U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                   Form 10-KSB

(Mark One)
[ X ] Annual report under section 13 or 15(d) of the Securities  Exchange Act of
1934 for the fiscal year ended  December  31, 2000 [ ]  Transition  report under
section 13 or 15(d) of the  Securities  Exchange Act of 1934 for the  transition
period from ----------------- to --------------------

Commission file no.        0-26631

                        SAFE TRANSPORTATION SYSTEMS, INC.
      ---------------------------------------------------------------------
                 (Name of small business issuer in its charter)

                               Sweets & Eats, Inc.
                       ----------------------------------
                                  (Former name)

         Florida                                        59-3567558
(State or other jurisdiction of               (IRS Employer Identification No.)
incorporation or organization)

3871 Airport Way, Bellingham, Washington                  98226
(Address of principal executive offices)                (Zip Code)

Issuer's telephone number is (360) 527-1112.

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

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

Check  whether the issuer (1) 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 past 90 days. Yes [X] No [
]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  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]

The company did not generate any revenues in the fiscal year ending December 31,
2000.

The market  value of the common stock of the issuer held by  non-affiliates  was
approximately  $4,800,000 on April 15, 2001,  based on the average bid and asked
price of the common stock as of that date as reported by the NASD OTC Electronic
Bulletin Board.

                                       1
<PAGE>

As of April 1, 2001, the issuer had a total of 17,098,750 shares of Common Stock
outstanding.

                  Transitional Small Business Disclosure Format
                           (Check One): Yes [ ] No [X]

                                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 a Vote of Security Holders                7


                                     Part II

Item 5.   Market for Common Equity and Related Stockholder Matters           8
Item 6.   Management's Discussion and Analysis or Plan of Operation         10
Item 7.   Financial Statements                                              13
Item 8.   Changes in and Disagreements with Accountants on
          Accounting and Financial Disclosure                               13


                                    Part III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;     14
Item 10.  Executive Compensation                                            15
Item 11.  Security Ownership of Certain Beneficial Owners and               17
          Management
Item 12.  Certain Relationships and Related Transactions                    18
Item 13.  Exhibits and Reports on Form 8-K                                  19
Signatures                                                                  21



                                     Part I

Item 1.  Description of Business

Corporate History

The company was  incorporated in the state of Florida on December 6, 1994 as Big
Daddy's  Auto Sales,  Inc.  On April 19,  2000 the  company  changed its name to
Sweets & Eats,  Inc. On December  18, 2000,  the Company  entered into a reverse
merger with Safe  Transportation  Systems,  Inc.  (STS), a Wyoming  corporation,
whereby the Company  issued to STS 12,000,000  shares of its  restricted  common
stock in exchange for 100% of the issued and outstanding shares of STS.

                                       2
<PAGE>

Safe  Transportation  Systems,  Inc. was incorporated  under the laws of British
Columbia,  Canada on July 7,  19981.  On October 17,  2000 STS  domesticated  to
Wyoming by a unanimous consent of the shareholders.

Subsequent to the reverse  merger,  the Company changed its name from Sweats and
Eats, Inc. to Safe Transportation Systems, Inc. and began trading its securities
on the NASDAQ OTCBB under the symbol  `SFTS' in January of 2001.  The Company is
authorized to issue up to  50,000,000  shares of common stock having a par value
of $0.001 per share and 5,000,000 preferred shares.

General Business

From July of 1998 until  October 2000 the Company  developed  and tested  safety
products for the trucking  industry.  In this respect,  the  stockholders of the
Company  contributed $1.8 million,  which was used for research and development,
and patenting of the Company's proprietary technology, the `STS Accident Control
and Anti-Jackknife System', which prevents a tractor-trailer from losing control
and jackknifing.

The Product

The Department of Transportation ("DOT") defines trailer swing as occurring when
trailer wheels lose traction. The trailer rotates to a dangerous, out-of-control
position,  often without  being noticed by the driver until it is too late.  The
DOT defines  jackknifing  as occurring when the rear wheels of the tractor loose
traction. This instability results in the tractor rotating rapidly and violently
slamming into the side of the trailer.  Rollover occurs with the same motion and
can be compounded by unstable and uneven road conditions.

The  Company's  Accident  Control and  Anti-Jackknife  System is attached to the
underside  of the  trailer.  The  system is turned  on  during  normal  driving;
however,  the System is always  under  driver  control and can be  activated  or
deactivated by the driver turning on or off the illuminated, dash-mounted switch
in less than a second.

In the on  position,  the  engaging  bar limits the  amount of  rotation  of the
tractor  relative to the trailer and prevents the trailer from  swinging to such
an extent where it would become out of control,  therefore,  allowing the driver
to power and steer out of emergency situations.

The kinetic energy that could become an uncontrollable sideways swing is instead
redirected  forward  onto the front drive axle of the  tractor.  Since the front
wheels  are  part of the  steering  axle,  the  driver  can  turn  into the skid
optimizing overall vehicle  stability.  By steering in the opposite direction of
the skid the  attitude of the tire tread runs truer to the road  surface,  which
improves driver control.  Because there is additional force being applied to the
steering  tires,  traction and  maneuverability  are enhanced.  By improving the
tire's friction and maintaining  steering control the driver can reduce stopping
distances and simultaneously optimize the attempt to avoid obstacles.

The System is always  under driver  control and the driver can easily  disengage
the System by pushing the off-switch and freeing the movement of the trailer.

-------------
1 A copy of the Certificate of Incorporation is attached hereto as Exhibit 2.2.

                                       3
<PAGE>

The Company believes the System will dramatically help reduce stopping distances
in emergency braking  situations and is planning on conducting  further in-depth
study of the control effect on stopping distances.

Independent Testing

The Company  successfully  completed its Canadian testing at the Pacific Traffic
Education Center (PTEC), in Delta, British Columbia in October of 19992. PTEC is
a joint venture of the Justice  Institute of British  Columbia and the Insurance
Corporation of British Columbia. PTEC, which is BC's NAFTA representative to the
Commercial  Vehicle Safety  Alliance,  was  established to reduce the number and
severity  of  traffic   accidents  and  promotes  traffic  safety  thorough  its
affiliation with  organizations  such as the Institute of Police  Technology and
Management, University of North Florida.

The  Company   successfully   completed  its  United   States   testing  at  the
Transportation  Research Center (TRC), East Liberty,  Ohio in November of 19993.
The TRC is the most widely recognized and respected  independent  transportation
proving ground in the world.

The TRC testing was documented  under full  instrumentation  including angles of
articulation for both jackknife and trailer swing,  incident entry acceleration,
speed,  lateral traction control,  braking reaction time and emergency  stopping
distances.

The NHTSA assisted STS with research during the American  testing and STS wishes
to  continue  research  into the  impact of its new  technology  with  regard to
accident   control,   reduced  stopping   distance  analysis  and  ABS,  non-ABS
tractor-trailer configurations.

According to  conclusions  drawn from  independent  evaluations,  the  Company's
Accident Control System:

(i)      Prevents jackknifing, trailer-swing and rollover of the tractor-trailer
         in all test permutations;
(ii)     Does not  interfere  with  normal  highway  operations  such as passing
         maneuvers or obstacle avoidance; and
(iii)    Enhances the driver's ability to maintain  steering control by limiting
         articulation  angle  during the  jackknifing,  trailer-swing  or out of
         control incident.

Product Reliability

The system that was tested by US and Canadian  authorities was also forensically
audited by Bacon Donaldson  Engineering of Richmond,  British Columbia to report
on how the  Accident  Control  System  stood up to  rigorous  testing  and sharp
impacts. The tested system withstood over 100 hard impacts, some at speeds of up
to 60 MPH, and deviated 5/100 of an inch from its original specifications4.

-----------------
2 See Exhibit 12.1 hereto.
3 See Exhibit 12.2.
4 See Exhibit 12.3.

                                       4
<PAGE>

The Industry

According to the Commercial  Carrier  Journal Census of the  Professional  Truck
Fleet Market, there are over 5 million trailers currently in use on the roads in
the  United  States and  Canada.  In 1998,  according  to the US  Department  of
Commerce,  over  300,000  new  trailers  were  sold  and  delivered  in the  US.
Twenty-six trailer manufacturers command 88% of the US domestic market.

According to a 2000 composite of the American  Trucking  Association's  database
there were  approximately  45,000 member  trucking  fleets  throughout the fifty
United  States.  Of those  fleets,  nearly  42%  were  located  in nine  states:
California;  Texas;  Pennsylvania;  Illinois;  Ohio; New York;  Michigan;  North
Carolina and Wisconsin.

Trucking  is vital to the US  economy.  On  January  25,  2000,  in a letter  to
President  Clinton  regarding  diesel fuel  prices,  Walter B.  McCormick,  Jr.,
President and CEO of the American  Trucking  Association,  stated:  "Trucks move
most of America's  freight and are the  transportation  backbone of the American
economy...the  trucking  industry  accounts  for  81% of the  country's  freight
revenue."

According  to  the  U.S.  Bureau  of  Labor  Statistics  (1997)  highway  crash,
jackknifing is the number one  occupational  cause of death.  Statistically  for
every truck driver  fatally  injured in a truck  accident a  corresponding  five
motorists  are also  killed.  In 1997,  857 truck  drivers were killed and 5,355
motorists died as a result of those accidents. According to the same statistics,
truck driving is 8.5 times more risky  occupation than being an airline pilot or
taxicab driver; 5.5 times more deadly than being a law enforcement  officer; and
4 times more deadly than being a construction laborer.

A large truck accident occurs on average every 71 seconds in North America.  The
NHTSA published a technical report titled Large-Truck  Accident  Causation,  DOT
HS-806-300.  According to the DOT report, "...data for single-vehicle  accidents
indicate that  run-off-road,  jackknife and rollover accidents account for 23.2%
of all reported truck incidents..."

