paid  to  members  of  Company  management  and/or
principal  shareholders  to acquire their shares  creates a conflict of interest
for them and may  compromise  their state law fiduciary  duties to the Company's
other  shareholders.  In making  any such sale,  members  of Company  management
and/or principal  shareholders may consider their own personal pecuniary benefit
rather  than  the  best  interests  of  the  Company  and  the  Company's  other
shareholders,  and the other  shareholders  are not  expected to be afforded the
opportunity  to  approve  or  consent  to  any  particular  buy-out  transaction
involving  shares  held  by  members  of  Company  management  and/or  principal
shareholders.

The Company has adopted a policy under which any  consulting or finders fee that
may be paid to a third party for  consulting  services to assist  management  in
evaluating a prospective business opportunity would be paid in stock rather than
in  cash.  Any  such  issuance  of  stock  would  be  made  on an ad hoc  basis.
Accordingly,  the Company is unable to predict whether,  or in what amount, such
stock issuance might be made.

During July 2002, in order to facilitate the Company's  merger or other business
combination  transaction  with another  company,  the Company  issued a total of
84,720,733 shares of the Company's  unregistered,  restricted common stock to be
held in  escrow  for the  benefit  of the  Company's  potential  merger of other
combination partner.

It is not currently anticipated that any salary,  consulting fee, or finders fee
shall be paid to any of the Company's directors or executive officers, or to any
other affiliate of the Company except as described under Executive Compensation.

It is possible  that the Company  may enter into an  agreement  with a merger or
other  combination  partner requiring the sale of all or a portion of the Common
Stock held by some or all of the Company's current stockholders to the merger or
other  combination  partner or principals  thereof,  or to other  individuals of
business entities, or requiring some other form of payment to some or all of the
Company's current stockholders,  or requiring the future employment of specified
officers  and payment of  salaries to them.  It is more likely than not that any
sale of  securities by some or all of the Company's  current  stockholders  to a
merger or other  combination  partner would be at a price  substantially  higher
than  that  originally  paid  by  such  stockholders.  Any  payment  to  current
stockholders  in the  context  of a merger or other  combination  involving  the
Company would be  determined  entirely by the largely  unforeseeable  terms of a
future agreement with an unidentified business entity.

Limitation of Liability and Indemnification Matters
---------------------------------------------------

The  Company's  By-Laws  provide  for the  indemnification,  to the full  extent
allowed by Florida law, of its directors, Officers, employees and agents who are
or were a party, or are threatened to be made a party to any threatened, pending
or completed  legal action,  suit or proceeding by reason of the fact that he or
she is or was serving a director,  Officer,  employee or agent of the Company or
is or was serving in such capacity at another  entity at the Company's  request.
The extent,  amount and eligibility for such indemnification are determined by a
majority vote of a quorum of disinterested directors, or by a majority vote of a
quorum of disinterested shareholders.

Section  607.0850 of the Florida  Business  Corporation  Act  empowers a Florida
corporation to indemnify any person who is a party to any proceeding (other than
an  action by or in the  right of such  corporation)  by reason of the fact that
such  person  is  or  was  a  director,  Officer,  employee  or  agent  of  such
corporation,  or is or was  serving  at the  request  of such  corporation  as a
director,  officer,  employee  or agent of another  corporation  or  enterprise,


                                                                              23
<PAGE>

provided that he acted in good faith and in a manner he  reasonably  believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal  action or  proceeding,  had no reasonable  cause to believe his
conduct was unlawful.  A Florida  corporation  may indemnify any person who is a
party to any  proceeding  by or in the right of the  corporation  under the same
conditions,  except  that  no  indemnification  is  permitted  without  judicial
approval if the officer or director is adjudged to be liable in the  proceeding.
Where an officer, director,  employee or agent of a corporation is successful on
the merits or  otherwise  in the defense of any action  referred  to above,  the
corporation  must  indemnify  him against  the  expenses  which he actually  and
reasonably incurred in connection therewith.

Insofar as indemnification  for liabilities arising under the Securities Act may
be  permitted to  directors,  officers  and  controlling  persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the  Commission  such  indemnification  is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.

The  Company is not aware of any  claims,  whether  possible  or  asserted,  for
indemnification.


Item 11 - Security Ownership of Certain Beneficial Owners and Management

The following  table shows,  as of December 31, 2002, the shares of Common Stock
beneficially owned by all of the persons who served as the directors or officers
of the Company during 2002 as well as the principal  shareholders  (greater than
5%) of the Company  individually  and, as to the directors  and  officers,  as a
group. The address of each person or entity, unless otherwise noted, is c/o Safe
Alternatives  Corporation  of  America,  Inc.,  440  Main  Street,   Ridgefield,
Connecticut.

The number of shares  beneficially  owned by each person or entity is determined
under rules of the Securities and Exchange  Commission,  and the  information is
not necessarily  indicative of beneficial ownership for any other purpose. Under
such rules,  beneficial ownership includes any shares as to which the person has
the sole or shared  voting power or  investment  power and also any shares which
the  person  has the right to  acquire  as of a date  within  60 days  after the
relevant date through the exercise of any stock option or other right.

                                                                  % of Class
     Name and address                Number of Shares         Beneficially Owned
     ----------------                ----------------         ------------------

Richard J. Fricke (1) (2) (4)          33,462,252                  20.58%
25 Buckingham Ridge Road
Wilton CT 06897

Dominic G. Parisi (2)                   8,468,804                   5.11%
701 Kettner Blvd #75
San Diego CA

Loper & Seymour, P.A. (3)              84,720,733                  51.08%
     Trust Account
24 East 4th Street
St. Paul MN 55101

All Directors and Officers
     as a Group                        41,931,056                  25.28%

(1)  Includes (a) 300,000  shares of the  Company's  restricted  Common Stock as
     compensation  for his services as an Officer and Director  during 1998; (b)
     currently  exercisable  options to purchase 2,500,000  restricted shares of
     the  Company's  Common  Stock  at an  exercise  price  of $.01  per  share,
     exercisable  until December 21, 2008, for his continued  service,  together


                                                                              24

<PAGE>

     with the liability exposure  attendant thereto,  as an Officer and Director
     of the Company after the remainder of the Company's  Officers and Directors
     resigned in December  1998.  In 1999,  the Company  converted  the award of
     these options into an award of the Company's  restricted  Common Stock; (c)
     options to purchase 4,500 shares of the Company's  restricted  Common Stock
     as  compensation  for  serving as an Officer  and  Director  of the Company
     during 1998; and (d) 2,954 shares owned by The Ridge Group.

     Although the following are included in the total,  Mr. Fricke  specifically
     disclaims any ownership in the following shares:  (a) 82,080 shares held by
     the Fricke Family Trust;  (b) 636,800 shares held by Mr.  FrickeAEs  former
     spouse;  (c) 82,080  shares held by his father;  (d) 15,303  shares that he
     holds as Trustee; and (e) 82,080 held by his grown children.

(2)  In 1999,  the Company  authorized  the  issuance  options to purchase  four
     hundred (400) shares of the Company's restricted Common Stock at $.0001 per
     share for a period of five (5) years  from the date of the  meeting to each
     member  of the Board for each  meeting  attended.  Under  this  plan,  each
     Director is entitled to  currently  exercisable  options to purchase  6,000
     shares of the  Company's  restricted  Common  Stock in 1999 and  options to
     purchase  4,000 shares of restricted  Common Stock for 2000.  There were no
     options issued in 2001 or 2002.

