U.S. SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB OMB Approval Expires: Approval Pending OMB Number: xxxx-xxxx Estimated Average Burden Hours Per Response: 1.0 (Mark One) X Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended OCTOBER 31, 2000 [ ] Transition report under Section 13 or 15(d) of the Exchange Act For the transition period from to ----------- ----------. Commission file number 0-23356 --------------------- AMERICAN ABSORBENTS NATURAL PRODUCTS, INC. ---------------------------------------------- (Name of Small Business Issuer in Its Charter) UTAH 87-0421089 (State or Other Jurisdiction of IRS Employer Identification Incorporation or Organization) 6015 LOHMAN FORD ROAD, SUITE 100 LAGO VISTA, TEXAS 78645 - ------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) 512-267-2221 - -------------------------------------------------------------------------------- (Issuer's Telephone Number, Including Area Code) - -------------------------------------------------------------------------------- (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) Check whether the issuer: (1) filed all reports required to be filed by Section13 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 past 90 days. Yes X No ------------ ---------- APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the Registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes__________ No___________ APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable DATE: OCTOBER 31, 2000 6,956,982 ($0.001 PAR VALUE) COMMON SHARES PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. The following interim consolidated financial statements as of October 31, 2000 and for the nine months and quarter then ended, are unaudited, but in the opinion of management, have been prepared in conformity with generally accepted accounting principles applied on a basis consistent with those of the annual audited financial statements and in conformity with the instructions provided in Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete audited financial statements. Such interim financial statements reflect all adjustments (consisting of normal recurring adjustments and accruals) which management considered necessary for a fair presentation of the financial position and the results of operations for the quarters presented. The results of operations for the quarters presented are not necessarily indicative of the results to be expected for the year ending January 31, 2001. The interim consolidated financial statements should be read in connection with the audited consolidated financial statements for the year ended January 31, 2000. SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Forward looking statements made herein are based on current expectations of the Company that involve a number of risks and uncertainties and should not be considered as guarantees of future performance. These statements are made under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. The factors that could cause actual results to differ materially include but are not limited to: interruptions or cancellation of existing contracts, impact of competitive products and pricing, product demand and market acceptance risks, the presence of competitors with greater financial resources than the Company, product development and commercialization risks and an inability to arrange additional debt or equity financing. -2- AMERICAN ABSORBENTS NATURAL PRODUCTS, INC. AND SUBSIDIARY (A Development Stage Company) Consolidated Financial Statements For the Nine Months Ended October 31, 2000 and 1999 (Unaudited) INDEX PART I. FINANCIAL INFORMATION PAGE NUMBERS Item 1. Financial Statements (Unaudited) 4 Consolidated Balance Sheets at October 31, 2000 and 4-5 January 31, 2000 Consolidated Statement of Operations for the three 6 months and quarter ended October 31, 2000 Consolidated Statements of Stockholders' Equity 7-11 from inception on February 9, 1984 through October 31, 2000 Consolidated Statement of Cash Flows for the 12-13 nine months ended October 31, 2000 and 1999 and from inception to October 31, 2000 Notes to the Consolidated Financial Statements 14-19 Item 2. Management's Discussion and Analysis of Financial 20-21 Condition and Results of Operations PART II. OTHER INFORMATION Item 1. Legal Proceedings 22 Item 2. Changes in Securities 22 Item 3. Defaults Upon Senior Securities 23 Item 4. Submission of Matters to a Vote of Security-Holders 23 Item 5. Other Information 23 Item 6. Exhibits and Reports on Form 8-K 23 Signatures 23 Exhibit 1, Statement of Earnings (Loss) Per Share 24 Exhibit 2, Subsidiary of the Registrant 25 -3- AMERICAN ABSORBENTS NATURAL PRODUCTS, INC. AND SUBSIDIARY (A Development Stage Company) Consolidated Balance Sheets October 31, 2000 and January 31, 2000 (unaudited) ASSETS OCTOBER 31, 2000 JANUARY 31, 2000 ---------------- ---------------- CURRENT ASSETS Cash $ 1,487 $ 9,512 Accounts receivable Trade 380 31,447 Prepaid expenses 29,584 17,208 Inventory 318,161 345,851 ---------- ---------- Total Current Assets 349,612 404,018 ---------- ---------- PROPERTY AND EQUIPMENT 476,583 651,984 OTHER ASSETS Mining claims 5,081,569 5,081,569 Certificates of deposit 15,000 15,000 Trademarks & product development cost 1,725 1,725 ---------- ---------- Total Other Assets 5,098,294 5,098,294 ---------- ---------- TOTAL ASSETS $5,924,489 $6,154,296 ========== ========== -4- AMERICAN ABSORBENTS NATURAL PRODUCTS, INC. AND SUBSIDIARY (A Development Stage Company) Consolidated Balance Sheets (Continued) October 31, 2000 and January 31, 2000 (unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ OCTOBER 31, 2000 JANUARY 31, 2000 ---------------- ---------------- CURRENT LIABILITIES Accounts payable and accrued expenses $ 322,368 $ 391,938 Note payable 220,000 155,000 Current portion of related party long-term debt 311,705 252,397 ------------------ -------------------- Total current liabilities 854,073 799,335 ------------------ -------------------- COMMITMENTS AND CONTINGENCIES LONG-TERM LIABLITIES Related Party Long-Term Debt, Less Current Maturities 608,232 755,884 ------------------ -------------------- Total Liabilites 1,462,305 1,555,219 ------------------ -------------------- STOCKHOLDERS' EQUITY Common stock; authorized 50,000,000 common shares at $0.001 par value 9,831,763 and 7,635,766 shares issued and 6,941,763 and 4,745,766 shares outstanding respectively (2,890,000 in treasury) 9,771 7,560 Preferred stock; authorized 10,000,000 preferred shares at 0 295 $0.001 par value Common Stock Subscription 0 0 Common Stock Subscription Receivable 0 0 Capital in excess of par value 10,691,156 10,120,390 Deficit accumulated during the