U.S. SECURITIES AND EXCHANGE COMMISSION
                           Washington, DC 20549
                               FORM 10-KSB
 
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       (Mark One) 
 X  Annual report under Section 13 or 15(d) of the Securities Exchange Act of
1934  (Fee required)
        For the fiscal year ended January 31, 1998
   Transition report under Section 13 or 15(d) of the Securities Exchange Act
of  1934 (No fee required)
        For the transition period from             to           .
 
Commission file number 0-23356                   Cusip number   2368E 10 1
                               
                  AMERICAN ABSORBENTS NATURAL PRODUCTS, INC. 
             (Name of Small Business Issuer in Its  Charter)
  
         Utah                                    
                                           87-0421089                      .
 (State or Other Jurisdiction
 of Incorporation or Organization)              
                                        IRS Employer Identification
 
     3800 Hudson Bend Road, Suite #300, Austin, Texas       78734 
   (Address of Principal Executive Offices)               (Zip Code)
                                                                   
                            512-266-2481                               
       (Issuer's Telephone Number, Including  Area  Code)
  
 Securities registered under Section 12(b) of the Exchange Act:
 
      Title of Each Class           Name of EachExchange  on Which Registered 
           NONE                               NONE 

  
 Securities registered under Section 12(g) of the Exchange Act:
 
COMMON STOCK (.001 par value)   
                                               (Title of Class)
        
 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 past 90 days.
 Yes        X             No                    .                         
 
 Check if there is no disclosure of delinquent filers in response to Item 405
of  Regulation S-B  contained in this form,  and no disclosure will
be contained, to the best of registrant's knowledge, in definitive  proxy 
or information  statements incorporated by reference in Part III of this 
Form 10-KSB or any amendment  to this Form 10-KSB. XX
 
 Issuer's revenues for the fiscal year ended January 31, 1998.    $55,552 
 
 Aggregate market value of common stock (.001 par value) held by non-affiliates
at March 31, 1998. $ 6,867,677
 
 Common stock (.001 par value) shares outstanding at March 31, 1998. 6,766,512 
  
 This Form 10-KSB document contains 46 pages.
 
 
                                 PART I
                       
     ITEM I.  DESCRIPTION OF BUSINESS:
 
 ORGANIZATION:
 
 American Absorbents Natural Products, Inc., a Utah corporation, through its
wholly  owned subsidiary, American Absorbents, Inc., a Texas corporation,
offers a number of products using volcanically  derived minerals known 
as zeolites.
 
 The Company's principal executive offices are located at 3800 Hudson Bend
Road,  Austin, Texas  78734.  Its telephone number is (512) 266-2481; 
its fax number is (512) 266-3800;  its E-Mailaddress  is aanpi@aanpi.com;  
its web page address is http://www.aanpi.com.
 
  The Company was incorporated in the State of Utah on February 9, 1984, under
the  name TPI Land, Inc. and changed its name to Environmental Fuels, Inc.
on September 18, 1990.  On May 6, 1991,the  Company changed its name to Geo-
Environmental Resources, Inc.  The Company effected a one-for-two reverse
split  of its outstanding shares on January 17, 1991, and a one-for-ten
reverse split of its outstanding shares on June 30,  1992.  Unless otherwise
indicated herein, all references to shares of common stock shall give 
effect to these reverse splits.
 
 In August 1990, Austin Young, Inc., a Utah corporation controlled by Terry L.
Young,  an officer, director, and controlling shareholder of the Company, 
acquired a controlling block of thecommon  stock, which currently represents
approximately 47% ownership, and Mr. Young became a director, President and
Chief  Executive Officer of the Company.
 
 In September 1990 the Company acquired certain distributorship licenses for
equipment  used to convert vehicles to operate on natural gas. 

The Company attempted to enter the natural gasvehicle  conversion market, but, 
after further investigation, determined that the cost of engaging in such
business would be prohibitive  given the financial resources  of the 
Company at such time.  Therefore, in April 1991 the Company resold the 
distributorship  licenses to the original manufacturer of the conversion
equipment and commenced seeking a differentfield  of operation.
 