(3)  During the second  quarter of 2002,  in order to  facilitate  the Company's
     merger or other  combination  with another  company,  the Company  issued a
     total of 84,720,733 shares of the Company's  restricted stock to be held in
     escrow  for the  benefit  of the  Company's  future  merger or  combination
     partner.

(4)  The directors have agreed to waive the right to and under any stock options
     that they may have,  effective upon the  consummation  of a merger or other
     combination of SACA and another company.


Item 12 - Certain Relationships and Related Transactions

During 1997 and the first half of 1998, the Investor  Group,  including  current
shareholders  and persons who were Directors of the Company for part of 1997 and
1998,  advanced working capital loans and committed to make loans to the Company
in the aggregate amount of approximately $1.0 million.  During the first quarter
of 1998,  in  consideration  for,  among other things,  not demanding  immediate
repayment of the loans,  the Company and the  Investor  Group agreed to exchange
all of such  outstanding  indebtedness  for a convertible  promissory  note (the
"Investor Note"),  2,000,000 shares of the Company's Common Stock with piggyback
registrations  rights (but which may not be traded until the $1,300,000  note is
converted)  and stock options.  The Investor Note is in the aggregate  principal
amount of $1.3 million, and accrues interest at a rate of 8% per annum beginning
January 1, 1998.  The Board  authorized  the issuance of warrants in  connection
with the  Investor  Note  that are  exercisable  for a period  of five  years to
acquire  1,500,000 shares of Common Stock at $.25 per share and 1,500,000 shares
of Common Stock at $.50 per share.  In connection  with the Investor  Note,  the
Company  also issued  options to acquire  Common  Stock as  follows:  options to
purchase 2.6 million shares at an exercise price of $.01 per share, 1.95 million
shares at an exercise  price of $.25 per share,  and 1.95  million  shares at an
exercise  price of $.50,  all of which may be exercised at any time between June
30, 1999 and June 30, 2003,  the  expiration  date of the options.  The Investor
Note is repayable as follows:  $433,333 in principal amount, plus interest,  was
due and  payable on or before  September  9, 1998;  an  additional  $433,333  in
principal amount,  plus interest,  was due on or before January 9, 1999; and any
unpaid principal balance, plus interest,  was due on or before March 9, 1999. In
addition to any other  remedies  they may have if the Company  fails to make the
principal  payment on the  shareholder  loans on September 9, 1998,  the Company
will be obligated to issue to the lender options to acquire an additional 75,000
shares of Common Stock,  exercisable  at a price of $.01 per share,  for each 30
days that the principal payments are in default. The Company did not make any of
the payments required under these Investor Notes and is currently in default. On
May 29, 1999, in exchange for the issuance of 1,000,000  shares of the Company's
restricted  Common Stock,  Nicky Hunt released the Company from:  (1) paying any
sums due to him,  including  amounts due to him under the foregoing $1.3 million
Note; (2) issuing any additional  stock then due or becoming due to him; and (3)
any and all rights he had,  including any right under any option or warrant,  to
receive any  additional  Common Stock from the Company that arose as a result of
his association  with the Company.  Messrs.  McNamara and Hill released the same
obligations in October 2001 in exchange for the issuance of 4,000,000  shares of
the Company's restricted Common Stock.


                                                                              25

<PAGE>

In lieu of cash  payments for their service as members of the Board of Directors
and committee  members,  the Company has agreed to issue stock and/or options to
the members of the Board of Directors.  In 1997,  the Company agreed to issue to
each of Messrs.  Sean  McNamara and Richard Hill  200,000  shares of  restricted
Common  Stock for their  services.  On January  16, 1998 and in lieu of monetary
compensation,  the Board of  Directors  authorized:  (1) the  issuance  of stock
options to the members of the Management Committee (Messrs.  McNamara,  Hunt and
Hill) to purchase 100,000 shares of the companies  restricted  Common Stock at a
price of $.01 per share and  exercisable  for a period  of five  years;  (2) the
issuance  of  stock  options  to the  members  of the  Management  Committee  to
purchase,  at $.01 per share,  $2,500  worth of stock (with the number of shares
being  determined by the last per share sales price of the month) for each month
and  exercisable  for a period  of five  years;  and (3) the  issuance  of stock
options to each member of the Board of Directors (Messrs.  McNamara,  Hunt, Hill
and Fricke) to  purchase,  at $.01 per share,  $500.00  worth of stock (with the
number of shares  being  determined  by the last per  share  sales  price of the
month) for each Board meeting and  exercisable  for a period of five years.  The
Company's obligation to issue these options was released by Mr. Hunt in May 1999
and by Messrs. McNamara and Hill in October 2001.

On June 1, 1998,  Nicky Hunt was granted options to purchase up to 40,000 shares
of the Company's  restricted Common Stock at a price of $.01 per share for doing
the due diligence in connection with Norfield Corporation. Mr. Hunt released the
Company's obligation to issue these options in May 1999.

On May 29,  1999,  in  exchange  for the  issuance  of  1,000,000  shares of the
Company's  restricted  Common Stock,  Nicky Hunt released the Company from:  (1)
paying any sums due to him,  including  amounts  due to him under the  foregoing
$1.3 million Note; (2) issuing any additional  stock then due or becoming due to
him; and (3) any and all rights he had,  including any right under any option or
warrant, to receive any additional Common Stock from the Company that arose as a
result of his association with the Company.  Messrs.  McNamara and Hill released
the same  obligations  in October 2001 in exchange for the issuance of 4,000,000
shares of the Company's restricted Common Stock.

During 1998, the Company issued its restricted  Common Stock to pay for services
to the Company, as follows:  Sam Armato, Jr., 50,000 shares;  Chester Greenwood,
50,000 shares; Kenneth Hodgdon,  10,000 shares; and Neil Rogers, 100,000 shares.
In  addition,   the  Company  authorized  (issued  in  1999)  the  following  as
compensation  and incentive pay:  100,000  shares of restricted  Common Stock to
Robert Berger;  and (2) 25,000 shares of restricted Common Stock plus options to
purchase 234,000 shares of restricted Common Stock exercisable for a period of 5
years at a price of $.01 per share to Robert  Percheski.  In 2002,  the  Company
settled all claims held by Mr.  Percheski  against the  company,  including  the
waiver of all rights  under the stock  options that he has or claimed to have by
the issuance of 412,000  shares of  restricted  common stock and $1,200  payable
upon the  consummation  of a merger  or other  combination  of SACA and  another
company. In 1999 the Company issued 50,000 shares of its restricted Common Stock
to Scott Purvis for services he rendered to the Company.

On December 21, 1998, the Board granted options to purchase  2,500,000 shares of
the Company's Common Stock to Mr. Fricke and 500,000 shares to Ms. Yrizarry (Mr.
Fricke's  former  spouse) at an  exercise  price of $.01 per share,  exercisable
until  December 21, 2008 for  remaining and serving as a Director and Officer of
the Company, together with the attendant liability,  after the rest of the Board
and management had resigned.  In 1999, the Company substituted  2,500,000 shares
and  500,000  shares  of  its  Common  Stock  to  Mr.  Frick  and   Ms.Yrizarry,
respectively, in place of these options.

In lieu of cash payment for serving as a member of the Board of  Directors,  the
Board  authorized,  but did not  issue,  options to  purchase  400 shares of the
Company's restricted Common Stock for each meeting attended.  These options were
exercisable  for a period of five (5) years from the date of the  meeting at the
price of $.001 per share.  All three (3) members of the Company's Board attended
each of the  fifteen  (15)  meeting  that were held  during  1999 for options to
purchase a total of 18,000  shares of the  Company's  restricted  Common  Stock.
During 2000,  each of the members of the Company's  Board of Directors  attended
the ten (10)  meetings  for options to purchase a total of 12,000  shares of the
Company's restricted Common Stock. There were no in-person meetings of the Board
of Directors during 2001 or 2002 and no options were awarded. Messrs. Fricke and
Parisi  have  waived  all  rights  under  these  options,   effective  upon  the
consummation of a merger or other combination of SACA and another company.