development stage (5,293,743) (4,584,168) Treasury stock (cost of 2,890,000 shares held by the company) (945,000) (945,000) ------------------ -------------------- Total Stockholders' Equity 4,462,184 4,599,077 ------------------ -------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,924,489 $ 6,154,296 ================== ==================== -5- AMERICAN ABSORBENTS NATURAL PRODUCTS, INC. AND SUBSIDIARY (A Development Stage Company) Consolidated Statements of Operations October 31, 2000 and 1999 (unaudited) Third Quarter (three months) From Inception Nine Months Ended October 31 Ended October 31 February 9, 1984) ---------------------------- --------------------------- ------------------- 2000 1999 2000 1999 to October 31, 2000 REVENUES Net sales $ 83,706 $ 26,480 $ 14,029 $ 7,941 $ 582,445 Cost of goods sold 49,977 18,536 32,849 5,559 366,650 ----------- ----------- ----------- ----------- ----------- Gross Profit 33,728 7,944 (18,820) 2,382 215,794 ----------- ----------- ----------- ----------- ----------- EXPENSES General and administrative 848,624 619,476 357,561 224,877 5,408,907 Depreciation and amortization 72,474 71,276 23,899 23,928 311,301 ----------- ----------- ----------- ----------- ----------- Total expenses 921,098 690,752 381,460 248,805 5,720,208 ----------- ----------- ----------- ----------- ----------- Other Income Rent 5,220 7,830 0 2,610 32,092 Interest 552 526 174 181 3,220 Other Income 57,084 0 0 0 57,084 Gain on sale of assets 68,335 0 0 0 74,318 ----------- ----------- ----------- ----------- ----------- Net Other Income 131,191 8,356 174 2,791 166,714 Net loss before provision ----------- ----------- ----------- ----------- ----------- for income taxes (756,178) (674,452) (400,106) (243,632) (5,337,699) Provision for income taxes 0 0 0 0 2,647 ----------- ----------- ----------- ----------- ----------- Net loss before extraordinary items (756,178) (674,452) (400,106) (243,632) (5,340,346) Extraordinary gain, modification of note payable, net of taxes 46,603 0 0 0 46,603 ----------- ----------- ----------- ----------- ----------- Net Loss $ (709,575) $ (674,452) $ (400,106) $ (243,632) $(5,293,743) =========== =========== =========== =========== =========== Weighted average loss per share $ (0.13) $ (0.11) $ (0.06) $ (0.05) =========== =========== =========== =========== Average shares outstanding 5,519,067 6,134,087 6,420,186 4,540,524 -6- AMERICAN ABSORBENTS NATURAL PRODUCTS, INC. AND SUBSIDIARY (A Development Stage Company) Consolidated Statements of Stockholders' Equity From Inception on February 9, 1984 to October 31, 2000 (unaudited) Capital Capital Stock Common Stock Preferred Stock Stock Subscription Shares Amount Shares Amount Subscription Receivable --------------------------------------------------------------------------------- Balance at Inception February 9, 1984 -0- $ -0- -0- $ -0- -0- $ -0- Issuance of common stock for cash 37,500 38 -0- -0- -0- -0- Expenses paid by shareholders for the years ended January 31, 1990 -0- -0- -0- -0- -0- -- Net Loss From Inception to January 31, 1990 -0- -0- -0- -0- -0- -0- -------- -------- --------- -------- ---------- -------- Balance at January 31, 1990 37,500 38 -0- -0- -0- -0- Issuance of common stock for services rendered in August 1990 391,000 391 -0- -0- -0- -0- Issuance of common stock in September 1990 for various assets from Austin-Young, Inc. 50,000 50 -0- -0- -0- -0- Issuance of common stock for distribution licenses from Global Environmental Industries (GEI) for UT & WA, September 1990 50,000 50 -0- -0- -0- -0- Contribution from Austin-Young, Inc. -0- -0- -0- -0- -0- -0- Issuance of common stock for services rendered in October 1990 12,500 12 -0- -0- -0- -0- Net loss for the year ended January 31, 1991 -0- -0- -0- -0- -0- -0- -------- -------- --------- -------- ---------- -------- Balance at January 31, 1991 541,000 541 -0- -0- -0- -0- Common stock returned in exchange for common stock of GEI in March 1991 (17,000) (17) -0- -0- -0- -0- Repurchase of common stock from Austin-Young, Inc. in May 1991 (338,000) (338) -0- -0- -0- -0- Deficit Accumulated Additional During the Treasury Paid-in Development Stock Ampount Capital Stage ------------- ---------- ------------ Balance at inception February 9, 1984 $ -0- $ -0- $ -0- Issuance of common stock for cash -0- 962 -0- Expenses paid by shareholders for the years ended January 31, 1990 -0- 518 -0- Net loss from inception to January 31, 1990 -0- -0- (1,618) ------ ------- ------- Balance at January 31, 1990 -0- 1,480 (1,618) Issuance of common stock for services rendered in August 1990 -0- 7,429 -0- Issuance of common stock in September 1990 for various assets from Austin-Young, Inc. -0- 198,890 -0- Issuance of common stock for distribution licenses from Global Environmental -0- 37,070 -0- Industries (GEI) for UT & WA, September 1990 Contribution from Austin-Young, Inc. -0- 13,500 -0- Issuance of common stock for services rendered in October 1990 -0- 37,488 -0- Net loss for the year ended January 31, 1991 -0- -0- (57,756) ------ ------- ------- Balance at January 31, 1991 -0- 295,857 (59,374) Common stock returned in exchange for common stock of GEI in March 1991 -0- (85,423) -0- Repurchase of common stock from Austin-Young, Inc. in May 1991 -0- (64,682) -0- 7 Capital Capital Stock Common Stock Preferred Stock Stock Subscription Shares Amount Shares Amount Subscription Receivable --------------------------------------------------------------------------------- Cancellation of common shares (20,000) (20) -0- -0- -0- -0- Issuance of common stock for the purchase of product from steelhead specialty mineral in August 1991 10,000 10 -0- -0- -0- -0- Issuance of common stock for the purchase of mining claims in October 1991 13,214 13 -0- -0- -0- -0- Common stock canceled by officers/directors in January 1992 (20,000) (20) -0- -0- -0- -0- Contribution from Austin-Young, Inc. -0- -0- -0- -0- -0- -0- Net loss for the year ended January 31, 1992 -0- -0- -0- -0- -0- -0- -------- -------- ------- -------- -------- -------- Balance at January 31, 1992 169,214 169 -0- -0- -0- -0- Issuance of common stock for the acquisition of Geo-Environment Services, Inc. in February 1992 701,800 702 -0- -0- -0- -0- Issuance of common stock for the purchase of mining claims in March 1992 243,000 243 -0- -0- -0- -0- Common stock canceled by officers and directors in June 1992 (32,430) (32) -0- -0- -0- -0- Cancellation of Fractional shares due to reverse stock split (21) -0- -0- -0- -0- -0- Contribution by Austin-Young, Inc. -0- -0- -0- -0- -0- -0- Issuance of common stock (pursuant to a repurchase agreement in May, 1991) to Austin-Young, Inc. for relief of debt in July 1992 3,380,000 