UNITED STATES
                            SECURITIES AND EXCHANGE
                                   COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

|X|   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934

      For the fiscal year ended December 31, 2000.

      Commission file number 0-30215

                             Safari Associates, Inc.
                             -----------------------
                  Name of small business issuer in its charter

                   Utah                                  Fed ID 87-9369569
      ---------------------------------------------------------------------
      State or other jurisdiction of                      (I.R.S. Employer
      incorporation or Organization                      Identification No.)

       64 Edson Street, Amsterdam, New York                     12010
       ------------------------------------                     -----
      (Address of principal executive offices)                   Zip

Issuer's telephone number (518) 842-6500
                          --------------

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

Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.001 par value
                          -----------------------------
                                (Title of class)

      Indicate by check mark, whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
during the past 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|

      Indicate by check mark , if disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained herein and will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB |X|


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<PAGE>

Revenue for the fiscal year ended December 31, 2000 is $769,580 The aggregate
market value of the voting stock held by non-affiliates of the registrant based
on the closing bid price of such stock as of March 20, 2001 amounted to $977,485

The number of shares outstanding of each of the registrant's classes of common
stock as of December 31, 2000 was 8,223,770 shares.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

                                   FORM 10-KSB
                       FISCAL YEAR ENDED DECEMBER 31, 2000

                                TABLE OF CONTENTS

                                     Part I

                                                                            Page
                                                                            ----

Item 1. Description of Business                                               3

Item 2. Description of Property                                               6

Item 3. Legal Proceedings                                                     7

Item 4. Submission of Matters to Vote of Security Holders                     8

                                     Part ll

Item 5. Market for Common Equity and Related Stockholder Matters              8

Item 6. Management's Discussion and Analysis or Plan of Operation             9

Item 7. Financial Statements                                                 10

Item 8. Changes in and Disagreements With Accountants Accounting
        And Financial Disclosure                                             10

                                    Part lll

Item 9. Directors, Executive Officers, Promoters, and Control Persons;
         Compliance with Section 16(a) of the Exchange Act                   11


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<PAGE>

Item 10. Executive Compensation                                               11

Item 11. Security Ownership of Certain Beneficial Owners and Management       11

Item 12. Certain Relationships and Related Transactions                       12

Item 13. Exhibits, Financial Statement Schedules and Reports on Form 8-K      12

Signatures                                                                    13

                                     PART 1

Item 1. Description of Business

      Safari Associates, Inc., (the "Company") is the successor corporation of
Mag Enterprises, Inc., a Utah corporation incorporated on July 30, 1980. Mag
Enterprises, Inc., issued a total of 600,000 shares of its $0.001 par value
common stock to its officers, directors and founders. In August, 1980, the
Company offered 2,000,000 shares of its common stock, par value $0.001, a6 $0.25
a share pursuant to an original Offering Circular having an effective date of
August 7, 1980. The Offering Circular was filed with the Utah Securities
Commission. The offer was made pursuant to a Section 3(a)(11) exemption from
registration of the Securities Act of 1933, as amended. The entire offering was
sold resulting in net proceeds to the Company of $44,000. Thereafter, on or
about July 5, 1981, the shares of common stock of the Company became eligible
for interstate trading. From on or about July 5, 1981 through December, 1986,
the Company's sole asset and business was the owning of mining leases. From 1983
until on or about April, 1988, Mag Enterprises, Inc., was listed in the Pink
Sheets of the National Quotation Bureau. From its inception in 1980 through
November, 1986, the Company was virtually dormant. In December, 1986, the
Company acquired all of the issued and outstanding common stock of American
International Airboat Company, Inc., a Florida corporation that manufactured and
sold aluminum airboats. In late 1987, American International Airboat Company,
Inc., had its assets seized and sold for unpaid federal taxes. Mag Enterprises,
Inc., reverted to being a corporation without any active business.

That on or about August 10, 1993, Mag Enterprises, Inc., entered into an
Agreement and Plan of Reorganization with the owners of all of the issued and
outstanding common stock of Safari Enterprises, Inc., a Delaware corporation. At
the time, Safari Enterprises, Inc., had two wholly owned subsidiaries; Safari
Boat Company, Inc., and Safari Lure Company, Inc., both subsidiaries organized
and existing under and pursuant to the laws of the State of New York. On the
date of the Agreement and Plan of Reorganization, Mag Enterprises, Inc., had
authorized capital of 100,000,000 common shares, $0.0001 par value of which
5,500,000 shares were issued and outstanding, fully paid and non-assessable.
Pursuant to the Agreement and Plan of Reorganization, the stockholders of Mag
Enterprises, Inc., voted their stock to effectuate a 1 for 10 reverse split and
to increase the par value per share to $0.001 so that on the date of the
closing, the total number of shares of Mag Enterprises, Inc., common stock,
issued and outstanding was 550,000, $0.001 par value. That at the closing, the
stockholders of Safari Enterprises, Inc., were issued a total of 4,950,000
restricted shares of common stock of Mag Enterprises, Inc., having a par value
of $0.001. The total number of shares of common stock, $0.001 par value, issued
and outstanding after the closing was 5,500,000 shares.

On September 10, 1993, Articles of Amendment to the Articles of Incorporation of
Mag Enterprises, Inc., were filed with the State of Utah, Department of
Commerce, Division of Corporations and Commercial Code to change its name from
Mag Enterprises, Inc., to Safari Associates, Inc.


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<PAGE>

By and Offering Memorandum dated December 7, 1993, the Company offered for sale
600,000 shares of its common stock, par value $0.001, at a price of $0.50 per
share. The shares were sold to a total of fifty individual investors. The
offering was made in accordance with an exemption from registration with the
United States Securities and Exchange Commission pursuant to the terms and
conditions of Regulation D, Section 230.504 of the Securities Act of 1933, as
amended.

By an Offering Memorandum dated October 14, 1994, the Company offered for sale
350,000 shares of its common stock, par value $0.001, at a price of $1.50 per
share. The total number of shares offered were sold to individual investors. The
offering was made in accordance with an exemption from registration with the
United States Securities and Exchange Commission pursuant to the terms of
Regulation D, Section 230.504 of the Securities Act of 1933, as amended.

From 1993 through 1996, the Company had two operating wholly owned subsidiaries.
These were Safari Boat Company, Inc., and Safari Lure Company, Inc. Safari Boat
Company, Inc., manufactured and distributed a fiber glass Jon Boat. Safari Lure
Company, Inc., distributed cedar wood fishing lures. By the end of 1996,
management of the Company decided that both of these subsidiaries could not
generate sufficient sales or profits to merit continuing their operations. The
operations of both wholly owned subsidiaries were discontinued by the end of
1996.

The Company now has four wholly owned operating subsidiaries., Safari Camera
Corporation, Photography For Evidence, Inc., Impact Dampening Technology, Inc.,
and Safari Target Corporation. The Company also owns all of the issued and
outstanding common stock of Safari Enterprises, Inc. and Shoothru, Inc.

Safari Camera Corporation, a New York corporation, was organized on March 2,
1998. It is in the business of reloading single-use (disposable) cameras, which
it sells to distributors, retail stores and for promotions.

Photography For Evidence, Inc., a New York corporation was organized on November
25, 1997. The Company filed a Certificate of Doing Business under the name Smith
& Wesson(R) Cameras on December 17, 1997. Smith & Wesson(R)Cameras has an
exclusive license from Smith & Wesson Corp., to make, use and sell single-use
(disposable) cameras and conventional film using cameras under the Smith &
Wesson(R) brand name. Smith & Wesson(R) Cameras markets its single-use
(disposable) cameras to federal, state and local law enforcement agencies.
Effective September 1, 2000, Safari Associates, Inc., was awarded a five year
contract by the United States General Services Administration (Contract
#GS-07F-0434K) to sell these cameras to federal and state law enforcement
agencies.

