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

                                   FORM 10-QSB

(Mark One)

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

                  For the quarterly period ended March 31, 2007
                                                 --------------

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

            For the transition period from ___________ to ___________

                        Commission file number 000-17746
                        --------------------------------

                      Safe Technologies International, Inc.
                      -------------------------------------
        (Exact name of small business issuer as specified in its charter)

          Delaware                                           22-2824492
          --------                                           ----------
(State or other jurisdiction of                             (IRS Employer
incorporation or organization)                             Identification No.)

            123 NW 13 Street, Suite 30408, Boca Raton, FL 33432
            --------------------------------------------------------
                    (Address of principal executive offices)

                                 (561) 832-2700
                                 --------------
                           (Issuer's telephone number)


             --------------------------------------------------------
              (Former address, changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 932,631,602 shares of common stock as
of May 1, 2007

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

<PAGE>

                          PART I FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

Consolidated Financial Statements:
         Consolidated Balance Sheets                                         F-2
         Consolidated Statements of Operations                               F-3
         Consolidated Statements of Changes in Stockholders' Equity          F-5
         Consolidated Statements of Cash Flows                               F-6
         Notes to Consolidated Financial Statements                          F-7

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATION

Our business activities currently consist of the operations of Internet
Associates International, Inc., (IAI) our sole active wholly owned subsidiary.
IAI is a website hosting company.

We continue to be receptive to possible acquisition candidates, but have not yet
been presented with an opportunity worthy of presenting for Board of Director
and/or shareholder approval.

We are not actively searching out business opportunities at this time, because
Universal Equity Holdings LLC, which purchased approximately 24% of our
outstanding stock in 2004, has been unable to transfer of record the shares that
it purchased. Since this could have a material effect on any shareholder vote
which may be required in connection with a business opportunity, we are working
with Universal Equity Holdings to rectify this situation before resuming an
active search for business opportunities.

COMPARISON OF THE PERIODS ENDED MARCH 31, 2007 AND MARCH 31, 2006

Revenues were $2,952 and $6,553, respectively, for the three months ended March
31, 2007 and 2006. The decrease in revenues is primarily a result of increased
competition for the services offered by IAI, our sole active subsidiary.

Cost of Operations were $3,300 and $3,300, respectively, for the three months
ended March 31, 2007 and 2006, reflecting our elimination of variable costs in
connection with the activities of IAI.

General and administrative expenses were $18,976 and $22,153, respectively, for
the three months ended March 31, 2007 and 2006. The decrease reflects reductions
in rent and general expenses as a result of a lack of business activity.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2007, we had a $1,449,494 working capital deficit, compared to a
$1,210,836 working capital deficit as of March 31, 2006. The increase of
$238,658 is primarily due to our operating at a loss while we await a suitable
acquisition transaction. We will continue to have limited revenues, and are
essentially dependant on our primary shareholders to fund operating shortfalls.
There can be no assurance that our cash flow will increase in the near future,


                                       2
<PAGE>

or that revenues generated from our existing subsidiary operations will be
sufficient to allow us to pursue new profitable ventures.

Risk Factors.

OUR OPERATING SUBSIDIARY, IAI, IS ENGAGED IN PROVIDING SUPPORT TO THOSE INVOLVED
IN COMMERCE ON THE INTERNET PLATFORM. The viability of IAI's customers is
dependent upon their success in e-commerce. Customers unable to compete in
e-commerce may fail, and as a result, we would lose a customer.

WE EXPECT TO CONTINUE TO INCUR NET LOSSES AND NEGATIVE CASH FLOWS FOR THE
FORESEEABLE FUTURE, AND THERE CAN BE NO ASSURANCE THAT WE WILL EVER ACHIEVE
PROFITABILITY OR GENERATE POSITIVE CASH FLOWS. We will continue to incur
operating losses unless and until an acquisition transaction occurs. We may need
to raise additional funds through the issuance of equity, equity-related or debt
securities in order to complete a transaction.