3,380 -0- -0- -0- -0- Net loss for the year ended January 31, 1993 -0- -0- -0- -0- -0- -0- -------- -------- ------- -------- -------- -------- Balance at January 31, 1993 4,461,563 4,462 -0- -0- -0- -0- Issuance of common stock for services rendered 17,800 -0- -0- -0- -0- -0- in June 1993 Deficit Accumulated Additional During the Treasury Paid-in Development Stock Ampount Capital Stage ------------- ---------- ------------ Cancellation of common shares -0- 20 -0- Issuance of common stock for the purchase of Product from steelhead specialty mineral in -0- 74,990 -0- August 1991 Issuance of common stock for the purchase of Mining Claims in October 1991 -0- 184,987 -0- Common stock canceled by officers/directors in January 1992 -0- 20 -0- Contribution from Austin -0- 17,000 -0- Net loss for the year ended January 31, 1992 -0- -0- (93,315) ------- -------- -------- Balance at January 31, 1992 -0- 422,769 (152,689) Issuance of common stock for the acquisition of Geo-Environment Services, Inc. in February -0- 96,442 -0- 1992 Issuance of common stock for the purchase of mining claims in March 1992 -0- 4,859,757 -0- Common stock canceled by officers and directors in June 1992 -0- 32 -0- Cancellation of fractional shares due to reverse stock split -0- -0- -0- Contribution by Austin-Young, Inc. -0- 10,000 -0- Issuance Of common stock (pursuant to a repurchase agreement in May, 1991) to Austin-Young, Inc. for relief of debt in July 1992 -0- 61,620 -0- Net Loss for the year ended January 31, 1993 -0- -0- (136,304) ------- -------- -------- Balance at January 31, 1993 -0- 5,450,620 (288,993) Issuance of common stock for services rendered in June 1993 -0- 26,682 -0- 8 Capital Capital Stock Common Stock Preferred Stock Stock Subscription Shares Amount Shares Amount Subscription Receivable --------------------------------------------------------------------------------- Issuance of common stock Austin-Young, Inc. in June 1993 12,000 12 -0- -0- -0- -0- Issuance of common stock for cash October 1993 66,667 67 -0- -0- -0- -0- Issuance of common stock as down payment on building October 1993 6,000 6 -0- -0- -0- -0- Issuance of common stock for services rendered October 1993 17,000 17 -0- -0- -0- -0- Issuance of common stock for cash December 1993 80,072 18 -0- -0- -0- -0- Contribution by Austin-Young, Inc. -0- -0- -0- -0- -0- -0- Net loss for the year ended January 31, 1994 -0- -0- -0- -0- -0- -0- --------- -------- --------- --------- --------- -------- Balance at January 31, 1994 4,661,102 4,662 -0- -0- -0- -0- Issuance of common stock for services rendered February 1994 6,000 6 -0- -0- -0- -0- Issuance of common stock for services rendered in June 1994 41,750 42 -0- -0- -0- -0- Issuance of common stock in a private offering 22,500 22 -0- -0- -0- -0- Issuance of common stock for services rendered in November 1994 15,000 -0- -0- -0- -0- -0- Contribution by Austin-Young, Inc. -0- -0- -0- -0- -0- -0- Net loss for the year ended January 31, 1995 -0- -0- -0- -0- -0- -0- Balance at January 31, 1995 4,746,352 4,747 -0- -0- -0- -0- --------- -------- --------- --------- --------- -------- Issuance of common stock for services 9,000 9 -0- -0- -0- -0- Issuance of common stock in a private offering 214,168 214 -0- -0- -0- -0- Contribution by Austin-Young, Inc. -0- -0- -0- -0- -0- -0- Net loss for the year ended January 31, 1996 -0- -0- -0- -0- --------- -------- --------- --------- --------- -------- Deficit Accumulated Additional During the Treasury Paid-in Development Stock Ampount Capital Stage ------------- ---------- ------------ Issuance of common stock Austin-young, Inc. in -0- 35,988 -0- June 1993 Issuance of common stock for cash October 1993 -0- 199,936 -0- Issuance of common stock as down payment on building October 1993 -0- 29,994 -0- Issuance of common stock for services rendered October 1993 -0- 50,983 -0- Issuance of common stock for cash December 1993 -0- 191,321 -0- Contribution by Austin-Young, Inc. -0- 36,000 -0- Net loss for the year ended January 31, 1994 -0- -0- (310,862) -------- ---------- ---------- Balance at January 31, 1994 -0- 6,021,524 (599,855) Issuance of common stock for services rendered February 1994 -0- 29,994 -0- Issuance of common stock for services rendered in June 1994 -0- 175,458 -0- Issuance of common stock in a private offering -0- 89,978 -0- Issuance of common stock for services rendered in November 1994 -0- 46,235 -0- Contribution by Austin-Young, Inc. -0- 36,000 -0- Net loss for the year ended January 31, 1995 -0- -0- (709,048) -------- ---------- ---------- Balance at January 31, 1995 -0- 6,399,189 (1,308,903) Issuance of common stock for services -0- 22,391 -0- Issuance of common stock in a private offering -0- 394,148 -0- Contribution by Austin-Young, Inc. -0- 36,000 -0- Net loss for the year ended January 31, 1996 -0- -0- (401,467) -------- ---------- --------- 9 Capital Capital Stock Common Stock Preferred Stock Stock Subscription Shares Amount Shares Amount Subscription Receivable --------------------------------------------------------------------------------- Balance at January 31, 1996 4,969,520 4,970 -0- -0- -0- -0- Issuance of common stock for cash in a private offering 130,960 131 -0- -0- -0- -0- Issuance of common stock for services 259,620 260 -0- -0- -0- -0- Net loss for the year ended January 31, 1997 -0- -0- -0- -0- -0- -0- ---------- ---------- --------- --------- --------- ---------- Balance at January 31, 1997 5,360,100 5,361 -0- -0- -0- -0- Issuance of common stock for cash in a private offering (net of commissions of $84,575) 582,000 582 -0- -0- -0- -0- Issuance of common stock for services 129,784 130 -0- -0- -0- -0- Issuance of common stock for purchase of Equipment 13,555 13 -0- -0- -0- -0- Issuance of common stock for cash pursuant to a stock option plan 25,000 25 -0- -0- -0- -0- Issuance of common stock for partial redemption of a note pursuant to a stock option plan 100,000 100 -0- -0- -0- -0- Net loss for the year ended January 31, 1998 -0- -0- -0- -0- -0- -0- ---------- ---------- --------- --------- --------- ---------- Balance at January 31, 1998 6,210,439 6,211 -0- -0- -0- -0- Issuance of common stock in a private placement offering (net of commissions of $53,428) 963,269 963 -0- -0- Issuance of common stock for services 135,480 136 -0- -0- -0- -0- Issuance of common stock for purchase of Equipment 82,063 82 - -0- -0- -0- Net loss for the year ended JANUARY 31, 1999 -0- -0- -0- -0- -0- -0- ---------- ---------- --------- --------- --------- ---------- Balance at January 31, 1999 7,391,251 7,392 -0- -0- -0- -0- Issuance of common stock in a private placement offering 129,001 78 -0- -0- -0- -0- Deficit Accumulated Additional During the Treasury