In 1999 the NHTSA reported that large trucks caused:

(i)      5,362 fatalities
(ii)     142,000 injuries
(iii)    453,000 accidents
(iv)     $24 Billion in insurance claims (DOT-1997)

Sales & Marketing

The Company  intends to expand its business and generate  sales  through a three
pronged  strategy:  (i)  marketing  directly to and through  Original  Equipment
Trailer  Manufactures  (OEM's),  the National Trailer Dealers,  fleet operators,
petroleum and chemical  distributors and both private and public entities;  (ii)
lobbying  the  various  regulatory  agencies  such  as the  U.S.  Department  of
Transportation,  the National  Transportation Safety Board and the Environmental
Protection Agency; and, (iii) conducting a public relations campaign to industry
organizations  and unions such as the American Trucking  Association,  the Truck
Trailer Manufacturers Association, the National Tank Truck Carriers Association,
the  National  Association  of  Chemical   Distributors  and  the  International
Brotherhood  of  Teamsters  as well as other  industries  that are  effected  by
trucking safety such as insurance underwriters, trial lawyer associations, etc.

                                       5
<PAGE>

The  Company  will  significantly  increase  its  staff  over the  next  several
quarters.  Sales and marketing,  as well as technical and administrative support
staff will be increased to accommodate  the OEM and Trailer Dealer  distribution
network within the continental US and Canada.

Marketing to trailer manufacturers and fleet operators will be developed through
strategic  alliances  with  Original  Equipment  Manufacturers  (OEMs)  and  the
National  Trailer  Dealers  Association  (NTDA).  The Company's  intention is to
become a  preferred  supplier  of  technologies.  Each major  trailer OEM has an
aftermarket  parts  distribution   program  selling  to  the  dealers  in  their
distribution  network.  The products may be warehoused by the OEM or be directly
shipped  from the  manufacturer  to the dealers and billed  through the OEM. The
Company will also sell directly to independent dealers.

The Company will sell its System to fleets through  independent  tractor-trailer
repair facilities, parts distribution outlets and member dealers of the National
Trailer Dealers Association. Each dealership is an independently owned business,
representing  one or more of the  major  trailer  OEMs.  There are over 450 NTDA
members  representing  various trailer  manufacturers,  covering every State and
Province.

The  Company  will  also  establish  a  separate   aftermarket  network  through
independent tractor-trailer repair facilities and distributors. This will enable
the  Company  to more than  triple  the number of  installation  facilities  and
enhance  its  exposure  to the  small  fleets  and  independent  tractor-trailer
owner-operators.

The Company has identified major U.S. and Canadian commercial and private fleets
that include bulk commodity carriers,  flatbed carriers,  refrigerated carriers,
tank carriers, general freight carriers and special carriers.

The Company will also focus on state and federal government fleets, particularly
the Department of Energy and the Military,  by pursuing an aggressive government
marketing strategy.

The Company will lobby both the executive and legislative  branches of state and
federal  government to increase  awareness of the Company's System and to garner
support for mandating its technology.

The Company has engaged in dialogues with  officials in California.  The Company
has been  requested to prepare a report,  and is working  with a  transportation
lobby group  recommended by state  officials.  California is the largest vehicle
market in the world and has the  second  highest  death  rate from  large  truck
accidents in America.

The Company  believes that labor  organizations,  occupational and safety groups
and the insurance  industry will be motivated to work with the Company to ensure
that  tractor-trailers  are equipped with the System. The Company recognizes the
interest of these groups in creating  positive  changes to reduce  accidents and
the  resulting  claims.  For example,  the use of safety belts is now  mandatory
throughout the United States and Canada.  Insurance  claims can be denied if the
driver  and/or  the  passengers  are not  buckled  up,  because  they  would  be
contributing to their own injuries and breaking the law. Seatbelts,  ABS brakes,
conspicuous  reflective  tape and rear  under-ride  guards  are just some of the
safety  technologies  previously  mandated to help  drivers of  tractor-trailers
maintain control and reduce the severity of accidents.

                                       6
<PAGE>

The Company,  which is a member of the American Trucking  Association's Safety &
Loss  Prevention  Council,  will work with the  Council as well as the  National
Association  of  Chemical  Distributors,  affected  unions and the  Occupational
Safety Health  Administration  to integrate its system throughout all sectors of
the trucking industry. We will participate in professional seminars to influence
groups  that  may  affect  financial  settlements  resulting  from  large  truck
accidents  such as the State  and  Provincial  Trial  Lawyers  Associations  and
insurance actuarial groups.

The Company  believes that its  technology has vehicle  dynamic  characteristics
that have legal and regulatory implications for trucking companies. According to
some legal  authorities the Company's crash  mitigation  technology could create
negligence and personal liability exposure for directors of trucking  companies.
In the late 1980s, The Georgia Trial Lawyer  Association was conducting  courses
on suing trucking  companies for negligence.  They suggested a case for punitive
damages was  prosecutable if a  tractor-trailer  had an accident that could have
been mitigated or avoided with an anti-jackknife  device.  The litigation tactic
was only possible as long as anti-jackknife devices were available.

Competition

Currently,  there is no known  competitor  that markets an Accident  Control and
Anti-Jackknife System.  However, in the late 1980s a company conducted extensive
testing of a rudimentary  anti-jackknife  device and lobbied  various  levels of
government,  the transportation  sector and the insurance industry.  The company
published  material  stating it had conducted  numerous tests and the subsequent
evaluations  resulted in the State of New Mexico drafting legislation to mandate
the use of  anti-jackknife  devices.  It  further  stated  the  State  of  Texas
contemplated   insurance  premium   reductions  for  resident  fleets  employing
anti-jackknife  devices  on  their  trailers,  and  both  State  Departments  of
Transportation used the device on their fleets.  Apparently,  the States did not
follow through with their respective  initiatives  because the company could not
maintain  itself as a financially  viable entity and ceased  operations  shortly
thereafter.

Governmental Regulation

The Company  complies  with all existing laws and  regulations.  The Company has
made,  and will  continue  to make,  expenditures  to comply  with such laws and
regulations.

Employees

The  Company  will  significantly  increase  its  staff  over the  next  several
quarters.  Sales and marketing as well as technical and  administrative  support
staff will be increased to accommodate  the OEM and Trailer Dealer  distribution
network within the continental U.S. and Canada.

None of the Company's  employees are  represented  by unions.  There has been no
disruption  of  operations  due to  labor  disputes.  Management  considers  its
relations with its employees to be good.


Item 2.  Description of Property

Office Space Lease

The Company maintains executive offices and a  production/distribution  facility
at 3871  Airport  Way,  Bellingham,  WA,  98226;  a sales office at No. 400, 409
Granville St.,  Vancouver,  BC V6C 1T2; and an administrative  office at 2700 N.
Military Trail, Suite 220, Boca Raton, Florida 33431. The Bellingham facility is
approximately  30,000  square  feet of which  3,000 is office  space and  27,000
manufacturing and warehouse space.

                                       7
<PAGE>

Real and other Tangible Property

The company has office equipment  valued at $22,884,  and furniture and fixtures
at $8,121.

Intellectual Property

In June of  1999,  the  Company's  Intellectual  Property  lawyers  filed a U.S.
provisional  patent  application  for the Company's  first Accident  Control and
Anti-Jackknife  System.  The Company filed an additional US  provisional  patent
application for another  Accident Control and  Anti-Jackknife  System in July of
1999.

Item 3.  Legal Proceedings

The Company is currently not a party to any litigation.


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

In December 2000, prior to the merger,  both Sweats and Eats, Inc. (the Company,
and surviving  corporation in the merger) and Safe Transportation  Systems, Inc.
solicited the consent of their  shareholders to the merger and subsequent change
of name and appointment of Board of Directors.  Required  consent was duly given
by the shareholders of both corporations.

On April 19, 2000 the shareholders of the Company voted to amend the articles of
incorporation  of the  Company to change its name from Big  Daddy's  Auto Sales,
Inc.  to Sweats and Eats,  Inc.  See the  Articles of  Amendment  to Articles of
Incorporation attached hereto as Exhibit 2.6.

                                     Part II

Item 5.  Market for Common Equity and Related Stockholder Matters

Trading Market

Our stock is traded on the OTCBB under the symbol  "SFTS."  Trading began in the
first quarter of 2001, and the stock traded at the following prices:

Calendar Period            Bid Price:                High              Low

First Quarter                                       $4.58             $1.08

Holders

As of April 1, 2001, there were  approximately  204 record holders of our voting
common stock.

                                       8
<PAGE>

Dividends

We have not paid cash  dividends  on our common  stock.  We expect to invest our
future earnings, if any, in the further expansion and growth of our business for
the foreseeable future.

Recent Sales of Unregistered Securities by Sweets and Eats, Inc. Prior to Merger

Prior to the merger Sweets and Eats, Inc. (the Company, or S&E) made no sales of
its securities during the year 2000.

On  December  28,  2000,  Sweets  & Eats,  Inc.  completed  a merger  with  Safe
Transportation  Systems,  Inc.  (STS).  Pursuant  to the  merger  agreement  STS
stockholders  received  12,000,000 shares of S&E, and the former stockholders of
S&E  retained  4,000,000  shares.  At the  date of the  transaction,  S&E had no
assets,  liabilities or operations.  Therefore,  for  accounting  purposes,  the
transaction  was  treated as a  reorganization  and  accounted  for as a reverse
acquisition.

Sales of Unregistered Securities by Safe Transportation Systems, Inc.