 On October 11, 1990, Geo-Environment Services, Inc. was incorporated by Mr.
Young  and others for the purpose of locating, purchasing, and developing 
mining properties containing zeolites. Ultimately,  this company became the
marketing arm of the zeolite products of the Company.  In February 1992, the
shareholders  of the Company approved a stock-for-stock acquisition of
Geo-Environment Services, Inc. and issued 701,800  shares of common 
stock to the shareholders of Geo-Environment Services, Inc., including 
290,000 shares to Mr.  Young.
 
 Since 1991, the Company has been actively engaged in acquiring mining
properties  containing deposits of zeolite and  in test marketing the
products produced from the natural zeolite.  At presentthe  Company has 
one primary source for its zeolite, which source is located on unpatented
mining claims in the HarneyBasin  near Burns, Oregon.
 
 On June 5, 1995, the names of Geo-Environmental Resources, Inc. and
Geo-Environment  Services, Inc. were changed to American Absorbents 
Natural Products, Inc. and American Absorbents, Inc., respectively.
 
 The Company, through AAI, currently markets a number of odor and gas
adsorption  products and proposes to expand its marketing efforts
significantly in the future.
 
 
 OVERVIEW OF THE COMPANY:
 
 AMERICAN ABSORBENTS NATURAL PRODUCTS, INC. (the Company) markets a number of
products  using a volcanic mineral known as zeolite which is mined from mining 
claims owned by the  Company in the State of Oregon  or purchased as a bulk 
commodity in the open market from other domestic natural  zeolite suppliers
who may compete  with the Company.  These products are used primarily for
odor control, gas orliquid  adsorption and the slow release of nutrients 
into the soil.  The Company does not currently have any material contracts 
with its suppliers, but materials used by the company are not limited to 
"single source" suppliers.
 
 Zeolite minerals are comprised of aluminum, silicon and other elements which
have  a predictable crystalline structure with pore openings of molecular
dimensions.  Clinoptilolite is one classification  type of more than 40
types of zeolite and is the classification type most used by the Company.
The structure will capture  certain substances that vary with the size and
shape of the pores.  Zeolites are also chemically active and their  
surfaces are able to attract and hold molecules through processes known as
adsorption and absorption.  These characteristics  also serve to enable
zeolite to function as a catalyst, whereby the rate of chemical reactions
may be altered. More than 40 types of zeolites occur naturally and an even 
greater number may be synthetically produced because oftheir  higher 
adsorption capacities, lack of impurities, and regeneration capabilities. 
Although management believes that  synthetic zeolite can be currently  
produced with the exact properties as the zeolite used by the Company in its
products,  the high cost of such synthetically  produced zeolite makes it
less desirable in products similar to those marketed by  the Company 
which require lower costs to be competitive with similar products without
zeolite.
 
 The synthetic development and commercial introduction of zeolite products
began  in the early 1950s.  A variety of  companies have entered the 
industry and provide zeolite products used in many diverse  agronomic and
horticultural applications.  These applications include slow-release
fertilization, zeoponics,  soil conditioning, and soil remediation.
In addition, natural zeolites are used in water-filtration systems to 
produce clean  drinking water, as a food supplement for livestock and 
poultry to protect them from toxic substances, as filler incement  
and in the collection and disposal of radioactive waste.  In general, 
the industry offers high quality products and processes  designed for
specialty markets. 
 As the physical properties of zeolites have become more widely known, the
amount  of zeolite used has increased.  The  area in which the Company now
competes is in using natural zeolite in productsthat  adsorb liquids or
gases which might otherwise be harmful or obnoxious and in a product which
time releases nutrients  into the soil.
 
 The Company currently produces and markets over a dozen products which target
the  retail and agricultural consumable  products area and the turf grass
industry and which use the natural zeolite mineral  mined from the 
Company's claims or purchased as a bulk commodity in the open market.
A partial listing of these  products includes Mother Earth Cat  Litter and
Soil Enhancer, a cat litter product which, when used, can be disposed  of
into the soil as a soil enhancer;  Stall Fresh, a product to eliminate
urine-generated ammonia odors and wetness caused  by livestock; White
Buffalo, a multi-purpose home, farm and ranch absorb-all product; and
Stinky Pinkys and  Shoe Fresh, products that eliminate moisture and odor
from shoes and boots.  The Company has not currently entered into  the 
industrial or bulk sales markets with the zeolite minerals located on the 
Company's claims, but it may enter  these markets during the next fiscal
year.
 