Paid-in Development Stock Ampount Capital Stage ------------- ---------- ------------ Balance at January 31, 1996 -0- 6,851,728 (1,710,370) Issuance of common stock for cash in a private offering -0- 156,729 -0- Issuance of common stock for services -0- 262,359 -0- Net loss for the year ended January 31, 1997 -0- -0- (464,662) ----- --------- ----------- Balance at January 31, 1997 -0- 7,270,816 (2,175,032) Issuance of common stock for cash in a private offering (net of commissions of $84,575) -0- 729,843 -0- Issuance of common stock for services -0- 131,782 -0- Issuance of common stock for purchase of Equipment -0- 15,236 -0- Issuance of common stock for cash pursuant to a stock option plan -0- 9,350 -0- Issuance of common stock for partial redemption of a note pursuant to a stock option plan -0- 37,400 -0- Net loss for the year ended January 31, 1998 -0- -0- (489,525) ----- --------- ---------- Balance at January 31, 1998 -0- 8,194,427 (2,664,557) Issuance of common stock in a private placement offering (net of commissions of $53,428) -0- 1,218,676 -0- Issuance of common stock for services -0- 147,628 -0- Issuance of common stock for purchase of -0- 121,472 -0- equipment Net loss for the year ended January 31, 1999 -0- -0- (961,270) ----- --------- ---------- Balance at January 31, 1999 -0- 9,682,203 (3,625,827) Issuance of common stock in a private placement offering -0- 79,921 -0- 10 Capital Capital Stock Common Stock Preferred Stock Stock Subscription Shares Amount Shares Amount Subscription Receivable -------------------------------------------------------------------------------- Issuance of common stock for services 115,514 90 -0- -0- -0- -0- Issuance of preferred stock to redeem debt -0- -0- 142,084 142 -0- -0- Issuance of preferred stock in a private offering -0- -0- 152,500 153 -0- -0- Reacquire common stock for note payable (2,520,000) -0- -0- -0- -0- -0- Reacquire common stock in settlement of note receivable (50,000) -0- -0- -0- -0- -0- Repurchase common stock (320,000) -0- -0- -0- -0- -0- Net loss for the year ended January 31, 2000 -0- -0- -0- -0- -0- -0- ---------- ---------- ---------- --------- ---------- ----------- Balance at JANUARY 31, 2000 4,745,766 $7,560 294,584 $295 -0- -0- Issuance of common stock for services 12,616 13 -0- -0- -0- -0- Issuance of common stock for debt, Compensation, and accrued interest 415,754 416 -0- -0- -0- -0- Issuance of common stock for compensation 100,000 100 -0- -0- -0- -0- Cancellation of common stock issued for compensation (33,000) (33) -0- -0- -0- -0- Issuance of common stock subscription (500,000) -0- -0- -0- -0- 187,500 (187,500) Amortization of common stock subscription receivable earned -0- -0- -0- -0- -0- 58,756 Issuance of common stock for compensation 347,125 347 -0- -0- -0- -0- Balance at July 31, 2000 5,588,261 $8,403 294,584 $295 $187,500 $(128,744) ========== ========== ========== ========= ========== ============ Issuance of Common Stock for Compensation 338,203 338 -0- -0- -0- -0- Issuance of Common Stock for Stock Subscription 250,000 250 -0- -0- (93,750) 34,994 Reduction in Common Stock Subscription -0- -0- -0- -0- (93,750) 93,750 Issuance of Common Stock for Professional 323,882 324 -0- -0- -0- -0- Services Conversion of Preferred Stock to Common Stock 441,880 442 (294,584) (295) -0- -0- Deficit Accumulated Additional During the Treasury Paid-in Development Stock Ampount Capital Stage ------------- ---------- ------------ Issuance of common stock for services -0- 65,547 -0- Issuance of preferred stock to redeem debt -0- 140,372 -0- Issuance of preferred stock in a private offering -0- 152,347 -0- Reacquire common stock for note payable (831,600) -0- -0- Reacquire common stock in settlement of note receivable (5,000) -0- -0- Repurchase common stock (108,400) -0- -0- Net loss for the year ended January 31, 2000 -0- -0- (958,341) --------- ----------- ----------- Balance at January 31, 2000 $(945,000) $10,120,390 $(4,584,168) Issuance of common stock for services -0- 4,120 Issuance of common stock for debt, compensation, and accrued interest -0- 136,783 Issuance of common stock for compensation -0- 24,900 Cancellation of common stock issued for Compensation -0- (16,467) Issuance of common stock subscription (500,000) -0- -0- -0- Amortization of common stock subscription receivable earned -0- -0- -0- Issuance of common stock for compensation -0- 46,549 Net loss for the period ended July 31, 2000 -0- -0- (310,753) Balance at July 31, 2000 $(945,000) $10,316,275 Issuance of Common Stock for Compensation -0- 153,818 Issuance of Common Stock for Stock Subscription -0- 93,500 Reduction in Common Stock Subscription -0- -0- Issuance of Common Stock for Professional Services -0- 117,985 Conversion of Preferred Stock to Common Stock -0- (147) -11- Capital Capital Stock Common Stock Preferred Stock Stock Subscription Shares Amount Shares Amount Subscription Receivable -------------------------------------------------------------------------------- Issuance of Common Stock for Payment of 14,756 15 -0- -0- -0- -0- Dividend due to Preferred Share Holders Net Loss for the period ended October 31, 2000 -0- -0- -0- -0- -0- -0- Balance at October 31, 2000 6,956,982 9,772 -0- -0- -0- -0- ============ ============ ========== ========== ============== ============== Deficit Accumulated Additional During the Treasury Paid-in Development Stock Ampount Capital Stage ------------- ---------- ------------ Issuance of Common Stock for Payment of -0- 9,724 Dividend due to Preferred Share Holders Net Loss for the period ended October 31, 2000 -0- -0- (709,575) Balance at October 31, 2000 (945,000) 10,691,155 (5,293,743) ============== ============ ============== -12- AMERICAN ABSORBENTS NATURAL PRODUCTS, INC. AND SUBSIDIARY (A Development Stage Company) Consolidated Statement of Cashflows From Inception on Nine Months Ended February 9, 1984 October 31 Through 2000 1999 October 31, 2000 Cash flows from operating activities Net Loss (709,575) (675,522) (5,293,743) Extraordinary gain, modification of debt (52,275) 0 (52,275) Depreciation and amortization 72,474 67,944 311,301 (Increase) decrease in receivables 31,067 37,386 (380) Decrease (increase) in prepaid expenses (17,375) (21,031) (22,583) Decrease (increase) in inventory 27,689 (78,670) (244,987) Increase (decrease) in payables (63,943) 193,475 290,578 Gain from disposal of fixed assets (66,500) 0 (53,123) Stock issued for services 468,484 0 1,474,099 Stock Issued for interest on debts 4,199 0 4,199 Expenses paid by shareholder 0 0 149,018 --------------------------------------------------------- Net cash used by operating activities (305,755) (476,418) (3,437,896) --------------------------------------------------------- Cash