Impact Dampening Technology, Inc., a New York corporation, was organized on
January 29, 1998. The company filed a Certificate of Doing Business under the
name Smith & Wesson(R) Recoil Pad Company on February 10, 1998. Smith &
Wesson(R) Recoil Pad Company has an exclusive license from Smith & Wesson(R)
Corp., to make, use and sell recoil pads under the Smith & Wesson(R) brand name.
Effective September 1, 2000, Safari Associates, Inc., was awarded a five year
contract by the United States General Services Administration (Contract
#GS-07F-0434K) to sell its self-adhesive Smith & Wesson(R) shoulder recoil pad
to federal and state law enforcement agencies.

Safari Target Corporation was organized under and pursuant to the laws of the
State of New York on August 2, 1999. It filed a Certificate of Doing Business
under the name Smith & Wesson(R) Targets on August 20, 1999. Smith & Wesson
Targets(R) has an exclusive license from Smith & Wesson Corp., to make use and
sell targets under the Smith & Wesson(R) brand name. Smith & Wesson(R) Targets
distributes a series of self sealing targets, intended to replace steel targets.
Effective September 1, 2000, Safari Associates, Inc., was awarded a five year
contract by the United States General Services Administration (Contract
#GS-07F-0434K) to sell the Smith & Wesson(R) self sealing targets to federal and
state law enforcement agencies.

Safari Camera Corporation is in the business of reloading single-use
(disposable) cameras which it sells to distributors, retailers and for
promotions. The company purchases used (disposable) camera shells from photo
labs and others and reloads these cameras with film and if a flash camera, with
a battery. Batteries and film are purchased from battery and film manufacturers
and distributors. These reloaded single-use cameras are then


                                       4
<PAGE>

placed in new packaging and sold. Some packaging is private label for retailers,
distributors and for promotions. Other cameras are sold in generic SAFARI
packaging. The raw materials required for this business are camera shells,
batteries and film. This business is highly competitive as to pricing and
purchasing single-use camera shells. The company has limited its distribution
and solicits small niche markets so as to try to avoid the competition for
camera shells and customers. Safari Camera Corporation also reloads single-use
cameras for Smith & Wesson(R) Cameras.

The company solicits its customers through sales representatives, direct mail
and through e-commerce. At the present time, Sierra Sales & Marketing accounts
for more than fifty percent of the company's business. If Safari Camera
Corporation were to lose Sierra Sales & Marketing as a customer, it would most
likely have to discontinue business.

The Company averages eight full time employees. These employees devote
approximately ninety (90%) percent of their time to the operations of Safari
Camera Corporation. The remainder of their time is devoted to the businesses of
the three other operating wholly owned subsidiaries. The operations of the
Company and its three wholly owned operating subsidiaries are located at 64
Edson Street, Amsterdam, New York 12010. (See Item 2. "Description of
Property").

On or about February 13, 1998, Fuji Photo Film Co., Tokyo, Japan, filed a
complaint with the United States International Trade Commission (ITC) charging
that certain Asian manufacturers and reloaders of single-use cameras and United
States importers of those cameras were infringing on fifteen United States
patents of Fujifilm that allegedly cover the manufacture of single-use cameras.
On or about April 21, 1999, the ITC ruled in favor of Fuji. The case is now on
appeal in the United States Court of Appeals for the Circuit of Washington, D.C.
The appeal has still not been argued. Should Fuji prevail, the decision would
not be binding upon United States reloaders of single-use cameras. However, the
decision would be persuasive precedent as to United States reloaders. Should
Fuji prevail on appeal and thereafter bring lawsuits for patent infringement
against United States reloaders of single-use cameras, including Safari Camera
Corporation, the company may have to discontinue it reloading operations.

Smith & Wesson(R) Cameras is an exclusive licensee of Smith & Wesson Corp. It
distributes single-use cameras to law enforcement agencies. The cameras are
reloaded by Safari Camera Corporation. Sales are generated through direct mail
advertising, trade shows and its United States General Services Administration
contract. A royalty of five (5%) percent of gross sales is paid to Smith &
Wesson Corp. The business operations of Smith & Wesson(R) Cameras are subject to
the same risks as set forth for Safari Camera Corporation.

Smith & Wesson(R) Recoil Pad Company is an exclusive licensee of Smith & Wesson
Corp. It has private label recoil pads manufactured by Hartlee Systems, Inc. The
recoil pads are designed by Smith & Wesson(R) Recoil Pad Company and the molds
necessary to manufacture the recoil pads are purchased by Smith & Wesson(R)
Recoil Pad Company. It distributes these pads under the Smith & Wesson brand
name. Two models of recoil pads are manufactured for the company. The "Safari"
model is conventional as it is fitted to the butt of the stock of a shotgun or
rifle. The Smith & Wesson(R) self-adhesive shoulder recoil pad is unique as it
self adheres to the outer garment being worn by the user. On September 23, 1999,
Smith & Wesson(R) Recoil Pad Company, entered into a consulting agreement with
Mark Hendricks with regard to the design of new recoil pads. On September ,
2000, the Company entered into a consulting agreement with Jan Barani, with
regard to the development of coatings for its Smith & Wesson(R) recoil pads. The
Company now offers the self-adhesive shoulder recoil pad to federal and state
law enforcement agencies pursuant to its contract with the United States General
Services Administration, Contract #GS-07F-0434K that became effective on
September 1, 2000. These recoil pads are still in test marketing and no decision
has been reached as to whether the company will expand its efforts beyond test
marketing at this time. Also, at this time, the Company does not have the
financial resources necessary to go beyond test marketing should it decide that
it would be in the best interest of the company to do so. Furthermore, the
company does not have any reason to believe that it will be able to raise the
capital to go beyond the test marketing phase of the business or that should it
raise such capital, it could do so on terms favorable to the company or that it
could compete succesfully with other companies that have been in the market for
many years.


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<PAGE>

Smith & Wesson(R) Targets has an exclusive license from Smith & Wesson Corp., to
make, use and sell targets under the Smith & Wesson(R) brand name. At the
present time the company is test marketing a self-sealing plastic target that is
intended to replace steel targets. Unlike steel targets, the Smith & Wesson(R)
self-sealing targets allow a bullet to pass through when the target is struck.
The user knows that the target is struck as it moves when hit by the bullet.
With steel targets, when the target is struck by a bullet, there is a danger of
ricochet, splatter and fragmentation of the bullet, which can strike and injure
the shooter or someone in the vicinity of the shooter. With the Smith &
Wesson(R) self-sealing targets, the bullet passes through the target into a
safety zone without any danger of injury as the bullet does not ricochet,
splatter or fragment. These targets are manufactured for Smith & Wesson(R)
Targets by Creative Urethanes, Inc. Smith & Wesson(R) Targets owns the molds
with which the targets are manufactured. The company is developing a line of
variously shaped targets and is still at the test marketing stage of its
business. Some of the targets are designed to knock-down and others to
knock-down and spring back up when struck by a bullet. Others wiggle when struck
by a bullet. The market for these targets now appears to be very small but may
increase if their safety factor over steel targets dictates their use. The
company has not advertised these targets for more than a year. The Company was
awarded a five year contract for these targets by the United States General
Services Administration effective September 1, 2000, for sale to federal and
state law enforcement agencies. This is part of Contract #GS-07F-0434K. Should
circumstances indicate that the company should go beyond test marketing of these
targets, the company would have to obtain capital for advertising, manufacture
and inventory. At this time the Company does not have the capital necessary for
any of the foregoing and does not know whether it will be able to raise such
capital, if necessary, or whether, if it could raise the capital, it can do so
on terms favorable to the Company that would make it feasible to risk the
capital in an attempt to increase its sales.