OUR BUSINESS STRATEGY OF GROWTH THROUGH BUSINESS COMBINATIONS LEADS TO UNKNOWN
AND UNQUANTIFIABLE RISKS. We are attempting to expand our operations and market
presence by entering into business combinations, investments, joint ventures or
other strategic alliances with third parties. Any such transaction would be
accompanied by risks commonly encountered in such transactions, which could
include, among others, the difficulty of assimilating the operations, technology
and personnel of the combined companies, the potential for disruption of ongoing
business, the inability to retain key technical and managerial personnel, the
inability of management to maximize our financial and strategic position through
the successful integration of acquired businesses, additional expenses
associated with amortization of acquired intangible assets, the maintenance of
uniform standards, control and policies and the impairment of relationships with
existing employees and customers. There can be no assurance that we will be
successful in overcoming these risks or any other problems encountered in
connection with such business combinations, investments, joint ventures or other
strategic alliances.

OUR SUCCESS DEPENDS IN LARGE PART UPON THE EFFORTS OF THE FEW INDIVIDUALS WHO
SERVE ON OUR BOARD AND AS MANAGEMENT, NONE OF WHOM ARE FULL TIME EMPLOYEES.
These individuals may not be able to fulfill their responsibilities adequately
and may not remain with us. The loss of the services of any of our directors and
officers could hurt our business.

OUR SHARES ARE CLASSIFIED AS "PENNY STOCK," WHICH WILL MAKE IT MORE DIFFICULT TO
SELL THAN EXCHANGE-TRADED STOCK. Our common stock is subject to the Securities
and Exchange Commission rule that imposes special sales practice requirements
upon broker-dealers that sell such securities to other than established
customers or accredited investors. For purposes of the rule, the phrase
"accredited investors" means, in general terms, institutions with assets
exceeding $5,000,000 or individuals having a net worth in excess of $1,000,000
or having an annual income that exceeds $200,000 (or that, combined with a
spouse's income, exceeds $300,000). For transactions covered by the rule, the
broker-dealer must make a special suitability determination for the purchaser
and receive the purchaser's written agreement to the transaction prior to the
sale. Consequently, the rule may affect the ability of purchasers of our
securities to buy or sell in any market that may develop.

In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks". A "penny stock" is any equity security that
has a market price of less than $5.00 per share or with an exercise price of


                                       3
<PAGE>

less than $5.00 per share, subject to certain exceptions. Such rules include
Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the
Securities and Exchange Act of 1934, as amended. The rules may further affect
the ability of owners of our shares to sell their securities in any market that
may develop for them. Shareholders should be aware that, according to the
Securities and Exchange Commission Release No. 34-29093, the market for penny
stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include:

     o   control of the market for the security by one or a few broker-dealers
         that are often related to the promoter or issuer;
     o   manipulation of prices through prearranged matching of purchases and
         sales and false and misleading press releases;
     o   "boiler room" practices involving high pressure sales tactics and
         unrealistic price projections by inexperienced sales persons;
     o   excessive and undisclosed bid-ask differentials and markups by selling
         broker-dealers; and
     o   the wholesale dumping of the same securities by promoters and
         broker-dealers after prices have been manipulated to a desired level,
         along with the inevitable collapse of those prices with consequent
         investor losses.

CONCENTRATION OF OWNERSHIP MAY REDUCE THE CONTROL BY OTHER SHAREHOLDERS. Our two
largest shareholders own approximately 50% of our voting stock. As a result,
other investors in our common stock may not have much influence on corporate
decision-making.

OUR ISSUANCE OF ADDITIONAL SHARES MAY HAVE THE EFFECT OF DILUTING THE INTEREST
OF SHAREHOLDERS. In connection with any acquisition, we may issue additional
shares. Any additional issuances of common stock by us from our authorized but
unissued shares will have the effect of diluting the percentage interest of
existing shareholders.

WE DO NOT ANTICIPATE PAYING DIVIDENDS TO COMMON STOCKHOLDERS IN THE FORESEEABLE
FUTURE, WHICH MAKES INVESTMENT IN OUR STOCK SPECULATIVE OR RISKY. We have not
paid dividends on our common stock and do not anticipate paying dividends on our
common stock in the foreseeable future. The board of directors has sole
authority to declare dividends payable to our stockholders. The fact that we
have not and do not plan to pay dividends indicates that we must use all of our
funds generated by operations for reinvestment in our operating activities.

IT IS POSSIBLE THAT WE MAY MAKE ONE OR MORE ACQUISITIONS IN THE INTERNATIONAL
MARKET. Any such acquisitions would expose us to political and economic
uncertainties, including, among other things, inflation , governmental
instability, transportation, tariffs, export controls, government regulation,
currency exchange rate fluctuations, foreign exchange restrictions that limit
the repatriation of investments and earnings, changes in taxation, hostilities
or confiscation of property. Changes related to these matters could have a
material adverse effect on the Company.