flows from investing activities Purchase of fixed & other assets (20,575) (37,105) (742,086) Proceeds from Sale of warehouse 190,000 0 190,000 Purchase certificates of deposit 0 0 (15,000) Purchase of product tradenames 0 (1715) (28,683) Purchase of note receivable 0 0 (5,000) Organization costs 0 0 (1,524) Business Development Costs 0 (8,168) (58,599) Purchase/sale of mining development costs 0 0 7,920 Purchase of mining claims 0 0 150,000 Sale of licenses & other assets 0 29,607 (65,000) --------------------------------------------------------- Net cash used by investing activities 169,425 (17,381) (567,972) --------------------------------------------------------- Cash flows from financing activities Issuance of common stock 0 41,480 3,210,061 Issuance of preferred stock 0 273,014 152,500 Issuance of notes payable 435000 1,163,245 1,638,031 Purchase of treasury stock 0 (945000) (108,400) Principal payments on long-term debt (306,695) 0 (884,837) --------------------------------------------------------- Net cash provided by financing activities 128,305 532,739 4,007,355 --------------------------------------------------------- Net (decrease) increase in cash (8,025) 38,940 1,487 Cash at beginning of period 9,512 4,966 0 --------------------------------------------------------- Cash at end of period 1,487 43,906 1,487 ========================================================= -13- AMERICAN ABSORBENTS NATURAL PRODUCTS, INC. AND SUBSIDIARY (A Development Stage Company) Consolidated Statements of Cash Flows (Continued) From Inception on For the Nine Months Ended February 9, 1984 October 31 Through 2000 1999 October 31, 2000 Supplemental cash flow information: Cash paid for: Interest 22,613 6,627 43,312 Income taxes 0 0 2,547 Non-cash transactions: Stock issued for mining claims 0 0 5,045,000 Stock issued for down payment on building 0 0 30,000 Stock issued for services 468,484 0 1,474,099 Stock issued for stock of Geo-Environmental Services, Inc. (name changed to American Absorbents, Inc.) 0 0 97,144 Stock issued for inventory 0 0 75,000 Stock issued for assets of Austin-Young, Inc. and Global Environmental Industries 0 0 236,000 Stock issued for purchase of equipment 0 0 136,803 Stock issued for redemption of note 109,199 0 142,500 Treasury stock repurchased in exchange for debt 0 0 831,600 Treasury stock repurchased in settlement of note receivable 0 0 5,000 Debt assumed by buyer of fixed asset disposition 0 0 14,281 Preferred stock issued as redemption of debt 0 0 140,000 -14- AMERICAN ABSORBENTS NATURAL PRODUCTS, INC. AND SUBSIDIARY (A Development Stage Company) Notes to the Consolidated Financial Statements October 31, 2000 (unaudited) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BUSINESS ORGANIZATION American Absorbents Natural Products, Inc. was incorporated on February 9, 1984 under the laws of the State of Utah and under the name of TPI Land, Inc. as a wholly-owned subsidiary of TPI, Inc. On September 14, 1990, the Company changed its name to Environmental Fuels, Inc. and began developing its involvement in various phases of the conversion of vehicles to operating on compressed natural gas. That developing business was sold on April 23, 1991. On May 6, 1991, the Company changed its name to Geo-Environmental Resources, Inc. and is now developing its involvement in the distribution of zeolite, a mineral product which is an absorbent and has many potential uses such as oil and gas well cleanup, shoe and refrigerator freshener, landfill absorption, and other agricultural uses. On February 6, 1992, the Company acquired the outstanding stock of Geo-Environment Services, Inc., a wholly owned subsidiary involved in marketing of the zeolite products. The transaction was accounted for at historical cost in a manner similar to that in pooling of interest accounting for business combinations. In June 1995, the Company changed its name to American Absorbents Natural Products, Inc. and the name of its subsidiary to American Absorbents, Inc. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of American Absorbents Natural Products, Inc. and its subsidiary American Absorbents, Inc. Collectively, these entities are referred to as the Company. All significant intercompany transactions and accounts have been eliminated. METHOD OF ACCOUNTING The Company recognizes income and expenses according to the accrual method of accounting. Expenses are recognized when performance is substantially complete and income is recognized when earned. Earnings (loss) per share are computed based on the weighted average method. Stock options, preferred stock and convertible debt currently outstanding were not used in calculating earnings per share since the effect would be antidilutive. The fiscal year of the Company ends on January 31 of each year. The financial statements reflect activity from inception, February 9, 1984. CASH AND CASH EQUIVALENTS For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments with a maturity of three months or less to be cash equivalents. NONMONETARY TRANSACTIONS Nonmonetary transactions are transactions for which no cash was exchanged and for which shares of common stock were exchanged for assets or services. These transactions are recorded at fair market value as determined by the board of directors. -15- AMERICAN ABSORBENTS NATURAL PRODUCTS, INC. AND SUBSIDIARY (A Development Stage Company) Notes to the Consolidated Financial Statements October 31, 2000 (unaudited) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) INVENTORIES Inventories are accounted for using the first in, first out (FIFO) method and are valued at the lower of cost or market. Inventories consist of finished goods and packaging materials. ACCOUNTS RECEIVABLE Accounts receivable are shown net of the allowance for doubtful accounts. This amount was determined to be $0 and $0 at October 31, 2000 and 1999 after writing off all accounts determined to be uncollectible. PREPAID EXPENSES Prepaid expenses consist of the following: October 31, 2000 January 31, 2000 ---------------- ---------------- Prepaid mining land lease $ 24,584 $ 17,208 Prepaid Accounting Fees 5,000 - -------- -------- Total Prepaid Expenses $ 29,584 $ 17,208 MINING CLAIMS Mining claims are stated at the lower of cost or market. Any costs incurred for the betterment or to increase the expected efficiency of the operations related to the extraction from the Company mining claims are capitalized and charged off to operations over the expected economic life of the claims. PROPERTY AND EQUIPMENT The Company has adopted SFAS statement #121, which requires a review of any potential for the impairment of value