 All of the Company's products use the natural zeolite minerals mined from the
Company's  unpatented placer mining claims located in the Harney Basin area
in the State of Oregon or purchased as a  bulk commodity in the open market. 
When mined, the minerals are stored in bulk near the claims or in the
Company's  Oregon milling facility.  The  Company's larger packaged
products, such as Mother Earth Cat Litter and Soil Enhancer,  
White Buffalo and Stall Fresh, are packaged and stored at the Oregon 
milling facility or a production facility  in New Mexico until they are
shipped to the distributor or end retailer.  The smaller packaged products,
such  as the shoe odor and moisture  products, Stinky Pinkys and
Shoe Fresh, are packaged and stored at the Company's
facility  in Austin, Texas.  The Company  has previously used mostly
contract labor for each phase of its current mining,  milling and 
packaging operations. 

 However, in February, 1998, the Company employed a Vice President of
Production  to manage the Oregon milling  facility, purchased in 
October, 1995, in a distress sale for $65,000 plus an additional
$34,000 for repairs.  Production  employees have been hired for
milling and packaging operations at this location.  The milling,
packaging and storage  facility contains 103,125 square feet and 
approximately 3,500,000 cubic feet of  inventory storage space in Hines,
Oregon. The Company's insurance carrier placed a replacement value of
$2,049,172 on the  facility.  This facility has been  equipped with milling
and packaging equipment  purchased from the proceeds of a  private
placement completed during the first part of fiscal 1998.  The current 
configuration of the plant allows for  the production of up to 10,000 bags
of cat litter per eight hour shift simultaneosly with the production of raw 
zeolite material  for use in other of the Company's  products including
Stall Fresh, White Buffalo and Sorbs-A-Lot.  Additional milling  and
packaging equipment has been purchased that will allow the Company to at
least triple its current capacity. Marketing of the Company's products is
performed by the Company's wholly owned subsidiary,  American Absorbents,
Inc., through joint-venture type relationships and through retail marketing
entities.   Since the commencement of its  zeolite products business in 
approximately 1991, the Company has been principally  in the product and
market development stage and has focused its marketing efforts primarily 
in the test market  area.   More recently, and since the  completion of 
the milling and packaging facility, the Company has turned its efforts  to 
the implementation of full marketing programs in the western portion of the 
United States.  The Company began  marketing its agricultural products
in the European marketplace in November, 1995, through an import/export
company  located in France.  Upon completion of the test marketing of its
current products, the Company began  promoting its products in the
marketplace.  The Company's product promotion is being pursued in several
ways,  including through participation in trade shows, direct contacts
with distributors, product brokers, large national  chains, and 
advertisements in trade  publications. The Company is also engaged in
public awareness campaigns to inform  the general public about the uses
of natural zeolites.  Public awareness campaigns include distribution of
videotapes  on the Company and its products,  promotion of zeolite products
by shareholders, discimination of a book entitled 
"101 Fantastic Uses For Zeolites" and limited distribution of research
papers on zeolite uses.  Shareholders are encouraged  to discuss the
Company's products with friends and relatives as well as request the 
products they use from various  stores.  CNN Headline News and NASA
have broadcast or published information on zeolite uses.
 
 The Company is also engaged in a continuing product development program
including  test marketing and packaging design programs. The Company
currently has available over a dozen productsthat  it has researched, 
developed and test  marketed.  During the first two years the Company 
introduced a new product using  natural zeolite on the average of every
three months.  Some of these new products included Mother Earth Cat Litter
and  Soil Enhancer, Stall Fresh, White  Buffalo, Fresh Pak,
Sorbs-A-Lot, Fridge Fresh, Boat Fresh and Cooler Fresh. 
Many of the sales outlets that  participated in the test marketing
programs still carry the products.  The Company  believes the test 
marketing programs were successful and believes that sales will increase
significantly with marketing  capital availability, although there are
no assurances when sales will increase.  The Company was able to determine
from  the test marketing programs that  customers will buy the Company's 
products at price levels that will generate at  least a 25% gross profit
margin to the  Company.  Since there are so many potential uses (estimated
at 3,000+) for the zeolite  mineral in consumer products,  any future
research and development will be primarily in the area of market research.
The Company will be  concentrating its efforts over the next twelve
months to marketing existing products  but plans to introduce at least two
new products during that time period. For future products, the Company will
test  market each such new product in a limited area until it has
determined market acceptance and pricing.  The Company  will then design
the final full color packaging for the product and introduce it into retail
stores.
    