                                                                              26

<PAGE>

In lieu of  receiving  cash  payments  for his  services  as an  Officer  of the
Company,  in  exchange  for salary  arrearages,  and in exchange  for rent,  the
Company issued 10,000,000 shares of its restricted Common Stock to Mr. Fricke in
1999 and 18,500,000 shares of its restricted Common Stock in 2000.

During  1999,  Dominic  Parisi  purchased  2,400,000  shares  of  the  Company's
restricted  Common Stock for a purchase  price of $72,000 for the benefit of the
Dominic G. Parisi Trust.  During 2000, Mr. Parisi purchased  5,750,000 shares of
the Company's restricted Common Stock for a purchase price of $37,500.

In March and April,  1998,  the  Company  issued its 6%  Convertible  Notes (the
"Notes") in the aggregate  principal  amount of $726,500 in a private  placement
under Rule 505 of Regulation D. Interest on the Notes is payable  semi-annually.
The principal amount of the Notes, together with unpaid interest thereon, is due
and  payable,  if not  earlier  converted,  on  March 3,  1999.  The  Notes  are
convertible  into shares of Common Stock at the option of the holder at any time
following  the  earlier  of (i) 90  days  after  the  filing  of a  registration
statement  with the SEC covering the shares to be received  upon  conversion  or
(ii)  the date the SEC  declares  such  registration  statement  effective.  The
conversion  price per share is the lesser of (i) 70% of the average  closing bid
price  per  share  of  Common  Stock  for the  five  trading  days  prior to the
conversion date or (ii) $0.25. Upon conversion,  any accrued and unpaid interest
is waived by the holder. The Company has the option to repurchase the Notes from
the holder prior to  registration  of the underlying  shares at a premium of 10%
over the purchase  price of the Notes.  The Company  agreed to file with the SEC
not later than June 3, 1998, and use its best efforts to have declared effective
not later than July 3, 1998, a  registration  statement  registering  for resale
them shares that would be issued upon  conversion of the Notes.  The Company has
made no payments on these notes;  has not  repurchased  these  Notes,  and is in
default with regard to its registration obligation.

As of December  31, 2002,  nine (9) holders  have  released the Company from all
obligations  to them under or as a result of the  Convertible  Notes in exchange
for the issuance of a total of  17,178,264  shares of the  Company's  restricted
Common  Stock.  In  addition,  on August 23, 2002,  the Company  entered into an
agreement with one holder to exchange its Convertible  Note for 4,125,000 shares
of the  Company's  Common Stock to be issued  pursuant to 15 U.S.C.A  (0)77c and
Rule 144 with an issue date of March 10, 1998.  This  settlement was consummated
with the  issuance  of these  shares  during the fourth  quarter of 2002.  As of
December 31, 2002,  the Company had also been informed  that two (2)  additional
holders,  representing  a total  of  $50,000  in  principal  and  not  including
interest,  have written off their interests in the Convertible  Notes.  Finally,
the Company  believed  that it had entered into a settlement  with the remaining
holder of a Convertible Note and issued 124,618 shares of its restricted  Common
Stock to consummate that  settlement.  The holder  disclaimed the settlement and
the Company has  requested  that the transfer  agent place a stop order on those
shares.  Consequently,  one  note  held  by (1)  holder  remains  unpaid  in the
principal amount of $25,000.

As  compensation  to the placement  agent,  Alexander,  Wescott & Co, Inc.,  the
Company paid cash fees of 10% of the gross proceeds from the Investor  Notes. In
addition,  the  Company  paid a 3%  nonaccountable  expense  reimbursement,  and
certain other  out-of-pocket  expenses of the agent.  The Company also issued to
the agent  Warrants  exercisable  for  284,600  shares of  Common  Stock,  at an
exercise  price of $.30 per share,  expiring  June 28, 2003. On August 22, 2002,
the Company  entered  into an  agreement  to exchange  this  Warrant for 800,000
shares of the Company's  Common Stock to be issued pursuant to 15 U.S.C.A (0)77c
and  Rule  144  with an  issue  date of March  10,  1998.  This  settlement  was
consummated with the issuance of these shares during the fourth quarter of 2002.

During the second quarter of 2002, in order to facilitate  the Company's  merger
or  other  combination  with  another  company,  the  Company  issued a total of
84,720,733 shares of the Company's restricted stock to Loper & Seymour,  P.A. to
be held in escrow for the benefit of the Company's  future merger or combination
partner.


                                                                              27

<PAGE>

On September 17, 2002,  The Company's  Board of Directors  agreed to sell, as of
June 30, 2002, all of the Company's assets to Environmental  Alternatives,  Inc.
(EAI), a privately held Vermont corporation, in exchange for EAI'S assumption of
and agreement to indemnify and hold the Company harmless from paying any and all
claims,  causes of action,  or other  liabilities,  including but not limited to
interest, costs, expenses, disbursements and attorneys' fees, that could, may or
do attach to the  Company  as of June 30,  2002 as a result of, or is in any way
related to any of the  Company's  obligations  to its  creditors and all adverse
judgments  entered  against the Company except any obligations to the following:
(A) Continental Stock Transfer and Trust Company,  the Company's transfer agent;
Green Holman Frenia & Company,  L.L.P., the Company's former auditors;  (C) Arab
Commerce  Bank, a holder of a Company 6%  Convertible  Note;  and (D) Settlement
amounts due upon the  completion of a merger or other  combination  between SACA
and another  company.  Except as provided  above,  the  agreement  to assume the
Company's liabilities and to indemnify and hold the Company harmless from paying
the same is  unlimited as to amount or as to time.  EAI is owned by Mr.  Kenneth
Hodgdon,  a  former  employee  who  was  responsible  for  the  Company's  daily
operations.  Shareholders  holding a  majority  of the  Company's  common  stock
approved the Agreement by written action in lieu of a shareholder's meeting.

The Company believes that the terms of the transactions  discussed herein are at
least as  favorable  to the  Company  as those  which  the  Company  could  have
negotiated with unaffiliated parties.




























                                                                              28

<PAGE>

Item 13 - Exhibits and Reports on Form 8-K

Exhibits
--------

2.1*     Asset Purchase Agreement and Plan of Reorganization between the Company
         and SAC Delaware dated August 21, 1995
3.1*     Certificate of Incorporation of the Company
3.2*     By-Laws of the Company
3.3***   Amendment  to  Articles  on  Incorporation  increasing  the  number  of
         authorized  shares  of  the  Company's  common  stock  to  one  hundred
         seventy-five million (175,000,000) shares at $0.0001 par value.
4*       Copy of  specimen  certificate  representing  shares of  Common  Stock,
         $.0001 par value per share, of the Company
10.1*    License  Agreement  for  coatings  and  sealants  technologies  between
         Richard B. Kennedy and the Company as licensee dated December 9, 1992
10.2*    License  Agreement  for  packaging  applications  of foam  Technologies
         between Richard B. Kennedy,  Patrick J. Crehan and Richard J. Fricke as
         licensors and the Company as licensee dated December 9, 1992
10.3*    License Agreement for fire retardant  applications of foam Technologies
         between Richard B. Kennedy,  Patrick J. Crehan and Richard J. Fricke as
         licensors and the Company as licensee dated December 9, 1992
10.4*    Amendment to Technology License Agreements of foam Technologies between
         Richard  B.  Kennedy,  Patrick  J.  Crehan  and  Richard  J.  Fricke as
         licensors and the Company as licensee dated August 23, 1993
10.5**   Financial Accord among Rudolph L. Chase,  Raymond C. Chase, and Clement
         H.  Royer,  dated  as of  March  1,  1997,  relating  to  royalties  on
         NaturalCool Technology
10.6**   Agreement  between Natural Cool,  Inc., and the Company dated as of May
         6, 1998, relating to acquisition of assets of Natural Cool, Inc.
10.7**   License  Agreement  between  Rudolph Chase and Raymond  Chase,  and the
         Company dated as of May 6, 1998,  relating to licensing of  NaturalCool
         patent rights
10.8**   Promissory Note of Natural Cool, Inc., guaranteed by the Company, dated
         as of May 6, 1998,  relating to  acquisition of assets of Natural Cool,
         Inc.
10.9**   Bill of Sale of Rudolph  Chase and  Raymond  Chase,  dated as of May 6,
         1998, relating to sale of stock of Natural Cool, Inc. to the Company