of any long-lived assets. It is the policy of the Company to annually review the future economic benefit of all long-lived assets and to charge off to operations any potential impairment of value of long-lived assets when applicable. NOTE 2 - DEVELOPMENT STAGE ENTERPRISE The Company, per FASB Statement No. 7, is properly accounted for and reported as a development stage enterprise. Substantially all of the Company's efforts since its formation have been devoted to establishing its new business. No significant revenue has been earned as of the balance sheet date. Operations have been devoted to raising capital, purchasing zeolite property and establishing a marketing plan. Continuation of the development effort is contingent upon the Company raising sufficient capital from shareholders or other sources. It is management's intent to raise capital and further develop the marketing of its zeolite products. -16- AMERICAN ABSORBENTS NATURAL PRODUCTS, INC. AND SUBSIDIARY (A Development Stage Company) Notes to the Consolidated Financial Statements October 31, 2000 (unaudited) NOTE 3 - COMMON STOCK AND STOCKHOLDERS' EQUITY Stock of the Company has been issued for cash, license agreements, mining claims, compensation for services, and in exchange for other stock. During the period ended October 31, 2000, the Company issued shares of stock for services, the payment of debt, and compensation. On March 7, 2000, the Company issued 12,616 shares at $0.33/share for legal services. On April 13, 2000, the Company issued 330,906 shares at $0.33/share for payment of debt and accrued interest. On April 13, 2000, the Company issued 84,848 shares at $0.33/share for payment of accrued salaries to an officer of the Company. On April 27, 2000, the Company cancelled 33,000 shares issued for compensation to two officers of the Company. The shares were issued at $0.50/share. On April 27, 2000 the Company issued 100,000 shares at $0.25/share for compensation to two officers of the Company. On July 21, 2000 the Company issued 500 shares at $0.21/share as part of the judgement directed in the Calkins' lawsuit. On July 21, 2000 the Company issued 21,625 shares at $0.21/share for professional services and as part of the settlement with a former officer of the company. On July 21, 2000 the Company issued 325,000 shares at $0.13/share for consulting and investor relations services. On August 17, 2000 the Company issued 52,203 shares at $0.33/share for compensation to two current officers and a former officer for compensation due. On August 17, 2000 the Company issued 20,500 shares at $0.31/share for compensation for administrative and production staff. On August 17, 2000 the Company issued 265,500 shares at $0.50/shares to officers of the Company in lieu of unissued options. On August 17, 2000 the Company issued 250,000 share at $0.375/share for professional services rendered. On August 31, 2000 the Company issued 15,000 at $1.00/share for consulting services. -17- AMERICAN ABSORBENTS NATURAL PRODUCTS, INC. AND SUBSIDIARY (A Development Stage Company) Notes to the Consolidated Financial Statements October 31, 2000 (unaudited) NOTE 3 - COMMON STOCK AND STOCKHOLDERS' EQUITY (Continued) On August 31, 2000 the Company issued 275,178 shares at $0.33/share for professional services. On September 18, 2000 the Company issued 33,704 shares at prices ranging from $0.26/share to $0.41/share for directors' compensation. On October 4, 2000 the Company converted 294,584 Preferred shares to 441,880 share of Common stock. The company also issued 14,756 shares to pay the $9,085 in dividends due to the preferred shareholders. NOTE 4 - MINING CLAIMS The Company has purchased several zeolite mining claims in three different regions in the western United States. All purchases were acquired through stock issuance and are described below. In April 1991 (before acquisition by Geo-Environmental Resources) (now American Absorbents Natural Products, Inc.), the Company's subsidiary issued 440,000 shares of its stock for mining claims containing zeolite in the Mohave County, Arizona region, and the stock given was originally valued at $.50 per share. Thus the mining claims were originally valued at $220,000. Since the value of the mining claims was not readily determined the mining claims were written down to a nominal value. In October 1991 the Company acquired twenty zeolite mining claims in Harney County, Oregon. The value of the claims was agreed to be $185,000 by the seller and purchaser and 13,214 (132,143 pre-split) shares of common stock were issued. The stock was quoted on the market at $1.40 per share, thus determining the number of shares to be issued for the claims. In December 1991, the Company acquired an additional 203 zeolite mining claims in the Harney County, Oregon region. A geological study was conducted and reserves were estimated at over 477,600,000 tons. The value per ton was also estimated based on mining costs and market value of other companies in the industry. The reserves were then discounted 99 1/2% and a value was determined to be approximately $4,800,000. Stock was then issued at market price to equal the value given to the claims. On July 10, 1997, the Department of the Interior Bureau of Land Management granted approval of the Company's Permanent Mining Permit and Plan of Operations to mine its Harney County, Oregon zeolite properties. To date $100 depletion has been taken on any of these claims. Additional depletion of these assets will begin once material mining operations on these claims begins. -18- AMERICAN ABSORBENTS NATURAL PRODUCTS, INC. AND SUBSIDIARY (A Development Stage Company) Notes to the Consolidated Financial Statements October 31, 2000 (unaudited) NOTE 5 - NOTES PAYABLE During the quarter ended October 31, 2000, total notes payable outstanding increased by $101,049 from the previous quarter due primarily to the $220,000 in funds advanced to the Company by Centre Capital in accordance with the capitalization plan outlined in the definitive agreement signed August 9, 2000. These funds are in the form of a short-term note that was scheduled to expire upon completion of the acquisition of the Company by Centre Capital Corp. Subsequent to the end of the quarter ended October 31, 2000, the Company has terminated the agreement with Centre Capital due to the recent significant decline in their stock price and their inability to provide the remaining funds as provided for in the definitive agreement. The company also made the first installment payment due on the note to Austin-Young, Inc. as part of the stock buyback executed in July 1999. In addition to the funding provided by Centre Capital Corp, the Company has