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 September 30, 2001

[ ]    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 September 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>





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


<PAGE>

PART I: FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS:


                  SAFE ALTERNATIVES CORPORATION OF AMERICA, INC
                                TABLE OF CONTENTS




Balance Sheets,
September 30, 2001 and 2000                                                1

Statements of Operations,
For the Nine Months Ended September 30, 2001 and 2000                      2

Statements of Operations,
For the Three Months Ended September 30, 2001 and 2000                     3

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

Notes to Financial Statements                                            5 - 7



<PAGE>



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


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

Current Assets:
  Cash                                             $        215    $      2,382
  Accounts receivable - net of allowance
    of $5,000 and $0 for 2001 and 2000                    4,509          28,639
                                                   ------------    ------------

  Total current assets                                    4,724          31,021
                                                   ------------    ------------


Property and Equipment, Net                              26,010          33,592
                                                   ------------    ------------


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

                                                   $     30,734    $    338,262
                                                   ============    ============



                      Liabilities and Stockholders' Deficit


Current Liabilities:
  Accounts payable and other accrued expenses      $    504,253    $    401,114
  Current maturities of stockholders' loans             926,900         926,900
  Convertible debentures                                726,500         726,500
                                                   ------------    ------------

  Total current liabilities                           2,157,653       2,054,514
                                                   ------------    ------------

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 2000                   110,747         110,747
  Additional paid-in capital                         15,528,674      15,528,674
  Accumulated deficit                               (17,908,499)    (17,383,832)
  Subscriptions issuable                                  2,160           2,160
                                                   ------------    ------------

                                                     (2,266,918)     (1,742,251)

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

  Total stockholders' deficit                        (2,266,919)     (1,742,252)
                                                   ------------    ------------

                                                   $     30,734    $    338,262
                                                   ============    ============




                                        1

<PAGE>


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




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

Sales                                      $     57,002    $     68,792

Cost of Goods Sold                               21,255          29,760
                                           ------------    ------------

Gross Profit                                     35,747          39,032
                                           ------------    ------------

Operating Costs:
  Selling, general and administrative            48,591          59,410
  Research and development                         --              --
  Depreciation and amortization                   5,687           5,687
                                           ------------    ------------

  Total operating costs                          54,278          65,097
                                           ------------    ------------

Loss from Operations                            (18,531)        (26,065)
                                           ------------    ------------

Other Expenses:
  Interest expense - stockholders' loan         (55,614)        (55,614)
  Interest expense - convertible notes          (32,694)        (32,694)
                                           ------------    ------------

  Total other expenses                          (88,308)        (88,308)
                                           ------------    ------------

Net loss before extraordinary item             (106,839)       (114,373)

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

Net Loss                                   $   (380,488)   $   (114,373)
                                           ============    ============

Net Loss per Common Share                  $     (.0070)   $     (.0025)
                                           ============    ============

Weighted Average Number of Common Shares     54,580,960      45,762,778
                                           ============    ============




                                       2
<PAGE>


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



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

Sales                                       $     14,510    $     33,245

Cost of Goods Sold                                 6,299          14,093
                                            ------------    ------------

Gross Profit                                       8,211          19,152
                                            ------------    ------------

Operating Costs:
  Selling, general and administrative             10,571          15,761
  Research and development                          --              --
  Depreciation and amortization                    1,895           1,895
                                            ------------    ------------

  Total operating costs                           12,466          17,656
                                            ------------    ------------

Income (Loss) from Operations                     (4,255)          1,496
                                            ------------    ------------

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                                    $    (33,691)   $    (27,940)
                                            ============    ============

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

Weighted Average Number of Common Shares      54,580,960      45,762,778
                                            ============    ============


                                       3
<PAGE>



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


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

Cash Flows from Operating Activities:

Net Loss                                    $(380,488)   $(114,373)

Adjustments to reconcile net loss to
  net cash provided (used) in operating
  activities:
   Depreciation and amortization                5,687        5,687
   Extraordinary item                         273,649         --



  Changes in assets and liabilities:
   Decrease in accounts receivable              7,486        4,984
   Increase in accounts payable and
     accrued expenses                          86,643       67,118
                                            ---------    ---------

Net Cash Used in Operating Activities          (7,023)     (36,584)
                                            ---------    ---------

Net Cash Flows from Financing Activities:
   Net proceeds from issuance of common
    stock and subscriptions                      --         37,500
                                            ---------    ---------

Net Cash Provided by Financing Activities        --         37,500
                                            ---------    ---------

Net Increase (Decrease) in Cash                (7,023)         916

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

Cash, End of Period                         $     215    $   2,382
                                            =========    =========


                                       4
<PAGE>


                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                          NOTES TO FINANCIAL STATEMENTS
              FOR THE NINE MONTHS ENDED SEPTEMBER 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
nine months ended September 30, 2001 and 2000, respectively.