10.10**  Bill of Sale of Natural Cool, Inc, dated as of May 6, 1998, relating to
         sale of assets of Natural Cool, Inc. to the Company
10.11+   Agreement by and between  Environmental  Alternatives,  Inc., a Vermont
         corporation,  including  its  successors  and  assigns  and the Company
         transferring  all assets of the Company in exchange for the  assumption
         of all liabilities,  exclusive of certain defined liabilities  retained
         by the Company, as of June 30,2002.

*        Incorporated by reference from the Company's  Registration Statement on
         Form 10-KSB filed December 31, 1996.
**       Incorporated  by reference  from the  Company's  Form 10-KSB for fiscal
         year ended December 31, 1997 and filed as of September 3, 1998.
***      Incorporated  by  reference  from the  Company's  Form  10-QSB  for the
         quarterly period ended June 30, 2001.
+        Incorporated  by reference from the Company's Form 8-K dated October 2,
         2002.

Reports on Form 8-K.
--------------------

October 2, 2002   Approval  of the sale of  assets  by  shareholders  holding  a
                  majority of the Company's outstanding shares.


                                                                              29

<PAGE>

Item 14 - Controls and Procedures

As required by Rule 13a-15 under the Exchange  Act,  within the 90 days prior to
the filing date of this report,  the Company  carried out an  evaluation  of the
effectiveness of the design and operation of the Company's  disclosure  controls
and  procedures.  This evaluation was carried out under the supervision and with
the  participation  of  the  Company's   management,   including  the  Company's
President,  Chief Executive and Financial  Officer.  Based upon that evaluation,
the Company's  President,  Chief Executive and Financial  Officer concluded that
the Company's disclosure controls and procedures are effective.  There have been
no significant  changes in the Company's  internal controls or in other factors,
which could  significantly  affect internal controls  subsequent to the date the
Company carried out its evaluation.

Disclosure  controls and procedures are controls and other  procedures  that are
designed to ensure that information  required to be disclosed in Company reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported,  within the time  periods  specified  in the  Securities  and Exchange
Commission's  rules and  forms.  Disclosure  controls  and  procedures  include,
without limitation,  controls and procedures designed to ensure that information
required to be  disclosed  in Company  reports  filed under the  Exchange Act is
accumulated  and  communicated  to  management,  including the  Company's  Chief
Executive  and  Financial  Officer as  appropriate,  to allow  timely  decisions
regarding required disclosure.


--------------------------------------------------------------------------------


                                   SIGNATURES

Pursuant to the  requirements  of Section 13 or 15(d) of the  Securities  Act of
1933,  the  registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                  Safe Alternatives Corporation of America, Inc.

Date: March 19, 2003                        By:      /s/ Richard J. Fricke
      --------------                           ---------------------------------
                                                               Richard J. Fricke
                                             President, Chief Executive Officer,
                                              Chief Financial Officer & Director


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


Date: March 19, 2003                        By:      /s/ Richard J. Fricke
      --------------                           ---------------------------------
                                                               Richard J. Fricke
                                             President, Chief Executive Officer,
                                            Chief Financial Officer and Director

Date: March 19, 2003                        By:      /s/ Dominic G. Parisi
      --------------                           ---------------------------------
                                                               Dominic G. Parisi
                                                          Secretary and Director


                                                                              30

<PAGE>

                 Certification Pursuant to 18 USC, Section 1350,
  as Adopted Pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002


In connection  with the Quarterly  Report of Safe  Alternatives  Corporation  of
America,  Inc. (Registrant) on Form 10-KSB for the year ended December 31, 2002,
as filed with the Securities  and Exchange  Commission,  on the date hereof,  I,
Richard J. Fricke,  Chief Executive and Chief Financial  Officer of the Company,
certify  to the  best of my  knowledge,  pursuant  to 18 USC  1350,  as  adopted
pursuant  to ss.302 and  promulgated  as 18 USC 1350  pursuant  to ss.906 of the
Sarbanes-Oxley Act of 2002, that:

(5)  I have  reviewed  this Annual  Report on Form  10-KSB of Safe  Alternatives
     Corporation of America, Inc. for the year ended December 31, 2002.

(6)  Based on my  knowledge,  this  Annual  Report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

(7)  Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this Annual Report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this Annual Report;

(8)  The Registrant's other certifying  officers,  if any, and I are responsible
     for  establishing  and maintaining  disclosure  controls and procedures (as
     defined in Exchange  Act Rules  13a-14 and 15d-14) for the  Registrant  and
     have:

     (1)  designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  Registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this Annual Report
          is being prepared;
     (2)  evaluated the  effectiveness of the Registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this Annual Report (the "Evaluation Date"); and
     (3)  presented   in  this   Annual   Report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

(9)  The Registrant's other certifying  officers,  if any, and I have disclosed,
     based on our most recent evaluation,  to the Registrant's  auditors and the
     audit committee of registrant's  board of directors (or persons  performing
     the equivalent functions):

     (1)  all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  Registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  Registrant's  auditors any material  weaknesses in
          internal controls; and
     (2)  any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  Registrant's  internal
          controls; and

(10) The Registrant's other certifying officers, if any, and I have indicated in
     this  Annual  Report  whether  or not there  were  significant  changes  in
     internal  controls  or in other  factors  that could  significantly  affect
     internal  controls  subsequent  to the date of our most recent  evaluation,
     including any corrective  actions with regard to  significant  deficiencies
     and material weaknesses.


   /s/ Richard J. Fricke                                   Dated: March 19, 2003
---------------------------                                       --------------
Richard J. Fricke
Chief Executive Officer and
Chief Financial Officer
                                                                              31

<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.

                                    CONTENTS


                                                                            Page
                                                                            ----
Report of Independent Certified Public Accountants
   S. W. Hatfield, CPA                                                      F-2
   Green, Holman, Frenia and Company, L.L.P.                                F-3

Financial Statements

   Balance Sheets
     as of December 31, 2002 and 2001                                       F-4

   Statement of Operations and Comprehensive Loss
     for the years ended December 31, 2002 and 2001                         F-5

   Statement of Changes in Stockholders' Equity
     for the years ended December 31, 2002 and 2001                         F-6

   Statement of Cash Flows
     for the years ended December 31, 2002 and 2001                         F-7

   Notes to Financial Statements                                            F-8
















                                                                             F-1

<PAGE>

S. W. HATFIELD, CPA certified public accountants

Member:    Texas Society of Certified Public Accountants
           Press Club of Dallas


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
               --------------------------------------------------



Board of Directors and Stockholders
Safe Alternatives Corporation of America, Inc.

