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, 2002

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

     For the transition period from _________________ 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 X  No
                      ---   ---

     As of June 30, 2002, there were  161,055,876  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 (Unaudited):

     As prescribed by Item 310 of Regulation  S-B, the  independent  auditor has
reviewed these unaudited interim financial statements of the registrants for the
three  months  ended  June  30,  2002.  The  financial  statements  reflect  all
adjustments  which  are,  in the  opinion  of  management,  necessary  to a fair
statement  of the  results  for the  interim  period  presented.  The  unaudited
financial  statements  of  registrant  for the three  months ended June 30, 2002
follow:

<PAGE>










                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                         UNAUDITED FINANCIAL STATEMENTS
                             JUNE 30, 2002 AND 2001


<PAGE>



                                   SAFE ALTERNATIVES CORPORATION OF AMERICA, INC
                                                 TABLE OF CONTENTS



                                                                           Page
                                                                           ----
Balance Sheets,
June 30, 2002 and 2001                                                       1

Statements of Operations,
For the Six Months Ended June 30, 2002 and 2001                              2

Statements of Operations,
For the Three Months Ended June 30, 2002 and 2001                            3

Statements of Cash Flows,
For the Six Months Ended June 30, 2002 and 2001                              4

Notes to Financial Statements                                               5-12



<PAGE>




                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                                 Balance Sheets
                             JUNE 30, 2002 AND 2001

                                                         2002            2001
                                                   ------------    ------------
                                     ASSETS

Current Assets:
  Cash                                             $       --      $      3,343
  Accounts receivable - net of allowance
    of $5,000 for 2002 and 2001
                                                          5,027           4,509
                                                   ------------    ------------

  Total current assets                                    5,027           7,852
                                                   ------------    ------------


Property and Equipment, Net                              20,324          27,905
                                                   ------------    ------------


                                                   $     25,351    $     35,757
                                                   ============    ============


                                       Liabilities and Stockholders' Deficit


Current Liabilities:
  Accounts payable and other accrued expenses      $     66,809    $    475,585
  Current maturities of stockholders' loans                --           926,900
  Convertible debentures                                125,000         726,500
                                                   ------------    ------------

  Total current liabilities                             191,809       2,128,985
                                                   ------------    ------------

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

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


Stockholder's Deficit:
  Common stock, $.0001 par value,
   175,000,000 shares authorized;
   issued(including shares in treasury)
   92,739,265 shares in 2002 and                        110,747         110,747
   54,580,960 in 2001
  Additional paid-in capital                         16,995,483      15,528,674
  Accumulated deficit
  Subscriptions issuable                            (17,274,847)    (17,874,808)
                                                          2,160           2,160
                                                   ------------    ------------

                                                       (166,457)     (2,233,227)

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

  Total stockholders' deficit                          (166,458)     (2,233,228)
                                                   ------------    ------------


                                                   $     25,351    $     35,757
                                                   ============    ============




                                       1
<PAGE>





                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                            Statements of Operations
                    FOR THE SIX MONTHS JUNE 30, 2002 AND 2001




                                                        2002            2001
                                                  ------------    ------------

Sales                                             $     33,147    $     42,492

Cost of Goods Sold                                      13,003          14,956
                                                  ------------    ------------

Gross Profit                                            20,144          27,536
                                                  ------------    ------------

Operating Costs:
  Selling, general and administrative                   29,180          38,020
  Research and development                                --              --
  Depreciation and amortization                          3,792           3,792
                                                  ------------    ------------

  Total operating costs                                 32,972          41,812
                                                  ------------    ------------

Loss from Operations                                   (12,828)        (14,276)
                                                  ------------    ------------

Other Income (Expenses):
  Forgiveness of debt - trade payables (Note 7)         62,219            --
  Interest expense - stockholders' loan                (37,076)
  Interest expense - convertible notes                    --           (21,796)
                                                                        (5,648)
                                                  ------------    ------------

  Total other income (expenses)                         56,571         (58,872)
                                                  ------------    ------------

Net loss before extraordinary items                     43,743         (73,148)

 Extraordinary Item (Note 6)                           565,557            --
 Extraordinary Item (Note 4)                              --          (273,649)
                                                  ------------    ------------

Net Income (Loss)                                 $    609,300    $   (346,797)
                                                  ============    ============

Net Income (Loss) per Common Share                $      .0065    $     (.0064)
                                                  ============    ============

Average Number of Common Shares                     92,739,265      54,580,960
                                                  ============    ============




                                       2
<PAGE>





                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                            Statements of Operations
                FOR THE THREE MONTHS ENDED JUNE 30, 2002 AND 2001




                                                        2002            2001
                                                  ------------    ------------