Shoothru, Inc., a New Jersey corporation, was acquired by the Company in March,
1998. Shoothru, Inc., developed and designed a small product line of
self-sealing targets. The operations of Shoothru, Inc., are now conducted by
Smith & Wesson(R)Targets.

On January 1, 1998, Smith & Wesson Corp., Springfield, Massachusetts, granted
Safari Enterprises, Inc., an exclusive Trademark License to make, use and sell
single-use and conventional film using still cameras under the Smith & Wesson(R)
brand name in the United States, its possessions and Canada. The term of the
license is from January 1, 1998 to June 30, 2001. The license agreement provides
that Safari Enterprises, Inc., will pay Smith & Wesson Corp., a minimum royalty
of $15,000 the first eighteen months; $25,000 the next twelve months and $35,000
the final twelve months. The minimums are to be paid against a royalty of 5% of
net sales, whichever is greater. By oral agreement, the minimum royalty had been
kept at $8,664 a year during the term of the license agreement to December 31,
2000 and $2,500 a quarter thereafter. That minimum payment has been made and
accepted during the entire life of the license agreement. The license agreement
further provides that Safari Enterprises, Inc., can assign the license to an
affiliate company under the same control as Safari Enterprises, Inc. On January
12, 1998, the License was amended by adding recoil pads for firearms effective
January 1, 1998. The minimum royalty was not increased and covered both
products. On May 18, 1999, the License was further amended to include targets
for firearms effective January 1, 1998. Again, the minimum royalties were not
increased and covered all three products. On November 25, 1997 the Company
organized a wholly owned subsidiary, Photography For Evidence, Inc., under the
laws of the state of New York. On December 17, 1997, Photography For Evidence,
Inc., filed a Certificate of Doing Business under the name Smith & Wesson(R)
Cameras. The License Agreement was assigned the Smith & Wesson(R) Cameras. On
January 29, 1998, the Company organized a wholly owned subsidiary, Impact
Dampening Technologies, Inc., a New York corporation. On February 10, 1998,
Impact Dampening Technologies, Inc., filed a Certificate of Doing Business under
the name Smith & Wesson(R) Recoil Pad Company. Safari Enterprises, Inc.,
assigned its exclusive recoil pad license to Smith & Wesson(R) Recoil Pad
Company. On August 2, 1999 the Company organized Safari Target Corporation under
the laws of the State of New York. On August 20, 1999, Safari Target Corporation
filed a Certificate of Doing Business under the name Smith & Wesson(R) Targets.
Safari Enterprises, Inc., assigned its target license to Smith & Wesson(R)
Targets.

Item 2. Description of Property.


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<PAGE>

The principal office and plant of the Company and its wholly owned subsidiaries
is located at 64 Edson Street, Amsterdam, New York. It is the location where
Safari Camera Corporation reloads single-use (disposable) cameras, inventories
and from which its ships the products produced and distributed by the Company
and its wholly owned subsidiaries, Smith & Wesson(R) Targets, Smith & Wesson(R)
Cameras and Smith & Wesson(R) Recoil Pad Company. The entire building is
occupied by the Company and its wholly owned subsidiaries. The Company owns the
building and the property of which it is constructed subject to a $95,000
mortgage. Of the $95,000 mortgage, $55,000 was loaned to the Company by Lillian
Berger, its Secretary-Treasurer and $40,000 was loaned to the company by Pamela
Gray and Charles Gray, her husband. The building and property cost the Company
approximately $192,000 to construct in 1994, which includes about $4,500 for the
purchase of the vacant land. (See: Part 1, Item 3. Legal Proceedings)

The premises is a two story concrete block building on approximately two acres
of land located in the Amsterdam Industrial Development Park. It has 5,000
square feet on the first floor and 1,500 square feet on the second floor.
Approximately 4,000 square feet on the first floor is used for the reloading of
cameras, assembly of targets, packaging of recoil pads and storage of inventory.
The remainder of the space on the first floor contains three offices, two
bathrooms and an entrance hall. The second floor contains an employee kitchen
and general open work and storage space.

The Company has no policy with respect to investments in real estate or
interests in real estate and no policy with respect to investments in real
estate mortgages. Further, the Company has no policy with respect to investments
in securities of or interests in persons primarily engaged in real estate
activities.

Item 3. Legal Proceedings.

In or about September, 1993, the Amsterdam Industrial Development (AIDA) sold
Safari Enterprises, Inc., the property on which Safari Enterprises, Inc.,
constructed premises 64 Edson Street, Amsterdam, New York. Thereafter, on
October 4, 1993, Safari Enterprises, Inc., conveyed the property to AIDA for
$85,000 pursuant to a sale and ten year leaseback at the end of which, if Safari
Enterprises, Inc., met certain conditions, AIDA would convey the property back
to Safari Enterprises, Inc. In or about 1996, a legal dispute arose between AIDA
and Safari Enterprises, Inc., concerning the Sale and Leaseback. Safari
Enterprises, Inc., stopped paying rent. The dispute between the parties was that
AIDA refused to acknowledge that its ownership of the property was in effect a
mortgage and that the sale and leaseback did not properly reflect the true
agreement of the parties concerning the payment of real estate taxes, it being
the contention of Safari Enterprises, Inc., that although the lease called for
the payment of such taxes, the actual agreement was that the tenant should have
a five year exemption. On April 8, 1998, AIDA commenced a legal proceeding
against Safari Enterprises, Inc., defendant, in the Supreme Court of the State
of New York, County of Montgomery. AIDA, in its action sought to foreclose all
of the right, title and interest that Safari Enterprises, Inc., had in the
subject property. A motion for Summary Judgment in favor of AIDA was granted on
September 23, 1999. The decision was settled by an order of Reference dated
October 6, 1999 and entered on October 20, 1999. The Order appointed a Referee
to determine the amount due to the plaintiff from the defendant. As of May 5,
2000 the amount due and owing from the defendant to plaintiff was computed at
$84,105.51. Pursuant to the judgment of foreclosure, the property was scheduled
for public sale by the Referee on May 31, 2000. In order to Stay the sale, on
May 30, 2000, Safari Enterprises, Inc., filed a Petition in Bankruptcy in the
United States Bankruptcy Court, Northern District of New York, pursuant to
Chapter 11 of the United States Bankruptcy law. AIDA made a motion in the
bankruptcy court to lift the stay of the foreclosure sale. The motion was
granted and the sale of the property took place on October 26, 2000. The Company
was the high bidder at the sale, bidding $91,968.56. The Company paid the
Referee a deposit of ten (10%) percent of the bid price on the date of the
bidding, another $15,000 on November 14, 200 and the balance and the balance of
$67, 768.40 on December 22, 2000 and by deed dated November 15, 2000, delivered
to the Company on December 22, 2000 and recorded in the office of the County
Clerk of Montgomery County on February 2, 2001, the property was conveyed to
Safari Associates, Inc. By decision made and entered January 18, 2001, the
Supreme Court, Appellate Decision, Third Department, reversed the judgment of
the lower court pursuant to which the property was sold at public foreclosure
sale. It was the opinion of the appellate court that the lower court erred in
granting the Plaintiff's motion for summary judgment. AIDA has not appealed from
the decision of the Appellate Division. The case instituted by AIDA against
Safari Enterprises, Inc., is still


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<PAGE>

pending but the Company, Safari Associates, Inc., now has title to premises 64
Edson Street, Amsterdam, New York. The Chapter 11 bankruptcy was converted to a
Chapter 7 bankruptcy and is pending.

