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, 2003

[_]      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)
                         2614 Main St., Dallas, TX 75226
                         -------------------------------
                    (Address of principal executive offices)

                                 (214) 670-0005
                                 --------------
                           (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, 2003 was $-0-.

The aggregate market value of voting common equity held by  non-affiliates as of
December 31, 2003 was approximately $1,744,641.  This determination of affiliate
status is not necessarily a conclusive determination for other purposes.

As of December 31, 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, Related Stockholders
           Matters and Small Business Issuer Purchases of Equity
           Securities                                                      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
Item 8A     Controls and Procedures

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    Principal Accountant Fees and Services

Signatures                                                                 27

Certifications pursuant to Sarbanes-Oxley Act of 2002                      29






<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.

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
(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.




                                                                               3
<PAGE>

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 Norfield 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
operations.

The  Company  intends to locate and  combine  with an  existing,  privately-held
company which, 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.



                                                                               4
<PAGE>

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.  On May 14,  2004,  Company  had  entered  into a
conditional Letter of Intent with Mortgage Assistance  Corporation  concerning a
prospective  business  combination.  No assurance  can be given that this or any
other  business  combination,  which  might  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 has been directed toward small sized  enterprises that have
a desire  to  become  public  corporations.  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.

No one factor 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.



                                                                               5
<PAGE>

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 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 measures, 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 will 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 of 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 diluted of other shareholder's  interest in the
Company.

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.



                                                                               6
<PAGE>

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 use by  another  company  within  the
business opportunity.

Employees
---------

As of  December  31,  2003,  and  subsequent  thereto,  the  Company had no paid
employees.  None of the Company's  employees  have been  represented  by a labor
organization.  Due to the lack of ongoing business operations, the Company's two
(2)  officers  spend up to  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
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 Executive Compensation, 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.

Need for Additional Financing.  The Company has no funds, and we may not be able
to take advantage of any available business  opportunity.  Even if the Company's
future 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



                                                                               7
<PAGE>

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 Binding Agreement with Specific Business and Highly Risky. As of December 31,
2003,  the Company  had not entered  into any formal  written  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.  On May 14,  2004,  we entered into a Letter of
Intent with Mortgage Assistance  Corporation.  This is a contingent  transaction
which is not binding on the parties until a definitive  acquisition agreement is
executed.

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.

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 continued eligibility for listing NASD Electronic Bulletin Board. 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.




                                                                               8
<PAGE>

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 Company's
officers and  directors  of the Company may resign.  A decision to resign may 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.  On March 5,  2004,  Messrs.  Fricke  and  Parisi
resigned appointing Dale Hensel as successor director and president.

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. (See Item 10-Executive Compensation)

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
losses.  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 any business opportunity acquired through a
leveraged  transaction  will generate  sufficient  revenues to cover the related
debt and expenses.

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.



                                       9
<PAGE>

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. During 2003, we maintained corporate
offices at 440 Main Street,  Ridgefield  Connecticut  06877, which was then, the
law office of the Company's President, Richard J. Fricke.

Item 3 - Legal Proceedings

Proceedings Settled in 2003

Matter No. 1:
-------------
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.  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.  This matter was settled on June 30,
2003.

Matter No. 2:
-------------
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.
This matter was settled on December 3, 2003.

Other  than set  forth  herein  and to our best  knowledge,  there  are no legal
actions pending against the Company.

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, 2003.

PART II

Item 5 - Market for Common  Equity and  Related  Stockholder  Matters  and Small
Business Issuer Purchases of Equity Securities

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

There has not been an active market for the Company's securities.  The Company's
Common Stock was quoted on the NASD Over the Counter Bulletin Board.

A range of high and low  quotations  for each quarter for the  Company's  Common
Stock for fiscal  years  2002 and 2003 are listed  below.  The  information  was
obtained from the NASD OTC Electronic Bulletin Board (www.otcbb.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.