WE MAY BE SUBJECT TO DELAYS BECAUSE OF INTENTIONAL, CRIMINAL THIRD PARTY
INTERVENTION. Though we have taken several precautions to prevent any
disruptions from terrorist attacks and hackers, we cannot guarantee that our
operations are completely invulnerable. A disruption can occur from numerous
sources, including damage to the company property, damage to one of our vendors,
suppliers or customers, or damages to third parties such that it restricts the
flow of commerce. Disruptions could materially adversely affect our revenues.

                                       4
<PAGE>

ITEM 3.  CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's Exchange Act
reports is recorded, processed, summarized and reported within the time frames
specified in the SEC's rules and forms, and that such information is accumulated
and communicated to the Company's management, including its Chief Executive
Officer and its principal financial officer, to allow timely decisions regarding
required disclosure based closely on the definition of "disclosure controls and
procedures in Rule 13a-15(f). In designing and evaluating the disclosure
controls and procedures, management recognized that any controls and procedures,
no matter how well designed and operated, can provide only reasonable assurance
of achieving the desired control, objectives and management necessarily was
required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures.

As of the end of the period covered by this report, based on an evaluation of
the Company's controls and procedures, the Company's Chief Executive Officer and
principal financial officer concluded that the Company's disclosure controls and
procedures were effective.

There have been no significant changes in the Company's internal controls, or in
other factors that could significantly affect the internal controls, during the
last fiscal quarter.

                          PART II -- OTHER INFORMATION

ITEM 6. EXHIBITS.

         31.1  Certification of principal executive officer

         31.2  Certification of principal financial officer

         32    Section 1350 Certification

                                       5
<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.

                                        Safe Technologies International, Inc.
                                        (Registrant)



Date: May 14, 2007                      By: /s/ Randi Swatt
      ------------                          ---------------
                                            Randi Swatt, Chief Executive Officer

                                       6
<PAGE>

                      SAFE TECHNOLOGIES INTERNATIONAL, INC.

                                TABLE OF CONTENTS

                                 MARCH 31, 2007

                                                                            PAGE
                                                                            ----

Consolidated Financial Statements

     Balance Sheet                                                        F-2

     Statement of Operations                                              F-3

     Statement of Stockholders' Equity (Deficit)                          F-4

     Statement of Cash Flows                                              F-5

Notes to Financial Statements                                          F-6 - F-9

                                      F-1

<PAGE>
                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                           CONSOLIDATED BALANCE SHEETS
                      MARCH 31, 2007 AND DECEMBER 31, 2007
<TABLE>
<CAPTION>
                                                                                MARCH 31,        DECEMBER 31,
                                                                                  2007               2006
                                                                               -----------       ------------
                                                                               (UNAUDITED)
<S>                                                                            <C>               <C>
                                  ASSETS
CURRENT ASSETS
  Cash                                                                         $    15,808       $     9,948
  Accounts receivable, net of allowance for doubtful accounts of
  $2,805 and $1,500 at March  31, 2007 and December 31, 2006 respectively            1,963             4,003
  Prepaid Expenses                                                                   1,342                --
                                                                               -----------       -----------
     Total current assets                                                           19,113            13,951
                                                                               -----------       -----------

PROPERTY AND EQUIPMENT
  Furniture, fixtures, and equipment                                                 6,801             6,801
  Less: Accumulated depreciation                                                    (6,801)           (6,801)
                                                                               -----------       -----------
     Total property and equipment                                                       --                --
                                                                               -----------       -----------

OTHER ASSETS
  Deposits                                                                             852               893
                                                                               -----------       -----------
     Total other assets                                                                852               893

                                                                               -----------       -----------
Total Assets                                                                   $    19,965       $    14,844
                                                                               ===========       ===========

           LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
  Accounts payable and accrued expenses                                             48,398           146,787
  Notes and loans payable                                                        1,418,309         1,255,934
  Deferred revenue                                                                   1,900             1,300
                                                                               -----------       -----------

     Total current liabilites                                                    1,468,607         1,404,021
                                                                               -----------       -----------

Total liabilites                                                                 1,468,607         1,404,021
                                                                               -----------       -----------

