U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB
(mark one)

|X|   Quarterly Report Pursuant to Section 13 or 15(d) of Securities Exchange
      Act of 1934

                  For the quarterly period ended March 31, 2002

|_|   Transition report under Section 13 or 15(d) of the Securities Exchange
      Act of 1934

                  For the transition period from _______ to _______.

                                       Commission File No. 000-26631

                        SAFE TRANSPORTATION SYSTEMS, INC.
                 (Name of Small Business Issuer in Its Charter)

Florida                                                   59-3567558
-------                                                   ----------
(State or Other Jurisdiction of                           (I.R.S. Employer
Incorporation or Organization)                            Identification No.)

909 Lakeway Drive, Suite 208, Bellingham, WA              98226
--------------------------------------------              -----
(Address of Principal Executive Offices)                  (Zip Code)

                                 (360) 527-1112
                                 --------------
                (Issuer's Telephone Number, Including Area Code)

         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange  Act during the past 12 months,  and (2) has
been subject to such filing requirements for the past 90 days. Yes |X| No |_|

         There were 19,670,269  shares of Common Stock outstanding as of May 31,
2002.

<PAGE>

                                     PART I
                              FINANCIAL INFORMATION


Item 1.  Financial Statements



                                               SAFE TRANSPORTATION SYSTEMS, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)
--------------------------------------------------------------------------------


                                                  CONDENSED FINANCIAL STATEMENTS

                                                                  MARCH 31, 2002



                                       2

<PAGE>


C O N T E N T S
                                                                        Page
--------------------------------------------------------------------------------


CONDENSED FINANCIAL STATEMENTS

         Balance Sheet                                                    4

         Statements of Operations                                         5

         Statements of Cash Flows                                         6

         Notes to Condensed Financial Statements                        7 - 10




                                       3

<PAGE>





<TABLE>
<CAPTION>
SAFE TRANSPORTATION SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEET (UNAUDITED)
MARCH 31, 2002

ASSETS
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                          <C>
PROPERTY AND EQUIPMENT                                                                                       $         107,577

DEFERRED OFFERING COSTS                                                                                                 37,500

PREPAID CONSULTING FEES                                                                                                  5,000

PATENT PENDING COSTS                                                                                                    11,469

DEPOSITS                                                                                                                 2,500
--------------------------------------------------------------------------------------------------------------------------------

         TOTAL ASSETS                                                                                        $         164,046
--------------------------------------------------------------------------------------------------------------------------------

LIABILITIES AND DEFICIENCY IN ASSETS
--------------------------------------------------------------------------------------------------------------------------------

CURRENT LIABILITIES
     Bank overdraft                                                                                          $              30
     Accounts payable and accrued expenses                                                                             490,003
     Accrued payroll and payroll taxes                                                                                 492,097
     Loans payable - stockholders                                                                                       50,950
     Notes payable                                                                                                     314,912
--------------------------------------------------------------------------------------------------------------------------------
       Total current liabilities                                                                                     1,347,992

CONVERTIBLE DEBENTURES                                                                                                 150,000
--------------------------------------------------------------------------------------------------------------------------------
         Total liabilities                                                                                           1,497,992
------------------------------------------------------------------------------------ --------------------- ---------------------


DEFICIENCY IN ASSETS
     Preferred stock, no par value 5,000,000 shares authorized,
         no shares issued and outstanding                                                                                    -
     Common stock, $0.001 par value 50,000,000 shares authorized,
         19,170,269 shares issued and outstanding                                                                       19,670
     Additional paid-in capital                                                                                      8,027,328
     Accumulated other comprehensive expense                                                               (             6,794)
     Deficit accumulated during the development stage                                                      (         9,374,150)
------------------------------------------------------------------------------------ --------------------- ---------------------
       Total deficiency in assets                                                                          (         1,333,946)
------------------------------------------------------------------------------------ --------------------- ---------------------

         TOTAL LIABILITIES AND DEFICIENCY IN ASSETS                                                          $         164,046
------------------------------------------------------------------------------------ --------------------- ---------------------

                                                       See accompanying notes.

</TABLE>


                                                                 4

<PAGE>

<TABLE>
<CAPTION>
SAFE TRANSPORTATION SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
------------------------------------------------------------------------------------------------------------------------------------


                                                                         Three Months Ended March 31,              Inception
                                                                  -------------------------------------------   (July 8, 1998) to
                                                                          2002                  2001             March 31, 2002
----------------------------------------------------------------- --------------------- --------------------- ---------------------
<S>                                                               <C>                   <C>                   <C>
REVENUES                                                            $            -        $            -        $            -
----------------------------------------------------------------- --------------------- --------------------- ---------------------

OPERATING EXPENSES
   Selling, general and administrative
     Non-cash compensation and services                                          -                     -             6,900,340
     Other selling, general and administrative                             241,130               367,877             2,176,679
   Research and development                                                      -                     -               336,790
----------------------------------------------------------------- --------------------- --------------------- ---------------------
       Total operating expenses                                            241,130               367,877             9,413,809

OTHER INCOME                                                                39,659                     -                39,659
----------------------------------------------------------------- --------------------- --------------------- ---------------------

NET LOSS                                                          ( $      201,471)     ( $      367,877)     ( $    9,374,150)
----------------------------------------------------------------- --------------------- --------------------- ---------------------

LOSS PER SHARE - BASIC AND DILUTED                                ( $         0.01)     ( $         0.02)
----------------------------------------------------------------- --------------------- --------------------- ---------------------

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING                           19,264,713            17,585,556
----------------------------------------------------------------- --------------------- --------------------- ---------------------


</TABLE>

                                                       See accompanying notes.