We have audited the accompanying balance sheet of Safe Alternatives  Corporation
of America, Inc. (a Florida corporation) as of December 31, 2002 and the related
statement of operations and comprehensive loss, changes in stockholders' deficit
and cash flows for the year ended December 31, 2002. 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  audit.  The
financial statements of Safe Alternatives Corporation of America, Inc. as of and
for the year ended December 31, 2001 were audited by other auditors whose report
was dated January 28, 2002 and included a paragraph expressing substantial doubt
about Safe Alternatives  Corporation of America, Inc.'s ability to continue as a
going concern.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit 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  audit  provides  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 Alternatives  Corporation
of America,  Inc. as of December 31, 2002 and results of its operations and cash
flows for the year ended  December 31, 2002,  respectively,  in conformity  with
generally accepted accounting principles generally accepted in the United States
of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note C to the
financial statements,  as of June 30, 2002, the Company has no viable operations
or significant assets and is dependent upon significant  shareholders to provide
sufficient  working  capital to maintain the integrity of the corporate  entity.
These  circumstances  create  substantial  doubt about the Company's  ability to
continue  as a  going  concern  and are  discussed  in  Note  C.  The  financial
statements do not contain any adjustments  that might result from the outcome of
these uncertainties.




                                                             S. W. HATFIELD, CPA
Dallas, Texas
March 18, 2003



                      Use our past to assist your future sm
(secure mailing address)                   (overnight delivery/shipping address)
P. O. Box 820395                               9002 Green Oaks Circle, 2nd Floor
Dallas, Texas  75382-0395                               Dallas, Texas 75243-7212
214-342-9635 (voice)                                          (fax) 214-342-9601
800-244-0639                                                      SWHCPA@aol.com

                                                                             F-2

<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders
Safe Alternatives Corporation of America, Inc.

We  have  audited  the  accompanying   statements  of  operations,   changes  in
stockholders'  deficit  and  cash  flows  of Safe  Alternatives  Corporation  of
America,  Inc. as of December 31, 2001 and the related  statement of operations,
changes in stockholders'  deficit and cash flows for the year 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 audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit 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 audit provides 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 Alternatives  Corporation
of  America,  Inc. as of  December  31, 2001 and the results of its  operations,
stockholders' deficit and cash flows for the year then ended, in conformity with
generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern. As more fully described in Note C, the
Company  has  incurred  recurring  operating  losses  and has a working  capital
deficiency. These conditions raise substantial doubt about the Company's ability
to continue as a going  concern.  The  financial  statements  do not include any
adjustments  to reflect the possible  future effects on the  recoverability  and
classifications of assets or the amounts and classifications of liabilities that
may result from the outcome of this uncertainty.


                                        GREEN, HOLMAN, FRENIA AND COMPANY L.L.P.
                                        Certified Public Accountants

Woodbridge, New Jersey
January 28, 2002



                                                                             F-3

<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                                  BALANCE SHEET
                                December 31, 2002


                                                                   December 31,
                                                                       2002
                                     ASSETS                        ------------
                                     ------
Current Assets
   Cash on hand and in bank                                        $       --
                                                                   ------------
     Total current assets                                                  --
                                                                   ------------

TOTAL ASSETS                                                       $       --
                                                                   ============


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                 ----------------------------------------------

Current Liabilities
   Accounts payable - trade                                        $     20,939
   Accrued interest payable                                               7,216
                                                                   ------------

     Total current liabilities                                           28,155
                                                                   ------------


Commitments and contingencies


Convertible notes payable                                                25,000
                                                                   ------------


Stockholders' Equity (Deficit)
   Common stock - $0.0001 par value
     175,000,000 shares authorized
     165,853,058 shares issued and outstanding                            8,113
   Additional paid-in capital                                        22,801,891
   Accumulated deficit                                              (22,865,318)
                                                                   ------------
                                                                        (55,314)
   Subscriptions issuable                                                 2,160
   Treasury stock - at cost (11,682 shares)                                  (1)
                                                                   ------------

     Total stockholders' equity (deficit)                               (53,155)
                                                                   ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $       --
                                                                   ============


The accompanying notes are an integral part of these financial statements.
                                                                             F-4

<PAGE>
<TABLE>
<CAPTION>

                              SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                 STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                                  Years ended December 31, 2002 and 2001


                                                             Year ended      Year ended
                                                            December 31,    December 31,
                                                                2002            2001
                                                            ------------    ------------
<S>                                                         <C>             <C>

Revenues - net                                              $       --      $       --
   Cost of Sales                                                    --              --
                                                            ------------    ------------
Gross Profit                                                        --              --
                                                            ------------    ------------

Operating Expenses
   Selling, general and administrative expenses                   20,183            --
   Interest expense                                               10,952          40,590
   Compensation expense related to common stock issuances
     at less than "fair value"                                 4,920,923            --
   Cost of converting outstanding warrant to common stock             80            --
   Depreciation and amortization                                    --              --
                                                            ------------    ------------
     Total operating expenses                                  4,952,138         (40,590)
                                                            ------------    ------------

Loss from continuing operations
   before other income and provision for income taxes         (4,952,138)        (40,590)

Other income
   Forgiveness of convertible debentures                            --            56,000
   Litigation settlement                                                       - 140,000
                                                            ------------    ------------
Income (Loss) before provision for income taxes               (4,952,138)        155,410

Income tax benefit (expense)                                        --              --
                                                            ------------    ------------
Loss before discontinued operations                           (4,952,138)        155,410

Discontinued operations, net of income taxes
   Loss from discontinued operations,
     net of income taxes of $-0- and $-0-, respectively          (14,430)         (7,896)
   Loss on troubled debt restructuring                              --          (273,649)
   Forgiveness of trade accounts payable,
     net of income taxes of $-0- and $-0-, respectively            9,591            --
   Loss on disposition, net of income taxes of $-0-
     and $-0-, respectively                                      (24,195)           --
                                                            ------------    ------------
   Loss from discontinued operations                             (29,034)       (281,545)
                                                            ------------    ------------

Net Loss                                                      (4,981,172)       (126,135)
Other comprehensive income                                          --              --
                                                            ------------    ------------

Comprehensive Loss                                          $ (4,962,669)   $   (126,135)
                                                            ============    ============

Netloss per weighted-average share of common stock
   outstanding, calculated on  Net Loss -
   basic and fully diluted
     From continuing operations                             $      (0.04)            nil
     From discontinued operations                                   0.00             nil
                                                            ------------    ------------
       Total                                                $      (0.04)            nil
                                                            ============    ============

Weighted-average number of shares
   of common stock outstanding                               123,509,578      56,580,960
                                                            ============    ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
                                                                             F-5

<PAGE>
<TABLE>
<CAPTION>
                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
             STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                     Years ended December 31, 2002 and 2001

                                           Common Stock             Additional
                                    ----------------------------      paid-in        Accumulated    Subscription
                                       Shares          Amount         capital          deficit        issuable
                                    ------------    ------------    ------------    ------------    ------------
<S>                                   <C>           <C>             <C>             <C>             <C>
Balances at January 1, 2001,
   as reported                        54,580,960    $    110,747    $ 15,528,674    $(17,528,011)   $      2,160
Adjustment to correct
   par value calculation                    --          (105,289)        105,289            --              --
                                    ------------    ------------    ------------    ------------    ------------

Balances at January 1, 2001,
   as adjusted                        54,580,960           5,458      15,633,963     (17,528,011)          2,160