three notes payable, all outstanding to stockholders and bear interest at the rate of 8.25, 10.5%, and 0.00%. The Company did not make any additional draws on the $215,000 line of credit and as of October 31, 2000 the outstanding balance was $210,292. NOTE 6 - PRIVATE PLACEMENT OF COMMON STOCK or PREFERRED STOCK During the third quarter ended October 31, 2000, there were no issuance of private placements of common stock. There were, however, several transactions completed with common stock as detailed in Note 3 - Common Stock and Stockholders' Equity of this filing. -19- AMERICAN ABSORBENTS NATURAL PRODUCTS, INC. AND SUBSIDIARY (A Development Stage Company) Notes to the Consolidated Financial Statements October 31, 2000 (unaudited) NOTE 7 - COMMITMENTS AND CONTINGENCIES The Company has sold two private placements that include a royalty payment. The first private placement includes a $3 per ton per minimum investment on 6,000 tons of zeolite mined and sold. Total royalties paid per minimum investment will be $18,000. The company sold 91 units of this private placement. The second private placement includes a $2 per ton per minimum investment on 10,000 tons of zeolite mined and sold. Total royalties paid per minimum investment will be $20,000. The Company sold 144 units of this private placement. The royalties will be paid simultaneously ($5 per ton) to the shareholders proportionately once the zeolite has been mined and sold. The Company may increase the amount of the royalty payment to any holder of the royalty right above the specified dollar per ton royalty, but in no event will the total royalty payment exceed the maximum per investment. The increase in the royalty amount paid would only decrease the time limit in which the holder of a royalty right would receive the total royalty amount. Royalty payments will be made quarterly after the Company has made its quarterly financial statement filing with the Securities and Exchange Commission and determined the total tonnage that has been mined, milled and sold during the quarter. The Company is not aware of any outstanding legal matters at this time. NOTE 8 - ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. In these financial statements, assets, liabilities and earnings involve extensive reliance on management's estimates. Actual results could differ from those estimates. NOTE 9 - SUBSEQUENT EVENTS On November 30, the Company announced that it had suspended its merger discussions with Centre Capital Corp due to their inability to meet their initial funding requirements and the recent drop in Centre Capital's stock price. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION, RESULTS OF OPERATIONS AND PLAN OF OPERATIONS. The Company, per FASB statement No. 7, is properly accounted for and reported as a development stage enterprise. The Company's efforts since entering its current business have been devoted primarily to Company capitalization, acquisition of mining properties, packaging and milling facility acquisitions and product and market development. -20- RESULTS OF OPERATIONS The Company is a development stage enterprise and has incurred losses in each of its fiscal years ended January 31, 1998, 1999 and 2000 and for the quarters ended October 31, 2000, and October 31, 1999. These losses are the result of the continued operating expenses the Company incurs as it develops its niche in the retail and industrial marketplaces. Revenues have been insufficient to cover operating expenses or operational cash flow requirements. A net loss of $400,106 was incurred in the three-month period ended October 31, 2000, compared to a net loss of $243,632 for the same quarter of the previous year. For the nine months ended October 31, 2000, the Company incurred a net loss of $709,575 as compared to a net loss of $674,452 for the same period a year ago. Revenue for the quarter ended October 31, 2000 increased to $14,029 from $7,941 for the same quarter the previous year and for the first nine months of 2001 and 2000 was $83,706 and $26,480 an increase of $37,226. General and administrative expenses increased by approximately $132,684 from $224,877 to $357,561 during the three months ended October 31, 2000 as compared to the same period of the previous year. Significant expenditures during the third quarter included a charge of $49,994 for consulting services, $23,898 for depreciation, and $16,370 for interest. Personnel related expenses increased by approximately $57,439 from $131,673 for the period ended October 31, 1999 to $189,112 for the period ended October 31, 2000. The increase in personnel expenses was primarily the result of stock issued for services provided by management and other employees. Legal and accounting increased by approximately $5,000 due in part to the costs associated with the audit required as part of the now terminated agreement with Centre Capital. For the three months ended October 31, 2000, the Company wrote down inventory to more accurately account for the purchase of advertising and marketing material. These $28,000 in charges included $17,000 for our 101 Uses of Zeolites booklet and $11,000 for inventory liquidated in order to clear our Austin warehouse. Of the $14,079 in sales this quarter, $12,289 was for our Mother Earth Cat Litter. We shipped this product into the Los Angeles, California marketplace at an introductory price to begin developing a presence in the California market. This sale represents nearly 15% of our year-to-date sales of $83,706. The ratio of current assets to current liabilities (current ratio) was 0.51, 2.69, 0.77, and 0.47, respectively, for the fiscal years ended January 31, 2000, 1999, 1998 and 1997. Current ratios at October 31, 2000 and 1999 were .41 and .51, respectively. The decrease in the current ratio is attributable to an additional $100,000 in short-term debt moving into current liabilities. This $100,000 increase resulted from the partial capitalization as provided for in our now terminated merger. October 31, 2000 the outstanding balance on the line of credit was $210,292. As of the end of the quarter, the Company was delinquent on both the line of credit and the short-term note to Austin-Young, Inc. Payments for October, November, and now December 1st are due and payable totally $15,000. We have been notified by Austin-Young, Inc. of this situation and are seeking to resolve this issue as soon as possible. LIQUIDITY AND FINANCIAL CONDITIONS The Company has financed its operations to date primarily through the sale of equity securities and borrowings from stockholders. The Company has been unprofitable since its inception and has incurred net losses in each year, including