                                                                              10
<PAGE>

                                          2003                     2002
                                     -------------            --------------
                                   Low         High          Low           High
                                 -------      ------       -------        ------

         First Quarter           $0.001        $0.001      $0.002         $0.009
         Second Quarter          $0.001       $0.0045      $0.004         $0.006
          Third Quarter          $0.001        $0.001      $0.0001        $0.005
         Fourth Quarter          $0.001       $0.0013      $0.0001        $0.002

The Company had approximately  1,334 holders of record of its Common Stock as of
December 31, 2003.

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

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      None
---------------------------------------

Small Business Issuer Purchases of Equity Securities: None
-----------------------------------------------------

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

General

The Company had no business operations during 2003.

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.

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, 2003 and 2002

During 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.




                                                                              11
<PAGE>

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  ceased
operations.

Liquidity and Capital Resources

The Company 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,  2003,  the  Company  had  current  assets  of  $-0-  and  current
liabilities  of $1,927.  At December 31, 2002, the Company had current assets of
$-0- and current liabilities of $28,155.  The Company's ability to continue as a
going concern in the near term is dependent upon obtaining additional financing.

As of  December  31, 2003 and 2002,  respectively,  the Company did not have the
financial  resources to operate its business,  continue research and development
or market its products.

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.  There can be no assurance that any additional
funds will be available to the Company to allow it to cover its expenses.

The Company may seek to  compensate  providers of services by issuances of stock
in lieu of cash.

Plan of Business

General
-------

Dale Hensel joined the Company on March 19, 2004 for the purpose of  structuring
a  business  combination  with a  company  whose  principal  business  operation
includes the purchase of non-performing real estate secured promissory notes and
real property investment.

Subject  to  majority  shareholder  approval,  the  Company  plans  to take  the
following  action:  (1)  implement  a  reverse  stock  split of the  issued  and
outstanding  common stock on a One for Two Hundred basis and then acquire all of
the issued and outstanding common stock of Mortgage  Assistance  Corporation,  a
Texas  corporation  (MAC).  Mr. Hensel is a shareholder of MAC. The  acquisition
would  be  structured  as a  share  exchange  with  the MAC  shareholders.  Upon
completion of the business  combination,  MAC will be a wholly owned subsidiary.
The  business   combination  will  require  a  reorganization  of  the  Company,
including,  but not  limited to a corporate  name change and a reverse  split of
issued  and  outstanding   capital  stock  prior  to  the  completion   business
combination with MAC. We anticipate that the capital stock will be reverse split
on a One for Two Hundred Fifty (1:250) basis. The Company's majority shareholder
must consent to the action. We will prepare an Information Statement on Schedule
14C disclosing the proposed corporate actions.  This Information  Statement will
be mailed to our  shareholders.  We will not seek proxies from our  shareholders
since we will  have  sufficient  shares  to carry  the  corporate  action.  This
transaction  is not  binding  on either  the  Company  or MAC  until  definitive
business  combination  agreement  are executed  following  majority  shareholder
approval and consent.

The Company  needs to obtain funds from outside  sources in order to pay for the
expenses that will be associated with the proposed business combination. It will
need to rely on its current officer and director for this funding.  There are no
financial commitments obligating Mr. Hensel to finance the Company.



                                                                              12
<PAGE>

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

None.

Item 8A - Controls and Procedures

         Within the 90 days prior to the date of this Annual Report for the year
ended  December 31, 2003, we believe that the former  management  carried out an
evaluation, including the Company's Chairman and Chief Executive Officer and the
Chief Financial Officer, of the effectiveness of the design and operation of our
disclosure  controls and  procedures  pursuant to Rule 13a-14 of the  Securities
Exchange  Act of 1934  (the  "Exchange  Act"),  which  disclosure  controls  and
procedures are designed to insure that information required to be disclosed by a
company  in the  reports  that it files  under  the  Exchange  Act is  recorded,
processed, summarized and reported within required time periods specified by the
SEC's rules and forms.  Based upon that  evaluation,  the Chairman and the Chief
Financial  Officer  concluded  that our  disclosure  controls and procedures are
effective  in timely  alerting  them to  material  information  relating  to the
Company required to be included in the Company's period SEC filings.