Sales                                             $      4,191    $     16,443

Cost of Goods Sold                                       2,511           3,458
                                                  ------------    ------------

Gross Profit                                             1,680          12,985
                                                  ------------    ------------

Operating Costs:
  Selling, general and administrative                   17,734          15,465
  Research and development                                --              --
  Depreciation and amortization                          1,895           1,896
                                                  ------------    ------------

  Total operating costs                                 19,629          17,361
                                                  ------------    ------------

Loss from Operations                                   (17,949)         (4,376)
                                                  ------------    ------------

Other Income (Expenses):
  Forgiveness of debt - trade payables                  62,219            --
  Interest expense - stockholders' loan                   --           (18,538)
  Interest expense - convertible notes                  (1,875)        (10,898)
                                                  ------------    ------------

  Total other income (expenses)                         60,344         (29,436)
                                                  ------------    ------------

Net Income (Loss) Before Extraordinary Item             42,395         (33,812)

  Extraordinary item (Note 6)                          146,550            --
                                                  ------------    ------------


Net Income (Loss)                                 $    188,945    $    (33,812)
                                                  ============    ============

Net Income (Loss) per Common Share                $       .002    $     (.0006)
                                                  ============    ============

Average Number of Common Shares                     92,739,265      54,580,960
                                                  ============    ============




                                       3
<PAGE>



                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                            StatementS of Cash Flows
                 FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001


                                                            2002         2001
                                                         ---------    ---------

Cash Flows from Operating Activities:

Net Income (Loss)                                        $ 609,300    $(346,797)

Adjustments to reconcile net income loss to
  net cash provided (used) in operating
  activities:
   Depreciation and amortization                             3,792        3,792
   Forgiveness of debt - trade payables                    (62,219)        --
   Extraordinary item                                     (565,557)     273,649


   Changes in assets and liabilities:
   Decrease in accounts receivable                            (518)       7,486
   Increase in accounts payable and
     accrued expenses                                       14,005       57,975
                                                         ---------    ---------

Net Cash Used in Operating Activities                       (1,197)      (3,895)
                                                         ---------    ---------

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

Net Cash Provided by Financing Activities                     --           --
                                                         ---------    ---------

Net Increase (Decrease) in Cash                             (1,197)      (3,895)

Cash, Beginning of Year                                      1,197        7,238
                                                         ---------    ---------

Cash, End of Period                                      $    --      $   3,343
                                                         =========    =========






                                       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, 2002 and 2001, respectively.

                                                         2002           2001
                                                   ------------   ------------


Income (loss) used in basic EPS                    $    609,300   $   (346,797)
                                                   ============   ============
Weighted average number of common
  shares used in basic EPS                           92,739,265     54,580,960
                                                   ============   ============

Net income (loss) per common share                 $      .0065   $     (.0064)
                                                   ============   ============


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, 2002 and 2001 property and equipment consisted of the following:

                                                               2002      2001
                                                              -------   -------

Equipment                                                     $29,288   $29,288
Furniture & Fixtures                                           10,008    10,008
Leasehold Improvements                                         11,468    11,468
                                                              -------   -------
                                                               50,764    50,764
Less: Accumulated depreciation                                 30,440    22,859
                                                              -------   -------

Property and Equipment - Net                                  $20,324   $27,905
                                                              =======   =======

Depreciation expense was $3,792 for the six months ended June 30, 2002 and 2001,
respectively.


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

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

During the three months ended June 30, 2002 and 2001, 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, 2002 and 2001,  respectively,  there were 0
and 250,000 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 and $0 for 2002 and
2001, respectively.

During the three  months  ended June 30,  2002 and 2001,  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, 2002 and 2001, respectively, 0 fully vested
shares of the Company's Common
Stock were issued to officers of the Company.


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, 2002
and 2001 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.  Transfer of Equity in Settlement of Convertible Notes
---------------------------------------------------------

During the three months ended June 30, 2002 four (4) holders of the  Convertible
Notes (totaling $126,500) were issued 678,646 shares of the Company's restricted
Common  Stock in exchange  for their  release of all  obligations  under or as a
result of the Convertible  Notes. The total market value of those shares issued,
$2,715,  has been recorded as "additional  paid-in capital" as of June 30, 2002.
At the transfer date the amounts due to debenture holders exceeded the aggregate
market value of the shares  transferred,  and accordingly a gain of $123,785 has
been included in income along with $22,770 of accrued  interest as  "Forgiveness
of Debt Income" of $146,555.