STOCKHOLDERS' EQUITY (DEFICIT)
  Common stock, $.00001 par value, 999,999,000 shares authorized;                    9,326             9,326
  932,631,602 shares issued and outstanding at
  December 31, 2006 and December 31, 2005, respectively
  Additional paid-in capital                                                     7,441,803         7,441,803
  Subscriptions received                                                            12,000            12,000
  Retained earnings (deficit)                                                   (8,911,771)       (8,852,306)
                                                                               -----------       -----------

     Total stockholders' equity (deficit)                                       (1,448,642)       (1,389,177)
                                                                               -----------       -----------

Total Liabilities and Stockholders' Equity (Deficit)                           $    19,965       $    14,844
                                                                               ===========       ===========
</TABLE>

    The accompanying notes are an intergral part of the financial statements

                                      F-2
<PAGE>
                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                   THREE MONTHS ENDED MARCH 31, 2007 AND 2006
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                              2007                 2006
                                                          -------------       -------------
<S>                                                       <C>                 <C>
REVENUES

  Sales, net of customer returns                          $       2,952       $       6,553
                                                          -------------       -------------

     Net sales                                                    2,952               6,553
                                                          -------------       -------------

COST OF OPERATIONS

  Cost of operations                                              3,300               3,300
                                                          -------------       -------------

     Total cost of operations                                     3,300               3,300
                                                          -------------       -------------

Gross Profit                                                       (348)              3,253
                                                          -------------       -------------

OPERATING EXPENSES

  Selling, general and adminstrative expenses                    18,976              22,153

                                                          -------------       -------------
     Total operating expenses                                    18,976              22,153
                                                          -------------       -------------

Operating income (loss)                                         (19,324)            (18,900)
                                                          -------------       -------------

OTHER INCOME (EXPENSE)
  Interest expense                                              (40,141)            (34,782)
                                                          -------------       -------------

     Total other income (expense)                               (40,141)            (34,782)
                                                          -------------       -------------

Loss before provision for income taxes                          (59,465)            (53,682)
Income taxes                                                         --                  --
                                                          -------------       -------------

Net income (loss)                                         $     (59,465)      $     (53,682)
                                                          =============       =============

Net income (loss) per common share, basic                 $          (0)      $          (0)
                                                          =============       =============

Weighted average number of common shares outstanding        932,631,602         932,631,602
                                                          =============       =============
</TABLE>

    The accompanying notes are an intergral part of the financial statements

                                      F-3
<PAGE>
                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                                 MARCH 31, 2007
<TABLE>
<CAPTION>
                                         NUMBER                            ADDITIONAL
                                           OF             COMMON             PAID-IN           SUBS.           ACCUMULATED
                                         SHARES            STOCK             CAPITAL          RECEIVE           DEFICITD
                                      -----------       ------------      ------------      ------------      ------------
<S>                                   <C>               <C>               <C>               <C>               <C>
BALANCE, December 31, 2005            932,631,602              9,326         7,441,803            12,000        (8,617,060)

  Net loss                               (235,246)

BALANCE, December 31, 2006            932,631,602              9,326         7,441,803            12,000        (8,852,306)

  Net loss for the three months                                                                                    (59,465)
                                      -----------       ------------      ------------      ------------      ------------

BALANCE, March  31, 2007              932,631,602       $      9,326      $  7,441,803      $     12,000      $ (8,911,771)
                                      ===========       ============      ============      ============      ============
</TABLE>

    The accompanying notes are an intergral part of the financial statements

                                      F-4
<PAGE>
                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                      2007           2006
                                                                    --------       --------
<S>                                                                 <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)                                                   $(59,465)      $(53,682)
Adjustments to reconcile net (loss) to net cash provided by
operating activities:
  Depreciation and amortization                                           --            750
  Bad debt expense                                                     2,985          2,660

Changes in operating assets and liabilites:
  (Increase) decrease in accounts receivable                            (825)           209
  (Increase) decrease in prepaid and other assets                     (1,301)            --
  Increase (decrease) in accounts payable and accrued expenses         5,225         17,744
  Increase (decrease) in accrued interest                             40,141             --
  Increase (decrease) in deferred revenue                                600           (503)
                                                                    --------       --------

Net cash provided (used) by operating activities                     (12,640)       (32,822)
                                                                    --------       --------

CASH FLOWS FROM INVESTING ACTIVITIES:

                                                                    --------       --------
Net cash provided (used) by investing activities                          --             --
                                                                    --------       --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase in shareholders loans                                      18,500         40,000
                                                                    --------       --------

Net cash provided (used) by financing activities                      18,500         40,000
                                                                    --------       --------