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


     Loss used in basic EPS                        $   (380,488)   $   (114,373)
                                                   ============    ============
     Weighted average number of common
       shares used in basic EPS                      54,580,960      45,762,778
                                                   ============    ============

     Net loss per common share                     $     (.0070)   $     (.0025)
                                                   ============    ============


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 NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000




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

As of  September  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                           24,754      17,172
                                                           ---------   ---------

     Property and Equipment - Net                          $  26,010   $  33,592
                                                           =========   =========

Depreciation expense was $5,687 for the nine months ended September 30, 2001 and
2000, respectively.

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

Shares Issued as Compensation and Commission

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

During  the nine  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 nine  months  ended  September  30,  2000,  an officer of the Company
purchased  5,750,000  shares  of the  Company's  restricted  Common  Stock for a
purchase price of $37,500.

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 September 30, 2001.


                                       6
<PAGE>

                 SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
                          NOTES TO FINANCIAL STATEMENTS
              FOR THE NINE MONTHS ENDED SEPTEMBER 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  September  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 for the Three Months Ending September 30, 2001 and 2000.
------------------------------------------------------------------------------

Sales; Gross Margins; Net Losses:

     For the three months ended  September 30, 2001,  sales decreased to $14,510
from $33,245 for the three months ended  September 30, 2000,  representing a 56%
decrease.

     The  Company's  gross  margin on sales  decreased  from (57%) for the third
quarter of 2000 to (56 %) for the third quarter of 2001.

     For the three months ended  September 30, 2001, the Company  reported a net
loss of $(33,691), or $(.0006) per share, as compared with $(27,940) or $(.0006)
per share in the same period in the previous  year, an increased loss of $5,751,
or 21%.  The loss for the third  quarter of 2001  included  accrued  interest of
$29,436,  which  includes  $10,898  and  $18,538  for the  convertible  note and
stockholder loans payable,  respectively.  The Company may continue to incur net
losses.  There was no change in the net loss per share in the third three months
of 2001 from the same  period in 2000 due to an increase in the number of shares
outstanding for each period.

     Selling,  General and Administrative  Expenses. For the three months ending
September 30, 2001, the Company  incurred  selling,  general and  administrative
expenses of $10,571,  as compared to $15,761 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  September 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 for the Nine Months Ending September 30, 2001.
-------------------------------------------------------------------

Sales; Gross Margins; Net Losses:

     For the nine months ending  September 30, 2001,  sales decreased to $57,002
from $68,792 for the nine months ending  September 30, 2000,  representing a 17%
decrease. This was due to decrease in customer orders.

     The Company's gross margin on sales increased from (57%) for the first nine
months of 2000 to (63%) for the first nine months of 2001.

     For the nine months ended  September 30, 2001 and before the  extraordinary
item discussed below, the Company had a net loss of $(106,839),  or $(.0020) per
share,  as compared with  $(114,373) or $(.0025) per share in the same period in
the previous  year.  For the nine months ended  September 30, 2001 and including
the  extraordinary  item that is discussed  below, the Company had a net loss of
$(380,488),  or $(.0070) per share,  as compared with $(114,373) or $(.0025) per
share in the same period in the previous year. The Company may continue to incur
net losses.  The  decrease of $.0005 in the net loss per share in the first nine
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 nine months ending
September 30, 2001, the Company  incurred  selling,  general and  administrative
expenses of $48,591,  as compared to $59,410 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 nine months ending September 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.

     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 September  30,
2001,  the  Company  had current  assets of $4,724 and  current  liabilities  of
$2,157,653.  As of September 30, 2001, 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.

     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 $971 as of September 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.


                                       9
<PAGE>

ITEM 2.  CHANGES IN SECURITIES:

     During the three months  ending on September  30,  2001,  settlements  were
reached with three trade creditors to release  $1,823.58 of debt in exchange for
the issuance of 1,824 shares of the Company's  restricted common stock...  It is
anticipated that this stock will be issued during the first quarter of 2002.

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


                                       10
<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 $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 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
13, 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.

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:

         None

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

(a)      Exhibits.  None

(b)      Reports on Form 8-K. None.


                                       11
<PAGE>



                                    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