                                                                 5

<PAGE>

<TABLE>
<CAPTION>
SAFE TRANSPORTATION SYSTEMS, INC.
------------------------------------------------------------------------------------------------------------------------------------
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                                         Three Months Ended March 31,              Inception
                                                                  -------------------------------------------   (July 8, 1998) to
                                                                          2002                  2001             March 31, 2002
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>                   <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                       ( $      201,471)     ( $      367,877)     ( $    9,374,150)
   Adjustments to reconcile net loss to net cash provided by
     (used in) operating activities:
     Depreciation and amortization                                          11,391                 5,762                77,929
     Loss on disposal of property and equipment                                  -                     -                62,449
     Issuance of stock for services                                              -                     -             5,728,690
     Issuance of stock options for services                                      -                     -             1,171,650
     Accrued interest on long-term debt                                          -                     -                47,100
     Changes in operating assets and liabilities:
       Inventory                                                                 -      (          2,210)                    -
       Prepaid consulting fees                                                   -                     -      (         30,000)
       Patent pending costs                                                      -                     -      (         11,469)
       Deposits                                                                  -                     -      (          2,500)
       Accounts payable and accrued expenses                               157,764               497,160               975,306
----------------------------------------------------------------- --------------------- --------------------- ---------------------
           Net cash provided by (used in) operating activities    (         32,316)              132,835      (      1,354,995)
----------------------------------------------------------------- --------------------- --------------------- ---------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                                            -      (        241,660)     (        198,955)
----------------------------------------------------------------- --------------------- --------------------- ---------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Bank overdraft                                                               30                     -                    30
   Payment of deferred offering costs                                            -                     -      (         37,500)
   Proceeds from loans payable - stockholders                                    -                     -                52,950
   Payments on loans payable - stockholders                                      -                     -      (          2,000)
   Proceeds from notes payable                                              20,812                     -                92,812
   Proceeds from long-term debt                                                  -                     -               175,000
   Payment of loan costs                                                         -                     -      (         24,000)
   Proceeds from convertible debentures                                          -                     -               150,000
   Net advances from stockholders                                                -                23,450               194,261
   Proceeds from sale of stock, net                                              -                85,230               952,397
----------------------------------------------------------------- --------------------- --------------------- ---------------------
           Net cash provided by financing activities                        20,842               108,680             1,553,950
----------------------------------------------------------------- --------------------- --------------------- ---------------------

NET INCREASE (DECREASE) IN CASH                                   (         11,474)     (            145)                    -

CASH - BEGINNING OF PERIOD                                                  11,474                   725                     -
----------------------------------------------------------------- --------------------- --------------------- ---------------------

CASH - END OF PERIOD                                                $            -        $          580        $            -
----------------------------------------------------------------- --------------------- --------------------- ---------------------


                                                       See accompanying notes.

</TABLE>


                                                                 6
<PAGE>

SAFE TRANSPORTATION SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 1.       BASIS OF PRESENTATION AND CONSOLIDATION
--------------------------------------------------------------------------------

                  BASIS OF PRESENTATION

                  The accompanying unaudited condensed financial statements have
                  been  prepared  in  accordance  with   accounting   principles
                  generally  accepted in the United States for interim financial
                  information  and  with the  instructions  to Form  10-QSB  for
                  quarterly  reports under section 13 or 15(d) of the Securities
                  Exchange Act of 1934. Accordingly,  they do not include all of
                  the  information  and  footnotes   necessary  for  a  complete
                  presentation of financial position,  results of operations and
                  cash flows in conformity with accounting  principles generally
                  accepted in the United States.

                  In the  opinion  of  management,  all  adjustments  considered
                  necessary for a fair  presentation have been included and such
                  adjustments  are  of  a  normal  recurring  nature.  Operating
                  results  for the three month  period  ended March 31, 2002 are
                  not necessarily indicative of the results that may be expected
                  for the year ending December 31, 2002.

                  The audited  financial  statements for the year ended December
                  31, 2001, which are included in the Company's Annual Report on
                  Form  10-KSB,   should  be  read  in  conjunction  with  these
                  condensed financial statements.

--------------------------------------------------------------------------------
NOTE 2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------------------

                  USE OF ESTIMATES

                  The  preparation  of financial  statements in conformity  with
                  accounting  principles generally accepted in the United States
                  requires  management to make  estimates and  assumptions  that
                  affect the  reported  amounts of assets  and  liabilities  and
                  disclosure  of  contingent  assets and  liabilities  as of the
                  balance  sheet date and the  reported  amounts of revenues and
                  expenses  during  the  respective  reporting  period.   Actual
                  results could differ from those estimates.

                  NET INCOME (LOSS) PER SHARE

                  Basic income (loss) per share is computed in  accordance  with
                  Statement of Financial Accounting Standards No. 128, "Earnings
                  Per Share"  (FAS 128)  using the  weighted  average  number of
                  common shares  outstanding during the period. All common stock
                  data has been restated to give effect to the  recapitalization
                  in  December   2000.   Outstanding   stock  options  were  not
                  considered  in the  calculation  of diluted loss per share for
                  the three month periods ended March 31, 2002 and 2001 as their
                  effect would have been anti-dilutive.




                                       7
<PAGE>


--------------------------------------------------------------------------------
NOTE 2.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
--------------------------------------------------------------------------------

                  NEW ACCOUNTING PRONOUNCEMENTS

                  In June 2001, the Financial  Accounting Standards Board issued
                  Statement of Financial Accounting Standards No. 141, "Business
                  Combinations,"  and No. 142,  "Goodwill  and Other  Intangible
                  Assets",  effective for fiscal years  beginning after December
                  15, 2001. Under the new rules,  goodwill and intangible assets
                  deemed to have  indefinite  lives will no longer be  amortized
                  but will be subject to annual  impairment  tests in accordance
                  with the Statements.  Other intangible assets will continue to
                  be amortized over their useful lives.

                  In October 2001,  the  Financial  Accounting  Standards  Board
                  issued  Statement of Financial  Accounting  Standards  No. 144
                  "Accounting  for the  Impairment  or  Disposal  of  Long-lived
                  Assets",  effective for fiscal years  beginning after December
                  15, 2001. This statement  addresses  financial  accounting and
                  reporting for the impairment or disposal of long-lived assets.

                  The Company has adopted these statements and they did not have
                  a material impact on the financial statements.

                  In August  2001,  the  Financial  Accounting  Standards  Board
                  Issued  Statement of Financial  Accounting  Standards  No. 143
                  "Accounting for Asset Retirement  Obligations",  effective for
                  fiscal years  beginning  after June 15, 2002.  This  statement
                  addresses  financial  accounting and reporting for obligations
                  associated with the retirement of tangible  long-lived  assets
                  and the associated retirement costs. The Company believes that
                  adopting this statement will not have a material impact on the
                  financial statements.

                  SEGMENT REPORTING

                  Statement  of   Financial   Accounting   Standards   No.  131,
                  "Disclosures  about  Segments  of an  Enterprise  and  Related
                  Information"  (SFAS  No.  131)  requires  companies  to report
                  information  about  operating  segments  in interim and annual
                  financial  statements.  It also requires  segment  disclosures
                  about  product  and  services,   geographic  areas  and  major
                  customers.  The Company did not have any separately reportable
                  operating  segments  for the period  from  inception  (July 8,
                  1998) through December 31, 2001.