Net increase (decrease) in cash                                        5,860          7,178
CASH and equivalents, beginning of period                              9,948          4,294
                                                                    --------       --------

CASH and equivalents, end of period                                 $ 15,808       $ 11,472
                                                                    ========       ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Payment of taxes in cash                                            $     --       $     --
                                                                    ========       ========
Expenses paid with common stock                                     $     --       $     --
                                                                    ========       ========
Payment of interest in cash                                         $     --       $     --
                                                                    ========       ========
</TABLE>

    The accompanying notes are an intergral part of the financial statements

                                      F-5
<PAGE>
                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Policies
         The Company was incorporated under the laws of the State of Delaware on
         May 21, 1987 as Safe Aid Products, Inc. On February 9, 1998, the
         Company changed its name to Safe Technologies International, Inc. Safe
         Technologies International, Inc. ("Safe Tech") is a multi-faceted
         company specializing in Internet services and products.

         a) Principles of consolidation-
         The consolidated financial statements include the accounts of Safe
         Technologies International, Inc. and its subsidiaries, Total Micro
         Computers, Inc., Connect.ad, Inc., Connect.ad Services, Inc. and
         Internet Associates International, Inc. All material inter-company
         transactions and balances have been eliminated in the consolidated
         financial statements.

         b) Use of estimates.-
         The financial statements have been prepared in conformity with
         accounting principles generally accepted in the United States. In
         preparing the financial statements, management is required to make
         estimates and assumptions that effect the reported amounts of assets
         and liabilities and disclosure of contingent assets and liabilities as
         of the dates of the balance sheets and statements of operations for the
         years then ended. Actual results may differ from these estimates.
         Estimates are used when accounting for allowance for bad debts,
         collectibility of accounts receivable, amounts due to service
         providers, depreciation, litigation contingencies, among others.

         c) Revenue recognition.-
         Revenues of Safe Technologies International, Inc. are recognized at the
         time the services are rendered to customers. Services are rendered when
         the Company's representatives receive the customer's requests and
         completes the customer's orders. Quarterly hosting fees are charged in
         advance, and recognized as earned.

         d) Net loss per share, basic.-
         Net income per share is computed by dividing the net income by the
         weighted average number of shares outstanding during the period. Net
         income per share, diluted, is not presented as no potentially dilutive
         securities are outstanding.

         e) Cash equivalents.-
         The Company considers all highly liquid debt instruments with an
         original maturity of three months or less to be cash equivalents. Cash
         and cash equivalents, accounts receivable and accounts payable are
         short-term in nature and the net values at which they are recorded are
         considered to be reasonable estimates of their fair values. The
         carrying values of notes payable are deemed to be reasonable estimates
         of their fair values.

         f) Concentration risks-
         The Company's sources of revenue and accounts receivable are comprised
         primarily of customers in the Internet industry. The Company requires
         no collateral from its customers.


                                      F-6
<PAGE>
                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Policies (Continued)

         i) Advertising.-
         Advertising costs, which are included in selling, general and
         administrative expenses, are expensed as costs are incurred.

         j) Deferred revenue-
         Deferred income arises in the normal course of business from the
         development of new web site contracts and advance payments for
         services.

         g) Fixed assets.-
         Fixed assets are recorded at cost. Depreciation is computed on the
         straight-line method, based on the estimated useful lives of the assets
         of generally five or ten years. Expenditures for maintenance and
         repairs are charged to operations as incurred. Fixed assets were fully
         depreciated for the year ended December 31, 2005.

         h) Intangible assets-
         The Company continually evaluates the carrying value of goodwill and
         other intangible assets to determine whether there are any impairment
         losses. If indicators of impairment are present in intangible assets
         used in operations and future cash flows are not expected to be
         sufficient to recover the assets' carrying amount, an impairment loss
         would be charged to expense in the period identified.

(2) Going Concern.-
         The accompanying financial statements have been prepared assuming that
         the Company will continue as a going concern. The Company's financial
         position and operating results raise substantial doubt about the
         Company's ability to continue as a going concern, as reflected by the
         net loss of $ 59,465 for the three months ended March 31, 2007, $
         253,246 for the year ended December 31, 2006, and the total cumulative
         loss of approximately $8,911,771. The ability of the Company to
         continue as a going concern is dependent upon developing sales and
         obtaining additional capital and financing. The financial statements do
         not include any adjustments that might be necessary if the Company is
         unable to continue as a going concern. The Company is currently
         pursuing acquisitions of viable business's in conjunction with seeking
         additional capital to fund its planned operations.