(b) Changes in Internal Control.

         Subsequent   to  the  date  of  such   evaluation   as   described   in
subparagraph(a)above, there were no significant changes in our internal controls
or other factors that could significantly  affect these controls,  including any
corrective   action  with  regard  to  significant   deficiencies  and  material
weaknesses.

PART III

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

With the  exception  of Dale J. Hensel,  the  Company's  Officers and  Directors
during 2003 were as follows:

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

         Richard J. Fricke         59                  President,
                                                 Chief Executive Officer
                                                 Chief Financial Officer
                                                       and Director

         Dominic G. Parisi         73            Secretary and Director

         Dale J. Hensel (1)        34              Director, President

(1) Richard Fricke and Dominic Parisi  resigned March 5, 2004 and nominated Dale
Hensel as sole  director and president of the company.  Mr. Hensel  consented to
the  nomination  on March 19, 2004.  Mr. Hensel will serve until the next annual
meeting of the Company's stockholders or until his successor is duly elected and
has  been  qualified  or has been  appointed  by the  board  to fill  vacancies.
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.



                                                                              13
<PAGE>

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

Dale J. Hensel was  nominated  to serve as sole  Director  and  President by the
former board of directors on March 5, 2004.  Richard  Fricke and Dominic  Parisi
resigned  their  director  and officer  positions  March 5, 2004 and Mr.  Hensel
consented to the  nomination  on March 19, 2004.  In 1999,  Mr.  Hensel was self
employed as a real estate investor of multi-family  residential property. In May
of 1999, he became President and of Meadow Wind, LLC, the co-owner of a 400 unit
apartment  complex in Dallas,  Texas.  In February 2000, he sold his interest in
Meadow  Wind,  LLC and was  appointed  President  and  member  of the  board  of
directors of Remington-Hall Capital Corporation, a financially troubled publicly
traded  corporation.  His principal role was to implement corporate clean-up and
reorganization  efforts.  In  October  2000,  he  resigned  his  positions  with
Remington-Hall.  In February 2001, he formed H&L International Investments, Inc.
The  company's   principal   business   operations   involved  the  acquisition,
rehabilitation  and sale of distressed  single  family  properties in the Dallas
area.  In  October  2001,  he was  asked  once  again  to act  as  president  of
Remington-Hall  and he consented.  In September 2002, he once again resigned and
the company subsequently filed for bankruptcy  protection.  In February of 2002,
he and others  formed  Note,  Inc.  Its  principal  corporate  business  was the
purchase of  non-performing  real estate secured  promissory  notes. He left the
company in April 2003. In April 2003, he formed Mortgage Assistance Corporation,
a company devoted to the development of purchase of  non-performing  real estate
secured promissory notes and real property investment.

Mr. Richard J. Fricke 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).

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

Compliance  with Section  16(a) of the  Securities  Exchange Act of  1934Section
16(a) of the  Securities  Exchange Act of 1934 requires the Company's  directors
and  executive  officers,  and  persons  who own more than 10% of the  Company's
Common  Stock,  to file with the  Securities  and  Exchange  Commission  initial
reports of beneficial  ownership and reports of changes in beneficial  ownership
of  Common  Stock of the  Company.  Officers,  directors  and  greater  than 10%
shareholders  are required by the Securities and Exchange  Commission to furnish
the Company with copies of all section 16(a) reports they file.  The Company has
not been  provided  with  copies  of any  forms by  officers,  directors  or 10%
shareholders and assumes that the forms were not filed.

CODE OF ETHICAL CONDUCT.

         On May 14,  2004,  our board of  directors  adopted our code of ethical
conduct  that  applies to all of our  employees  and  directors,  including  our
principal executive officer,  principal financial officer,  principal accounting
officer or controller, and persons performing similar functions.



                                                                              14
<PAGE>

We believe the adoption of our Code of Ethical  Conduct is  consistent  with the
requirements of the Sarbanes-Oxley Act of 2002.