--------------------------------------------------------------------------------
NOTE 3.       GOING CONCERN
--------------------------------------------------------------------------------

                  The  Company has  incurred  significant  operating  losses and
                  negative  cash  flows from  operations  since  inception,  has
                  experienced severe liquidity problems and has negative working
                  capital at March 31, 2002.  The Company's  ability to continue
                  as a going  concern is  dependent  upon  achieving  profitable
                  operations   and  positive  cash  flows  from   operations  or
                  obtaining debt or equity  financing.  These  conditions  raise
                  substantial doubt about the Company's ability to continue as a
                  going  concern.  The  financial  statements do not include any
                  adjustments  that  might  result  from  the  outcome  of these
                  uncertainties.



                                       8
<PAGE>


--------------------------------------------------------------------------------
NOTE 3.       GOING CONCERN (CONTINUED)
--------------------------------------------------------------------------------

                  Management's  plans  in  regard  to this  matter  is to  raise
                  capital  pursuant to an Equity Line of Credit  Agreement  (see
                  Note  4) and  become  profitable  by  marketing  its  accident
                  control  and  anti-jackknife  system in the United  States and
                  Europe.

--------------------------------------------------------------------------------
NOTE 4.       EQUITY LINE OF CREDIT
--------------------------------------------------------------------------------

                  In September  2001, the Company entered into an Equity Line of
                  Credit Agreement (Agreement) with an entity (Investor).  Under
                  this Agreement, the Company may issue and sell to the Investor
                  common stock for a total  purchase  price of up to $5,000,000.
                  This  Agreement  will commence when the common stock under the
                  Agreement  is  registered  with the  Securities  and  Exchange
                  Commission  and will  continue for two years  thereafter.  The
                  amount of each  advance  is subject  to an  aggregate  maximum
                  advance  amount of  $208,333  in any  thirty day  period.  The
                  purchase  price  for the  shares  will be  equal to 90% of the
                  lowest  closing bid price of the common  stock during the five
                  trading days following the notice date. As  consideration  for
                  entering into the Agreement, the Company will pay the Investor
                  a fee equal to $187,500,  payable in shares of common stock in
                  two  equal  installments.  The first  installment  was paid on
                  September  6, 2001 and  amounted  to 781,250  shares of common
                  stock.  The second  installment  is due on the  earlier of the
                  filing of a registration  statement  registering the shares of
                  common  stock to be issued  under the  Agreement or six months
                  after the closing date,  whichever  occurs first.  The Company
                  will also pay the Investor a fee of 3.75% of each advance.

                  In connection with the Agreement,  the Company paid $37,500 in
                  professional fees which have been recorded on the accompanying
                  balance sheet as deferred  offering costs.  These fees will be
                  deducted from the proceeds related to the sale of common stock
                  under the agreement in future periods.

--------------------------------------------------------------------------------
NOTE 5.       CAPITAL STOCK
--------------------------------------------------------------------------------

                  In March 2002,  the Company  entered into a Business  Advisory
                  and  Consulting  Services  Agreement  with a  private  venture
                  capital  consulting firm,  whereby the consultant will use its
                  best  efforts  to raise  funds in a private  offering  for the
                  Company.  The agreement  provides for, among other things,  an
                  initial  term of six  months  and the  consultant  to  receive
                  500,000 shares of restricted common stock of the Company.



                                       9
<PAGE>


--------------------------------------------------------------------------------
NOTE 6.       SUBSCRIPTION AND DISTRIBUTION AGREEMENT
--------------------------------------------------------------------------------

                  In October 2001, the Company  entered into a Subscription  and
                  Distribution Agreement which provides for, among other things,
                  the  Company to obtain a 50%  common  ownership  interest  and
                  non-voting  preferred  shares in a newly formed United Kingdom
                  Corporation  ("Safe  Europe")  which will market the  products
                  developed  by the Company in Europe and the Middle  East.  The
                  Company  accounts for this  investment on the equity method of
                  accounting.  Pursuant to the  agreement,  Safe  Europe  raised
                  capital  through a private  placement  offering and redeemed a
                  portion of the Company's  preferred shares for $39,659. As the
                  Company's  investment in the preferred  shares was zero,  this
                  amount  is  reflected  as  other  income  in the  accompanying
                  statement of operations.  In addition,  in accordance with the
                  agreement,  in  April  2002,  Europe  repaid  $202,100  of the
                  Company's notes payable.













                                       10

<PAGE>

            MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         THE  FOLLOWING  INFORMATION  SHOULD  BE READ IN  CONJUNCTION  WITH  THE
CONSOLIDATED  FINANCIAL  STATEMENTS OF SAFE TRANSPORTATION AND THE NOTES THERETO
APPEARING ELSEWHERE IN THIS FILING.  STATEMENTS IN THIS MANAGEMENT'S  DISCUSSION
AND  ANALYSIS OR PLAN OF  OPERATION  AND  ELSEWHERE  IN THIS FILING THAT ARE NOT
STATEMENTS   OF   HISTORICAL   OR  CURRENT  FACT   CONSTITUTE   "FORWARD-LOOKING
STATEMENTS."


         OVERVIEW

         Safe  Transportation was incorporated in Florida on December 6, 1994 as
Big Daddy's  Auto Sales,  Inc.  Big  Daddy's  Auto Sales was in the  business of
selling  used  automobiles.  On April 19,  2000,  Big Daddy's  Auto Sales,  Inc.
changed  its name to Sweets & Eats,  Inc.  Sweets & Eats was in the  business of
selling chocolate candy over the Internet.  On December 18, 2000, Sweets & Eats,
Inc.  entered into a reverse merger with Safe  Transportation  Systems,  Inc. In
that  merger,  the former  stockholders  of Safe  Transportation  Systems,  Inc.
received  12,000,000  shares  of  common  stock of  Sweets & Eats for all of the
common stock of Safe Transportation  Systems, Inc. In that merger, Sweets & Eats
changed its name to Safe Transportation Systems, Inc.

         Between July 1998 and October 2000, Safe  Transportation  developed and
tested  safety  products  for the  trucking  industry.  During  that time,  Safe
Transportation  spent  approximately $8 million on administration and developing
and  patenting  a  proprietary   technology  called  the  Accident  Control  and
Anti-Jackknife System. This system is intended to help prevent a tractor-trailer
from losing  control and  jackknifing.  The U.S.  Department  of  Transportation
defines  "jackknifing"  as  occurring  when the rear wheels of the tractor  lose
traction. This instability results in the tractor rotating rapidly and violently
slamming into the side of the trailer.

         Safe  Transportation  has  completed  development  and  testing  of the
Accident  Control and  Anti-Jackknife  System and has now focused its efforts on
marketing and  distribution.  To date,  Safe  Transportation  has not earned any
revenue from the sale of this product.