During 2000, STS sold 449,135 shares of Common Stock for $383,260.  During 2000,
83,789 shares of Common Stock were issued for services. The fair market value of
$71,500 was charged to expense.

On October 19, 2000, STS issued  unqualified  stock options  covering  2,655,000
shares of Common Stock at an exercise price of $1.00. The options do not have an
expiration date.  Certain  management  personnel  received options for 2,105,000
shares in exchange for the  relinquishment  of any  development  and proprietary
rights and/or royalties and/or licensing fee to the anti-jackknifing  systems. A
financial  consulting firm received options for 500,000 shares for services.  An
attorney  received  options  50,000  shares for  services.  These  options  were
recorded at fair value of $1,141,650 using the Black Shoals option formula.

On October  19,  2000,  STS issued  1,050,000  shares:  500,000 to five  outside
members of the Board of Directors, 500,000 shares to a financial consulting firm
and 50,000 to an attorney.  The fair market value of  $1,050,000  was charged to
expense.

On October 1, 2000, in contemplation of the merger with Sweets & Eats, Inc., STS
split  its  shares  1.17  for one and all  share  amounts  have  been  reflected
retroactively.

From June through  September 1999, the Company sold 247,970 shares for $211,600.
On August 25, 1999, 41,016 shares of Common Stock were issued for services.  The
fair market value of $35,000 was charged to expense.

On May 31, 1999, the Company sold 10,913,245  shares to officers for $93,125 and
264,844 shares for $113,000. Compensation expense was charged for the difference
between the cost and the fair market value or $4,563,190.

In July1998, the Company issued one share of common stock to its founder.


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

The following  discussion and analysis  should be read in  conjunction  with our
financial  statements and the notes thereto contained  elsewhere in this report.
The  discussion of these results should not be construed to imply any conclusion
that any condition or circumstance discussed herein will necessarily continue in
the  future.  When used in this  report,  the words  "believes,"  "anticipates,"
"expects,"  and similar  expressions  are  intended to identify  forward-looking
statements.  Risks  and  uncertainties  could  cause  actual  results  to differ
materially  from those that are  modified by these  forward-looking  statements.
Readers  are  cautioned  not to place undue  reliance  on these  forward-looking
statements,  which speak only as of the date hereof.  The Company  undertakes no
obligation   to  publicly   release  the  results  of  any  revisions  to  these
forward-looking  statements that may be made to reflect events or  circumstances
after the date of this report,  or to reflect the  occurrence  of  unanticipated
events.

Plan of Operation

Following is an outline of the Company's plan of operation for the year 2001:

The Company is in transition from a research and development  based company to a
product  manufacturer,  and as such,  has had no revenues  or income.  Our R & D
activities   have   included  the   refinement   of  the   Accident   Control  &
Anti-Jackknifing  System  that has  resulted  in the  filing of two  provisional
patent applications during 1999.

The Company is poised to implement  its sales and  marketing  plan on all levels
and will intensify its efforts as the plant becomes operational. The preliminary
response by the market  place has been  positive  and the Company  believes  its
continued success is dependent upon the ability to fulfill potential orders in a
timely manner.

The Company  has  performed  sales and  marketing  activities  of which the most
recent include the  following:  development  and production of sales  materials;
discussions  with CalTrans and the  California  Highway Patrol  regarding  their
participation  in testing of the device;  a follow up campaign to eight (8) tank
trailer manufacturers and seven hundred and fifty (750) trucking companies; and,
participation in industry  sponsored  conferences such as the American  Trucking
Association Safety & Loss Prevention Council National  Conference,  the American
Trucking   Association   Management  Council   Convention,   the  Truck  Trailer
Manufacturers  Association  Convention,  the National Truck Carriers Association
Annual Conference, the Commercial Vehicle Safety Alliance Annual Conference, the
National Association of Chemical Distributors Annual Conference,  the California
Trucking   Association   Annual  Safety   Conference  and  the  Oregon  Trucking
Association Annual Safety Conference.

In addition to general administrative and marketing expenses, the Company's most
significant  operating costs are anticipated to be capital  requirements for the
manufacture  of its  System  which  includes  plant  operation,  materials,  and
machinery.

                                       9
<PAGE>

The  Company  has entered  into a lease for a 30,000  square foot  manufacturing
facility in Bellingham, Washington. The terms of the lease are $14,000 per month
with an option to purchase the facility. The Company anticipates the facility to
be fully operational  during the third quarter of 2001.  Simultaneously to that,
the Company has subcontracted manufacturing to an experienced sub-contractor who
can produce up to 1,000 units a month.

The Company intends to secure financing from the Port of Bellingham,  Washington
in the form of a $5 million  Industrial  Revenue Bond. The Company will use $3.8
million of the proceeds to acquire the equipment  necessary for production.  The
balance  will be utilized  for  purchase of the  manufacturing  facility (in the
first quarter of year 2002).

Management anticipates the transaction will be executed in the second quarter of
2001. The proceeds from the IRB will be amortized over 20-years with interest at
4.5% per annum.  In  addition to the  interest  cost of the bond the Company has
projected  3%  additional  cost on the  unpaid  balance  of the  bond  for  bond
administration.  This  includes  fees,  bank charges and a letter of credit that
will be necessary.

Management expects that once the Washington facility is complete that there will
be ample  production  to meet  demand  during  the three  years  covered  in its
financial projections.

On January 10, 2001 the Company  commenced  an offering of  securities  which it
believes  is  exempt  from  registration  as per Rule 506 of  Regulation  D. The
Company  is  seeking  to raise  up to  $7,700,000  (before  payment  of  selling
commissions  and associated  expenses) by selling up to 2,500,000  shares of its
Common Stock in four  tranches as follows:  1,100,000  shares at the price of $2
per share in the First  Tranche;  500,000 shares at the price of $3 per share in
the  Second  Tranche;  500,000  shares at the price of $4 per share in the Third
Tranche;  and,  400,000  shares  at the  price of $5 per  share in the final and
Fourth Tranche.

Results of Operations

Prior to the reverse merger transaction,  Sweets & Eats, Inc., the Company,  had
no assets,  liabilities or operations.  For accounting purposes, the transaction
was treated as a  recapitalization  and accounted for as a reverse  acquisition.
Therefore,   the  financial  statements  of  the  company  reflect  the  assets,
liabilities and operations of Safe Transporation Systems, Inc. (STS).

Through  December 31, 2000 STS was a development  stage entity having no revenue
or operations from its inception.  Its efforts have been principally  devoted to
development of its products, organizational activities, and raising capital. The
accompanying  financial  statements  have  been  prepared  on  a  going  concern
basis,which  contemplates  the  realization  of assets and the  satisfaction  of
liabilities in the nornal course of business.  The company incurred net loses of
$2,761,511  and  $5,063,284  for the  years  ended  December  31,  2000 and 1999
respectively.  As of December 31, 2000 the company had negative  working capital
of $184,366 and stockholder's deficit of $144,256.

Liquidity and Capital Resources

The Company's  continued  existence is dependent upon its ability to resolve its
liquidity  problems,  principally  by  funding  obtained  through  the  Rule 506
Regulation D Offering,  commencing sales, and generating  sufficient revenues to
become profitable.  During the interim,  the company will continue to operate on
cash flows generated from loans,  raising capital and internally  generated cash
flow.  Additionally,  the Company  intends to secure  financing from the Port of
Bellingham,  Washington in the form of a $5 million Industrial Revenue Bond. The
Company will use $3.8 million of the proceeds to acquire the equipment necessary
for production.  The balance will be utilized for purchase of the  manufacturing
facility (first quarter of year two).

                                       10
<PAGE>

Factors  that  may  Affect  Implementation  of Plan  of  Operation  and  Company
Performance

This Report  contains  forward-looking  statements that may be affected by risks
and  uncertainties  including  many that are outside our control.  The Company's
actual operating results could differ materially as a result of certain factors,
including those set forth below and elsewhere in this Report.

General Risks Inherent in Transition from a R&D Company to a  Manufacturing  and
Distribution  Company:  The  Company  is  in  transition  from  a  research  and
development  oriented  company  to a  manufacturing  and sales  company,  and is
subject to all of the new risks that are inherent in a small company  seeking to
introduce, manufacture, market and distribute new products to retail, wholesale,
and  government  customers.  The  likelihood  of the  Company's  success must be
considered in view of the problems,  expenses,  difficulties,  complications and
delays frequently encountered in connection with the introduction,  manufacture,
marketing and distributions of new products.

No  assurances  of  Achieving   Profitability   during  the  2001  Fiscal  Year:
Furthermore, there can be no assurance that the Company's business strategy will
enable it to  achieve  profitable  operations  in the  future.  Accordingly,  an
investment in the Company is a high-risk  speculative  investment  suitable only
for  persons  having  no need for  liquidity  in their  investment  and who have
adequate financial resources to withstand a total loss of their investment.

General Industry Risks:  The inherent  industry risks to the Company include but
are not limited to the  following:  (i) the necessity of government  approval of
the product on federal and state regulatory  levels;  (ii) difficulty in gaining
acceptance  of the product  from the trucking  industry  and the numerous  trade
associations  and  organizations  throughout the industry;  (iii)  difficulty in
obtaining market penetration due to the novelty of the technology and an absence
of a performance history of the product and the Company; and, (iv) difficulty in
adapting  the  Company's  product  to  the  original  equipment   manufacturer's
equipment.

Technological  Change:  The trailer  manufacturing  industry is  dominated by 30
companies  that have over 90% market share.  The Company's  future  success will
depend,  in part, on the Company's  ability to develop and enhance the Company's
existing  products.  The  Company  must  respond to  technological  advance  and
evolving industry standards and practices on a timely and cost-effective  basis.
The development and enhancement of products  entails  significant  technical and
financial  risks.  The Company  may be  required  to adapt  products to evolving
industry standards, and/or develop, introduce and market product enhancements or
new products.  In addition,  the Company may experience  difficulties that could
delay  or  prevent  the  successful  development,  production,  introduction  or
marketing of these products, and the Company's new product enhancements.  If the
Company  encounters  these  problems,  its  business,  financial  condition  and
operating results may be adversely affected.

