U.S.SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB

[X]    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
       OF 1934

       For the quarterly period ended June 30, 2001

[ ]    TRANSITION  REPORT  UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

       For the transition period _________ to ___________.

                        Commission File Number 000-21627


                 Safe Alternatives Corporation of America, Inc.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

      Florida                                                     06-1413994
-----------------------------                                -------------------
(State or other jurisdiction of                              (I.R.S. Employer
Incorporation or organization)                               Identification No.)

                 440 Main Street, Ridgefield, Connecticut 06877
                ------------------------------------------------
                (Current Principal Executive Offices) (Zip Code)

                    Issuer's Telephone Number: (203) 438-4918

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the Registrant was required to file such report(s), and (2) has been
subject to such filing requirements for the past 90 days. Yes    No X
                                                             ---   ---

As of June 30,  2001,  there were  54,580,960  shares of Common Stock issued and
outstanding.


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



<PAGE>

PART I: FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS:


                  SAFE ALTERNATIVES CORPORATION OF AMERICA, INC
                                TABLE OF CONTENTS




Balance Sheets,
June 30, 2001 and 2000                                                       1

Statements of Operations,
For the Six Months Ended June 30, 2001 and 2000                              2

Statements of Operations,
For the Six Months Ended June 30, 2001 and 2000                              3


Statements of Cash Flows,                                                    4
For the Six Months Ended June 30, 2001 and 2000

Notes to Financial Statements                                              5 - 7



<PAGE>


                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                                 Balance Sheets
                             JUNE 30, 2001 AND 2000



<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                         UNAUDITED FINANCIAL STATEMENTS
                             JUNE 30, 2001 AND 2000

                                                        2001            2000
                                                   ------------    ------------
                                     ASSETS

Current Assets:
  Cash                                             $      3,343    $      2,734
  Accounts receivable - net of allowance
    of $5,000 and $0 for 2001 and 2000                    4,509          18,850

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

  Total current assets                                    7,852          21,584
                                                   ------------    ------------

Property and Equipment, Net                              27,905          35,488
                                                   ------------    ------------

Loan Restructuring Costs                                      0         273,649
                                                   ------------    ------------

                                                   $     35,757    $    330,720
                                                   ============    ============



                      Liabilities and Stockholders' Deficit


Current Liabilities:
  Accounts payable and other accrued expenses      $    475,585    $    373,131
  Current maturities of stockholders' loans             926,900         926,900
  Convertible debentures                                726,500         726,500
                                                   ------------    ------------

  Total current liabilities                           2,128,985       2,026,531
                                                   ------------    ------------

Other Liabilities:
  Loss contingency                                      140,000          26,000
                                                   ------------    ------------

  Total other liabilities                               140,000          26,000
                                                   ------------    ------------


Stockholder's Deficit:
  Common stock, $.0001 par value,
   200,000,000 shares authorized;
   issued(including shares in treasury)
   54,580,960 shares in 2001 and                        110,747         103,247
   52,830,960 in 2000
  Additional paid-in capital                         15,528,674      15,528,674
  Accumulated deficit                               (17,874,808)    (17,355,891)
  Subscriptions issuable                                  2,160           2,160
                                                   ------------    ------------

                                                     (2,233,227)     (1,721,810)

  Treasury stock                                             (1)             (1)
                                                   ------------    ------------

  Total stockholders' deficit                        (2,233,228)     (1,721,811)
                                                   ------------    ------------


                                                   $     35,757    $    330,720
                                                   ============    ============


                                       1
<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                            Statements of Operations
                    FOR THE SIX MONTHS JUNE 30, 2001 AND 2000




                                               2001            2000
                                          ------------    ------------

Sales                                     $     42,492    $     35,547

Cost of Goods Sold                              14,956          15,667
                                          ------------    ------------

Gross Profit                                    27,536          19,880
                                          ------------    ------------

Operating Costs:
  Selling, general and administrative           38,020          43,649
  Research and development                        --              --
  Depreciation and amortization                  3,792           3,792
                                          ------------    ------------