         PLAN OF OPERATION

         Given the  economic  importance  of keeping  trucks  moving  safely and
efficiently,   Safe  Transportation  has  developed  a  multi-pronged   National
Marketing  Campaign,  which divides  North America into five regional  districts
geographically  arranged with consideration to major trucking fleets,  petroleum
and  chemical  refineries,  deep-sea  ports and  heavy  industry.  The  campaign
includes:

         o     DIRECT SALES. Safe Transportation  intends to initially market to
               the 65,000 carriers that employ liquid petroleum  tankers and the
               350,000 hazardous material haulers. Safe Transportation  believes
               these tankers and haulers have the greatest  incentive to use its
               product  because  of the  potential  harm that could be caused in
               accidents.  These companies have the highest insurance costs; the
               highest  cargo  risks;  the  most  expensive  equipment  and  the
               greatest liabilities in an accident.

         o     In addition to identifying  the top fleets,  Safe  Transportation
               intends to continue to market  through  and  maintain  its active
               memberships in strategic industry associations like:

         o     The  American  Trucking   Association  with  over  45,000  member
               trucking companies.

         o     The  National  Tank  Truck  Carriers,  which  represents  85%  of
               petroleum hazardous material hauler fleets.

         o     The  North  American  Chemical  Distributors  Association,  which
               represents 90% of chemical distributors.

         o     The Truck Trailer Manufacturers Association, which represents 90%
               of new trailer manufacturers.

         o     The  Commercial  Vehicle  Safety  Alliance,  the  administration,
               compliance and enforcement body representing  State,  Federal and
               Provincial Governments for commercial vehicle safety.



                                       11
<PAGE>

         Safe  Transportation  intends to increase exposure through all of these
key associations with  presentations to their boards as well as hosting exhibits
at their trade shows and annual conferences.

         o     In order to introduce the potential benefits of its product, Safe
               Transportation  has  begun to work with the  insurance  industry,
               private and public insurance corporations; key industry lobby and
               research  organizations like the Insurance  Institute for Highway
               Safety and the Highway Loss Data  Institute;  and the  industry's
               education branch,  The American  Institute for Chartered Property
               Casualty Underwriters and the Insurance Institute of America.

         o     Safe Transportation will seek to develop strategic alliances with
               original equipment trailer manufacturers.

         o     Safe  Transportation  is working with an  established  Washington
               D.C.  lobbying  firm to furnish  government  and  public  affairs
               consulting services and to develop of a government public affairs
               strategy to acquaint appropriate Members of the U.S. Congress and
               relevant government agencies with the existence of the technology
               and its potential to improve highway safety.

         o     Safe Transportation intends to expand by pursuing joint ventures.
               In October 2001, Safe Transportation  entered into a Subscription
               and  Distribution  Agreement  which  provides  for,  among  other
               things, Safe Transportation to obtain 50% of the common stock of,
               together with 800,000 shares of preferred stock in a newly formed
               United Kingdom  corporation,  Safe Europe Plc., which will market
               Safe Transportation's product in Europe and the Middle East. Safe
               Transportation  also received a promissory note for $202,000 with
               interest accruing at 12% per year until December 31, 2001 and 18%
               per year  thereafter.  Safe  Transportation  assigned  50% of the
               preferred  stock it receives from Safe Europe and the  promissory
               note to a creditor in  satisfaction  of a $175,000  note payable.
               Under  this   agreement,   Safe  Europe  will  be  the  exclusive
               distributor  of Safe  Transportation's  product in Europe and the
               Middle  East.  Safe Europe has the right to purchase  the product
               from Safe  Transportation  or to manufacture the products itself.
               Safe Europe will pay Safe  Transportation  a royalty on each unit
               produced  equal to 12.5% of its  cost or  $250.00,  whichever  is
               higher. Safe Transportation has the right to appoint three of the
               six directors in Safe Europe.

         Safe  Transportation  Systems has  out-sourced  the  manufacture of its
product to a third  party and intends to  concentrate  its efforts on the sales,
marketing and distribution of its product.


         RESEARCH AND DEVELOPMENT

         Safe  Transportation  believes that its product is ready for market and
does not anticipate  incurring any significant research and development expenses
over the next 12 months.


         PLANT AND EQUIPMENT

         Safe  Transportation  does not  anticipate  incurring  any  significant
expenses for the purchase of plant or equipment over the next 12 months.


         EMPLOYEES

         Safe  Transportation  has five  full  time  employees  and  anticipates
increasing  the  number of  employees  to  approximately  20-25 over the next 12
months if funding permits.


         RESULTS OF OPERATIONS

         THREE MONTHS ENDED MARCH 31, 2002  COMPARED TO THREE MONTHS ENDED MARCH
31, 2002. During the three months ended March 31, 2002, Safe  Transportation had
no revenues from operations.  It incurred  selling,  general and  administrative
expenses  of  $241,130 in the three  months  ended  March 31,  2002  compared to
$367,877 in the  comparable  period in the prior year.  The decrease in selling,
general and administrative  expenses resulted  principally from the reduction of
non-cash  compensation  in the form of stock and options  granted to  directors,
employees and consultants.  The decrease in non-cash  compensation was partially
offset by an increase in payroll resulting  primarily from the transition from a
research  and  development  company to a  marketing  and  distribution  company.
Selling,  general and  administrative  expenses for the three months ended March
31, 2002 consisted  primarily of payroll and payroll taxes of $108,000,  rent of
$8,800, professional fees of $42,100, travel and marketing of $14,900, telephone
of $7,850, depreciation and amortization of $11,308, interest of $37,900, public



                                       12
<PAGE>

company  expenses  of $2,570 and  miscellaneous  expenses  of  $7,700.  Selling,
general and  administrative  expenses  for the three months ended March 31, 2001
consists  primarily of payroll and payroll  taxes of $132,400,  rent of $98,300,
insurance  of  $23,000,  professional  fees of  $28,400,  marketing  expenses of
$10,300 and miscellaneous  office expenses of $75,500.  These operating expenses
resulted in a net loss of  $(201,471)  or $(0.01) per share in the three  months
ended March 31, 2002  compared to a net loss of  $(367,877) or $(0.02) per share
in the comparable period in the prior year.


         LIQUIDITY AND SOURCES OF CASH

         Safe   Transportation  is  dependent  on  external  cash  to  fund  its
operations. It will need to raise capital to continue operations and to complete
its  transition  from a research  and  development  company to a  marketing  and
distribution company.  During this transition,  Safe Transportation  anticipates
that  its  most  significant   operating  expense  will  be  sales,   marketing,
distribution,  OEM integration and technical support  expenses.  As of March 31,
2002, Safe Transportation had no cash-on-hand.