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

No matter was submitted during the fourth quarter of the fiscal year covered by
this report, or for the entire fiscal year, to a vote of security holders,
through the solicitation of proxies or otherwise.

                                     PART II

Item 5. Market for Common Equity and Related Stockholder Matters.

      (a) Market Information

The Company's Common Stock is traded over-the-counter on the Electronic Bulletin
Board maintained the National Association of Securities Dealers under the symbol
"SAFR". There is no assurance that the Common Stock will continue to be quoted
or that any liquidity exists for the Company's shareholders.

The following table sets forth the quarterly quotes of high and low prices for
the Company's Common Stock on the OTC Bulletin Board during the fiscal years
1999 and 2000.

Fiscal 2000                    High               Low

March 31, 2000                 $0.437            $0.25
June 30, 2000                  $0.45             $0.19
September 30, 2000             $0.43             $0.25
December 31, 2000              $0.31             $0.12

Fiscal 1999

March 31, 1999                 $0.25             $0.125
June 30, 1999                  $0.81             $0.25
September 30, 1999             $0.43             $0.14
December 31, 1999              $0.43             $0.15

The source of this information is Bloomberg Quotation Services and
broker-dealers making a market in the Company's Common Stock. These prices
reflect inter-dealer prices, without retail markup, mark-down or commission and
may not represent actual transactions.

      (b) Holders

As of December 31, 2000, there were approximately 252 stockholders of record of
the Company's Common Stock. The number does not include beneficial owners who
held shares at broker/dealers in "street name"

      (c) Dividends

The Company has paid no cash dividends on its Common Stock and management does
not anticipate that such dividends will be paid in the foreseeable future.

      (d) Recent Sales of Unregistered Securities.


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<PAGE>

During the past year, the Company sold restricted shares of its $0.001 par value
Common Stock without registering the securities under the Securities Act of
1933, as amended.

On or about January 14, 2000, the company sold 25,000 shares of its par value
$0.001 restricted Common Stock to Anthony Crisci at a price of $0.25 a share.
Mr. Crisci executed an investment letter upon which the Company relied to
establish that the transaction was exempt from registration pursuant to Section
4(2) of the Securities Act of 1933, as amended. No broker or underwriter was
involved in the transaction and no commission was paid. The proceeds were used
for working capital.

On or about January 14, 2000, the Company sold 25,000 shares of its $0.001 par
value restricted Common Stock to Jeff Rodman at a price of $0.25 a share. Mr.
Rodman executed an investment letter upon which The Company relied to establish
that the transaction was exempt from registration pursuant to Section 4(2) of
the Securities Act of 1933, as amended. No broker or underwriter was involved in
the transaction and no commission was paid. The proceeds were used for working
capital.

In September, 2000, the Company sold 250,000 shares of its $0.001 par value
restricted Common Stock to Michael Baia at a price of $0.20 a share. Mr. Baia
executed an investment letter upon which the Company relied to establish that
the transaction was exempt from registration pursuant to Section 4(2) of the
Securities Act of 1933, as amended. No broker or underwriter was involved in the
tranasaction and no commission was paid. The proceeds were used for working
capital.

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

Revenue for the year ended December 31, 2000 was $769,580, an increase of
$300,909 (64.2%) over the year ended December 31, 1999. The increase was
entirely due to an increase in the quantity of units single-use cameras sold.
There was no material change in the number of units old of the other products of
the Company.

Cost of sales for the year ended December 31, 2000, was 86.8%, resulting in a
gross profit of 13.2%. Cost of sales for the year ended December 31, 1999, was
76.9%, resulting in a gross profit of 23.1%. The decrease of the gross profit
margin can be attributed to several factors which the Company believes have now
or will be corrected shortly. In the process of recycling (reloading) single-use
cameras, the Company had a defective rate of approximately 20% of its cameras
during the recycling process caused by new untrained employees and not being
able to detect errors until after film had been loaded. New equipment that has
been on order for approximately eight months, is expected to be delivered by the
end of March, 2001. It is believed that this new equipment will eliminate
approximately 75% of the defects while a better trained and experienced work
force will eliminate most of the other defects. The cost to the Company was
approximately $36,000 or 9.4% of the cost of sales.

Included in the cost of sales is a write-off of approximately $24,000 in target
inventory which was disposed of as the result of an improvement in materials
used to produce targets. An additional $32,000 was written off as the Company
disposed of camera shells no longer used. The second shift was shut down for the
entire month of September during which time the warehouse layout was redesigned,
including shelving for the inventory, laying out eight new work stations, and
construction of a new office on the second floor of the facility which will be
used to service the contract awarded to the Company by the United States General
Services Administration. The estimated cost incurred by the Company in labor,
material and other direct expenses, which were not capitalized, is approximately
$32,000. Without these non-recurring costs and expenses, cost of sales would
have been approximately $544,455 and the gross profit would have been $215,125
or approximately 28% compared to approximately 23% in 1999. With more trained
personnel and new equipment, the Company expects that the gross profit as a
percentage of revenue will increase to approximately 30%.

Operating expenses for the year ended December 31, 2000 were $245,437, compared
to $265,625 for the year ended December 31, 1999, a decrease of $20,188. Selling
expenses for the year ended December 31, 2000 decreased by $18,807. The decrease
in selling expenses were approximately $10,000 in advertising and $6,500 in
telemarketing expenses. General and administrative expenses decreased by $1,381
for the year ended December


                                       9
<PAGE>

31, 2000 compared to the year ended December 31, 1999. Accounting and filing
fees increased by approximately $15,000 in the year 2000. This is attributed to
the fact that the Company became a reporting company. Legal fees decreased by
approximately $10,000 from those of the prior year.

Liquidity and Capital Resources

At December 31, 2000, current liabilities exceeded current assets by $308,484.
Approximately $157,400 of the liabilities are those of Safari Enterprises, Inc.,
which is now in Chapter 7 of the United States Bankruptcy law.(See Legal
Proceedings, Item 3, page 7), Safari Lure Company, Inc., and Safari Boat
Company, Inc., which can file for Chapter 7 protection pursuant to United States
Bankruptcy law. These subsidiaries of the Company have no assets. All assets are
owned by Safari Associates, Inc., the "Company" and its operating subsidiaries
and are not subject to the liabilities of Safari Enterprises, Inc., Safari Lure
Company, Inc., and Safari Boat Company, Inc. After deducting the liabilities of
the non operating subsidiaries, current liabilities of the Company exceed
current assets by approximately $151,000.

The Company is currently in the process of seeking to refinance its mortgage on
its premises at 64 Edson Street for $135,000, which would infuse approximately
$95,000 into the Company after paying off $40,000 of the current mortgage and
converting $55,000 of said mortgage due to Lillian Berger into a long term
unsecured loan. Lillian Berger has agreed to the foregoing in the event that the
Company is able to refinance said mortgage. There can be no assurance that the
Company will be able to refinance said mortgage or, that if it is able to obtain
such refinancing, it will be on terms beneficial to the Company. The Company is
also seeking to raise additional equity capital to reduce its outstanding
current liabilities. There is no assurance that the Company will be able to
raise the additional equity capital or that doing so will not create dilution to
the present stockholders. Also, even if all of these steps are successful, there
is no assurance that the Company will be able to continue as a going concern.