  Total operating costs                         41,812          47,441
                                          ------------    ------------

Loss from Operations                           (14,276)        (27,561)
                                          ------------    ------------

Other Expenses:
  Interest expense - stockholders' loan        (37,076)        (37,076)
  Interest expense - convertible notes         (21,796)        (21,796)
                                          ------------    ------------

  Total other expenses                         (58,872)        (58,872)
                                          ------------    ------------

Net loss before extraordinary item             (73,148)        (86,433)

  Extraordinary Item                          (273,649)           --
                                          ------------    ------------

Net Loss                                  $   (349,797)   $    (86,433)
                                          ============    ============

Net Loss per Common Share                 $     (.0064)   $     (.0020)
                                          ============    ============
Average Number of Common Shares             54,580,960      43,830,960
                                          ============    ============


                                       2
<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                            Statements of Operations
                FOR THE THREE MONTHS ENDED JUNE 30, 2001 AND 2000




                                               2001            2000
                                          ------------    ------------

Sales                                     $     16,443    $     20,522

Cost of Goods Sold                               3,458           6,501
                                          ------------    ------------

Gross Profit                                    12,985          14,021
                                          ------------    ------------

Operating Costs:
  Selling, general and administrative           15,465          15,097
  Research and development                        --              --
  Depreciation and amortization                  1,896           1,895
                                          ------------    ------------

  Total operating costs                         17,361          16,992
                                          ------------    ------------

Loss from Operations                            (4,376)         (2,971)
                                          ------------    ------------

Other Expenses:
  Interest expense - stockholders' loan        (18,538)        (18,538)
  Interest expense - convertible notes         (10,898)        (10,898)
                                          ------------    ------------

  Total other expenses                         (29,436)        (29,436)
                                          ------------    ------------


Net Loss                                  $    (33,812)   $    (32,407)
                                          ============    ============

Net Loss per Common Share                 $     (.0006)   $     (.0007)
                                          ============    ============

Average Number of Common Shares             54,580,960      43,830,960
                                          ============    ============


                                       3
<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                            StatementS of Cash Flows
                 FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000


                                              2001         2000
                                            ---------    ---------

Cash Flows from Operating Activities:

Net Loss                                    $(346,797)   $ (86,433)

Adjustments to reconcile net loss to
  net cash provided (used) in operating
  activities:
   Depreciation and amortization                3,792        3,792
   Extraordinary item                         273,649         --



  Changes in assets and liabilities:
   Decrease in accounts receivable              7,486       14,774
   Increase in accounts payable and
     accrued expenses                          57,975       39,135
                                            ---------    ---------

Net Cash Used in Operating Activities          (3,895)     (28,732)
                                            ---------    ---------

Net Cash Flows from Financing Activities:
   Net proceeds from issuance of common
    stock and subscriptions                      --         30,000
                                            ---------    ---------

Net Cash Provided by Financing Activities        --         30,000
                                            ---------    ---------

Net Increase (Decrease) in Cash                (3,895)       1,268

Cash, Beginning of Year                         7,238        1,466
                                            ---------    ---------

Cash, End of Period                         $   3,343    $   2,734
                                            =========    =========


                                       4
<PAGE>



                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000

1. Basis of Presentation
------------------------

The accompanying unaudited financial statements have been prepared in accordance
with  generally  accepted  accounting   principles  for  the  interim  financial
information.  Accordingly,  they  do not  include  all of  the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial  statements.  In the  opinion of  management  of the  management,  all
adjustments  of a normal  recurring  nature  necessary for a fair statement have
been included.

The financial statements and notes are condensed as permitted by Form 10-QSB and
do not contain certain information  included in the annual financial  statements
and notes of the Company.

Method of Accounting
--------------------

The financial  statements  are prepared  using the accrual basis of  accounting.
Generally accepted  accounting  principles  requires  management,  under certain
circumstances,  to make  estimates  and  assumptions  that  affect  the  amounts
reported in the financial  statements  and  accompanying  notes.  Actual results
could differ from those estimates.

Earnings Per Share
------------------

The following data show the amounts used in computing earnings per share for the
six months ended June 30, 2001 and 2000, respectively.