Issuance of common stock for
   Conversion of related
     party debt                        4,000,000             400       1,378,956            --              --
Prior period adjustment                     --              --              --          (230,000)           --

Net loss for the year                       --              --              --          (126,135)           --
                                    ------------    ------------    ------------    ------------    ------------

Balances at
   December 31, 2001                  58,580,960           5,858      17,012,919     (17,884,146)          2,160

Issuance of common stock for
   Conversion of debentures
     and accrued interest             21,303,264           2,130       5,325,969            --              --
   Settlement of accounts payable        448,101              45         448,053            --              --
   Cancellation of warrant               800,000              80            --              --              --
   Prospective acquisition            84,720,733            --              --              --              --

Capital contributed to
   support operations                       --              --            14,950            --              --

Net loss for the year                       --              --              --        (4,981,172)           --
                                    ------------    ------------    ------------    ------------    ------------

Balances at
   December 31, 2002                 165,853,058    $      8,113    $ 22,801,891    $(22,865,318)   $      2,160
                                    ============    ============    ============    ============    ============

                                          Treasury Stock
                                    ----------------------------
                                       Shares          Amount          Total
                                    ------------    ------------    ------------
Balances at January 1, 2001,
   as reported                           (11,682)   $         (1)   $ (1,886,431)
Adjustment to correct
   par value calculation                    --              --              --
                                    ------------    ------------    ------------

Balances at January 1, 2001,
   as adjusted                           (11,682)             (1)     (1,886,431)

Issuance of common stock for
   Conversion of related
     party debt                             --              --         1,379,356
Prior period adjustment                     --              --          (230,000)

Net loss for the year                       --              --          (126,135)
                                    ------------    ------------    ------------

Balances at
   December 31, 2001                     (11,682)             (1)       (863,210)

Issuance of common stock for
   Conversion of debentures
     and accrued interest                   --              --         5,328,099
   Settlement of accounts payable           --              --           448,098
   Cancellation of warrant                  --              --                80
   Prospective acquisition                  --              --              --

Capital contributed to
   support operations                       --              --            14,950

Net loss for the year                       --              --        (4,981,172)
                                    ------------    ------------    ------------

Balances at
   December 31, 2002                     (11,682)   $         (1)   $    (53,155)
                                    ============    ============    ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
                                                                             F-6

<PAGE>
<TABLE>
<CAPTION>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                            STATEMENTS OF CASH FLOWS
                     Years ended December 31, 2002 and 2001


                                                                 Year ended      Year ended
                                                                December 31,    December 31,
                                                                    2002            2001
                                                                ------------    ------------
<S>                                                             <C>             <C>
Cash Flows from Operating Activities
   Net loss for the period                                      $ (4,981,172)   $   (126,135)
   Adjustments to reconcile net loss to net cash
     provided by operating activities
       Depreciation                                                    3,791           7,582
       Compensation expense related to common
         stock issuances at less than "fair value"                 4,920,923            --
       Cost of converting outstanding warrant to common stock             80            --
       Loss on disposition of discontinued operations                 24,195            --
       Forgiveness of trade accounts payable                          (9,591)           --
       Loss on troubled debt restructuring                              --           273,649
       Litigation settlement                                            --          (140,000)
       Forgiveness of convertible debentures                            --           (56,000)
       (Increase) Decrease in
         Current assets of discontinued operations                       639           7,487
       Increase (Decrease) in
         Current liabilities of discontinued operations               (6,903)        (13,214)
         Accounts payable - trade                                     20,939            --
         Accrued interest payable                                     10,952          40,590
                                                                ------------    ------------
Net cash used in operating activities                                (16,147)         (6,041)
                                                                ------------    ------------

Cash Flows from Investing Activities                                    --              --
                                                                ------------    ------------

Cash Flows from Financing Activities
   Cash contributed to support operations                             14,950            --
                                                                ------------    ------------
Net cash provided by financing activities                             14,950
                                                                ------------

Increase (Decrease) in Cash                                           (1,197)         (6,041)

Cash at beginning of period                                            1,197           7,238
                                                                ------------    ------------

Cash at end of period                                           $       --      $      1,197
                                                                ============    ============

Supplemental Disclosure of
   Interest and Income Taxes Paid
     Interest paid for the period                               $       --      $       --
                                                                ============    ============
     Income taxes paid for the period                           $       --      $       --
                                                                ============    ============

Supplemental Disclosure of Non-cash
   investing and financing activities
     Common stock issued for retirement of debt                 $    651,500    $    926,900
                                                                ============    ============
     Common stock issued in payment of accrued interest         $    157,273    $    222,456
                                                                ============    ============
     Common stock issued in payment of accounts payable         $     46,501    $       --
                                                                ============    ============
</TABLE>


The accompanying notes are an integral part of these financial statements.
                                                                             F-7

<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.

                          NOTES TO FINANCIAL STATEMENTS


NOTE A - Organization and Description of Business

Safe Alternatives  Corporation of America, Inc. (Company) was organized in 1976,
under  the name  Knight  Airlines,  Inc.,  to  engage  in the  commuter  airline
business.  In October 1978, the Company  completed an initial public offering of
its Common Stock in Florida,  pursuant to an exemption from  registration  under
Regulation A  promulgated  under the  Securities  Act of 1933,  as amended.  The
Company  operated as a commuter  airline from its inception  through April 1983,
when it ceased  operations  and all of the  assets of the  Company  were sold to
satisfy all outstanding  indebtedness.  From April 1983, through September 1995,
the Company  was  dormant.  In May 1994,  the name of the Company was changed to
Portsmouth Corporation.

On September 15, 1995,  pursuant to the terms of an Asset Purchase Agreement and
Plan of  Reorganization  dated as of August 21, 1995 (the  "Agreement")  between
Safe  Alternatives   Corporation  of  America,   Inc.,  a  Delaware  corporation
("SAC-Delaware")  and the  Company,  the Company  purchased  the  business  (the
"Business"),  including,  without limitation, all of the assets of SAC-Delaware,
and assumed all of the liabilities of SAC- Delaware (the "Reorganization"),  and
commenced operations. Prior to the Reorganization, the Company had no meaningful
operations.  On March 4, 1996, the Company changed its name to Safe Alternatives
Corporation of America, Inc. (a Florida corporation).


NOTE B - Preparation of Financial Statements

The  Company  follows  the  accrual  basis  of  accounting  in  accordance  with
accounting principles generally accepted in the United States of America and has
a year-end of December 31.

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America 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.

Management further acknowledges that it is solely responsible for adopting sound
accounting  practices,   establishing  and  maintaining  a  system  of  internal
accounting  control and preventing and detecting  fraud. The Company's system of
internal  accounting  control is designed to assure,  among other items, that 1)
recorded  transactions  are valid; 2) valid  transactions  are recorded;  and 3)
transactions  are  recorded in the proper  period in a timely  manner to produce
financial  statements which present fairly the financial  condition,  results of
operations  and cash  flows of the  Company  for the  respective  periods  being
presented.