Need for Additional  Capital:  The Company's capital  requirements have been and
will continue to be  significant  due to,  amongst  other  things,  research and
development costs incurred in the filing of two provisional patent applications,
and the manufacture, distribution and marketing costs of the Company's products.
There can be no assurance that any additional financing will be available to the
Company when needed, on commercially  reasonable terms, or at all. Any inability
to obtain additional  financing when needed would have a material adverse effect
on the Company's business, financial condition and results of operations.

                                       11
<PAGE>

Management  Growth: The Company  anticipates  significant growth in it first two
years  of  operations,  and  this  growth  will  require  the  Company  to  make
significant  additions  in  personnel  and  significantly  increase  its working
capital   requirements.   Such  growth   will   result  in  new  and   increased
responsibilities  for management personnel and has placed and continues to place
a  significant  strain upon the  Company's  management,  operating and financial
systems and other  resources.  There can be no assurance  that the strain placed
upon the  Company's  management,  operating  and  financial  systems  and  other
resources  will not have a material  adverse  effect on the Company's  business,
financial  condition and results of  operations,  nor can there be any assurance
that the  Company  will be able to attract  or retain  sufficient  personnel  to
continue  planned  expansion of its  operations.  Also crucial to the  Company's
success in  managing  its growth  will be its  ability to achieve  economies  of
scale.  There can be no assurance  that the Company will be able to achieve such
economies of scale and the failure to do so could have a material adverse effect
on the Company's financial condition and results of operations.

To manage  the  expansion  of its  operations,  the  Company  must  continuously
evaluate the adequacy of its management  structure and its existing  systems and
procedures,  including,  without limitation,  it quality control,  financial and
internal  controls  systems.  There can be no  assurance  that  management  will
adequately  anticipate  all of the changing  demands that growth could impose on
the Company's systems,  procedures, and structure. In addition, the Company will
be required to react to changes in its  industry,  and there can be no assurance
that it will be able to do so  successfully or at all. Any failure to adequately
anticipate  and  respond to such  changing  demand  may have a material  adverse
effect on the Company's business, financial condition and results of operations.

Indebtedness:  The  Company  does  not  have any  long-term  debt at this  time.
However,  the Company  intends to secure  additional  financing from the Port of
Bellingham,  Washington in the form of a $5 million  Industrial  Revenue Bond as
described above in `Plan of Operation'.

Regulatory Matters: The Company complies with all existing laws and regulations.
The Company has made,  and will  continue to make,  expenditures  to comply with
such laws and regulations.

Dependence on Key Personnel:  The Company's  business requires the employment of
highly skilled personnel. The recruitment and retention of experienced personnel
that are technologically and manufacturing  proficient is particularly important
to the Company's  performance and success. The success of the Company's business
will be dependent to a large extent upon the  services,  abilities and continued
participation of the executive officers and principal  employees and consultants
of the Company for management of the Company and  implementation of its business
strategy.  The loss of the  services of James Long or Ian  Pallett  could have a
material  adverse  effect  on  the  Company's  business  operations,   financial
conditions,  and results of  operations.  However,  the  Company  does have "key
person" life insurance for its officers.  If its operations  expand, the Company
will also be  dependent  upon its  ability  to  attract  and  retain  additional
qualified employees and consultants.  There can be no assurance that the demands
placed on the Company personnel by growth of the Company's business and the need
for  close  monitoring  of its  operations  and  financial  performance  through
appropriate and reliable  administrative and accounting  procedures and controls
will be met, or that the Company will otherwise manage its growth  successfully;
the  failure  to do so could  have a material  adverse  effect on the  Company's
business,  financial  condition and results of operations.  There is significant
competition  for  qualified  personnel,  and there can be no assurance  that the
Company will be successful in  recruiting,  retaining or training the management
personnel it requires.

                                       12
<PAGE>

Significant  Fluctuations in Quarterly Operating Results: The Company's revenues
and operating  results may fluctuate  from quarter to quarter,  and from year to
year, due to a combination of factors,  including  fluctuations in the number of
units sold,  fluctuations in manufacturing costs, unforeseen production problems
such  as  with  machinery  reliability,  and  fluctuations  in  advertising  and
marketing  costs.  Accordingly,  any  increase  in  any  of  these  costs  could
negatively impact the Company's revenues. In addition, there can be no assurance
that the revenues generated from product sales will be maintained.

Uncertainty  of Protection of  Proprietary  Information:  The Company  relies on
trade  secrets  and  proprietary  know-how  in  order  to  prevent  others  from
developing  substantially  similar  products.  In June of  1999,  the  Company's
Intellectual  Property lawyers filed a U.S.  provisional  patent application for
the Company's  first Accident  Control and  Anti-Jackknife  System.  The Company
filed an additional U.S.  provisional  patent  application for another  Accident
Control and Anti-Jackknife  System in July of 1999. These actions,  however, may
not afford  complete  protection  and there can be no assurance that others will
not  independently  develop  similar  trade  secrets  or  obtain  access  to the
Company's trade secrets. The company will aggressively protect its trade secrets
and proprietary know-how but in the event that competitors independently develop
or to otherwise  obtain access to the  Company's  trade  secrets,  the Company's
business, financial condition and results of operations may be affected.

Competition:  Currently,  there is no known competition that markets an Accident
Control  and  Anti-Jackknife  System.  However,  in the  late  1980s  a  company
conducted extensive testing of a rudimentary  anti-jackknife  device and lobbied
various  levels of  government,  the  transportation  sector  and the  insurance
industry. The company published material stating it had conducted numerous tests
and the  subsequent  evaluations  resulted  in the State of New Mexico  drafting
legislation to mandate the use of anti-jackknife  devices. It further stated the
State of Texas  contemplated  insurance  premium  reductions for resident fleets
employing anti-jackknife devices on their trailers and both State Departments of
Transportation used the device on their fleets.  Apparently,  the states did not
follow through with their respective  initiatives  because the company could not
maintain  itself  as  a  financially   viable  entity,   and  ceased  operating.
Nonetheless,  the Company  cannot  preclude the  possibility  that a competitive
technology could be introduced to the market place.


Item 7.  Financial Statements

The Company's  financial  statements and  associated  notes are included in this
report.

                                       13
<PAGE>

                       SAFE TRANSPORTATION SYSTEMS, INC.,
                          FORMERLY SWEETS & EATS, INC.
                          (a development stage company)
                              FINANCIAL STATEMENTS



                                TABLE OF CONTENTS

                                                                           Page


Report of Independent Certified Public Accountants                           F1

Auditor's Report                                                             F2

Balance Sheet                                                                F3

Statements of Operations                                                     F4

Statement of Stockholders' Deficit                                           F5

Statements of Cash Flows                                                     F6

Notes to the Financial Statements                                            F8

<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS




To the Board of Directors
Safe Transportation Systems, Inc.,
Formerly Sweets & Eats, Inc.



We have audited the accompanying  balance sheet of Safe Transportation  Systems,
Inc., (a development  stage  company),  as of December 31, 2000, and the related
statements of operations and  stockholders'  deficit and cash flows for the year
ended December 31, 2000. These financial  statements are the  responsibility  of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our  opinion,  based on our audit and the report of the other  auditors,  the
financial statements referred to above present fairly, in all material respects,
the financial  position of Safe  Transportation  Systems,  Inc., (a  development
stage company) as of December 31, 2000, and the results of its operation and its
cash flow for the year ended  December 31, 2000, in conformity  with  accounting
principles generally accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
company  will  continue  as a  going  concern.  As  discussed  in  Note 3 to the
financial statements,  the Company has suffered losses from operations and has a
net  capital  deficiency  that  raise  substantial  doubt  about its  ability to
continue as a going concern.  Management's  plans in regard to these matters are
also  described  in  Note  3.  The  financial  statements  do  not  include  any
adjustments that might result from the outcome of this uncertainty.


                                       SWEENEY, GATES & CO.


Fort Lauderdale, Florida
April 16, 2001

                                       F1
<PAGE>

                                AUDITOR'S REPORT




To the Shareholders of
Safe Transportation Systems, Inc.,


I have audited the  accompanying  statements  of  operations  and  stockholders'
deficit and cash flows for the year ended  December 31, 1999, and for the period
July 7, 1998  (inception) to December 31, 1998 of Safe  Transportation  Systems,
Inc.  These  financial  statements  are  the  responsibility  of  the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on my audits.

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

In my opinion,  these financial  statements referred to above present fairly, in
all material respects,  the results of its operations and its cash flows for the
years ended  December 31, 1999,  and for the period July 7, 1998  (inception) to
December 31, 1998, in accordance with generally accepted accounting  principles.
As required by the British  Columbia  Company Act, I report that, in my opinion,
these principles have been applied on a consistent basis.