                                         2001            2000
                                    ------------    ------------


Loss used in basic EPS              $   (346,797)   $    (86,433)
                                    ============    ============
Weighted average number of common
  shares used in basic EPS            54,580,960      43,830,960
                                    ============    ============

Net loss per common share           $     (.0064)   $     (.0020)
                                    ============    ============


Property, Plant and Equipment
-----------------------------

Property,  plant and equipment are recorded at cost. Depreciation is provided on
a  straight-line  basis over estimated  useful lives of the  respective  assets.
Leasehold  improvements  are  depreciated  over the shorter of the lease term or
economic life of the related improvement. Maintenance and repairs are charged to
expense as incurred; major renewals and betterments are capitalized.  When items
of  property,  plant and  equipment  are sold or retired,  the related  cost and
accumulated  depreciation  are removed from the accounts and any gain or loss is
included in the results of operations.


                                       5
<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000



2. Property and Equipment
-------------------------

As of June 30, 2001 and 2000 property and equipment consisted of the following:

                                        2001        2000
                                      ---------   ---------

     Equipment                        $  29,288   $  29,288
     Furniture & Fixtures                10,008      10,008
     Leasehold Improvements              11,468      11,468
                                      ---------   ---------
                                         50,764      50,764
     Less: Accumulated depreciation      22,859      15,276
                                      ---------   ---------

     Property and Equipment - Net     $  27,905   $  35,488
                                      =========   =========

Depreciation expense was $3,792 for the six months ended June 30, 2001 and 2000,
respectively.

3. Stockholders' Deficit
------------------------

Shares Issued as Compensation and Commission
--------------------------------------------

During the three months ended June 30, 2001 and 2000, respectively, there were 0
fully vested shares of the Company's common stock issued to outside  consultants
for services rendered.

During the six months  ended June 30,  2001 and 2000,  respectively,  there were
250,000  and 0 fully  vested  shares of the  Company's  common  stock  issued to
outside  consultants  for services  rendered.  The fair value of shares awarded,
based upon the value of Common Stock sold during these periods, were $0 for 2001
and 2000, respectively.

During the three  months  ended June 30,  2001 and 2000,  respectively,  0 fully
vested  shares of the  Company's  Common  Stock were  issued to  officers of the
Company.

During  the six  months  ended  June 30,  2001  and  2000,  respectively,  0 and
18,500,000  fully  vested  shares of the  Company's  Common Stock were issued to
officers of the Company. The fair value of shares awarded,  based upon the value
of  Common  Stock  sold  during  these  periods,  were  $0 for  2001  and  2000,
respectively.

During the six months ended June 30, 2000,  an officer  purchased  approximately
4,000,000 shares of the Company's  restricted  Common Stock for a purchase price
of $20,000.

4. Extraordinary Item
---------------------

During the first quarter of 2001 there was a change in the treatment of the debt
restructuring   that  had   occurred   in  1998  that   originally   result  the
capitalization  of  intangible  costs.  As per  FAS 15  these  intangible  costs
associated  with  this  debt  restructuring  should  be  classified  as "Loss on
Troubled Debt Restructuring" and charged against income. As a result, to reflect
this change,  the capitalized "Loan  Restructuring  Costs" of $273,649 have been
charged against income as of June 30, 2001.


                                       6
<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                          NOTES TO FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000



5. Cash Flow Information
------------------------

The Company  considers all short-term  investments with an original  maturity of
three months or less to be cash equivalents.

Cash paid for  interest  and income taxes for the six months ended June 30, 2001
and 2000 were zero.

Non Cash Transaction
--------------------

In 2001 a loss  due to  restructuring  troubled  debt of  $273,649  was  charged
against income, as referred to in Note 4.


6. Subsequent Events
---------------------

In 2001 the Company entered into a settlement agreement with the Trustee for the
Bankruptcy  Estate of Samuel L.  Beinstein,  whereby the Company  will receive a
Satisfaction  of  Judgement  in exchange for $10,000 to be paid on behalf of the
Company. This settlement was approved by the Bankruptcy Court and is expected to
be completed in February 2002.