                (Remainder of this page left blank intentionally)



                                                                             F-8

<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE C - Going Concern Uncertainty

On September 17, 2002,  the Board of Directors of the Company agreed to sell, as
of June 30, 2002, of all of the Company's assets to Environmental  Alternatives,
Inc.  ("EAI"),  a privately  held  Vermont  corporation,  in exchange  for EAI's
assumption  of and  agreement to indemnify  and hold the Company  harmless  from
paying any and all claims, causes of action, or other liabilities, including but
not limited to interest,  costs,  expenses,  disbursements  and attorneys' fees,
that  could,  may or does  attach to the Company as of June 30, 2002 as a result
of,  or is in  any  way  related  to any of  the  Company's  obligations  to its
creditors  and all adverse  judgments  entered  against  the Company  except any
obligations to the following:  (A) Continental Stock Transfer and Trust Company,
the Company's  independent  stock transfer agent;  (B) Green,  Holman,  Frenia &
Company,  L.L.P., the Company's former independent  auditors;  (C) Arab Commerce
Bank, a holder of a 6% Convertible Note; and (D) any settlement amounts due upon
the completion of a merger or other combination  between the Company and another
company.  Except as  provided  above,  the  agreement  to assume  the  Company's
liabilities and to indemnify and hold the Company  harmless from paying the same
is unlimited as to amount or as to time.  A copy of the  Agreement  was filed by
the Company as an exhibit in a Current  Report on Form 8-K as of  September  17,
2002.

EAI is owned by Mr. Kenneth  Hodgdon,  an employee who was  responsible  for the
Company's  daily  operations.  The  Company  was in the  business  of  marketing
AmeriStripTM,  a paint stripper, and assembling and marketing NaturalCoolTM,  an
air  circulation  system.  The assets  purchased  include the  AmeriStripTM  and
NaturalCoolTM patents, the formula for a water-based foam product, furniture and
fixtures,  equipment,  leasehold  improvements,  accounts  receivable,  works in
progress,  and the Company's name. The  liabilities  assumed include but are not
limited to accounts payable and a judgment.  Shareholders  holding a majority of
the Company's common stock approved the Agreement by written action in lieu of a
shareholder's meeting.

Accordingly,  as of July 1, 2002,  the Company has no assets or  operations  and
intends to seek a suitable  business  combination  transaction  through either a
purchase or merger.  The  Company's  continued  existence is dependent  upon its
ability to generate  sufficient  cash flows from operations to support its daily
operations  as  well  as  provide   sufficient   resources  to  retire  existing
liabilities and obligations on a timely basis.

The Company  anticipates  issuing  additional  equity securities to facilitate a
business  combination  transaction  with another  entity.  However,  there is no
assurance that the Company will be able to consummate such a transaction or that
such transaction,  if available, will be done on terms favorable to the existing
shareholders or affordable by the Company.

If no additional  operating  capital is received  during the next twelve months,
the  Company  will be  forced  to rely on  existing  cash in the  bank  and upon
additional  funds  loaned  by  management  and/or  significant  stockholders  to
preserve the  integrity of the  corporate  entity at this time. In the event the
Company  is  unable to  acquire  advances  from  management  and/or  significant
stockholders, the Company's ongoing operations would be negatively impacted.

It  is  the  intent  of  management  and  significant  stockholders  to  provide
sufficient  working  capital  necessary to support and preserve the integrity of
the corporate entity.  However, no formal commitments or arrangements to advance
or loan funds to the Company or repay any such advances or loans exist. There is
no legal obligation for either management or significant stockholders to provide
additional future funding.




                                                                             F-9

<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE C- Going Concern Uncertainty - Continued

The Company has no assets,  several liabilities and no operations,  our auditors
have  issued a review  report on the  accompanying  financial  statements  which
includes a statement  describing our going concern  status.  This means,  in our
auditor's  opinion,  substantial  doubt about our ability to continue as a going
concern exists at the date of their opinion.

While the Company is of the opinion that good faith  estimates of the  Company's
ability to secure additional  capital in the future to reach our goals have been
made, there is no guarantee that the Company will receive  sufficient funding to
sustain operations or implement any future business plan steps.


NOTE D - Discontinued Operations

As  discussed  in Note C, the  Company  disposed  of all  operating  activities,
effective of July 1, 2002, on September 17, 2002.

The results of the Company's operations for the respective periods presented are
reported  as a  component  of  discontinued  operations  in  the  statements  of
operations.  Additionally,  the respective  gain or loss incurred on the sale of
the  Company's  operations  are also  presented  separately  as a  component  of
discontinued operations.

Summarized results of operations for the disposed operations for the years ended
December 31, 2002 and 2001, are as follows:

                                                    Year ended      Year ended
                                                   December 31,    December 31,
                                                       2002            2001
                                                   ------------    ------------

     Net sales                                     $     33,147    $     88,286
                                                   ============    ============
     Operating income (loss)                       $    (14,430)   $     (7,896)
                                                   ============    ============
     Loss from discontinued operations             $    (14,430)   $   (126,135)
                                                   ============    ============


NOTE E - Summary of Significant Accounting Policies

1.   Cash and cash equivalents
     -------------------------

     For  Statement of Cash Flows  purposes,  the Company  considers all cash on
     hand  and  in  banks,  including  accounts  in  book  overdraft  positions,
     certificates of deposit and other highly-liquid investments with maturities
     of three months or less, when purchased, to be cash and cash equivalents.

2.   Income Taxes
     ------------

     The Company uses the asset and liability  method of  accounting  for income
     taxes. At December 31, 2002 and 2001, respectively,  the deferred tax asset
     and deferred  tax  liability  accounts,  as recorded  when  material to the
     financial  statements,  are entirely  the result of temporary  differences.
     Temporary  differences  represent  differences in the recognition of assets
     and  liabilities  for  tax  and  financial  reporting  purposes,  primarily
     accumulated depreciation and amortization,  allowance for doubtful accounts
     and vacation accruals.


                                                                            F-10

<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE E - Summary of Significant Accounting Policies - Continued

o    Income Taxes
     ------------
     As of December 31, 2002 and 2001,  the  deferred  tax asset  related to the
     Company's net operating loss  carryforward  is fully  reserved.  Due to the
     provisions  of Internal  Revenue  Code  Section  338,  the Company may have
     limited net  operating  loss  carryforwards  available to offset  financial
     statement or tax return  taxable  income in future periods as a result of a
     Fiscal 2000 change in control involving 50 percentage points or more of the
     issued and outstanding securities of the Company.

3.   Income (Loss) per share
     -----------------------

     Basic  earnings  (loss) per share is computed  by  dividing  the net income
     (loss)  by  the   weighted-average   number  of  shares  of  common   stock
     outstanding.  The  calculation of fully diluted  earnings  (loss) per share
     assumes the  dilutive  effect of the  exercise of  outstanding  options and
     warrants,  using the treasury stock method,  at either the beginning of the
     respective period presented or the date of issuance, whichever is later. As
     of December 31, 2002 and 2001, respectively, the Company has no outstanding
     stock warrants, options or convertible securities which could be considered
     as dilutive for purposes of the loss per share calculation.


NOTE F - Fair Value of Financial Instruments

The carrying amount of cash,  accounts  receivable,  accounts  payable and notes
payable, as applicable,  approximates fair value due to the short term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.

Interest  rate risk is the risk  that the  Company's  earnings  are  subject  to
fluctuations  in interest  rates on either  investments  or on debt and is fully
dependent  upon  the  volatility  of  these  rates.  The  Company  does  not use
derivative instruments to moderate its exposure to interest rate risk, if any.

Financial  risk  is  the  risk  that  the  Company's  earnings  are  subject  to
fluctuations in interest rates or foreign exchange rates and are fully dependent
upon the  volatility  of  these  rates.  The  company  does  not use  derivative
instruments to moderate its exposure to financial risk, if any.


NOTE G - Convertible Notes Payable

On March 10, 1998, the Company  entered into an Agency  Agreement with Alexander
Wescott & Co., Inc. (AWC) for the offer and sale of 6% Convertible  Notes,  with
maximum gross proceeds not to exceed $1,000,000.