         For the three months ended March 31, 2002,  Safe  Transportation  had a
net decrease in cash of $11,474.  Net cash used in operating  activities totaled
$32,316,  consisting  primarily of a net loss of $201,471,  which was  partially
offset by an increase in accounts  payable and accrued  expenses of $157,764 and
amortization  and  depreciation  of  $11,391.  Net cash  provided  by  financing
activities totaled $20,842, consisting primarily of notes payable of $20,812.

         From September to November 2001, Safe Transportation raised $150,000 of
gross proceeds from the issuance of  convertible  debentures.  These  debentures
accrue interest at a rate of 6% per year and mature five years from the issuance
date.  The  debentures  are  convertible  at the holder's  option any time up to
maturity  at a  conversion  price equal to the lower of (i) $0.24 or (ii) 80% of
the  lowest  closing  bid  price of the  common  stock  for the 5  trading  days
immediately preceding the conversion date. At maturity,  Safe Transportation has
the  option to either  pay the  holder the  outstanding  principal  balance  and
accrued  interest or to convert the debentures  into shares of common stock at a
conversion  price  equal  to the  lower of (i)  $0.24 or (ii) 80% of the  lowest
closing  bid  price of the  common  stock  for the 5  trading  days  immediately
preceding the conversion date. In connection with these convertible  debentures,
Safe  Transportation  entered into various  consulting  agreements which provide
for, among other things, the payment of fees of approximately $30,000.

         In December 2001, Safe Transportation borrowed $46,000 and $26,000 from
Cornell Capital  Partners,  L.P. The loans bear an interest rate of 12% per year
and the  first  loan  was due in  January  2002 and the  second  loan was due in
February 2002. Safe  Transportation  is in default of these loans for failing to
pay  principal  and interest  when due. In  connection  with these  loans,  Safe
Transportation  granted to Cornell Capital Partners  warrants to purchase 46,000
shares of common stock at an exercise  price of $0.01 per share.  Our  Executive
Vice  President,  James B.  Long,  personally  guaranteed  the loan and  pledged
4,250,000   shares  of  common  stock  as  collateral  to  secure  his  guaranty
obligations.  Cornell Capital Partners has started selling the pledged shares in
partial satisfaction of the indebtedness.

         In September 2001, Safe  Transportation  entered into an Equity Line of
Credit Agreement with Cornell Capital Partners,  LP. Under this agreement,  Safe
Transportation  may issue and sell common stock to Cornell for a total  purchase
price of up to $5.0 million. Subject to certain conditions,  Safe Transportation
will be entitled to commence  drawing down on the equity line of credit when the
common stock under the Equity Line of Credit is registered  with the  Securities
and Exchange Commission and for two years thereafter. The purchase price for the
shares will be equal to 90% of the lowest  closing bid price of the common stock
during the five  trading  days  following  the notice  date.  The amount of each
advance is subject to an  aggregate  maximum  advance  amount of $208,333 in any
thirty-day  period.  Cornell was  entitled to a one-time  fee equal to $177,500,
payable  in  shares  of  common  stock  in two  equal  installments.  The  first
installment  was paid in September  2001 and resulted in the issuance of 781,250
shares of common  stock.  The second  installment  is due on the  earlier of the
filing of a registration  statement registering the shares of common stock to be
issued  under the Equity  Line of Credit or March  2002.  Cornell is entitled to
retain 3.75% of each advance. In addition, Safe Transportation will entered into
a  placement  agent  agreement  with  Westrock  Advisors,   Inc.,  a  registered
broker-dealer.  Pursuant to the placement agent agreement,  Safe  Transportation
will pay a one-time placement agent fee of 100,000 shares of common stock.

         In  April,  2002,  Safe  Transportation  satisfied  a note  payable  of
$175,000,  plus  interest.  Originally,  this note  payable  was due in  monthly
installments  of  principal  and  interest   through  December  15,  2001.  Safe
Transportation defaulted on the original terms of the note and, in October 2001,
renegotiated the terms.  The new terms provide for monthly interest  payments at
12% per year through December 31, 2001 and 18% thereafter, with principal due in
January 2003. In 2002, Safe  Transportation  assigned 50% of the preferred stock
in Safe Europe and a promissory  note in the amount of $202,100 it received from
Safe Europe to the creditor in satisfaction of the notes payable.



                                       13
<PAGE>

         In January  2002,  Safe  Transportation  borrowed  $20,812 from Cornell
Capital  Partners,  L.P. The loan bears an interest rate of 12% per year and the
first loan was due in March  2002.  Safe  Transportation  is in default of these
loans for failing to pay principal  and interest  when due. Our  Executive  Vice
President,  James B. Long,  personally guaranteed the loan and pledged 4,250,000
shares of common stock as collateral to secure his guaranty obligations. Cornell
Capital Partners had started selling the pledged shares in partial  satisfaction
of the indebtedness.

         Safe Transportation has judgments against it for a total of $64,310.00,
plus interest.  These amounts are due and payable.  Safe Transportation does not
have enough  cash-on-hand to satisfy these  judgments.  Excluding the judgments,
Safe  Transportation  believes it has sufficient funds to finance its operations
for the next three months. Thereafter,  Safe Transportation will need additional
capital to finance  its  operations  and to satisfy the  judgments.  In order to
raise such capital,  Safe  Transportation  will need to raise additional capital
from loans or the sale of securities,  if available.  Other than the Equity Line
of Credit,  Safe Transportation does not have any commitments to receive capital
from any source.


         EFFECT OF RECENT ACCOUNTING PRONOUNCEMENTS

         In June 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 141, "Business Combinations," and No. 142,
"Goodwill and Other  Intangible  Assets",  effective for fiscal years  beginning
after December 15, 2001.  Under the new rules,  goodwill and  intangible  assets
deemed to have indefinite  lives will no longer be amortized but will be subject
to annual  impairment tests in accordance with the Statements.  Other intangible
assets will continue to be amortized over their useful lives.

         In October  2001,  the  Financial  Accounting  Standards  Board  issued
Statement  of  Financial  Accounting  Standards  No.  144  "Accounting  for  the
Impairment  or  Disposal  of  Long-lived  Assets",  effective  for fiscal  years
beginning after December 15, 2001. This statement addresses financial accounting
and reporting for the impairment or disposal of long-lived assets.

         The  Company  has  adopted  these  statements  and  they did not have a
material impact on the financial statements.