During the six months  ended June 30, 2002 nine (9)  holders of the  Convertible
Notes  (totaling  $551,500)  were  issued  17,178,264  shares  of the  Company's
restricted  Common Stock in exchange for their release of all obligations  under
or as a result of the Convertible  Notes. The total market value of those shares
issued,  $85,213,  has been recorded as "additional  paid-in capital" as of June
30, 2002. At the transfer date the amounts due to debenture holders exceeded the
aggregate  market value of the shares  transferred,  and  accordingly  a gain of
$466,287  ($.005 per share) has been  included in income  along with  $99,270 of
accrued interest as "Forgiveness of Debt Income" of $565,557.

7.  Forgiveness of Debt - Trade Payables
----------------------------------------

During  the three  months  ended June 30,  2002 the  Company  issued  447,991 of
Company's restricted Common Stock to various unsecured creditors in exchange for
their  release of any further  claims.  The total  amount of debt as of June 30,
2002 was $46,799.  The total market value of those shares  issued,  $2,240,  has
been  recorded  as  "additional  paid-in  capital" as of June 30,  2002.  At the
transfer date the amounts due to vendors  exceeded the aggregate market value of
the shares  transferred,  and accordingly a gain of $44,559 has been included in
income along with $17,660 of additional  payables that have been written-off and
recognized as "Forgiveness of Debt - Trade Payables" of $62,219.


8.  Issuance of Restricted Shares
---------------------------------

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


                                       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 with
one (1) employee and  substantially  reduced  overhead.  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.

     The Company has been attempting to settle its  outstanding  liabilities but
has been unable to settle with certain creditors.  The revenues generated by the
Company's current operations are not sufficient for the Company to continue over
the next twelve-month period given its current structure.  During the first part
of the third quarter,  the Company's  telephone at its Vermont facility was shut
off for failure to pay the telephone bill.  Therefore,  the Company is currently
in  negotiations  to sell  its  assets  in  exchange  for an  agreement  for the
assumption  of its  liabilities  (with  certain  exceptions),  together  with an
agreement to indemnify and hold the Company  harmless from paying the same.  The
Company is also actively  seeking another Company for the purpose of a merger or
other combination.

     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 by the Company, to waive his right to all his outstanding stock options, and
to assume and hold the  Company  harmless  from  certain  tax  liabilities.  Mr.
Parisi,  a director of the Company,  effective  upon  completion  of a merger or
other combination, to waive his right to all his outstanding stock options.

     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.


                                       8
<PAGE>



Results of Operations:
---------------------

Sales; Gross Margins; Net Losses:

     For the three months ended June 30,  2002,  sales  decreased to $4,191 from
$16,443  for the  three  months  ended  June 30,  2001,  representing  a $12,252
decrease.  This was due to a lack of  sufficient  funding  in order to  generate
sales through additional marketing efforts.  Also contributing to the decline in
sales was the fact  that the  northeast  experienced  a very  mild  winter  that
reduced demand for the products.

     The  Company's  gross margin on sales  decreased  from (78%) for the second
three months of 2001 to (40%) for the second three months of 2002.

     For the three months  ended June 30, 2002,  the Company had a net income of
$188,945,  or $.002 per  share,  as  compared  with a net loss of  $(33,812)  or
$(.0006) per share in the same period in the previous  year.  For the six months
ended June 30, 2002 and 2001, the Company had a net income of $609,300 or $.0065
per share, and a net loss of $(346,797) or $(.0064) per share, respectively. The
Company may continue to incur minimal  profits or losses while  operating at the
current level. The increase in the net income per share for the six months ended
June 30,  2002  from  the same  period  in 2001 is due to  lower  costs  and the
Forgiveness of Debt Income described in "Note 6" of the financial statements.

     Selling,  General and Administrative  Expenses. For the three months ending
June 30, 2002, the Company incurred selling, general and administrative expenses
of $17,734,  as compared  to $15,465 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, 2002 and 2001,
the Company did not have any research and development expenses. The research and
development  of the Company's  product lines were  terminated in 1998 due to the
Company's financial condition. The research facility in Brookfield,  CT was also
closed in 1998.  Calculations  with  respect to the  percentage  of research and
development expenses relative to sales are not meaningful.

     Liquidity and Capital Resources.  The Company has been unable to settle all
of its outstanding liabilities.  The revenues generated by the Company's current
operations  are not  sufficient  for the  Company  to  continue  over  the  next
twelve-month period given its current structure. The Company is not aware of any
prospects  for an  additional  infusion of capital  under the current  corporate
structure.  During the first part of the third quarter,  the Company's telephone
at its  Vermont  facility  was shut off for failure to pay the  telephone  bill.
Therefore,  the  Company  is  currently  in  negotiations  to sell its assets in
exchange for an agreement for the  assumption of its  liabilities  (with certain
exceptions),  together  with an  agreement  to  indemnify  and hold the  Company
harmless  from paying the same.  The Company is also  actively  seeking  another
Company for the purpose of a merger or other combination.