Our Code of Ethical Conduct is designed to deter wrongdoing and to promote:

o        Honest and ethical conduct, including the ethical handling of actual or
         apparent  conflicts  of  interest  between  personal  and  professional
         relationships;

o        Full, fair, accurate,  timely and understandable  disclosure in reports
         and  documents  that we file or submit  to the  Securities  &  Exchange
         omission and in other public communications made by us;

o        Compliance with applicable governmental laws, rules and regulations,

o        The  prompt  internal  reporting  to an  appropriate  person or persons
         indentified  in the code of violations of our Code of Ethical  Conduct;
         and

o        Accountability for adherence to the Code.

Item 10- Executive Compensation

As of December 31, 2003, 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 up to  approximately  4 hours each per month managing the
Company's affairs.

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, agreed, effective upon completion
of merger or other combination,  to waive his right to all his outstanding stock
options.

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.

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

Mr.  Hensel,  as the  Company's  sole  officer  and  director  has a conflict of
interest  relating to the proposed  business  combination  transaction  with MAC
because he is an officer,  director and  shareholder of MAC. As a result of this
conflict of  interest,  we will seek the  approval  and consent of the  proposed
business combination  transaction from our majority  shareholders as required by
Florida Statutes 607.0832.

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.



                                                                              15
<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,
provided that he acted in good faith and in a manner he  reasonably  believed to



                                                                              16
<PAGE>

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, with the exception of Dale Hensel, as of December 31,
2003,  the shares of Common Stock  beneficially  owned by all of the persons who
served as the  directors  or officers of the Company  during 2003 as well as the
principal  shareholders (greater than 5%) of the Company individually and, as to
the directors and officers, as a group.

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)(5)        32,766,988                  19.75%
25 Buckingham Ridge Road
Wilton, CT 06897

Dominic G. Parisi (2)(5)                 8,468,804                  5.10%
701 Kettner Blvd #75
San Diego, CA

Loper & Seymour, P.A. (3)(6)            84,720,733                  51.08%
Escrow Account
24 East 4th Street
St. Paul, MN 55101

Dale J. Hensel(6)                           -0-                      -0-

All Directors and Officers
     as a Group                         41,235,792                  24.85%

(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
     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.




                                                                              17
<PAGE>

     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.  Frickes  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.

(5)  Fricke and Parisi resigned their officer and director  positions  effective
     March 5,  2004,  nominating  Dale  Hensel to fill the vacant  director  and
     president positions. Hensel consented to the nomination on March 19, 2004.

(6)  Dale Hensel became the sole company director on March 19, 2004.


Item 12 - Certain Relationships and Related Transactions

On May 14,  2004,  Dale  Hensel  executed a Letter of Intent  providing  for the
contingent  business  combination of the Company with MAC, a company in which he
is a shareholder. This Letter of Intent is a non-binding agreement, subject to a
number of actions  before it can  become  binding  on the  Company.  See Plan of
Business-General.

In 1999,  the  Company  authorized  compensation  and  incentive  pay to  Robert
Percheski consisting of 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. In June 2003, 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 the payment $1,200.

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.



                                                                              18
<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***    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.
20.1     Code of Ethical Conduct
31.0     Chief  Executive  and  Financial   Officer-Section   302  Certification
         pursuant to Sarbane-Oxley Act.
32.0     Chief  Executive  and  Financial   Officer-Section   906  Certification
         pursuant to Sarbane-Oxley Act.



*        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-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.

No reports were filed during the fourth quarter of 2003.

Item 14 - Principal Accounting Fees and Services

         The Company paid or accrued the following fees in each of the prior two
fiscal years to its principal  accountant,  S. W.  Hatfield,  C.P.A.  of Dallas,
Texas

                                                    Year End         Year End
                                                    12-31-03         12-31-02

         (1)      Audit Fees                         $5,365           $3,245
         (2)      Audit-related Fees                    -0-             -0-
         (3)      Tax Fees                           $  500             -0-
         (4)      All other fees                        -0-             -0-

         Total Fees                                  $5,865           $3,245

         The  Company  has no formal  audit  committee.  However,  as defined in
         Sarbanes-Oxley  Act of  2002,  the  entire  Board of  Directors  is the
         Company's defacto audit committee.