Item 7. Financial Statements.

The information required by this item is incorporated by reference to pages F-1
through F-15 of this annual report on Form 10-KSB.

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

None

                                    Part III

Item 9. Directors, Executive Officers, Promoters and Control Persons.

                                                             Year First Became
Name                 Age        Position With Company        Director or Officer
----                 ---        ---------------------        -------------------

Morton Berger        72         President/Director           1986

Lillian Berger       70         Secretary/Director           1986

Each director serves until the next annual meeting of shareholders and until his
or her respective successor is duly elected and qualifies. Executive officers
are elected by the Board of Directors to serve at the discretion of the
directors.


                                       10
<PAGE>

MORTON BERGER-President/Director-He has been an officer and director of the
Company since 1986. He has been the chief operating officer of the Company since
September, 1986. Mr. Berger graduated from New York University Law School in
June, 1952. He is the husband of Lillian Berger, the Secretary/Treasurer and
Director.

LILLIAN BERGER- Secretary-Treasurer- She has been an officer and director of the
Company since 1986. She graduated from Hunter College in June, 1951, Phi Beta
Kappa and Cum Laude. Her major at Hunter College was economics and she was
president of the Economics Society. She holds a Common Branches License in the
state of New York as to teach up to the eighth grade. She taught in the New York
City Public School system from September, 1952 to June, 1957 . Thereafter, she
taught in the Port Chester New York Public School system from September 1967 to
June 1986. She then retired and has worked as a substitute teacher and school
aid at different times to date. She is the wife of Morton Berger, the president
of the Company.

On June 13, 2000, Lillian Berger, Secretary-Treasurer, Director and owner of
more than 10% of the Company's issued and outstanding Common Stock, sold 5,000
shares of the Company's Common Stock pursuant to Rule 144 of the Securities Act
of 1933, as amended. Pursuant to Section 16(a) and 23(a) of the Securities
Exchange Act of 1934, she was required to file a Form 4 with the United States
Securities and Exchange Commission as she is a control person as defined in the
Act. The Form 4 sets forth and discloses changes of beneficial ownership of her
Common Stock of the Company. Lillian Berger failed to make the requisite.

Item 10. Executive Compensation

No Company executive other than Morton Berger has drawn or accrued a salary.
Since April, 1994, Morton Berger has had an agreement to be paid a salary of
$1,000 a week. He has never been paid his full salary and has been accruing his
unpaid salary. From April 1, 1994 to December 31, 2000, the Company owes Morton
Berger, president of the Company, accrued salary in the amount of $324,550.00.

Item 11. Security Ownership of Certain Beneficial Owners and Management.

The following table sets forth, as of the date of this report, the stock
ownership of each person known by the Company to be the beneficial owner of five
percent or more of the Company's Common Stock, each executive officer and
director individually and all executive officers and directors of the Company as
a group. No other class of voting securities is outstanding. Each person is
believed to have sole voting and investment power over the shares except as
noted.

(a)   Security ownership of certain beneficial owners

                   Name and Address of      Amount and Nature (1)     Percent
Title of Class      Beneficial Owner         Of Beneficial Owner    of Class (2)
--------------     -------------------      ---------------------   ------------
Common            Lillian Berger(3)
                  13 Eastbourne Drive
                  Spring Valley, NY10977          4,010,000              48.7%

Common            Morton Berger(4)
                  13 Eastbourne Drive
                  Spring Valley, NY 10977           303,830               3.6%


                                       11
<PAGE>

(b)   Security ownership of management

                   Name and Address of      Amount and Nature (1)     Percent
Title of Class      Beneficial Owner         Of Beneficial Owner    of Class (2)
--------------     -------------------      ---------------------   ------------
Common            Lillian Berger
                  13 Eastbourne Drive
                  Spring Valley, NY 10977         4,010,000                48%

Common            Morton Berger
                  13 Eastbourne Drive
                  Spring Valley, NY 10977           303,830               3.6%

Common            Includes all Officers and
                  Directors of the Company
                  As a group (2 persons)          4,313,830                52%

(1)   Includes the amount of shares each person or group has the right to
      acquire within 60 days pursuant options, warrants, rights, conversion
      privileges or similar obligations.

(2)   Based upon 8,223,770 shares outstanding, plus the amount of shares each
      person or group has the Right to acquire within 60 days pursuant to
      options, warrants, rights, conversion privileges or similar Obligations.

(3)   Lillian Berger is Secretary-Treasurer and a director of the Company.

(4)   Morton Berger is President and a director of the Company.

Item 12. Certain Relationships and Related Transactions

On or about December 22, 2000, the Company secured its outstanding indebtedness
to Lillian Berger in the amount of $55,000 by a first mortgage on its property
located at 64 Edson Street, Amsterdam, New York. Lillian Berger is an officer,
director and owns over 10% of the Company's issued and outstanding Common Stock.
On or about December 22, 2000, Pamela and Charles Gray loaned the Company
$40,000. The loan is also secured by a mortgage on the property of the Company
located at 64 Edson Street, Amsterdam, New York. The total mortgage on said
property is $95,000. Pamela Gray is the daughter of Lillian Berger and her
husband, Morton Berger, president of the Company. The mortgage bears interest at
the rate of % per annum and is amortized over a ten year term.

Item 13. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) The following documents are filed as part of this report.

                                                                       Page
                                                                       ----

1.    Financial Statements

      Report of Independent Certified Public Accountant                F-2
      Balance Sheet as of December 31, 2000 and 1999                   F-3- F-4

      Statements of  Operations for the years ended
      December 31, 2000 and 1999                                       F-5


                                       12
<PAGE>

      Statements of Changes in Stockholder' Equity
      For the years ended December 31, 2000 and 1999                   F-6

      Statements of Cash Flows for the years ended
      December 31, 2000 and 1999                                       F-7

      Notes to Consolidated Financial Statement                        F-8- F-15

(b)   Exhibits

      None

(c)   Reports on Form 8-K

      None

                                   Signatures

In Accordance with Section 13 and 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                             Safari Associates, Inc.
                                  (Registrant)


     By /s/ Morton Berger
       ----------------------------------
            MORTON BERGER, PRESIDENT

           Date: March 28, 2001


                                       13
<PAGE>

                             SAFARI ASSOCIATES, INC.

                          Index to Financial Statements

                                                                        Page
                                                                        ----

Report of Independent Certified
   Public Accountant                                                     F-2

Consolidated Balance Sheet as of
   December 31, 2000                                                  F-3 - F-4

Consolidated Statement of Operations for the
   years ended December 31, 2000 and 1999                                F-5

Consolidated Statement of Stockholders' (Deficit)
   for the years ended December 31, 2000 and 1999                        F-6

Consolidated Statement of Cash Flows for the years
   Ended December 31, 2000 and 1999                                      F-7

Notes to Financial Statements                                         F-8 - F-15


                                      F-1
<PAGE>

                          INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders
Safari Associates, Inc.
Amsterdam, NY

I have audited the accompanying consolidated balance sheets of Safari
Associates, Inc. and Subsidiaries as of December 31, 2000 and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows for each of the two years in the period ended December 31, 2000. These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion of these financial statements on my
audits.