In October 2001 the Company issued 4,000,000  shares of restricted  common stock
to the remaining shareholders in the Investor Group. These shares were issued in
consideration of a waiver by the members of the Investor Group of all money owed
to them and the waiver of all rights to or under any stock, options, warrants or
other rights to additional stock in the Company.

As of December  31, 2001,  six (6) holders of the  foregoing  Convertible  Notes
(totaling  $450,000)  agreed to release all obligations  under or as a result of
the  Convertible  Notes in exchange  for the  issuance of a total of  16,624,236
shares of the Company's  restricted Common Stock.. In addition,  two (2) holders
of the foregoing  Convertible Notes (totaling $50,000) have informed the Company
that they have written off the obligations under the foregoing Convertible Notes
and are therefore not interested in any settlement. Therefore, as of January 10,
2002,  the  Company was in default in the  amounts of 226,500 in  principal  and
$54,360 in interest for a total of $280,860 in arrearages.


                                       7
<PAGE>

ITEM 2.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
          RESULTS OF OPERATIONS:

Overview:
--------

     The following  discussion and analysis  should be read in conjunction  with
the Company's Financial Statements and notes and the other financial information
elsewhere in this filing. This report contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Sections 21E of the
Securities  Exchange Act of 1934.  Actual results could differ  materially  from
those  projected  in the  forward-looking  statements  as a  result  of the risk
factors set forth below and  elsewhere  in this  report.  The  Company's  future
operating  results may be affected  by a number of  factors,  including  general
economic conditions,  cyclical factors affecting the Company's industry, lack of
growth in the Company's  end-markets,  and the  Company's  ability to settle its
debts and  manufacture  and sell its products at a profitable,  yet  competitive
price.

     The industry in which the Company  competes is highly  competitive  and the
Company  expects  such  competition  to  continue  in the  future.  Most  of the
Company's competitors are larger than the Company and have substantially greater
financial, technical, marketing and manufacturing resources.

     Our operations are concentrated in a single facility in Derby, Vermont. Our
operations  could be interrupted by fire or other events beyond our control.  We
do not have a detailed  disaster  plan.  In addition,  we do not carry  business
interruption insurance to compensate us for losses that may occur and any losses
or damages incurred by us could have a material adverse effect on our business.

Results of Operations:  Three Months Ended June 30, 2001 and 2000.
-----------------------------------------------------------------

Sales; Gross Margins; Net Losses:

     For the three months ended June 30, 2001,  sales  decreased to $16,443 from
$20,522 for the three months ended June 30, 2000,  representing  a 20% decrease.
This was due to low customer orders.

     The Company's  gross margin on sales  increased  from (68 %) for the second
three months of 2000 to (79 %) for the second three months of 2001.

     For the three months ended June 30, 2001,  the Company  reported a net loss
of $(33,812),  or $(.0006) per share, as compared with $(32,407) or $(.0007) per
share in the same period in the previous year, an increased  loss of $1,405,  or
(4%). The loss for the second three months of 2001 included  $18,538 and $10,598
of accrued  interest for the stockholders  loans and convertible  notes payable,
respectively.  The Company may continue to incur net losses. The decrease in the
net loss per share in the second  three  months of 2001 from the same  period in
2000 is due to a larger number of shares outstanding.


                                       8
<PAGE>

     Selling,  General and Administrative  Expenses. For the three months ending
June 30, 2001, the Company incurred selling, general and administrative expenses
of $15,465,  as compared  to $15,097 in the same  period in the  previous  year.
Calculations   with  respect  to  the   percentage   of  selling,   general  and
administrative expenses to sales are not meaningful.

     Research and  Development.  For the quarters ending June 30, 2001 and 2000,
the Company did not have any research and development expenses. The research and
development  of the Company's  product lines were  terminated in 1998 due to the
Company's financial condition. The research facility in Brookfield,  CT was also
closed in 1998.  Calculations  with  respect to the  percentage  of research and
development expenses relative to sales are not meaningful.