         The Company's  principal  accountant,  S. W. Hatfield,  C.P.A.  did not
         engage any other persons or firms other than the principal accountant's
         full-time, permanent employees.






                                       19
                                                                          <PAGE>

                                   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: May 18, 2004                By: /s/ Dale Hensel
                                     -------------------------------------------
                                     Dale Hensel
                                     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: May 18, 2004                By: /s/ Dale Hensel
                                     -------------------------------------------
                                     Dale Hensel
                                     President, Chief Executive Officer,
                                     Chief Financial Officer and Director


























                                                                              20

<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.

                                    CONTENTS


                                                                            Page
                                                                            ----

Report of Independent Certified Public Accountants                           F-2

Financial Statements
   Balance Sheets
     as of December 31, 2003 and 2002                                        F-3

   Statement of Operations and Comprehensive Loss
     for the years ended December 31, 2003 and 2002                          F-4

   Statement of Changes in Stockholders' Equity
     for the years ended December 31, 2003 and 2002                          F-5

   Statement of Cash Flows
     for the years ended December 31, 2003 and 2002                          F-6

   Notes to Financial Statements                                             F-7






























                                                                             F-1

<PAGE>

                        Letterhead of S. W. Hatfield, CPA


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



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

We have audited the accompanying balance sheets of Safe Alternatives Corporation
of America,  Inc. (a Florida  corporation)  as of December 31, 2003 and 2002 and
the  related  statement  of  operations  and  comprehensive   loss,  changes  in
stockholders'  deficit and cash flows for each of the years ended  December  31,
2003  and  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 audits.

We conducted our audits 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  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Safe Alternatives  Corporation
of America,  Inc. as of December 31, 2003 and 2002 and results of its operations
and  cash  flows  for each of the  years  ended  December  31,  2003  and  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/ S. W. Hatfield, CPA
                                                        ------------------------
                                                         S. W. HATFIELD, CPA
Dallas, Texas
May 19, 2004



                                                                             F-2

<PAGE>
<TABLE>
<CAPTION>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                                 BALANCE SHEETS
                           December 31, 2003 and 2002


                                                                  December 31,    December 31,
                                                                      2003            2002
                                                                  ------------    ------------
<S>                                                               <C>             <C>
                                     ASSETS
                                     ------
Current Assets
   Cash on hand and in bank                                       $       --      $       --
                                                                  ------------    ------------
     Total current assets                                                 --              --
                                                                  ------------    ------------

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


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                 ----------------------------------------------
Current Liabilities
   Accounts payable - trade                                       $      1,927    $     20,939
   Accrued interest payable                                               --             7,216
                                                                  ------------    ------------

     Total current liabilities                                           1,927          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;
     81,132,325 fully paid and accessible, respectively                  8,113           8,113
   Additional paid-in capital                                       22,872,575      22,801,891
   Accumulated deficit                                             (22,884,774)    (22,865,318)
                                                                  ------------    ------------
                                                                        (4,086)        (55,314)
   Subscriptions issuable                                                2,160           2,160
   Treasury stock - at cost (11,682 shares)                                 (1)             (1)
                                                                  ------------    ------------

     Total stockholders' equity (deficit)                               (1,927)        (53,155)
                                                                  ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                        $       --      $       --
                                                                  ============    ============
</TABLE>


The accompanying notes are an integral part of these financial statements.
                                                                             F-3

<PAGE>
<TABLE>
<CAPTION>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                 STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                     Years ended December 31, 2003 and 2002


                                                                                 Year ended       Year ended
                                                                                December 31,     December 31,
                                                                                     2003             2002
                                                                                -------------    -------------
<S>                                                                             <C>              <C>
Revenues - net                                                                  $        --      $        --
   Cost of Sales                                                                         --               --
                                                                                -------------    -------------
Gross Profit                                                                             --               --
                                                                                -------------    -------------