                                   CHRIS THURGOOD


Vancouver, BC Canada
December 29, 2000

                                       F2
<PAGE>

                        SAFE TRANSPORTATION SYSTEMS INC.
                          (a development stage company)
                                  BALANCE SHEET
                                DECEMBER 31, 2000


ASSETS


Current assets:
   Cash and cash equivalents                                  $       725
                                                              -----------

        Total current assets                                          725
                                                              -----------

Property and equipment, net                                        27,916

Patent pending costs                                               11,469
                                                              -----------

                                                              $    40,110
                                                              ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable and accrued expenses                      $   184,366
                                                              -----------

       Total current liabilities                                  184,366
                                                              -----------

Stockholders' deficit
   Preferred stock, no par value, 5,000,000 shares
       authorized, no shares issued and outstanding                  --
   Common stock, $.001 par value, 50,000,000 shares
      authorized; 17,050,000 shares issued and  outstanding        17,050
   Additional paid-in capital                                   7,839,537
   Accumulated other comprehensive expense                         (6,966)
   Deficit accumulated during the development stage            (7,993,877)
                                                              -----------

       Stockholders' deficit                                     (144,256)
                                                              -----------

                                                              $    40,110
                                                              ===========


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

                                       F3
<PAGE>

                        SAFE TRANSPORTATION SYSTEMS INC.
                          (a development stage company)
                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                                  July 8, 1998
                                                                                  (inception)
                                                       Year ended December 31,    to December 31,
                                                         2000         1999              2000
                                                    ------------    ------------    ------------
<S>                                                 <C>             <C>             <C>
Sales                                               $       --      $       --      $       --

Operating expenses:
   Selling, general, and administrative:
        Non-cash compensation and services             2,263,150       4,598,190       6,861,340
        Other selling, general and administrative        491,892         225,236         795,747
   Research and development                                6,469         239,858         336,790
                                                    ------------    ------------    ------------

       Total operating expenses                        2,761,511       5,063,284       7,993,877
                                                    ------------    ------------    ------------

       Loss from operations                           (2,761,511)     (5,063,284)     (7,993,877)
                                                    ------------    ------------    ------------

Net loss                                            $ (2,761,511)   $ (5,063,284)   $ (7,993,877)
                                                    ============    ============    ============

Loss per share, basic and diluted                   $      (0.23)   $      (0.76)
                                                    ============    ============

Weighted averages shares outstanding                  12,096,665       6,652,133
                                                    ============    ============
</TABLE>


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

                                       F4
<PAGE>

                        SAFE TRANSPORTATION SYSTEMS INC.
                          (a development stage company)
                  STATEMENT OF CHANGES TO STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
                                                                                                           Deficit
                                                                                           Accumulated   accumulated
                                                                          Additional          other      during the
                                                     Common stock           paid-in       comprehensive  development
                                               Shares          Amount       capital     income/(expense)    stage         Total
                                             -----------   -----------    -----------    -----------    -----------    -----------
<S>                                           <C>          <C>           <C>            <C>            <C>            <C>
   Issuance of stock,
      July 8, 1998                                     1   $      --     $         1    $      --      $      --      $         1
   Foreign currency
   translation adjustment                           --            --            --            3,531           --            3,531
   Net loss for period ended
      December 31, 1998                             --            --            --             --         (169,082)      (169,082)
                                             -----------   -----------    -----------    -----------    -----------    -----------

Balance, December 31, 1998                             1          --               1          3,531       (169,082)      (165,550)

   Sale of stock                              11,426,059        11,426       406,299           --             --          417,725
   Charge for sale of stock at
   less than fair market value                      --            --       4,563,190           --             --        4,563,190
   Issuance of stock for services                 41,016            41        34,959           --             --           35,000
   Foreign currency
   translation adjustment                           --            --            --          (14,539)          --          (14,539)
   Net loss for year ended
      December 31, 1999                             --            --            --             --       (5,063,284)    (5,063,284)
                                             -----------   -----------    -----------    -----------    -----------    -----------

Balance, December 31, 1999                    11,467,076        11,467     5,004,449        (11,008)    (5,232,366)      (227,458)

   Contribution of stockholders loans               --            --         194,261           --             --          194,261
   Sale of stock                                 449,135           449       382,811           --             --          383,260
   Issuance of stock for services              1,133,789         1,134     1,120,366           --             --        1,121,500
   Options issued for services                      --            --       1,141,650      1,141,650
   Reorganization                              4,000,000         4,000        (4,000)          --             --             --
   Foreign currency
   translation adjustment                           --            --            --            4,042           --            4,042
   Net loss for year ended
      December 31, 2000                             --            --            --             --       (2,761,511)    (2,761,511)
                                             -----------   -----------    -----------    -----------    -----------    -----------

Balance, December 31, 2000                    17,050,000   $    17,050   $ 7,839,537    $    (6,966)   $(7,993,877)   $  (144,256)
                                              ==========   ===========   ===========    ===========    ===========    ===========
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                       F5
<PAGE>





                        SAFE TRANSPORTATION SYSTEMS INC.
                          (a development stage company)
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                                July 8, 1998
                                                                                                 (inception)
                                                                    Year ended December 31,    to December 31,
                                                                      2000          1999            2000
                                                                  -----------    -----------    -----------
<S>                                                               <C>            <C>            <C>
Cash flows from operating activities:
   Net loss                                                       $(2,761,511)   $(5,063,284)   $(7,993,877)
   Adjustments to reconcile net loss to
      net cash used in operating activities:
        Depreciation                                                    3,089           --            3,089
        Issuance of stock for services and compensation             1,121,500      4,598,190      5,719,690
        Issuance of stock options for services and compensation     1,141,650           --        1,141,650
        Changes in operating assets and liabilities:
            (Increase) in patent pending cost                         (11,469)          --          (11,469)
            Increase (decrease) in accounts payable
             and accrued expenses                                     141,498        (47,373)       177,400
                                                                  -----------    -----------    -----------

               Net cash used in operating activities                 (365,243)      (512,467)      (963,517)
                                                                  -----------    -----------    -----------

Cash flows from investing activities:
   Purchases of property and equipment                                (31,005)          --          (31,005)
                                                                  -----------    -----------    -----------

               Net cash used in investing activities                  (31,005)          --          (31,005)
                                                                  -----------    -----------    -----------

Cash flows from financing activities:
   Proceeds from sale of stock                                        383,260        417,725        800,986
   Net advances from stockholders                                      13,316         95,139        194,261
                                                                  -----------    -----------    -----------

               Net cash provided by financing activities              396,576        512,864        995,247
                                                                  -----------    -----------    -----------
</TABLE>

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

                                       F6
<PAGE>

                        SAFE TRANSPORTATION SYSTEMS INC.
                          (a development stage company)
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                   July 8, 1998
                                                                   (inception)
                                          Year ended December 31,  to December 31,
                                                    2000    1999   2000
                                                    ----   -----   ----
<S>                                                  <C>     <C>    <C>
               Net increase in cash and cash
                  equivalents:                       328     397    725
                                                    ----   -----   ----

Cash and cash equivalents, beginning or period       397    --      --
                                                    ----   -----   ----

Cash and cash equivalents, end of period            $725   $2397   $725
                                                    ====   =====   ====

Supplemental disclosure of cash flow information:
   Cash paid for interest during the period         $--    $--     $--
                                                    ====   =====   ====

   Cash paid for income taxes during the period     $--    $--     $--
                                                    ====   =====   ====
</TABLE>

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

                                       F7
<PAGE>


                        SAFE TRANSPORTATION SYSTEMS, INC.
                          FORMERLY SWEETS & EATS, INC.
                          (a development stage company)
                          NOTES TO FINANCIAL STATEMENTS


1.  BUSINESS AND BASIS OF PRESENTATION

The company was  incorporated on December 6, 1994 in Florida as Big Daddy's Auto
Sales, Inc. On April 19, 2000, the company changed its name to Sweets & Eats,
Inc. (S&E).

On  December  18,  2000,  the  stockholders  of S&E  approved a merger with Safe
Transportation  Systems,  Inc. ("STS"), a Wyoming  corporation,  incorporated on
October  17,  2000,   and  located  in   Bellington,   Washington,   USA.   Safe
Transportation Systems, Inc. (the "Company") was originally incorporated on July
7,  1998  in  British  Columbia,  Canada.  On  October  17,  2000,  the  Company
domesticated to Wyoming,  United States of America. Safe Transportation Systems,
Inc. is engaged in the development of safety products for the trucking industry.

The merger  agreement  provided  that the STS  stockholders  receive  12,000,000
shares of S&E. At the date of the transaction, S&E had no assets, liabilities or
operations. Therefore, for accounting purposes, the transaction was treated as a
reorganization  and  accounted  for  as a  reverse  acquisition.  The  financial
statements of the Company reflect the assets,  liabilities and operations of STS
as if it had been the  reporting  entity  since  inception.  On January 3, 2001,
subsequent to the merger, S&E changed its name to Safe  Transportation  Systems,
Inc.

The Company is in the  development  stage and its efforts  through  December 31,
2000 were principally devoted to organizational activities,  raising capital and
development   of  its   accident   control   and   anti-jackknife   system   for
tractor-trailers. Management anticipates incurring substantial additional losses
as it pursues its development efforts. See note 3 for management's plan.


2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and cash equivalents - The Company considers all unrestricted  deposits and
highly  liquid  investments,  readily  convertible  to  known  amounts,  with an
original maturity of three months or less, to be cash equivalents.

Foreign  currency  translation - The functional  currency of the Company was the
Canadian dollar until October 18, 2000.  Since that date, the Company reports in
United  States  dollars.  Accordingly,  the Company has applied the current rate
method to translate the prior financial  statements and the current transactions
into United States dollars.  All assets and liabilities are translated using the
period-end  exchange  rate and all revenues and expenses are  translated  at the
average of exchange in effect  during the period.  Translation  adjustments  are
recorded in comprehensive income in the statement of stockholders' equity.

Property  and  equipment  - Property  and  equipment  are stated at cost.  Major
renewals and  improvements are  capitalized,  while  maintenance and repairs are
expensed when incurred. The cost and accumulated  depreciation for property, and
equipment  sold,  retired,  or  otherwise  disposed  of are  relieved  from  the
accounts, and resulting gains or losses are reflected in income. Depreciation is
computed  over the  estimated  useful  lives of  depreciable  assets  using  the
straight-line method.