a net loss of $400,106 for quarter ended October 31, 2000. Revenues to date have provided insufficient funding of working capital. During the quarter, the Company's primary sources of funding were the $220,000 advanced as part of the capitalization plan outlined in the definitive agreement signed August 9, 2000 with Centre Capital. This was provided as a short-term loan that was to expire upon completion of the merger. The Company is now fully extended on the line of credit and is actively identifying alternative sources of funding. Also subsequent to the end of the quarter, the Company retained the services of Tribe Communication to assist us in raising investor awareness and to raise capital. The $118,800 principal payment -21- on the $831,600 note to Austin-Young was made on August 15, 2000 using the proceeds from the first installment of funds provided for in the capitalization plan as part of the definitive agreement. Also during the quarter, the Company secured the zeolite reserves for an additional year by making the $29,500 payment to the Bureau of Land Management. At October 31, 2000, the Company had $322,368 in accounts payable and accrued expenses; a year ago at October 31, 1999, the Company had $391,938. Notes payable, current and long-term totaled $1,139,937 at October 31, 2000, versus $1,163,281 at October 31, 1999. Management continues to believe it will be able to raise capital to provide for operations and debt service. However, there can be no assurance that additional financing will be available at all or, if available, such financing would be obtainable on terms acceptable to the Company. If adequate financing is not available, the Company may be required to curtail its operation significantly or to obtain funds through entering collaborative agreements or other arrangements on less favorable terms. The failure of the Company to raise capital on acceptable terms would have a material adverse effect on the Company's business, financial condition, and results of operations. During the development stage the Company has paid for almost everything as it was acquired including the build up in inventory levels. As a result, and now that the milling facility is in production, the future cash flow of the Company will benefit as the inventory is converted into sales with the implementation of the marketing efforts. During the development stage of the Company incurred losses that reflect the development stage activity of researching and test marketing its products. The Company paid $91,700 to the Bureau of Land Management for the fiscal year ended January 31, 1996 and $29,500 in the fiscal years ended January 31, 1997, 1998, 1999, and 2000. In the future, approximately $29,500 will be due to the Bureau of Land Management in August of each year to satisfy claim maintenance fees on existing claims. The Company did not issue any stock for cash investments into the Company during this quarter. INFLATION The Company does not expect inflation to have any material effect on its revenues, costs or overall operation. PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. During the quarter ended October 31, 2000 there were no material pending or threatened legal proceedings against the Company or, to the best of the company's knowledge, its directors, officers, affiliates and owners of record or beneficially of more than five percent of any class of voting securities of the Company nor, to the best of the company's knowledge, was there any associate of any such director, officer, affiliate or security-holder who is a party in any action that is adverse to the Company or its subsidiary. (SEE NOTE 7 - COMMITMENTS AND CONTINGENCIES, page 17) ITEM 2. CHANGES IN SECURITIES. During the quarter ended October 31, 2000, there were no material modifications to instruments defining the rights of the holders of any class of registered securities nor were the rights evidenced by any class of registered securities materially limited or qualified by the issuance or modification of any class of securities. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. During the quarter ended October 31, 2000, there was no material default in the payment of principal, interest, sinking or purchase fund installments, or any other material default not cured within 30 days, with respect to any indebtedness of the Company exceeding five percent of the total assets of the Company, nor was there any material arrearage in the payment of -22- dividends with respect to any class of preferred stock of the Company which is registered or which ranks prior to any class of registered securities, or with respect to any class of preferred stock of any significant subsidiary of the Company. (The Company currently has no dividend policy.) ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS. During the quarter ended October 31, 2000, no matters were submitted to a vote of security-holders. ITEM 5. OTHER INFORMATION. On August 24, 2000, the Company filed an 8-K detailing the signing of a definitive agreement with Centre Capital Corp. Centre Capital will acquire American Absorbents Natural Products, Inc. for a combination of common stock, preferred stock, and detachable warrants. Persons wanting additional information may access the 8-K filing through edgar-online.com and on the Centre Capital Corp website (cccx.net). ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) (1) The following financial statements are included in Part I, Item 1: (2) The following exhibits are included for the nine months and quarters ended October 31, 2000 and 1999: Exhibit 1 - Computation of Earnings (Loss) Per Share 24 Exhibit 2 - Subsidiary of the Registrant 25 All other exhibits are omitted since the required information is included in the financial statements or notes thereto, or since the required information is either not present, not present in sufficient amount or is not applicable. (b) A Form 8-K was filed on August 24, 2000 during the quarter ended October 31, 2000. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AMERICAN ABSORBENTS NATURAL PRODUCTS, INC. By: /S/ ROBERT L. BITTERLI Robert L. Bitterli, Chairman of the Board and Chief Executive Officer Date: December 14, 2000 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Company and in their capacities and on the dates indicated. Signature Title Date - --------- ----- ---- /s/ Robert L. Bitterli Chief Executive December 14, 2000 - ----------------------- Officer and Chairman of the Board Robert L. Bitterli (Principal Executive Officer) /s/ David C. Scott President and Chief Financial December 14, 2000 - ------------------- Officer David C. Scott (Principal Accounting Officer) -23-