Operating Expenses
   Selling, general and administrative expenses                                        18,294           20,183
   Interest expense                                                                     3,162           10,952
   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                                                          21,456        4,952,138
                                                                                -------------    -------------

Loss from Operations                                                                  (21,456)      (4,952,138)

Other income (expense)
   Settlement of judgment                                                              (5,000)            --
                                                                                -------------    -------------
Income (Loss) before provision for income taxes                                       (26,456)      (4,952,138)

Income tax benefit (expense)                                                             --               --
                                                                                -------------    -------------
Loss before discontinued operations                                                   (26,456)      (4,952,138)

Discontinued operations, net of income taxes
   Loss from discontinued operations,
     net of income taxes of $-0- and $-0-, respectively                                  --            (14,430)
   Forgiveness of trade accounts payable,
     net of income taxes of $-0- and $-0-, respectively                                 7,000            9,591
   Loss on disposition, net of income taxes of $-0- and $-0-, respectively               --            (24,195)
                                                                                -------------    -------------
   Income (Loss) from discontinued operations                                           7,000         (281,545)
                                                                                -------------    -------------

Net Loss                                                                              (19,456)      (4,981,172)
Other comprehensive income                                                               --               --
                                                                                -------------    -------------

Comprehensive Loss                                                              $     (19,456)   $  (4,962,669)
                                                                                =============    =============

Netloss per weighted-average share of common stock outstanding,
   calculated on Net Loss - basic and fully diluted
     From continuing operations                                                 $       (0.00)   $       (0.04)
     From discontinued operations                                                        0.00             0.00
                                                                                -------------    -------------
       Total                                                                    $       (0.00)   $       (0.04)
                                                                                =============    =============
Weighted-average number of shares
   of common stock outstanding                                                    163,853,058      123,509,578
                                                                                =============    =============
</TABLE>


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

<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
                                       Shares         Amount        capital        deficit
                                    ------------   ------------   ------------   ------------
<S>                                 <C>            <C>            <C>            <C>
Balances at
   January 1, 2002                    58,580,960   $      5,858   $ 17,012,919   $(17,884,146)

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)

Advances from affiliates
   contributed as additional
   paid-in capital                          --             --           70,684           --

Net loss for the year                       --             --             --          (19,456)
                                    ------------   ------------   ------------   ------------

Balances at
   December 31, 2003                 165,853,058   $      8,113   $ 22,872,575   $(22,883,574)
                                    ============   ============   ============   ============


                                                         Treasury Stock
                                    Subscription   ----------------------------
                                      issuable        Shares          Amount          Total
                                    ------------   ------------    ------------    ------------
Balances at
   January 1, 2002                  $      2,160   $    (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                       2,160        (11,682)             (1)        (53,155)

Advances from affiliates
   contributed as additional
   paid-in capital                          --             --              --            70,684

Net loss for the year                       --             --              --           (19,456)
                                    ------------   ------------    ------------    ------------

Balances at
   December 31, 2003                $      2,160        (11,682)   $         (1)   $     (1,927)
                                    ============   ============    ============    ============
</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 CASH FLOWS
                     Years ended December 31, 2003 and 2002


                                                                 Year ended      Year ended
                                                                December 31,    December 31,
                                                                    2003            2002
                                                                ------------    ------------
<S>                                                             <C>             <C>
Cash Flows from Operating Activities
   Net loss for the period                                      $    (19,456)   $ (4,981,172)
   Adjustments to reconcile net loss to net cash
     provided by operating activities
       Depreciation                                                     --             3,791
       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                          (7,000)         (9,591)
       (Increase) Decrease in
         Current assets of discontinued operations                      --               639
       Increase (Decrease) in
         Current liabilities of discontinued operations                 --            (6,903)
         Accounts payable - trade                                    (12,012)         20,939
         Accrued interest payable                                     (7,216)         10,952
                                                                ------------    ------------
Net cash used in operating activities                                (45,684)        (16,147)
                                                                ------------    ------------