                                       F-8
<PAGE>

                       SAFE TRANSPORTATION SYSTEMS, INC.,
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment of long-lived  assets - The Company  evaluates the  recoverability of
its property and  equipment,  and other assets in accordance  with  Statement of
Financial  Accounting  Standards  Board  ("FASB")  No.121,  "Accounting  for the
Impairment  of  Long-Lived  Assets and for  Long-Live  Assets to Be Disposed Of"
("SFAS 121").  SFAS 121 requires  recognition of impairment of long-lived assets
in the event the net book value of such  assets  exceeds  the  estimated  future
undiscounted  cash flows  attributable  to such assets or the  business to which
such intangible assets relate. When an asset exceeds its expected operating cash
flow, it is  considered to be impaired and is written down to fair value,  which
is determined based on either  discounted future cash flows or appraised values.
No  impairments  were  recognized  during the years ended  December 31, 2000 and
1999.

Fair value of financial  instruments - The fair value of the Company's financial
instruments such as accounts payable approximate their carrying value.

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 reported  amounts of assets and liabilities and
disclosures  of contingent  assets and  liabilities at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

Research  and  development  expenses - Research  and  development  expenses  are
charged to operations as incurred.

Income tax - Income  tax  assets  and  liabilities  are  computed  annually  for
temporary  differences  between the financial  statement and tax bases of assets
and liabilities that will result in taxable or deductible amounts in the future,
based upon  enacted  tax laws and rates  applicable  to the periods in which the
differences  are expected to affect  taxable  income.  A valuation  allowance is
recognized if, based on the weight of available evidence, it is more likely than
not that some  portion or all of the  deferred  tax asset will not be  realized.
Income tax expense is the tax  payable or  refundable  for the  period,  plus or
minus the change during the period in deferred tax assets and liabilities.

Start-up costs -The Company  accounts for start up costs in accordance  with the
Accounting  Standards  Executive  Committee  of the AICPA  Statement of Position
98-5,  "Reporting  on the  Costs of  Start-Up  Activities"  ("SOP  98-5")  which
requires start-up costs, including organizational costs be expensed as incurred.
The Company expensed all start-up costs.

Loss per share - The  Company  accounts  for  earnings  per share  according  to
Statement of Financial  Accounting Standards No. 128, "Earnings per Share" ("FAS
128") which  requires  presentation  of basic and  diluted  earnings or loss per
share.  Stock  options  granted  during  the  year  were  not  included  in  the
computation  of net loss per share  because  the  effect of  inclusion  would be
anti-dilutive  due to the  Company's  net  loss.  Earnings  or loss per share is
computed by dividing net income or loss by the weighted average number of shares
outstanding during the period.

                                       F-9
<PAGE>

                       SAFE TRANSPORTATION SYSTEMS, INC.,
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Segment  reporting  - In June  1997,  the FASB  issued  Statement  of  Financial
Accounting  Standards No. 131,  "Disclosures about Segments of an Enterprise and
Related  Information"  ("SFAS 131"). This statement requires companies to report
information about operating segments in interim and annual financial statements.
It also requires  segment  disclosures  about products and services,  geographic
areas and major  customers.  The Company did not have any separately  reportable
operating segments as of December 31, 2000 and 1999.


3.  GOING CONCERN AND MANAGEMENT'S PLAN

The Company is a  development  stage entity having no revenue from its inception
to December 31, 2000. The accompanying  financial  statements have been prepared
on a going concern basis,  which  contemplates the realization of assets and the
satisfaction  of liabilities  in the normal course of business.  As shown in the
accompanying financial statements, the Company incurred net losses of $2,761,511
and $5,063,284 for the years ended December 31, 2000 and 1999, respectively.  As
of December 31, 2000, the Company had negative  working  capital of $183,641 and
stockholders' deficit of $144,256.

The Company's  continued  existence is dependent upon its ability to resolve its
liquidity  problems,  principally  by obtaining  capital,  commencing  sales and
generating  sufficient  revenues to become profitable.  During the interim,  the
Company must  continue to operate on cash flows  generated  from loans,  raising
capital and  internally  generated  cash flow.  These factors raise  substantial
doubt about the Company's ability to continue as a going concern.

Management's  plans  in  regard  to this  matter  are to raise  capital,  become
profitable  by  commencing  manufacturing  and  sales  of its  product  in a new
facility in the State of  Washington.  Management  believes  these  efforts will
generate  positive cash flow.  See Note 10 for subsequent  event.  The financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.


4.  PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at December 31, 2000:

                                                               Estimated
                                                              Useful lives

Office equipment                       $        22,884        3 to 5 years
Furniture and fixtures                           8,121           7 years
                                       ---------------

                                                31,005

   Less:  accumulated depreciation              (3,089)
                                       ---------------

                                       $         27,916
                                       ================

Depreciation expense was $3,089 and $0 for the years ended December 31, 2000 and
1999.

                                       F-10
<PAGE>

                       SAFE TRANSPORTATION SYSTEMS, INC.,
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


5.  RELATED PARTY NOTES

As of December 31, 1999, the stockholders had advanced the Company $180,945.  In
2000, the stockholders contributed the $180,945 plus 2000 advances of $13,316 to
equity.


6.  SALE OF SECURITIES AND MERGER

On October 1, 2000, in contemplation of the merger with Sweets & Eats, Inc., the
Company split its shares 1.17 for one and all share amounts have been  reflected
retroactively.

In July1998, the Company issued one share of common stock to its founder.

On May 31, 1999, the Company sold 10,913,245  shares to officers for $93,125 and
264,844 shares for $113,000. Compensation expense was charged for the difference
between the cost and the fair market value or $4,563,190.

From June through  September 1999, the Company sold 247,970 shares for $211,600.
On August 25, 1999, 41,016 shares of common stock were issued for services.  The
fair market value of $35,000 was charged to expense.

During  2000,  the Company sold  449,135  shares of common  stock for  $383,260.
During 2000,  83,789 shares of common stock were issued for  services.  The fair
market value of $71,500 was charged to expense.

On October  19,  2000,  the Company  issued  1,050,000  shares:  500,000 to five
outside  members  of the  board of  directors,  500,000  shares  to a  financial
consulting  firm and 50,000 to an attorney.  The fair market value of $1,050,000
was charged to expense.

On October 19, 2000,  The Company  issued  nonqualified  stock options  covering
2,655,000 shares of common stock at an exercise price of $1.00 immediately.  The
options do not have an expiration date.  Certain  management  personnel received
options  for  2,105,000  shares  in  exchange  for  the  relinquishment  of  any
development and propriertary rights and/or royalties and/or licensing fee to the
anti-jackknifing  systems.  A financial  consulting  firm  received  options for
500,000  shares for services.  An attorney  received  options  50,000 shares for
services.  These  options were  recorded at fair value of  $1,141,650  using the
Black Shoals option formula.  The calculation assumed a 5.66% risk-free interest
rate, 0% dividend  yield,  .0001%  volatility,  and a ten-year  life,  since the
options did not have an expiration date.

On December 18, 2000,  the Company  completed a merger with Sweets & Eats,  Inc.
The merger  agreement  provided  that the STS  stockholders  receive  12,000,000
shares of S&E and the former  stockholders of S&E retained  4,000,000 shares. At
the date of the  transaction,  S&E had no  assets,  liabilities  or  operations.
Therefore,   for  accounting   purposes,   the  transaction  was  treated  as  a
reorganization and accounted for as a reverse acquisition.

                                       F-11
<PAGE>

                       SAFE TRANSPORTATION SYSTEMS, INC.,
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


7.  INCOME TAXES

The Company did not have any net operating loss carryforwards as of December 31,
1999,  due to the change of business and  ownership  provisions  of the Internal
Revenue Code.

The Company had available at December 31, 2000, operating loss carryforwards for
United States federal taxes of  approximately  $200,000,  which could be applied
against  taxable income in subsequent  years through 2020. The tax effect of the
net operating loss is approximately  $70,000 and a full valuation  allowance was
recorded, since realization is uncertain.

Reconciliation  of the differences  between income taxes computed at the federal
statutory tax rates and the provision for income taxes is as follows:
<TABLE>
<CAPTION>

                                                  2000          Percent           1999       Percent
                                               -----------    ------------    -----------   ----------
<S>                                            <C>                <C>           <C>           <C>
  Income taxes computed at
     federal statutory tax rate                $  (818,000)       (34.0)%       $(1,722,000)  (34.0)%

  Canadian losses, prior to merger                 150,000          6.2        1,722,000       34.0
  Non-deductible non-cash
     expenses                                      598,000
                                                                   24.8
  Change in valuation allowance                     70,000          3.0              --          --
                                               -----------    ------------    -----------   ----------
  Provision for income taxes                   $      --             --%      $      --          --%
                                               ===========    ============    ===========   ==========
</TABLE>

Temporary differences that give rise to significant deferred tax assets are as
follows:
                                                  2000            1999
                                               -----------    ------------

Net operating loss carry forward               $    70,000    $      --
                                               ===========    ============

Total deferred tax assets                           70,000           --
                                               -----------    ------------
Valuation alloancew
                                                   (70,000)          --
                                               -----------    ------------
Net deferred tax asset                         $      --             --
                                               ===========    ============

                                       F-12
<PAGE>

                       SAFE TRANSPORTATION SYSTEMS, INC.,
                          (a development stage company)
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


8.  OPERATING LEASES

On November 7, 2000, the Company entered into a 5-year lease to lease office and
manufacturing  space with an option to  purchase  the  facility  for fair market
value.  Rental  payments  started on March 1, 2001.  Rental expense for the year
ended December 31, 2000 was approximately  $36,000 including $14,358 accrued for
December  2000.  Rental  expense  for the  year  ended  December  31,  1999  was
approximately $11,000.