(3) Income Taxes.
         Deferred income taxes (benefits) are provided for certain income and
         expenses which are recognized in different periods for tax and
         financial reporting purposes. The Company had net operating loss
         carry-forwards for income tax purposes as of December 31, 2006 of
         approximately $ 6,800,000 with the latest expiring $ 235,000, $
         237,000, $ 418,000, $ 368,000, and $436,000 at December 31, 2021, 2022,
         2023, 2024 and 2025, respectively. The Company has established a 100%
         valuation allowance against this deferred tax asset, as the Company has
         no history of profitable operations.

                                      F-7
<PAGE>
                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(3) Income Taxes Continued.

         The differences between Federal income tax rates and the effective
         income tax rates are:

                                              MARCH 31, 2007    DECEMBER 31,2006
                                              --------------    ----------------
         Statutory federal income tax rate         34%                34%
         Valuation allowance                      (34)               (34)
                                                  ---                ---
         Effective tax rate                        --                 --

(4) Stockholders' Equity.
         The Company has authorized 999,999,000 shares of $.00001 par value
         common stock, with 932,631,602 shares issued and outstanding. Rights
         and privileges of the preferred stock are to be determined by the Board
         of Directors prior to issuance.

 (5) Commitments and Contingencies.-
         The Company rents office space in Boca Raton, Florida under an annual
         lease that commenced in October 2005. The total rent for 2006 was
         $5,155 and $1,342 for the three months ended March 31, 2007. Future
         lease expenses are approximately $ 4,026 in 2007.

(6) Short-Term Debt.
         At March 31, 2007 and December 31, 2006, total short-term debt
         consisted of the following:

                                              MARCH 31, 2007    DECEMBER 31,2006
                                              --------------    ----------------
         12% Notes and Loans payable to a
         shareholder and related affiliates,
         unsecured, and due upon demand.
         Upon default, the notes become due
         immediately at an interest rate
         of 18%.                                 $1,418,309        $1,255,934
            --                                   ----------        ----------
         Total short-term notes                  $1,418,309        $1,255,934
                                                 ==========        ==========

         Interest expense for 2006 was $ 137,593 and $40,141 for three months
         ended March 31, 2007. All the balances were accrued and unpaid. The
         2006 accrual had been added to the principle as of January 1, 2007.

                                      F-8
<PAGE>
                      SAFE TECHNOLOGIES INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(7) Recent Accounting Pronouncements

         In September 2006, the FASB issued SFAS No. 157, Fair Value
         Measurements ("SFAS No. 157"), which defines fair value, establishes a
         framework for measuring fair value in generally accepted accounting
         principles and expands disclosures about fair value measurements. SFAS
         No. 157 is effective for fiscal years beginning after November 15,
         2007, and interim periods within those fiscal years. The Company is
         currently assessing the impact the adoption of SFAS No. 157 will have
         on its consolidated financial position and results of operations.

         In June 2006, the FASB issued Interpretation No. 48, Accounting for
         Uncertainty in Income Taxes: An Interpretation of FASB Statement No.
         109 ("FIN No. 48"). This interpretation clarifies the accounting for
         uncertainty in income taxes recognized in an entity's financial
         statements in accordance with SFAS No. 109. FIN No. 48 prescribes a
         recognition threshold and measurement principles for the financial
         statement recognition and measurement of tax positions taken or
         expected to be taken on a tax return. This interpretation is effective
         for fiscal years beginning after December 15, 2006 and as such, the
         Company will adopt FIN No. 48 on January 1, 2007. The Company does not
         expect the adoption of FIN No. 48 to have a material effect on its
         consolidated financial position and results of operations.

         In February 2007, the FASB issued SFAS No., 159, The Fair Value Option
         for Financial Assets and Financial Liabilities, including an amendment
         to FASB Statements No. 115 ("SFAS No. 159"). SFAS No. 159 permits
         entities to choose to measure many financial instruments, and certain
         other items, at fair value that are not currently required to be
         measured at fair value. SFAS No. 159 is effective as of the beginning
         of an entity's first fiscal year that begins after November 15, 2007;
         however early adoption is permitted. The Company does not expect the
         adoption of SFAS No. 159 to have a material effect on its consolidated
         financial position and results of operations.

                                      F-9