I conducted my audits in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall consolidated
financial statement presentation. I believe that my audits provide a reasonable
basis for my opinion.

In my opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Safari Associates,
Inc. and Subsidiaries at December 31, 2000 and the results of their operations
and their cash flows for each of the two years in the period ended December 31,
2000 in conformity with generally accepted accounting principles.

The accompanying Financial Statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 9 to the Financial
Statements, the Company's recurring losses from operations and limited capital
resources raise substantial doubt about the Company's ability to continue as a
going concern. Management's plan in regards to these matters is also described
in Note 9. The Financial Statements do not include any adjustments that might
result from the outcome of this uncertainty.


/s/ Sanford Feibusch, CPA, P.C.

Monsey, New York
March 22, 2001


                                      F-2
<PAGE>

                             SAFARI ASSOCIATES, INC.
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2000

                                     ASSETS

                                                                          2000
                                                                        --------
Current Assets:
Cash                                                                    $ 30,125
Accounts Receivable - Net of
   allowance of $24,000                                                   38,402
Inventory                                                                 71,941
Prepaid Expenses                                                         102,313
                                                                        --------

           Total Current Assets                                          242,781
                                                                        --------

Property, Plant and Equipment:
Net of accumulated depreciation of $50,375                               184,690
                                                                        --------

Other Assets:
Goodwill - net of amortization of $5,475                                  21,883
Other Assets                                                               1,825
                                                                        --------

           Total Other Assets                                             23,708
                                                                        --------

           Total Assets                                                 $451,179
                                                                        ========

The accompanying notes are an integral part of these Financial Statements.


                                      F-3
<PAGE>

                             SAFARI ASSOCIATES, INC.
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2000

                     LIABILITIES AND STOCKHOLDERS' (DEFICIT)

                                                                        2000
                                                                    -----------
Current Liabilities:
Notes Payable                                                       $    40,000
Convertible Notes Payable                                                15,000
Mortgage Payable - Current Portion                                        5,320
Accounts Payable                                                        397,435
Payroll and Other Taxes Payable                                          29,458
Accrued Expenses                                                         64,054
                                                                    -----------

           Total Current Liabilities                                    551,267
                                                                    -----------

Other Liabilities:
Deferred Compensation                                                   324,550
Convertible Notes Payable                                                45,000
Mortgage Payable - Net of Current Portion                                89,680
                                                                    -----------

           Total Other Liabilities                                      459,230
                                                                    -----------

           Total Liabilities                                          1,010,497
                                                                    -----------

Commitments and Contingencies - Note 9

Stockholders' (Deficit):
Common Stock, par value $.001 authorized
   100,000,000 shares, issued and
   outstanding  8,223,770 shares                                          8,224
Additional Paid-in Capital                                            1,368,738
Retained (Deficit)                                                   (1,936,280)
                                                                    -----------

           Total Stockholders (Deficit)                                (559,318)
                                                                    -----------

           Total Liabilities and Stockholders' (Deficit)            $   451,179
                                                                    ===========

The accompanying notes are an integral part of these Financial Statements.


                                      F-4
<PAGE>

                             SAFARI ASSOCIATES, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                     2000               1999
                                                 -----------        -----------

Revenue                                          $   769,580        $   468,671
Cost of Sales                                        668,455            360,576
                                                 -----------        -----------
Gross Profit                                         101,125            108,095
                                                 -----------        -----------

Operating Expenses:
Selling Expenses                                      21,476             40,283
General and Administrative Expenses                  223,961            225,342
                                                 -----------        -----------

           Total Operating Expenses                  245,437            265,625
                                                 -----------        -----------

Net (Loss) from Operations                          (144,312)          (157,530)
Interest Expense                                     (22,959)           (21,975)
                                                 -----------        -----------
Net (Loss) before Provision
   For Income Taxes                                 (167,271)          (179,505)
                                                 -----------        -----------
Provision for Income Taxes                                --                 --

           Net (Loss)                            $  (167,271)       $  (179,505)
                                                 ===========        ===========

(Loss) Per Share                                 $      (.02)       $      (.02)
                                                 ===========        ===========

Weighted Average Shares Outstanding                8,044,604          7,743,020
                                                 ===========        ===========

The accompanying notes are an integral part of these Financial Statements.


                                      F-5
<PAGE>

                             SAFARI ASSOCIATES, INC.
                 CONSOLIDATED STATEMENT STOCKHOLDERS' (DEFICIT)
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>
                                      Common Stock            Additional
                                     Par Value $.001            Paid-In        Retained
                                  Shares         Amount         Capital        (Deficit)
                                  ------         ------         -------        ---------
<S>                             <C>           <C>             <C>             <C>
Balance - January 1, 1999       7,469,770     $     7,470     $ 1,115,092     $(1,589,504)
Private Placement                 155,000             155          37,345
Consulting Agreement               50,000              50           4,950
Conversion Convertible            249,000             249         149,151
Notes
Net (Loss) for the year
  ended December 31, 1999                                                        (179,505)
                              -----------     -----------     -----------     -----------

Balance-December 31,1999        7,923,770           7,924       1,306,538      (1,769,009)
                              -----------     -----------     -----------     -----------

Private Placements                300,000             300          62,200

Net(Loss)for the Year
   ended December 31,2000                                                        (167,271)
                              -----------     -----------     -----------     -----------

Balance-December 31,2000        8,223,770     $     8,224     $ 1,368,738     $(1,936,280)
                              ===========     ===========     ===========     ===========
</TABLE>

The accompanying notes are an integral part of these Financial Statements.


                                      F-6
<PAGE>

                             SAFARI ASSOCIATES, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                            2000        1999
                                                         ---------    ---------
Cash Flows from Operating Activities:
Net Income (Loss)                                        $(167,271)   $(179,505)
Adjustment to Reconcile Net Income (Loss)
   to net cash used in operating activities:
      Depreciation and Amortization                         11,187       11,289
      Consulting                                                          5,000
Changes in Operating Assets & Liabilities:
   Accounts Receivable                                      29,426      (25,363)
   Inventory                                                 5,164      (10,085)
   Prepaid Expenses and Other Assets                       (39,136)       1,498
Accounts Payable                                             3,303       74,799
Payroll and Other Taxes Payable                               (327)       4,692
Accrued Expenses                                            17,218       40,066
Deferred Compensation                                       52,000       52,000
                                                         ---------    ---------

           Net Cash Used in Operating Activities           (88,436)     (25,609)
                                                         ---------    ---------

Cash Flows from Investing Activities:
Property, Plant and Equipment                              (15,542)      (2,897)
                                                         ---------    ---------

           Net Cash Used in Investing Activities           (15,542)      (2,897)
                                                         ---------    ---------

Cash Flows from Financing Activities:
Issuance of Common Stock                                    62,500       37,500
Loans Stockholder                                           (4,452)       2,249
Mortgage Payable                                            40,000           --
Notes Payable                                               40,000           --
Capital Lease Obligations                                  (63,782)          --
                                                         ---------    ---------

           Net Cash Provided by Financing Activities        74,266       39,749
                                                         ---------    ---------

Net Increase (Decrease) in Cash                            (29,712)      11,243

Cash - Beginning of Year                                    59,837       48,594
                                                         ---------    ---------

Cash - End of Year                                       $  30,125    $  59,837
                                                         =========    =========

The accompanying notes are an integral part of these Financial Statements.