     The  Company is  generating  sufficient  revenues  to finance  its  current
operations  but has been  unable to  generate  sufficient  revenue to retire its
debt.  At June 30,  2002,  the Company had current  assets of $5,027 and current
liabilities of $191,809.  As of June 30, 2002 the Company was able to operate at
a near breakeven level based upon the reduction of costs  associated with sales.
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.


                                       9
<PAGE>



     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, 2002.

     Extraordinary Item: During the first quarter of 2002, the company settled a
portion of its  convertible  note debt plus  interest of  $401,500,  through the
issuance of 16,499,618  shares of the Company's  restricted Common Stock. At the
transfer  date the amounts due to the debenture  holders  exceeded the aggregate
market value of the shares  transferred  by  $419,002,  which is reflected as an
extraordinary  gain.  During the second quarter of 2002,  the company  settled a
portion of its  convertible  note debt plus  interest of  $149,270,  through the
issuance of 678,646  shares of the Company's  restricted  Common  Stock.  At the
transfer  date the amounts due to the debenture  holders  exceeded the aggregate
market value of the shares  transferred  by  $146,555,  which is reflected as an
extraordinary gain.


                           PART II: OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS:

     (a) Pending Legal  Proceedings:  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
$1,943 as of June 30, 2002.

     (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.

ITEM 2. CHANGES IN SECURITIES:  The settlement of the Company's  liabilities and
the Company's potential merger or other combination with another company has and
will cause the dilution of the current shareholders' interest in the Company.

     During the second quarter of 2002, the Company issued of a total of 678,646
shares of its  restricted  Common Stock to four (4) holders of the  Company's 6%
Convertible Notes (totaling principal in the amount of $126,500) in exchange for
the release of the Company's obligations under or as a result of the Convertible
Notes.  During the first quarter of 2002, the Company  mistakenly caused 124,168
shares of its  restricted  common  stock to be issued for the benefit of one (1)
holder in the  belief  that the holder had  agreed to a  settlement  offer.  The
Company has requested that the Transfer Agent cancel those shares.


                                       10
<PAGE>



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

     During the second quarter of 2002, the Company issued an additional 448,101
shares  of  its   restricted   Common  Stock  in  settlement  of  $40,999.46  of
liabilities.

     Mr.  Fricke,  a director  and officer of the  Company,  and Mr.  Parisi,  a
director of the  Company,  have agreed to waive all rights to all of their stock
options,   effective  upon  the  Company's  completion  of  a  merger  or  other
combination.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES:

     (a) Defaults In Debt  Obligations:  In March and April,  1998,  the Company
issued its 6% Convertible Notes (the "Notes") in the aggregate  principal amount
of $726,500 in a private  placement  under Rule 505 of Regulation D. Interest on
the Notes is payable semi-annually.  The principal amount of the Notes, together
with unpaid interest thereon, is due and payable,  if not earlier converted,  on
March 3, 1999.  The Notes are  convertible  into  shares of Common  Stock at the
option of the holder at any time  following the earlier of (i) 90 days after the
filing  of a  registration  statement  with the SEC  covering  the  shares to be
received upon  conversion  or (ii) the date the SEC declares  such  registration
statement effective.  The conversion price per share is the lesser of (i) 70% of
the  average  closing bid price per share of Common  Stock for the five  trading
days prior to the conversion date or (ii) $0.25.  Upon  conversion,  any accrued
and unpaid  interest  is waived by the  holder.  The  Company  has the option to
repurchase  the Notes from the holder prior to  registration  of the  underlying
shares at a premium of 10% over the  purchase  price of the Notes.  The  Company
agreed  to file  with the SEC not  later  than  June 3,  1998,  and use its best
efforts to have declared  effective not later than July 3, 1998, a  registration
statement registering for resale 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 June 30, 2002,  nine (9) holders of the foregoing  Convertible  Notes
(totaling principal of $551,000) agreed to release all obligations under or as a
result of the  Convertible  Notes in  exchange  for the  issuance  of a total of
17,178,264 shares of the Company's  restricted Common Stock. In addition,  as of
December 31, 2001, 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 June 30, 2002,  the Company was in default in the
amounts of $125,000 in principal and $29,512 in interest for a total of $151,512
in arrearages.


                                       11
<PAGE>


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:

     The Company is currently in negotiations to sell its assets in exchange for
an agreement for the assumption of its  liabilities  (with certain  exceptions),
together  with an  agreement  to indemnify  and hold the Company  harmless  from
paying the same. The Company is also actively  seeking  another  Company for the
purpose of a merger or other combination. No definitive agreements have, as yet,
been executed.

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

     (a)  Exhibits. None.

     (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 10th day of August 2002.

                                             SAFE ALTERNATIVES CORPORATION
                                             OF AMERICA, INC.

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