Results of Operations:  Six Months Ended June 30, 2001 and 2000.
---------------------------------------------------------------

     Sales;  Gross Margins;  Net Losses: For the six months ended June 30, 2001,
sales  increased to $42,492 from $35,547 for the six months ended June 30, 2000,
representing a 20% increase.  This was due to an increase in the number of sales
representative, all of whom are paid on a commission basis.

     The Company's  gross margin on sales increased from (56%) for the first six
months of 2000 as compared to (65 %) for the first six months of 2001.

     For the six months ended June 30, 2001, and before the  extraordinary  item
described below, the Company had a net loss of $(73,148), or $(.0013) per share,
as  compared  with  $(86,433)  or  $(.0020)  per share in the same period in the
previous  year.  For the six  months  ended  June  30,  2001 and  including  the
extraordinary item described below, the Company had a net loss of $(346,797), or
$(.0064) per share, as compared with $(86,433) or $(.0020) per share in the same
period in the previous year.  The Company may continue to incur net losses.  The
increase  in the net loss per share for the six months  ended June 30, 2001 from
the  same  period  in 2000 is due to the  increase  in net loss  from the  first
quarter of 2001.

     Selling,  General and  Administrative  Expenses.  For the six months ending
June 30, 2001, the Company incurred selling, general and administrative expenses
of $38,020,  as compared  to $43,649 in the same  period in the  previous  year.
Calculations   with  respect  to  the   percentage   of  selling,   general  and
administrative expenses to sales are not meaningful.

     Research and Development. For the six-month period ending June 30, 2001 and
2000,  the Company  did not have any  research  and  development  expenses.  The
research and development of the Company's  product lines were terminated in 1998
due to the Company's financial  condition.  The research facility in Brookfield,
CT was also  closed in 1998.  Calculations  with  respect to the  percentage  of
research and development expenses relative to sales are not meaningful.


                                       9
<PAGE>

     Liquidity and Capital Resources. The Company has never generated sufficient
revenues  to  finance  its  operations  and has been able to remain in  business
solely as a result of raising  capital and settling its debt.  At June 30, 2001,
the Company had current assets of $7,852 and current  liabilities of $2,128,985.
The  Company's  ability  to  continue  as a going  concern  in the near  term is
dependent upon obtaining additional financing and continuing to settle its debt.
As of June 30, 2001, the Company was able to operate at a near  breakeven  level
based upon the reduction of costs associated with sales.

     Extraordinary Item. During the first quarter of 2001, there was a change in
the  treatment  of the  debt  restructuring  that  had  occurred  in  1998  that
originally  resulted the capitalization of intangible costs. As per FAS 15 these
intangible costs associated with this debt  restructuring  will be classified as
"Loss on Troubled Debt  Restructuring"  and charged against income. As a result,
to reflect this change, the capitalized "Loan  Restructuring  Costs" of $273,649
have been charged against income as of March 31, 2001.

                           PART II: OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS:

     (a) Pending Legal Proceedings:  An adversary proceeding was brought against
the  Company  in July  1997,  in U.S.  Bankruptcy  Court  for  the  District  of
Connecticut,  by Richard Coan,  Trustee for the  Bankruptcy  Estate of Samuel E.
Bernstein (U.S.  Bankruptcy Court,  Dist. Conn.  Adversary  Proceedings File No.
97-5078). The suit seeks a judgment to recover accrued but unpaid wages totaling
approximately  $100,000 for 1995.  Judgment  against the Company and in favor of
the  Trustee  was  entered in this matter on or about April 5, 2000 in the total
amount of $140,000.  On or about October 23, 2001, the Bankruptcy court approved
a settlement  agreement  whereby a  Satisfaction  of Judgment will be entered in
this  matter upon the  Trustee's  receipt of $10,000 to be paid on behalf of the
Company.  This agreement  terminates if not completed on or before  February 15,
2002, unless extended in writing.