         In  August  2001,  the  Financial  Accounting  Standards  Board  Issued
Statement  of  Financial  Accounting  Standards  No. 143  "Accounting  for Asset
Retirement  Obligations",  effective for fiscal years  beginning  after June 15,
2002.  This  statement   addresses   financial   accounting  and  reporting  for
obligations associated with the retirement of tangible long-lived assets and the
associated  retirement  costs. Safe  Transportation  believes that adopting this
statement will not have a material impact on the financial statements.


         BUSINESS RISK FACTORS

         Safe  Transportation  is subject to various  risks that may  materially
harm its business,  financial  condition and results of  operations.  YOU SHOULD
CAREFULLY  CONSIDER THE RISKS AND  UNCERTAINTIES  DESCRIBED  BELOW AND THE OTHER
INFORMATION IN THIS FILING BEFORE  DECIDING TO PURCHASE OUR COMMON STOCK. IF ANY
OF  THESE  RISKS  OR  UNCERTAINTIES  ACTUALLY  OCCUR,  OUR  BUSINESS,  FINANCIAL
CONDITION OR OPERATING  RESULTS COULD BE MATERIALLY  HARMED.  IN THAT CASE,  THE
TRADING  PRICE OF OUR COMMON STOCK COULD  DECLINE AND YOU COULD LOSE ALL OR PART
OF YOUR INVESTMENT.


         WE HAVE HISTORICALLY LOST MONEY AND LOSSES MAY CONTINUE IN THE FUTURE

         We have  historically  lost money.  In the three months ended March 31,
2002, we had a net loss of  $(201,471)  or $(0.01) per share.  Future losses are
likely to occur.  Accordingly,  we may experience significant liquidity and cash
flow problems  because our operations are not  profitable.  No assurances can be
given  that  we  will  be  successful  in  reaching  or  maintaining  profitable
operations.


         WE WILL NEED TO RAISE ADDITIONAL CAPITAL TO FINANCE OPERATIONS

         We  have  relied  on  significant   external   financing  to  fund  our
operations.   Such  financing  has  historically  come  from  a  combination  of
borrowings  and sale of common  stock from third  parties and funds  provided by
certain officers and directors. We cannot assure you that financing whether from
external  sources or related parties will be available if needed or on favorable
terms.  Our inability to obtain  adequate  financing  will result in the need to
curtail business operations.  Any of these events would be materially harmful to
our  business  and may  result  in a lower  stock  price.  We will need to raise
additional  capital  to fund  our  anticipated  operating  expenses  and  future
expansion.  Among other things,  external financing may be required to cover our
operating costs.




                                       14
<PAGE>

         WE HAVE BEEN THE SUBJECT OF A GOING CONCERN OPINION FROM OUR
               INDEPENDENT AUDITORS, WHICH MEANS THAT WE MAY NOT BE ABLE TO
               CONTINUE OPERATIONS UNLESS WE OBTAIN ADDITIONAL FUNDING

         Our independent  auditors have added an explanatory  paragraph to their
audit  opinion  issued in  connection  with the year  ended  December  31,  2001
financial  statements,  which  states  that  Safe  Transportation's  ability  to
continue  as a going  concern  depends  upon its  ability to achieve  profitable
operations  and positive cash flows from  operations or obtaining debt or equity
financing.  Our financial  statements do not include any adjustments  that might
result from the outcome of this uncertainty.


         WE HAVE A WORKING CAPITAL DEFICIT, WHICH MEANS THAT OUR CURRENT ASSETS
               ON MARCH 31, 2002 WERE NOT SUFFICIENT TO SATISFY OUR CURRENT
               LIABILITIES ON THAT DATE

         We had a working capital deficit of $1,347,992 at March 31, 2002, which
means that our current liabilities exceeded our current assets on March 31, 2002
by $1,347,992.  Current assets are assets that are expected to be converted into
cash within one year and,  therefore,  may be used to pay current liabilities as
they become due. Our working  capital  deficit means that our current  assets on
March 31, 2002 were not sufficient to satisfy all of our current  liabilities on
that date.


         OUR FUTURE DEPENDS UPON THE MARKET ACCEPTANCE OF A SINGLE PRODUCT

         Safe Transportation markets and distributes a single product called the
Accident Control and Anti-Jackknife System. To date, Safe Transportation has not
had any revenue from the sale of its product. Safe  Transportation's  success is
completely dependent on the trucking industry's acceptance of this product, such
that Safe  Transportation  can  generate  sufficient  revenues  and cash flow to
finance its operations.  Safe  Transportation  may need to overcome  substantial
hurdles to obtain such market  acceptance,  including  convincing  the  trucking
industry of the necessity of such product and  encouraging  insurance  companies
and government entities to offer incentives to use our product.  Such incentives
may include lower insurance premiums or tax rebates.  No assurances can be given
that the market will accept our product.


         THE PRICE OF OUR COMMON STOCK MAY BE AFFECTED BY A LIMITED TRADING
               VOLUME AND MAY FLUCTUATE SIGNIFICANTLY

         There has been a limited  public  market for our common stock and there
can be no  assurance  that an active  trading  market for our common  stock will
develop.  An absence of an active  trading  market  could  adversely  affect our
stockholders'  ability  to sell  our  common  stock in short  time  periods,  or
possibly at all. Our common stock has  experienced,  and is likely to experience
in the future,  significant price and volume  fluctuations which could adversely
affect the market  price of our common  stock  without  regard to our  operating
performance. In addition, we believe that factors such as quarterly fluctuations
in our financial  results and changes in the overall economy or the condition of
the  financial  markets  could cause the price of our common  stock to fluctuate
substantially.


         WE COULD FAIL TO ATTRACT OR RETAIN KEY PERSONNEL

         Our  success  largely  depends  on the  efforts  and  abilities  of key
executives and consultants,  including Ian Pallett,  our Chief Executive Officer
and President,  and James B. Long, our Executive Vice President. The loss of the
services of either Mr. Long or Mr.  Pallett could  materially  harm our business
because of the cost and time necessary to replace and train a replacement.  Such
a loss would also divert management  attention away from operational  issues. We
do not presently  maintain a key-man life insurance policy on either Mr. Long or
Mr. Pallett.







                                       15
<PAGE>

                                     PART II
                                OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

         Safe  Transportation  is aware of the following  actual and  threatened
legal proceedings:

         In  August   2001,  a  default   judgment  was  entered   against  Safe
Transportation for $9,652.39, plus interest. The case was styled as RAELYN, LTD.
V. SAFE TRANSPORTATION  SYSTEMS,  INC., case no.  01-2-01296-3,  in the Superior
Court of the State of Washington in and for Whatcom County. The judgment relates
to the non-payment of leasehold improvements.