On January 16,  2001,  the Company  entered into a sales office lease in British
Columbia for three years at approximately $1,000 per month.

Future minimum lease payments for the years ended, December 31 are as follows:


                    2001              $      162,625
                    2002                     193,352
                    2003                     193,352
                    2004                     181,867
                    2005                     166,254
                                      --------------

                                      $      897,450
                                      ==============

9.  COMMITMENTS

Employment  agreements - On January 1, 2001, the Company entered into employment
agreements with the President and Chief Executive Officer and the Executive Vice
President. The agreements terminate on December 31, 2011. The agreements have an
initial base annual salary of $120,000.  The salaries will be adjusted  annually
to an  equal  industry  standard  of a  comparably  capitalized  and  successful
undertaking at a rate no less than ten percent of the prior year.


10. SUBSEQUENT EVENT

On January 10,  2001,  The Company  commenced  a private  placement  offering of
securities.  The Company is seeking to raise up to  $7,700,000  by selling up to
2,500,000  shares of its common  stock in four  tranches as  follows:  1,100,000
shares at the price of $2 per share in the first tranche;  500,000 shares at the
price of $3 per share in the second  tranche:  500,000  share at the price of $4
per share in the third tranche; and, 400,000 shares at the price of $5 per share
in the final and fourth  tranche.  As of March 31, 2001, the Company sold 48,750
shares for $97,500.

                                       F-13
<PAGE>


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

There  were  no  changes  in  or  disagreements   with  our  independent  public
accountants on accounting and financial disclosure in 2000.

                                    Part III

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

The executive officers and key management employees of the Company are described
below:

Name                           Age       Position
----                           ---       --------
James B. Long                  41        President & Chief Executive Officer

Ian Pallett                    51        Executive Vice President

Patrick Riebalkin              35        Vice President of New Product
                                         Development

James B. Long
(41 years old, President and Chief Executive Officer and Founder of the Company,
Director)

James B. Long has a  substantial  business  management,  marketing,  sales,  and
entrepreneurial  career,  which began in 1980 with IBM, and progressed through a
series  of  increasingly   senior  positions  in  the  business   equipment  and
telecommunications industry.

From 1987 - 1994 Mr. Long introduced many competitive telecommunication services
to the Canadian market. He co-founded Starcom  International  Optics Corporation
which linked  Vancouver B.C. to Seattle,  Washington  with the first fiber optic
link which  seamlessly  joined Canada to the United  States.  As a member of the
Board of Directors his company set telecommunication legislative precedence with
the  Federal   Communications   Commission   (FCC),  the  Washington   Utilities
Commission, the Canadian Radio and Telecommunications Commission (CRTC). As Vice
President of Sales and Marketing, he developed and implemented the strategy that
built a team,  which filled the  telecommunications  void between Canada and the
United States on the west coast.

From  1994  -  1997  Mr.  Long  co-developed  an  aerodynamic   device  for  the
tractor-trailer  industry. As Director, and in the capacity of Vice President of
Sales  and  Marketing  he proved  the value of the  technology  to  industry  as
recognized by the Innovation  Center of Waterloo,  Ontario,  where the invention
won first prize as the Most Environmentally Useful Innovation Award of 1996. Mr.
Long  developed  this  innovative  strategy  for  new  tractor-trailer   product
introduction  while working with Gorlan Fairing Inc. in Vancouver in association
with KPMG's Transportation Services Group.

Mr.  Long's broad  experience in marketing to the trucking  industry  helped him
recognize  the need  for a  tractor-trailer  anti-jackknife  safety  device.  He
conceived  the concept of a life  saving  accident  control  and  anti-jackknife
system.  Through STS, he assembled a diverse team of professionals  from various
disciplines varying from truck and trailer designers,  engineers,  manufacturing
specialists and vehicle systems technicians.

Mr.  Long  brings  his  highly  strategic  approach  to the  task  of  corporate
development,  international  marketing  and strategic  alliances.  Mr. Long is a
co-inventor of STS's new technologies.

Mr. Long earned a Diploma of Technology in Marketing Management from the British
Columbia   Institute  of  Technology.   He  also   successfully   completed  the
Telecommunications   Management  Program  of  Vancouver  Community  College  and
numerous other industry specific programs.

                                       14
<PAGE>

Ian Pallett
(51 years old, Director)

Mr. Pallett is the Executive  Vice  President of the Company and  co-inventor of
its technologies. Prior to joining STS in the spring of 1998, Mr. Pallett served
as  President of Penn Lease  Corporation.  Mr.  Pallett  brings over twenty (20)
years of experience as a highly  creative  executive  specializing in innovative
financial services to the transport industry;  particularly involving investment
services such as finance  structuring,  lease  facilitation and currency hedging
strategies  for  trans-border   carriers,   involving  millions  of  dollars  in
transactions  monthly in Canada and the United States. He has worked extensively
with foreign and U.S. banks, syndicates, institutional funds and brokerages.

Mr. Pallet worked as a securities  broker with Merrill Lynch Canada from 1984 to
1989,  where his  reputation  and clientele  flourished in the petroleum  supply
sector.  Mr. Pallett acted as a financial advisor on currency hedging strategies
for oil sector  transportation  companies  hauling  cross-border  freight,  with
particular emphasis on U.S. -Canadian currency hedging strategies.

Mr. Pallett's administrative, financial, leasing and lending expertise gives STS
the ability to offer clients  diverse and unique  finance  options for employing
the Company's technology.

Mr. Pallett attended  Vancouver City College,  Langara,  where he studied Honors
Mathematics and Physics.

Patrick Riebalkin
(35 years old, Vice President of New Product Development)

Mr.  Riebalkin  has over twelve (12) years of  experience  in metal and plastics
fabrication,  transportation related research and development,  and plant design
and construction. Mr. Riebalkin is the co-inventor of the STS Systems.

In 1997 Mr.  Riebalkin  joined Gorlan Trailer Fairing Inc. as Senior  Production
Manager  responsible for Product Design Engineering and Research and Development
of aerodynamic freight trailer fairings. Prior to that he was Technical Services
Supervisor and Quality Assurance Manager with Whitewater Specialties Ltd., where
his  responsibilities  included  production,  and  research and  development  of
components  supplied to Western Star Trucks. Mr. Riebalkin was also a key member
of  the  layout  and  design  team  of  Whitewater's   new  60,000  square  feet
manufacturing plant in Kelowna, British Columbia.

Mr. Riebalkin graduated from the School of Mechanical Engineering at the British
Columbia Institute of Technology in 1994 with a diploma in Plastics  Technology,
and was awarded a Senior Project  Excellence Award in Design and Development for
an Aerodynamic Freight Trailer Fairing.

Outside Directors of the Board

Alan P. Brooks
(52 years old, Director)

Mr. Brooks is Managing Director of Cone, Rose, Thatcher, Ltd., an investment and
merchant bank  specializing  in mergers and  acquisitions,  leveraged  buy-outs,
structured financing,  capital advisory services and marketing to a wide variety
of companies and government  organizations  throughout the world. Prior to this,
Mr.  Brooks served as CEO and Chairman of Interfund  Resources,  Ltd. Mr. Brooks
brings over thirty (30) years of  experience  as an  executive  specializing  in

                                       15
<PAGE>

financial  services whose  dealings in the  investment,  financial  services and
aviation  industries  have involved  several  billion dollars in transactions in
more than twelve (12)  nations in North  America,  Europe and the Far East.  Mr.
Brooks is also a Director and Advisor to Bromark Capital Management,  Ltd., MCAP
Investment  Group,  Ltd.  and  a  Partner  in  Allied  Capital  Partners,   Ltd.
Previously,  he was President of  Commercial  Leasing  Corporation  where he was
instrumental in developing financial products and services, and syndicating ITCs
and tax benefits. His career began in product management at the Clairol Division
of  Bristol  Myers,  Inc.  Later,  he  became  Director  of  Marketing  for  the
Revlon-Realistic  Division of Revlon, Inc., and then served as Vice President of
Marketing & Sales at Studio One Products,  Inc. where he was responsible for the
restructuring  and return to profitability of the company.  Mr. Brooks graduated
with a B.A. Degree in Marketing and Finance from the University of Florida.

Lawrence J. Brady
(61 years old, Director)

Mr. Brady is Chairman and CEO of American  Technologies  Group,  Inc.  (ATG), an
advanced  technology  company  providing  solutions  to  environmental  problems
worldwide.  Mr.  Brady was a founder and  director of  Capitoline  International
Group,  Ltd.,  Senior  Vice  President  of  Hill  and  Knowlton  Public  Affairs
Worldwide,  and  Director  of  International  Business  Development  of  Sanders
Associates,  a Lockheed  subsidiary.  Mr. Brady served as Assistant Secretary of
Commerce for Trade Administration in the Reagan Administration,  responsible for
administering  federal government export and import trade regulation  functions.
These included high technology  export control and enforcement  programs and the
anti-boycott  and foreign trade zone  programs.  Mr. Brady also  supervised  the
administration of U.S. laws designed to prevent unfair sales of foreign products
in the U.S.  Mr.  Brady  served  in  senior  staff  roles in the  Nixon and Ford
administrations.   He  has  represented  the  U.S.  in  trade  negotiations  and
conferences in Europe, Japan, and the People's Republic of China, and has been a
frequent witness on international trade matters before Congress. Mr. Brady holds
a degree in politics and  economics  for Catholic  University of America and has
completed pre-dissertation requirements for a doctorate in international affairs
and international economics.