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

Cash Flows from Financing Activities
   Cash paid to retire convertible debenture                         (25,000)           --
   Cash contributed to support operations                             70,684          14,950
                                                                ------------    ------------
Net cash provided by financing activities                             45,684          14,950
                                                                ------------    ------------

Increase (Decrease) in Cash                                             --            (1,197)

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

Cash at end of period                                           $       --      $       --
                                                                ============    ============

Supplemental Disclosure of
   Interest and Income Taxes Paid
     Interest paid for the period                               $     10,378    $       --
                                                                ============    ============
     Income taxes paid for the period                           $       --      $       --
                                                                ============    ============

Supplemental Disclosure of Non-cash
   investing and financing activities
     Common stock issued in payment of accounts payable         $       --      $     46,501
                                                                ============    ============
</TABLE>


The accompanying notes are an integral part of these financial statements.
                                                                             F-6

<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-7

<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. Additionally,  as a result of our
having no assets,  several  liabilities  and no  operations,  our auditors  have
issued an audit opinion on our 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.

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.

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.

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.


                                                                             F-8

<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE C- Going Concern Uncertainty - Continued

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.


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 year ended
December 31, 2002 is as follows:

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

     Net sales                                                     $     33,147
                                                                   ============
     Operating income (loss)                                       $    (14,430)
                                                                   ============
     Loss from discontinued operations                             $    (14,430)
                                                                   ============


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, 2003 and 2002, 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-9

<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE E - Summary of Significant Accounting Policies - Continued

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

     As of December 31, 2003 and 2002,  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, 2003 and 2002, 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-10

<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.

During the quarter  ended June 30, 2003,  the Company  exercised  it's option to
repurchase the remaining outstanding Convertible Note from the Noteholder with a
cash  payment  aggregating  approximately  $35,389,  which  included  $25,000 in
principal,  the stated 10%  repurchase  premium  and all  accrued,  but  unpaid,
interest.


NOTE H - Income Taxes

The components of income tax (benefit) expense,  on continuing  operations,  for
the years ended December 31, 2003 and 2002, respectively, are as follows:

                                                     December 31,   December 31,
                                                         2003           2002
                                                     ------------   ------------
     Federal:
       Current                                       $       --     $       --
       Deferred                                              --             --
                                                     ------------   ------------
                                                             --             --
                                                     ------------   ------------
     State:
       Current                                               --             --
       Deferred                                              --             --
                                                     ------------   ------------
                                                             --             --
                                                     ------------   ------------
       Total                                         $       --     $       --
                                                     ============   ============





                                                                            F-11

<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE H - Income Taxes - Continued

As of December 31, 2003,  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, 2003 and 2002,
respectively, differed from the statutory tax rate of 34.0% as follows:

                                                    Year ended      Year ended
                                                   December 31,    December 31,
                                                       2003            2002
                                                   ------------    ------------
Statutory rate applied to
    income before income taxes                     $     (6,600)   $ (1,694,000)
Increase (decrease) in income
   taxes resulting from:
     State income taxes                                    --              --
     Other, including reserve for
       deferred tax asset and
       application of net operating
       loss carryforward                                  6,600       1,694,000
                                                   ------------    ------------

       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, 2003 and 2002, respectively:

                                                   December 31,    December 31,
                                                       2003            2002
                                                   ------------    ------------
     Deferred tax assets
       Net operating loss carryforwards            $  3,236,200    $  3,230,000
       Less valuation allowance                      (3,236,200)     (3,230,000)
                                                   ------------    ------------

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

During the years ended December 31, 2003 and 2002, 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-12

<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.


NOTE K - Advances from Affiliates

During  2003,   an  affiliate  of  the  Company  made   unsecured   advances  of
approximately  $70,700 to support  operations and provide  working  capital.  At
December  31, 2003,  the  affiliate  contributed  these  advances as  additional
paid-in capital.
















                                                                            F-13