In March and April  1998,  the  Company  issued  its 6%  Convertible  Notes (the
"Notes") in the aggregate  principal  amount of $726,500 in a private  placement
under  Rule 505 of  Regulation  D. The Notes  bear  interest  at 6.0% per annum,
payable semi-annually in arrears, in cash or, at the Company's option, in shares
of Common Stock of the Company. The notes mature on the earlier of (i) the first
anniversary of the initial  closing of the proposed offer (April 10, 1999),  and
(ii) a sale of all or  substantially  all of the  Company's  assets or a merger,
acquisition  or  consolidation  in  which  the  Company  is  not  the  surviving
corporation.  The notes rank senior to all other indebtedness of the Company now
or hereafter  existing,  other than  indebtedness to banks, in terms of priority
and security.


                                                                            F-11

<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE G - Convertible Notes Payable - Continued

The Notes are  convertible  into  shares  of Common  Stock at the  option of the
holder at any time  following  the  earlier of (i) 90 days after the filing of a
registration  statement with the U. S. Securities and Exchange  Commission (SEC)
covering  the shares to be  received  upon  conversion  or (ii) the date the SEC
declares such registration  statement effective.  The conversion price per share
is the lesser of (i) 70% of the  average  closing  bid price per share of Common
Stock for the five trading days prior to the conversion date or (ii) $0.25. Upon
conversion, any accrued and unpaid interest is waived by the holder. The Company
has the option to repurchase the Notes from the holder prior to  registration of
the underlying  shares at a premium of 10% over the purchase price of the Notes.
The Company agreed to file a registration  statement with the SEC not later than
June 3,  1998,  and use its  best  efforts  to have the  registration  statement
declared effective not later than July 3, 1998. The Company has made no payments
on these notes;  has not repurchased  these Notes, and is in default with regard
to its registration obligation

AWC received a commission of 10% plus 3% non-accountable  expense  reimbursement
on the gross proceeds raised. In addition,  AWC was issued warrants  exercisable
for  400,000  shares of Common  Stock at an  exercise  price of $0.30 per share,
expiring  June 28, 2003.  On September  30, 2002,  the Company and AWC reached a
settlement  agreement  whereby AWC agreed to cancel the  outstanding  warrant in
exchange for 800,000 shares of restricted,  unregistered shares of the Company's
common stock.

As of December 31, 2001 two note holders with notes  totaling  $50,000  notified
the Company that they have written off the balances  owed to them by the Company
and  therefore  have  discharged  the Company from any further  liability.  As a
result  the  Company  recognized  a  $56,000  forgiveness  of debt  income as of
December 31, 2001, which includes $6,000 of accrued interest.

During 2002, all but one (1) of the Holders of the foregoing  Convertible Notes,
totaling  approximately  $651,500,  agreed to release all obligations  under the
Convertible  Notes,  including  accrued interest of approximately  $157,273,  in
exchange for the issuance of an aggregate of  21,303,264  shares of  restricted,
unregistered shares of the Company's common stock.

As of December 31, 2002, only one (1)  Convertible  Note was outstanding and the
Company was in default on the outstanding  amounts of  approximately  $25,000 in
principal and approximately $7,216 in accrued interest.


NOTE H - Income Taxes

The components of income tax (benefit) expense,  on continuing  operations,  for
the years ended December 31, 2002 and 2001, respectively, are as follows:

                                                     December 31,   December 31,
                                                         2002           2001
                                                     ------------   ------------
     Federal:
       Current                                       $       --     $       --
       Deferred                                              --             --
                                                     ------------   ------------
                                                             --             --
                                                     ------------   ------------
     State:
       Current                                               --             --
       Deferred                                              --             --
                                                     ------------   ------------
                                                             --             --
                                                     ------------   ------------
       Total                                         $       --     $       --
                                                     ============   ============

                                                                            F-12

<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE H - Income Taxes - Continued

As of December 31, 2002,  the Company has a net operating loss  carryforward  of
approximately  $9,500,000 to offset future  taxable  income.  Subject to current
regulations,  this  carryforward  will  begin to expire in 2007.  The amount and
availability  of  the  net  operating  loss  carryforwards  may  be  subject  to
limitations set forth by Section 338 of the Internal Revenue Code.  Factors such
as the number of shares ultimately issued within a three year look- back period;
whether there is a deemed more than 50 percent change in control; the applicable
long-term  tax  exempt  bond  rate;  continuity  of  historical  business;   and
subsequent  income of the  Company  all enter  into the  annual  computation  of
allowable annual utilization of the carryforwards.

The Company's income tax expense for the years ended December 31, 2002 and 2001,
respectively, are as follows:

                                                    Year ended      Year ended
                                                   December 31,    December 31,
                                                       2002            2001
                                                   ------------    ------------
Statutory rate applied to
    income before income taxes                     $ (1,694,000)   $    (43,000)
Increase (decrease) in income
   taxes resulting from:
     State income taxes                                    --              --
     Other, including reserve for
       deferred tax asset and
       application of net operating
       loss carryforward                              1,694,000          43,000
                                                   ------------    ------------

       Income tax expense                          $       --      $       --
                                                   ============    ============

Temporary  differences,  consisting primarily of statutory deferrals of expenses
for organizational costs and statutory  differences in the depreciable lives for
property and equipment, between the financial statement carrying amounts and tax
bases of assets and liabilities give rise to deferred tax assets and liabilities
as of December 31, 2002 and 2001, respectively:

                                                   December 31,    December 31,
                                                       2002            2001
                                                   ------------    ------------
     Deferred tax assets
       Net operating loss carryforwards            $  3,230,000    $  3,100,000
       Less valuation allowance                      (3,230,000)     (3,100,000)
                                                   ------------    ------------

     Net Deferred Tax Asset                        $       --      $       --
                                                   ============    ============

During the years ended December 31, 2002 and 2001, respectively, the reserve for
the deferred current tax asset did not significantly change.


NOTE I - Common Stock Transactions

During the year  ended  December  31,  2002,  the  Company  issued an  aggregate
21,303,264  shares of restricted,  unregistered  shares of the Company's  common
stock in settlement of approximately $651,000 in face amount of 6.0% Convertible
Notes and accrued interest of approximately $157,273.


                                                                            F-13

<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE I - Common Stock Transactions - Continued

During the year ended  December 31, 2002,  the Company  issued 448,101 shares of
restricted, unregistered common stock to various unsecured creditors in exchange
for their release of any further claims related to trade accounts payable. These
transactions  were valued at  approximately  $448,100,  including a "fair value"
adjustment  of  approximately  $410,597 for shares issued at less than the "fair
value"  of  the  shares  based  on  the  valuation   established  by  equivalent
transactions on equivalent dates.

Effective  September 30, 2002,  the Company issued 800,000 shares of restricted,
unregistered  common  stock in exchange  for the  retirement  of an  outstanding
warrant to  purchase up to 400,000  shares of the  Company's  common  stock at a
price of $0.30 per share, expiring June 28, 2003. This transaction was valued at
approximately  $80, which  approximates the "fair value" of the Company's common
stock on the date of the transaction.

During July 2002, in order to facilitate the Company's  merger or other business
combination  transaction  with another  company,  the Company  issued a total of
84,720,733 shares of the Company's  unregistered,  restricted common stock to be
held in escrow for the benefit of the Company's  merger or combination  partner.
No value has been  assigned  to this  issuance  pending  the  consummation  of a
business combination transaction.


NOTE J - Treasury Stock

Treasury stock  represents  11,682 shares (recorded at cost) being held in trust
to be used for future  issuance to  employees,  investors,  and other  potential
funding sources.  As the Company directly  benefits from the sales of the shares
in the trust, these shares have been recorded as treasury stock.




                                                                            F-14