     In October 2000,  Seaco  Insurance  Company filed an action  entitled Seaco
Insurance Company v. Safe Alternatives o f America, Inc. (Vermont Orleans County
Court Docket No.  274-10-000SCV)  alleging  non-payment  of insurance  premiums.
Default  judgment  was entered  against the Company on November  21, 2000 in the
total amount of $10,792.36.  Interest shall accrue on this judgment at a rate of
12% per annum and was in the amount of $648 as of June 30, 2001.

     (b)  Pending  Governmental  Proceedings:  The  Company  is not party to any
pending  action  involving  a  governmental  agency  and  is  not  aware  of any
contemplated action by a governmental agency against the Company.


                                       10
<PAGE>

ITEM 2.  CHANGES IN SECURITIES:

     On June 11, 2001,  the Board of Directors  unanimously  passed a resolution
amending the  Articles of  Incorporation  to increase  the number of  authorized
shares  of  the  Company's  $0.0001  par  value  common  stock  to  one  hundred
seventy-five  million  (175,000,000)   shares.   Shareholder  approval  was  not
required.  This  Amendment to the Articles of  Incorporation  was filed with the
Secretary of State for the State of Florida on July 30, 2001.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES:

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

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


                                       11
<PAGE>

the same  obligations  in October 2001 in exchange for the issuance of 4,000,000
shares of the Company's  restricted Common Stock.  Therefore,  as of the date of
the filing of this report, there were no arrearages outstanding.

     In March and April,  1998, the Company issued its 6% Convertible Notes (the
"Notes") in the aggregate  principal  amount of $711,500 in a private  placement
under Rule 505 of Regulation D. Interest on the Notes is payable  semi-annually.
The principal amount of the Notes, together with unpaid interest thereon, is due
and  payable,  if not  earlier  converted,  on  March 3,  1999.  The  Notes  are
convertible  into shares of Common Stock at the option of the holder at any time
following  the  earlier  of (i) 90  days  after  the  filing  of a  registration
statement  with the SEC covering the shares to be received  upon  conversion  or
(ii)  the date the SEC  declares  such  registration  statement  effective.  The
conversion  price per share is the lesser of (i) 70% of the average  closing bid
price  per  share  of  Common  Stock  for the  five  trading  days  prior to the
conversion date or (ii) $0.25. Upon conversion,  any accrued and unpaid interest
is waived by the holder. The Company has the option to repurchase the Notes from
the holder prior to  registration  of the underlying  shares at a premium of 10%
over the purchase  price of the Notes.  The Company  agreed to file with the SEC
not later than June 3, 1998, and use its best efforts to have declared effective
not later than July 3, 1998, a registration statement registering for resale the
shares that would be issued upon  conversion of the Notes.  The Company has made
no payments on these notes;  has not repurchased  these Notes, and is in default
with regard to its registration obligation.

     As of December 31, 2001, six (6) holders of the foregoing Convertible Notes
(totaling  $450,000)  agreed to release all obligations  under or as a result of
the  Convertible  Notes in exchange  for the  issuance of a total of  16,624,236
shares of the Company's restricted Common Stock... In addition,  two (2) holders
of the foregoing  Convertible Notes (totaling $50,000) have informed the Company
that they have written off the obligations under the foregoing Convertible Notes
and are therefore not interested in any  settlement.  Therefore,  as of February
11,  2002,  Company was in default in the amounts of $226,500 in  principal  and
$54,360 in interest for a total of $280,860 in arrearages.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:

     No matters were submitted to a vote of the shareholders.

ITEM 5.  OTHER INFORMATION:

     In May 2001,  the Company  entered into a strategic  alliance  with Process
Solutions, Inc. of Wilbraham,  Massachusetts for the manufacture and sale of the
Company's Ameristrip product.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K:


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<PAGE>

(a)       Exhibits.

          PART II EXHIBITS:

          3    Amendment to Articles of  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.

(b)       Reports on Form 8-K.

          None.

                                    SIGNATURE

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

Dated this 11th day of February, 2002

                                  SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.

                                By  /s/ Richard J. Fricke
                                  -----------------------
                                 Richard J. Fricke
                                 President, Chief Executive Officer
                                 And Chief Financial Officer




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