         In August 2001, a judgment was entered against Safe  Transportation for
$23,676.44,  plus  interest.  After a payment  of $4,900 in  October  2000,  the
balance  is  approximately   $18,650.  The  case  was  styled  as  HIGHER  PLANE
CABINETWORKS,  INC. V. SAFE TRANSPORTATION SYSTEMS, INC., case no. 01-2-01058-8,
Superior  Court of Washington  for Skagit  County.  The judgment  relates to the
non-payment of leasehold improvements.

         In August 2001, a judgment was entered against Safe  Transportation for
$30,981.15,  plus  interest.  The case was styled as  VIRGINIA M. BENTON V. SAFE
TRANSPORTATION,  ET AL., case no. CV01-1408, In the District Court of the County
of  Whatcom  in and for the State of  Washington.  The  judgment  relates to the
non-payment of back wages to a former employee.


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS


         (a), (b) and (d)

         None.


         (c)      SALE OF UNREGISTERED SECURITIES

         In March 2002, Safe Transportation entered into a Business Advisory and
Consulting  Services Agreement with Tarshish Capital Markets,  pursuant to which
Tarshish  Capital  Markets will use its best efforts to raise funds in a private
offering.  The  agreement  provides for an initial  term of six months.  For its
services, Tarshish Capital Markets received 500,000 shares of common stock.

         In January  2002,  Safe  Transportation  borrowed  $20,812 from Cornell
Capital  Partners,  L.P.  These loans bear an interest  rate of 12% per year and
were due in March  2002.  Safe  Transportation  is in default of these loans for
failing to pay principal and interest  when due. Our Executive  Vice  President,
James B. Long,  personally  guaranteed the loan and pledged  4,250,000 shares of
common stock as collateral to secure his guaranty  obligations.  Cornell Capital
Partners had started  selling the pledged shares in partial  satisfaction of the
indebtedness.

         With respect to the sale of unregistered  securities  referenced above,
all transactions were exempt from  registration  pursuant to Section 4(2) of the
Securities Act of 1933 (the "1933 ACT"), and Regulation D promulgated  under the
1933 Act. In each instance,  the purchaser had access to sufficient  information
regarding Safe  Transportation  so as to make an informed  investment  decision.
More  specifically,  Safe  Transportation had a reasonable basis to believe that
each  purchaser was an  "accredited  investor" as defined in Regulation D of the
1933 Act and otherwise had the requisite sophistication to make an investment in
Safe Transportation's securities.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         In  April,  2002,  Safe  Transportation  satisfied  a note  payable  of
$175,000,  plus  interest.  Originally,  this note  payable  was due in  monthly
installments  of  principal  and  interest   through  December  15,  2001.  Safe
Transportation defaulted on the original terms of the note and, in October 2001,
renegotiated the terms.  The new terms provide for monthly interest  payments at
12% per year through December 31, 2001 and 18% thereafter, with principal due in
January 2003. In 2002, Safe  Transportation  assigned 50% of the preferred stock
in Safe Europe and a promissory  note in the amount of $202,100 it received from
Safe Europe to the creditor in satisfaction of the notes payable.



                                       16
<PAGE>

         In January  2002,  Safe  Transportation  borrowed  $20,812 from Cornell
Capital  Partners,  L.P. The loan bears an interest rate of 12% per year and the
first loan was due in March  2002.  Safe  Transportation  is in default of these
loans for failing to pay principal  and interest  when due. Our  Executive  Vice
President,  James B. Long,  personally guaranteed the loan and pledged 4,250,000
shares of common stock as collateral to secure his guaranty obligations. Cornell
Capital Partners had started selling the pledged shares in partial  satisfaction
of the indebtedness.

         In December 2001, Safe Transportation borrowed $46,000 and $26,000 from
Cornell Capital  Partners,  L.P. The loans bear an interest rate of 12% per year
and the  first  loan  was due in  January  2002 and the  second  loan was due in
February 2002. Safe  Transportation  is in default of these loans for failing to
pay  principal  and interest  when due. In  connection  with these  loans,  Safe
Transportation  granted to Cornell Capital Partners  warrants to purchase 46,000
shares of common stock,  at an exercise price of $0.01 per share.  Our Executive
Vice  President,  James B.  Long,  personally  guaranteed  the loan and  pledged
4,250,000   shares  of  common  stock  as  collateral  to  secure  his  guaranty
obligations.  Cornell Capital Partners had started selling the pledged shares in
partial satisfaction of the indebtedness.


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

         None.


ITEM 5.  OTHER INFORMATION

         None.




















                                       17
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

<TABLE>
<CAPTION>
EXHIBIT NO.           DESCRIPTION                                              LOCATION
-----------           -----------                                              --------
<S>                   <C>                                                      <C>
2.1                   Articles of Merger Between Safe Transportation           Incorporated by reference to Exhibit 2.1 to
                      Systems, Inc. and Sweets and Eats, Inc. dated December   the Registrant's Form 10-KSB filed on April
                      28, 2000                                                 24, 2001

2.2                   Certificate of Incorporation of Safe Transportation      Incorporated by reference to Exhibit 2.2 to
                      Systems, Inc.                                            the Registrant's Form 10-KSB filed on April
                                                                               24, 2001

2.3                   Certificate of Continuance and Good Standing of Safe     Incorporated by reference to Exhibit 2.3 to
                      Transportation Systems, Inc.                             the Registrant's Form 10-KSB filed on April
                                                                               24, 2001

2.4                   Articles of Incorporation of Big Daddy's Auto Sales,     Incorporated by reference to Exhibit 2.4 to
                      Inc.                                                     the Registrant's Form 10-KSB filed on April
                                                                               24, 2001

2.5                   Amendment to Articles of Incorporation of Big Daddy's    Incorporated by reference to Exhibit 2.5 to
                      Auto Sales, Inc.                                         the Registrant's Form 10-KSB filed on April
                                                                               24, 2001

2.6                   Amendment to Articles of Incorporation of Big Daddy's    Incorporated by reference to Exhibit 2.6 to
                      Auto Sales, Inc.                                         the Registrant's Form 10-KSB filed on April
                                                                               24, 2001

2.7                   Amendment of Articles of Incorporation of Sweets &       Incorporated by reference to Exhibit 2.7 to
                      Eats, Inc.                                               the Registrant's Form 10-KSB filed on April
                                                                               24, 2001

2.8                   Bylaws                                                   Incorporated by reference to Exhibit 2.8 to
                                                                               the Registrant's Form 10-KSB filed on April
                                                                               24, 2001