                                      F-7
<PAGE>

                             SAFARI ASSOCIATES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

Note 1 - Description of Business

Safari Associates, Inc. (the "Company"), formerly Mag Enterprises, Inc., a Utah
Corporation was incorporated on July 30, 1980. On August 10, 1993, the Company
acquired Safari Enterprise, Inc. ("Enterprises") and its two wholly owned
subsidiaries: Safari Boat Company, Inc. ("Boat") and Safari Lure Company, Inc.
("Lure"). From 1993 through 1996, Boat manufactured and distributed a fiberglass
boat and Lure distributed wood fishing lures. Prior to the end of 1996, the
operations of Boat and Lure were discontinued. In 1996, Enterprise began
manufacturing and distributing recycled single use cameras. Since 1997, the
Company has incorporated four wholly owned operating subsidiaries; Safari Camera
Corporation, Inc., which manufactures recycled single use disposable cameras,
selling to distributors and retail stores; Photography for Evidence, Inc., doing
business under the name Smith & Wesson(R) Cameras, sells recycled single use
cameras to law enforcement agencies; Impact Dampening Technology, Inc., doing
business under the name Smith & Wesson(R) Recoil Pad, to manufacture and recoil
pads. In March 1998, the Company acquired Shoothru, Inc., a company that
developed and designed a product line of self-sealing reactive targets.

Note 2 - Summary of Significant Accounting Policies:

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amount of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenue and expenses during the reporting period. The most significant
estimates relate to the valuation allowance in connection with deferred tax
assets. Actual results could differ from those estimates.

Consolidation

The accompanying Consolidated Financial Statements include the accounts of the
Company and all its wholly owned subsidiaries. Intercompany transactions and
balances have been eliminated in consolidation.

Inventory

Inventory is stated at the lower of cost, using the first-in, first-out basis or
market.

Property and Equipment

Property and equipment are recorded at cost and depreciated using the
straight-line method over their estimated useful lives. The cost of maintenance
and repairs is charged to operations as incurred.


                                      F-8
<PAGE>

                             SAFARI ASSOCIATES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

Intangibles

Goodwill represents the excess of the cost of companies acquired over the fair
value of their net assets at the date of acquisition and is being amortized
using the straight line method over 15 years.

Income Taxes

The Company records deferred income taxes using the liability method. Under the
liability method, deferred tax assets and liabilities are recognized for the
expected future tax consequences of temporary differences between the financial
statement and income tax basis of the Company's assets and liabilities. An
allowance is recorded, based on currently available information, when it is more
likely than not that any or all of a deferred tax asset will not be realized.
The provision for income taxes includes taxes currently payable, if any, plus
the net change during the period presented in deferred tax assets and
liabilities recorded by the Company.

Per Share Data

The Company has adopted the standards set by the Financial Accounting Standards
Board and computes earnings per share data in accordance with SFAS No. 128
"Earning per Share." The basic per share data has been computed on the loss for
the period divided by the historic weighted average number of shares of common
stock outstanding. All potentially dilutive securities have been excluded from
the compulation since they would be antidilutive.

Note 3 - Deferred Compensation

In connection with the completion of a securities offering under Regulation D in
November, 1994, the Company entered into an employment agreement with Mr. Morton
Berger, President and Director of the Company. The agreement called for a base
annual salary of $52,000. As of December 31, 2000, the Company owes Mr. Berger
$324,500.

Note 4 - Income Taxes

There is no provision for federal or state income taxes for the years ended
December 31, 2000 and December 31, 1999 since the Company has incurred operating
losses. Additionally has reserved fully for any potential future tax benefits
resulting from its carryforward operating losses. Deferred tax assets at
December 31, 2000 and 1999 consist of the following:


                                      F-9
<PAGE>

                             SAFARI ASSOCIATES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

Note 4 - Income Taxes (Continued)

                                               2000         1999
                                             --------     --------
      Allowance for doubtful accounts        $  9,600     $  9,600
      Net Operating Loss Carryforward         683,600      617,000
      Property and Equipment                   10,000        8,000
                                             --------     --------
                                              703,200      634,600
      Valuation Allowance                     703,200      634,600
                                             --------     --------
                                             $     -0-    $     -0-
                                             ========     ========

As of December 31, 2000, the Company has net unused operating loss carryforwards
of approximately $1,709,100 which expire in various years from 2000 through
2015.

Note 5 - Notes Payable

Convertible Notes Payable

In 1996, the Company borrowed a total of $139,500 from individual investors.
Each loan was evidenced by a two-year promissory note with interest provided for
at the rate of 12% per annum. The notes plus accrued interest were convertible
into shares of the Company's common stock at $1.50 per common share. In January
1999, nine of the investors converted their loans and accrued interest into
share of common stock in the Company at an agreed upon rate of $.60 per common
share. The Company issued 249,000 shares of its common stock and reclassified
$124,500 principal amount of loans and $24,900 of accrued interest to
stockholders' equity. Interest accrued in excess of two years was waived. One
convertible note for $15,000 was not converted.

On December 20, 2000, one of the creditors of the Company agreed to receive a
note from the Company in the amount of $45,000 payable on December 19, 2002,
together with interest thereon at the rate of 8% per annum. Commencing one year
from the date of the note, the creditor may convert any portion of the note into
restricted shares of common stock at a conversion rate of $.15 per share.

Notes Payable

In January, 2000, the Company borrowed a total of $25,000 from two individual
investors. The notes are for a term of four months with interest to be accrued
at the rate of 10% per annum. The notes have been extended on a month or month
basis. In November, 2000, the Company borrowed a total of $15,000 form three
individual investors. The term of the notes are on a month to month basis with
interest accrued at the rate of 10% per annum.


                                      F-10
<PAGE>

                             SAFARI ASSOCIATES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

Note 6 - Loan Stockholder

Mrs. Lillian Berger, the majority stockholder and Secretary/Director of the
Company, has over the years made advances to the Company. On October 21, 1996,
she converted $39,500 of the advances into a mortgage to secure the loan on the
premises at 64 Edson Street. The mortgage with interest at 9% per annum was to
be paid in monthly interest payments of $296.25 beginning December 1, 1996 with
the balance to be repaid December 1, 1997. Interest continues to accrue and is
added to the loan balance. At December 31, 1999 the balance due was $59,452. On
December 22, 2000, the balance due on the loan was $55,000. This amount was
converted into a mortgage on the premise at 64 Edson Street. (See Note 7 -
Mortgage Payable.)

Note 7 - Mortgage Payable

On October 26, 2000, Safari Associates, Inc. acquired the premises at 64 Edson
Street in a foreclosure sale. At closing, the Company mortgaged the premises for
$95,000. The term of the mortgage is for a period of ten years with interest
computed at 10% per annum from the 1st day of January 2001. Monthly installments
$1,255.43 including principal and interest, will commence on February 1, 2001,
with the final payment due on the 1st day of January 2011.

Note 8 - Common Stock

In January 1999, holders of $124,500 in convertible notes with accrued interest
of $24,900 converted those notes and accrued interest into 249,000 shares of
common stock.

In June 1999, the Company entered into a consulting agreement with Mr. Michael
J. O'Connor in which he would consult the Company on procuring government
contracts. As a retained, the Company issued Mr. O'Connor 50,000 restricted
shares of common stock.

In October 1999, in a private placement, the Company issued 105,000 restricted
shares of common stock for $25,000.

In December 1999, the Company issued 50,000 restricted shares of common stock to
Mrs. Lillian Berger, a director and officer of the Company, for $12,500.

In January 2000, the Company issued a total of 50,000 restricted shares of
common stock to two individual investors at a price of $.25 per share with the
Company receiving net proceeds of $12,500.