G. Roy Long, Jr.
(77 years old, Director)

Mr. Long, as senior partner,  has managed the prominent law firm of Long, Miller
for over fifty (50) years:  the firm  specializes in estates,  trusts and family
law. Mr. Long is a well-known  philanthropist  in the city of Vancouver,  having
served as chairman,  director,  secretary  and an officer in numerous  charities
such as the Young Men's Christian  Association,  the Canadian Victorian Order of
Nurses,   the  Kiwanis  Club  of  Vancouver  and  other   charitable   religious
organizations.  Mr. Long is a member of the Chancellor's  Circle, a select group
of outstanding  contributors  and alumni of the University of British  Columbia.
Mr. Long is the father of the Company's President and CEO, James B. Long.

Charles R. McCarthy, Jr.
(60 years old, Chairman of the Board)

Mr.  McCarthy is presently  affiliated with the law firm of O'Connor & Hannan in
its  Washington,  DC office as Counsel to the Firm.  He brings over  twenty-five
(25) years of intensive experience in diverse corporate and securities practice.
He served for many years as the General  Counsel to the National  Association of
Corporate  Directors  and is a recognized  authority on the subjects of U.S. and
international  corporate  governance  issues.  Mr.  McCarthy has qualified as an
expert witness on corporate and securities law matters in both federal and state
courts around the country and currently serves on a number of corporate  boards.

                                       16
<PAGE>

He was Director of the National  Blue Ribbon  Commission  on the proposed  proxy
reforms and their impact on Executive  Compensation in the United States.  Early
in his career Mr.  McCarthy  served as trial  attorney with the  Securities  and
Exchange  Commission,  in the  Division of  Enforcement,  where he  prosecuted a
number of significant cases on behalf of the SEC. He is a member of the District
of Columbia  Bar and the DC Bar  Association.  He is admitted to practice law in
the various courts of the District of Columbia,  as well as the Supreme Court of
the United States.  Mr.  McCarthy  graduated from LeMoyne College with a B.S. in
Political Science and earned a Doctor of Law Degree from Georgetown University.

Larry Pressler
(58 years old, Director)

Former  United  States  Senator  Larry  Pressler  was a Member of  Congress  for
twenty-two  (22)  years.   During  that  time,  Senator  Pressler  authored  the
Telecommunications Act of 1996; was Chairman of the Senate Commerce, Science and
Transportation    Committee;   and   authored   various   aviation,    pipeline,
transportation,  satellite,  foreign  policy,  business  and trade  legislation.
During  his  tenure in the  Senate,  Senator  Pressler  served on the  following
committees:  Commerce,  Foreign  Relations,  Finance,  Banking,  Environment and
Public Works, Small Business,  and Special Committee on Aging.  Senator Pressler
is  currently a partner in the  Washington,  D.C. law firm of O'Connor & Hannan,
and is chairman of the law firm's Telecommunications and Business Group. Senator
Pressler specializes in regulatory law, commercial law, and lobbying activities.
Senator  Pressler  has  extensive  experience  in helping  businesses  that have
problems  with the  federal  government.  Senator  Pressler  is a former  Rhodes
Scholar at Oxford,  U.K.,  a Graduate of Harvard  Law School,  and a Vietnam War
veteran.


Item 10. Executive Compensation

The Company has executed  employment  agreements  with Mr. Long and Mr. Pallett.
The terms of both  contracts  are as follows:  five years;  annual  gross salary
commencing  at  $120,000;  re-evaluation  on an annual basis with an increase in
salary and benefits based upon performance;  and,  participation in an incentive
stock option plan (to be approved by the shareholders).

The  Company  has set up a  Compensation  Committee  of the  Board of  Directors
comprised of two outside directors and one management director to administer all
compensation issues.

The Company  does not  compensate  members of the Board of  Directors  for their
services in such capacity. Upon acceptance of election to the Board of Directors
each outside Director received a grant of 100,000 Shares of common stock.


Item 11. Security Ownership of Certain Beneficial Owners and Management

The  following  table sets  forth,  as of  December  31,  2000,  the  beneficial
ownership of the Company's outstanding shares of Common Stock.

                                       17
<PAGE>

Name                                Number of Shares          Percentage

James B. Long                         7,622,000                 44.6%

Ian Pallett                           3,091,720                 18.1%

All Directors and
Officers as a Group                  11,375,120                 66.5%


Item 12. Certain Relationships and Related Transactions

1. G. Roy Long, a director of the company,  is the father of James B. Long,  the
CEO and President.

2. On August 12, 2000, the Company  resolved to implement an unqualified  option
plan pursuant to which it would issue unqualified options with an exercise price
of $0.50 per share as follows:

     o   500,000  options to Cone,  Rose,  Thatcher,  Ltd. in accordance  with a
         Financial and Services Advisory Agreement;
     o   1,000,000  options to James B. Long in exchange for the  relinquishment
         of all development and proprietary  rights and/or royalties,  licensing
         fees, etc. to the anti-jack-knifing system;
     o   1,000,000  options to Ian Pallet in exchange for the  relinquishment of
         all  development  and proprietary  rights and/or  royalties,  licensing
         fees, etc. to the anti-jack-knifing system;
     o   25,000 options each to Colin V. Hall,  Norman L. Williams,  and Patrick
         Riebalkin in exchange for the  relinquishment  of all  development  and
         proprietary  rights  and/or  royalties,  licensing  fees,  etc.  to the
         anti-jack-knifing system; and
     o   30,000  options to Richard P/ Craig in exchange for the  relinquishment
         of all development and proprietary  rights and/or royalties,  licensing
         fees, etc. to the anti-jack-knifing system.

3. The Company also resolved to issue 50,000 shares of Common Stock,  and 50,000
unqualified options to Mark B. Goldstein.

4. On August 12,  2000,  the  Company  entered  into a  Financial  and  Advisory
Services  Agreement  with Cone,  Rose,  and Thatcher,  Ltd.  ("CRT").  Under the
Agreement CRT shall receive  500,000  shares of the Company's  Common Stock,  an
option to purchase an additional  500,000 shares of Common Stock at the price of
$.50 per share, and an advisory cash fee equal to 6% of all funding in excess of
$7,700,000  facilitated  by CRT in exchange  for a wide array of  financial  and
advisory services. For detailed terms of this agreement see Exhibit 6.1.


Item 13. Exhibits and Reports on Form 8-K.

(a)  Exhibits  The  Company  files the  following  exhibits  with this report or
incorporates  by reference to exhibits filed  previously with the Securities and
Exchange Commission by the Company.

                                       18
<PAGE>

Exhibit No.                Description

2.1      Articles of Merger between Safe Transportation Systems, Inc. and Sweets
         and Eats, Inc., dated December 28, 2000
2.2      Certificate  of  Incorporation  of Safe  Transportation  Systems,  Inc.
         (British Columbia, Canada, filed on July 7, 1998)
2.3      Certificates  of Continuance  and Good Standing of Safe  Transportation
         Systems, Inc. (Wyoming, October 17 and 19, 2000)
2.4      Articles of Incorporation (Big Daddy's Auto Sales, Inc., dated December
         6, 1994)*
2.5      Amendment to Articles of Incorporation  (Big Daddy's Auto Sales,  Inc.,
         dated October 2, 1998)
2.6      Amendment  to Articles of  Incorporation  (Change of name to Sweets and
         Eats, Inc., dated April 25, 2000)
2.7      Amendment  to  Articles  of  Incorporation  (Change  of  name  to  Safe
         Transportation Systems, Inc., dated March 15, 2001)
2.8      Bylaws**
6.1      Financial and Advisory Services  Agreement between Safe  Transportation
         Systems, Inc. and Cone, Rose, Thatcher, Ltd., dated August 12, 2000.
6.2      Lease Agreement
8.1      Merger Agreement between Safe Transportation  Systems,  Inc. and Sweets
         and Eats, Inc., dated December 18, 2000
8.2      Agreement for the Exchange of Common Stock, between Safe Transportation
         Systems, Inc. and Sweets and Eats, Inc., dated December 18, 2000
12.1     Pacific Traffic Education Centre test report
12.2     Transportation Research Center Inc. test report
12.3     Bacon Donaldson test report

99.1     Executive Employment Agreement between STS and Ian Pallet
99.2     Executive Employment Agreement between STS and James B. Long

Incorporation By Reference:

*        Filed as Exhibit to the Company's registration statement on Form 10-SB,
         Commission 000-26631 and incorporated by this reference.
**       Filed as Exhibit to the Company's registration statement on Form 10-SB,
         Commission 000-26631 and incorporated by this reference.

(b) Reports on Form 8-K

We filed a Current Report on Form 8-K on November 11, 2000__ Commission File No.
000-26631.

                                       19
<PAGE>

                                   Signatures

In  accordance  with  Section 13 or 15(d) of the  Securities  Exchange  Act, the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized this 12th day of April 2001.

Safe Transportation Systems, Inc.


By: /s/ James B. Long
---------------------
        James B. Long, CEO (Principal Executive Officer)


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.


Dated this 15th day of April 2001


By: /s/ James B. Long
---------------------
        James B. Long, President, CEO and Director


By: /s/ Ian Pallett
-------------------
        Ian Pallett, Executive Vice President and Director


By: /s/ Alan P. Brooks
----------------------
        Alan P. Brooks, Director


By: /s/ Lawrence J. Brady
-------------------------
        Lawrence J. Brady, Director


By: /s/ G. Roy Long
-------------------
        G. Roy Long, Director


By: /s/ Charles R. McCarthy
---------------------------
        Charles R. McCarthy, Jr., Chairman of the Board


By: /s/ Larry Pressler
----------------------
        Larry Pressler, Director


By: /s/ Mark Goldstein
----------------------
        Mark Goldstein, Secretary