10.1                  Lease Agreement, between Safe Transportation Systems,    Incorporated by reference to Exhibit 6.2 to
                      Inc. and the Port of Bellingham                          the Registrant's Form 10-KSB filed on April
                                                                               24, 2001

10.2                  Merger Agreement, dated December 18, 2000, between       Incorporated by reference to Exhibit 8.1 to
                      Safe Transportation, Inc. and Sweets and Eats, Inc.      the Registrant's Form 10-KSB filed on April
                                                                               24, 2001

10.3                  Agreement for the Exchange of Common Stock, dated        Incorporated by reference to Exhibit 8.2 to
                      December 18, 2000, between Safe Transportation, Inc.     the Registrant's Form 10-KSB filed on April
                      and Sweets and Eats, Inc.                                24, 2001

10.4                  Executive Employment Agreement, dated January 1, 2001,   Incorporated by reference to Exhibit 99.1 to
                      between Safe Transportation Systems, Inc. and Ian        the Registrant's Form 10-KSB filed on April
                      Pallet                                                   24, 2001



                                       18
<PAGE>

EXHIBIT NO.           DESCRIPTION                                              LOCATION
-----------           -----------                                              --------
10.5                  Executive Employment Agreement, dated January 1, 2001,   Incorporated by reference to Exhibit 99.2 to
                      between Safe Transportation Systems, Inc. and James B.   the Registrant's Form 10-KSB filed on April
                      Long                                                     24, 2001

10.6                  Subscription and Distribution Agreement dated as of      Incorporated by reference to Exhibit 10.7 to
                      October 24, 2001 among Safe Transportation Systems,      the Registrant's Form 10-QSB for the quarter
                      Inc., Safe Europe Limited, Timothy Meyrich and Wilton    ended September 30, 2001
                      Capital Limited

10.7                  Securities Purchase Agreement dated as of September      Incorporated by reference to Exhibit 10.8 to
                      2001 between Safe Transportation Systems, Inc. and the   the Registrant's Form 10-QSB for the quarter
                      Buyers listed thereon                                    ended September 30, 2001

10.8                  Registration Rights Agreement dated as of September      Incorporated by reference to Exhibit 10.9 to
                      2001 between Safe Transportation Systems, Inc. and the   the Registrant's Form 10-QSB for the quarter
                      Buyer listed thereon                                     ended September 30, 2001

10.9                  Form of Debenture                                        Incorporated by reference to Exhibit 10.10 to
                                                                               the Registrant's Form 10-QSB for the quarter
                                                                               ended September 30, 2001

10.10                 Escrow Agreement dated as of September 2001 among Safe   Incorporated by reference to Exhibit 10.11 to
                      Transportation Systems, Inc., Yorkville Advisors         the Registrant's Form 10-QSB for the quarter
                      Management, LLC and First Union National Bank            ended September 30, 2001

10.11                 Escrow Agreement dated as of September 2001 among Safe   Incorporated by reference to Exhibit 10.12 to
                      Transportation Systems, Inc., Cornell Capital            the Registrant's Form 10-QSB for the quarter
                      Partners, LP, Butler Gonzalez LLP and First Union        ended September 30, 2001
                      National Bank

10.12                 Registration Rights Agreement dated as of September      Incorporated by reference to Exhibit 10.13 to
                      2001 between Safe Transportation Systems, Inc. and       the Registrant's Form 10-QSB for the quarter
                      Cornell Capital Partners, LP                             ended September 30, 2001

10.13                 Equity Line of Credit Agreement dated as of September    Incorporated by reference to Exhibit 10.14 to
                      2001 between Cornell Capital Partners, LP and Safe       the Registrant's Form 10-QSB for the quarter
                      Transportation Systems, Inc.                             ended September 30, 2001

10.14                 Business Consultant Agreement dated as of August 21,     Incorporated by reference to Exhibit 10.14 to
                      2001 between Safe Transportation Systems, Inc. and MK    the Registrant's Form SB-2 filed with the SEC
                      Associates, Inc.                                         on February 14, 2002

10.15                 Investment Banking Agreement dated as of September 19,   Incorporated by reference to Exhibit 10.15 to
                      2001 between Safe Transportation Systems, Inc. and       the Registrant's Form SB-2 filed with the SEC
                      Hornblower & Weeks, Inc.                                 on February 14, 2002

10.16                 Non-Negotiable Promissory Note dated as of November      Incorporated by reference to Exhibit 10.16 to
                      30, 2001 in the Original Principal Amount of $46,000     the Registrant's Form SB-2 filed with the SEC
                      given by Safe Transportation Systems, Inc. to Cornell    on February 14, 2002
                      Capital Partners, L.P.

10.17                 Warrant dated as of November 30, 2001 between Safe       Incorporated by reference to Exhibit 10.17 to
                      Transportation System, Inc. and Cornell Capital          the Registrant's Form SB-2 filed with the SEC
                      Partners, L.P.                                           on February 14, 2002



                                       19
<PAGE>

EXHIBIT NO.           DESCRIPTION                                              LOCATION
-----------           -----------                                              --------
10.18                 Guaranty dated as of November 30, 2001 between Safe      Incorporated by reference to Exhibit 10.18 to
                      Transportation Systems, Inc. and Cornell Capital         the Registrant's Form SB-2 filed with the SEC
                      Partners, L.P.                                           on February 14, 2002

10.19                 Placement Agent Agreement between Westrock Advisors,     Incorporated by reference to Exhibit 10.19 to
                      Inc. and Safe Transportation Systems                     the Registrant's Form SB-2 filed with the SEC
                                                                               on February 14, 2002

10.20                 Business Advisory and Consulting Services Agreement      Incorporated by reference to Exhibit 10.20 to
                      dated as of March 19, 2002 between Tarshish Capital      the Registrant's Form 10-KSB filed on May 9, 2002
                      Markets and Safe Transportation Systems, Inc.

99.1                  Pacific Traffic Education Centre Inc. Test Report        Incorporated by reference to Exhibit 12.1 to
                                                                               the Registrant's Form 10-KSB filed on April
                                                                               24, 2001

99.2                  Transportation Research Center Inc. Test Report          Incorporated by reference to Exhibit 12.2 to
                                                                               the Registrant's Form 10-KSB filed on April
                                                                               24, 2001
</TABLE>













                                       20
<PAGE>

                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

June 3, 2002                    SAFE TRANSPORTATION SYSTEMS, INC.

                                By: /s/ Ian Pallett
                                    -----------------------------------------
                                Name:   Ian Pallett
                                Title:  President and Chief Executive Officer
                                        (Chief Accounting Officer)













                                       21