In September 2000, the Company issued 250,000 restricted shares of common stock
to an individual investor at a price of $.20 per share with the Company
receiving net proceeds of $50,000.


                                      F-11
<PAGE>

                            SAFARI ASSOCIATES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               DECEMBER 31, 2000

Note 9 - Commitments & Contingencies

Litigation

On April 8, 1998, the Amsterdam Industrial Development Agency, Plaintiff,
commenced a legal action against Safari Enterprises, Inc., Defendant, in the
Supreme Court of the State of New York, County of Montgomery. The Plaintiff was
seeking to foreclose upon the interest of the Defendant in a lease between the
Plaintiff, as landlord and the Defendant, as tenant, for premises 64 Edson
Street, Amsterdam, New York and for damages for rent in arrears, including
certain real estate taxes. The Defendant claimed that it was the owner of
premises 64 Edson Street, Amsterdam, New York and that plaintiff could not lease
it property that defendant owns.

A motion for Summary Judgment in favor of the Plaintiff was granted on September
23, 1999. The decision was settled by an Order of Reference dated October 6,
1999 and entered on October 20, 1999. The Order appointed a Referee to determine
the amount due to the Plaintiff from the Defendant. As of May 5, 2000, the
amount was computed as $84,105.51 with interest to continue thereafter. The
Defendant filed a timely Notice of Appeal.

On October 26, 2000, the Company was the high bidder at a foreclosure sale for
the property located at 64 Edson Street, with a winning bid of $91,968.56. The
Company made a down payment of $9,200. An additional payment of $15,000 was made
on November 14, 2000. The balance was paid at closing on December 22, 2000. The
proceeds from this foreclosure sale are being held by a referee appointed in the
case of AIDA vs. Safari Enterprises, Inc.

By decision made and entered January 18, 2001, the Supreme Court, Appellate
Division, Third Department, reversed the judgment of the lower court pursuant to
which the property was sold at public foreclosure sale, It was the opinion of
the Appellate Court that the lower court erred in granting the Plaintiff's
motion for summary judgment. AIDA has not appealed from the decision of the
Appellate Division. The case instituted by AIDA against Safari Enterprises,
Inc., is till pending, but the Company, Safari Associates, Inc., now has title
to premises 64 Edson Street, Amsterdam, New York.

In June 2000, Safari Enterprises, Inc. filed for protection pursuant to Chapter
11 of the federal bankruptcy law. The filing was made in the U.S. Bankruptcy
Court, Northern District of New York.


                                      F-12
<PAGE>

                             SAFARI ASSOCIATES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

Note 9 - Commitments & Contingencies (Continued):

Litigation (Continued):

In January 2001, the Chapter 11 bankruptcy was converted to a Chapter 7
bankruptcy proceeding which is still pending. All claims and judgments against
Safari Enterprises, Inc. have been included in the Financial Statements as
accounts payable subject Chapter 7 bankruptcy proceedings.

There are various judgments and claims against Lure and Boats relating to
expenses incurred by those companies in the ordinary course of business. These
claims and judgments are reflected as liabilities in the Financial Statements.

Employment Agreement

On April 1, 1994, the Company entered into an employment agreement with Mr.
Morton Berger, President of the Company. The term of the agreement was for five
years and, thereafter, continues on a year to year basis. Compensation shall be
paid at the rate of $52,000 per year.

License Agreement

On January 1, 1998, Smith & Wesson Corp., Springfield, Massachusetts, granted
Safari Enterprises, Inc., an exclusive Trademark License to make, use and sell
single-use and conventional film using still cameras under the Smith & Wesson(R)
brand name in the United States, its possessions and Canada. The term of the
License is from January 1, 1998 to January 30, 2001. The license agreement
provides that Safari Enterprises, Inc. will pay Smith & Wesson Corp. a minimum
royalty of $15,000 the first eighteen months; $25,000 the next twelve months and
$35,000 the final twelve months. The minimums are to be paid against a royalty
of 5% of net sales, whichever is greater. The license further provides that
Safari Enterprises, Inc., can assign the license to an affiliate company under
the same control as Safari Enterprises, Inc. On January 12, 1998, the License
was amended by adding recoil pads for firearms, effective January 1, 1998. The
minimum royalties were not increased and covered both products. On May 18, 1999,
the License was further amended to include targets for firearms effective
January 1, 1998. Again the minimum royalties were not increased. On November 25,
1997 the Company organized a wholly owned subsidiary, Photography for Evidence,
Inc., under the laws of the State of New York. One December 17, 1997 Photography
for Evidence, Inc., filed a Certificate of Doing Business under the name Smith &
Wesson Cameras. The license agreement was assigned to Smith & Wesson(R) Cameras.


                                      F-13
<PAGE>

                             SAFARI ASSOCIATES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

On January 29, 1998 the Company organized a wholly owned subsidiary, Impact
Dampening Technologies, Inc., a New York Corporation. On February 10, 1998,
Impact Dampening Technologies, Inc., filed a Certificate of doing business under
the name Smith & Wesson(R)Recoil Pad Company. Safari Enterprises, Inc., assigned
its exclusive recoil pad License to Smith & Wesson(R)Recoil Pad Company. On
August 2, the Company organized Safari Target Corporation, a New York
Corporation. On August 20, 1999, Safari Target Corporation filed a Certificate
of doing business as Smith & Wesson(R)Target Company. Safari Enterprises, Inc.,
assigned its target license to Smith & Wesson Target(R)Company.

Note 10 - Going Concern

The Company has experienced operating loss since inception and has a retained
deficit of $1,936,280. Approximately $1,155,000 of the losses occurred prior to
1997, and are a direct result of discontinued operations. Additional losses of
approximately $275,000 were incurred during the development stage in the
production of and recycling of single use cameras.

The Company's current liabilities exceed its current assets by $308,484 and the
Company continued to show losses from operations. All of the above raise
substantial doubts about the Company's ability to continue as a going concern.

The Company's plan to alleviate this concern is several-fold. When Safari
Enterprises, Inc. is liquidated under Chapter 7 bankruptcy, the Company believes
approximately $103,700 of current liabilities will be discharged. Safari Lure,
Inc. and Safari Boat Company, Inc. have no assets and liabilities of
approximately $53,700 which could be discharged if those two entities file for
protection under Chapter 7 bankruptcy proceedings.

The Company is in the process of trying to refinance its mortgage on its
premises for $135,000 which would increase its current assets by approximately
$95,000. Only $40,000 of the current mortgage would be repaid with the remaining
$55,000 due to Mrs. Lillian Berger, the majority shareholder to the Company
being converted into a long-term loan. The above will reduce the current working
capital deficit from $308,484 to approximately $56,000. The Company is also in
the process of seeking to raise additional equity to reduce its outstanding
current liabilities. Even if all these steps are successful, there is no
guarantee that the Company will be able to continue as a going concern.


                                      F-14
<PAGE>

                             SAFARI ASSOCIATES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2000

Note 12 - Supplemental Disclosures to Cash Flow Statement

<TABLE>
<CAPTION>
                                                                        2000         1999
                                                                      --------     --------
      <S>                                                             <C>          <C>
      Cash Paid During the Period For:
         Interest                                                     $  9,321     $  8,771
         Income Taxes                                                 $     --     $     --

      Supplemental disclosure of non-cash investing and financing
      activities:
         Common Stock issued for consulting                           $     --     $  5,000
         Common Stock issued upon conversion
            of convertible notes and accrued interest                 $     --     $149,500
</TABLE>


                                      F-15