 The majority of the Company's unpatented placer mining claims are located on
federal  land in the Harney Basin, Harney  County, Oregon.  These 259 
claims cover approximately 7.475 square miles or 6,000  acres.  
The estimated proven  reserves of in-place zeolite on the southern 40%
(approximately 135 claims or2,700  acres) of the Harney Basin claims
is 477,653,873 tons and the estimated probable reserves is 746,089,789 tons,
(based  on independent geologist's reports). 
The geologist assumed mining of only the top 80 feet of the deposit.  In-house
reports  of Anaconda (former owner of the northern portion of the 
Harney Basin Deposit) geologists placed the estimated reserves  of
zeolite mineral located on the northern 4060 acres of the Harney Basin in
excess of 1,000,000,000 tons of 90% pure  zeolite.  Their assumptions
included mining only the top 100 feet of the deposit.  Existing drill hole
core  data indicates that the total thickness of  the deposit is 
approximately 300 feet which would significantly increase the estimated 
reserves within the deposit.  An independent geological appraisal relating
only to the 404 acres, on which the Company  received its Permanent Mining
Permit and Plan of Operations on July 10, 1997, from the Department of the
Interior,  Bureau of Land Management, placed the reserves on the top 60 
feet of that area at 20-30,000,000 tons and valued  at 2.2-3.3 billion
dollars.  Mining  on the claims is open-pit and is performed by removing
any overburden with afront-end  loader or dozer before mining  and then
hauling the mineral in trucks to be stored and processed in Hines, Oregon,
approximately 25 miles from the  claims.
 
 The Company also owns 26 unpatented zeolite placer mining claims in Malheur
County,  Oregon, near the town of  Sheaville on the Oregon/Idaho border as
well as 10 unpatented lode zeolite mining  claims situated in Mohave County,
Arizona, approximately 60 miles northwest of Kingman, Arizona, near the town
of  Dolan Springs, Arizona.
 
 The Company's objective is to establish a mining, milling and packaging
operation  for zeolite consumer products and  to develop a national market 
for the products produced.  The Company also expects  to achieve long term
capital  appreciation of its major assets including large zeolite mineral 
reserves through  increased marketing efforts of zeolite  products.  
Although there is no assurance that the endeavors will be successful,  the
Company believes it will be successful in its objectives due to the
environmental awareness in the United States, as well  as the rest of the
world, and due to the  environmental aspects of the zeolite mineral.

 WARRANTIES:
 
 The Company's products are all manufactured from natural zeolite, a natural
mineral  mined from the earth.  As such,  the products do not have specific
warranties relative to the product.  The Company  does offer a 100% 
customer satisfaction guarantee.  If, for any reason, a customer is not
satisfied with a  particular product's performance, the  Company will 
refund 100% of the purchase price. 
 
 SUPPLIERS:
 
 The Company is the country's largest corporate holder of zeolite reserves
which  assures the Company of always having  an adequate inventory of the
zeolite minerals used in its products.  Other supplies,  primarily 
packaging materials, used by the Company in its manufacturing process are
readily available from a number  of suppliers.  Services used by the
Company for its mining are also readily available from a number of service 
providers.
 
 TRADEMARKS AND PATENTS:
 
 The Company markets its products under a number of trademarks and trademark
applications.   The Company has  applied for federal trademark protection on 
its products currently marketed and  those to be test marketed. The Company
does not own, hold or use any patents.
 
 
 INVENTORY:
 
 The Company has maintained lower inventory levels during the development
stage,  but has begun  increasing inventory levels with the commencement of 
full-scale marketing efforts in the westernportion  of the United States. 
The book value of inventory for the fiscal years ended January 31, 1998 and
January 31, 1997 was  $242,406 and $99,952, respectively. 
The Company mined and milled 10,000 tons of zeolite minerals in December, 
1997.
 
 
 CUSTOMERS:
 
 The Company's products are currently being sold  through direct sales to the
customer,  to retail outlets, through regional  marketing companies, 
through joint venture relationships and  through regional distributors.
Products have been sold  in the test marketing programs to over 100 
different retailers with approximately  2,000 retail outlets.  For the
fiscal year ended January 31, 1998, E.N.S.R./S.A.R.L. accounted for 
approximately 31% ofsales  and for the fiscal year ended  January 31, 1997,
E.N.S.R./S.A.R.L. accounted for approximately 58% of sales.
For  the fiscal year ended January 31, 1998,  Thunder Spring Distributors 
accounted for 11.4% of sales and Toxxcon International,  Inc. accounted for
11.5% of sales.  The Company's products are currently being sold, or have been
approved  for sale, in several large national  retail outlets as well as
smaller retail outlets.  Currently, and at the present  sales levels in the
development stage,  management does not believe that the loss of any single
or group of the Company's  largest customers would have a  materially 
adverse effect on the Company's business. 
 
 BACKLOG:
 
 The Company has been primarily in a test marketing phase.  Accordingly, there
was  no backlog at January 31, 1998 or January 31, 1997.  The Company has
maintained sufficient inventory levels to ship  products when they are
ordered and  plans to continue to maintain sufficient inventory levels to
fill future orders.
 
 COMPETITION:
 
 The Company experiences some competition in the developing and marketing of
its  products.  Management has  categorized competition into three areas,
namely:  1) producers of products similar  to those marketed by the Company
but not using any natural zeolite mineral; 2) producers of products using
natural  zeolite minerals mined from the  producer's own reserves; and,
 3) producers of products using zeolite minerals purchased  from an outside 
source.  The  Company believes that it can compete favorably with many of
these producers because  of the ability of the Company to  produce its 
natural zeolite products at relatively low cost because of the vast  amount 
of easily accessible zeolite located  on the Company's mining claims. 
Other zeolite producers are faced with the additional  expense of removing 
from a few  to several feet of overburden before mining activities can 
commence. 
Management  also believes that because the  Company's operations are
designed to reduce overhead expenses and the costs of producing  the
products through the  use of contract labor and independent contractors, the
Company will be able to quickly  adapt to the changing nature of  products
using environmentally safe materials. 
The Company is aware of a large number of other companies in the United States
which  are marketing cat litter products,  some of which contain small 
percentages of zeolites.  Management is also aware of  three other companies
in the nation  which market a cat litter product using natural zeolite
minerals, two of which own  small zeolite mining claims. 
Management believes that Mother Earth Cat Litter and Soil Enhancer, which can
be  recycled as a soil enhancer and  fertilizer and moisture absorbent, can 
favorably compete with the cat litters not  using natural zeolite minerals 
on a price  per pound basis with the added benefits of an environmentally 
friendly, dual-purpose  product.  The Company's   management views the 
percentage of the national cat litter market currently held  by the present
cat litter products using  natural zeolite minerals to be insignificant
and therefore does not believe that  the sale of such products by such
companies will significantly impact sales of Mother Earth Cat Litter and Soil
Enhancer  by the Company. 
 
 The Company's shoe products, Shoe Fresh and Stinky Pinkys, compete with a
number  of large companies which  manufacture similar shoe products, none of
which are believed to use naturalzeolite  minerals.  Management is aware
of a small company currently marketing a shoe product using natural zeolite
minerals;  however, such company does not have access to its own zeolite 
mining claims.  Management believes that it can compete  favorably with
these entities based upon pricing of the Company's products with the
advantage of being friendly  to the environment.
 
 The Company is not aware of any product similar to or which competes with
Fresh  Pak, an odor and moisture  absorbent for gym bags, closets, diaper
pails, gun cases and other small confined  areas. 
 
 The Company competes with a number of manufacturers of products used to absorb
automotive  fluids, chemicals and other liquid wastes from motor vehicles
and machines.  However, management is aware  of only one other product which
uses natural zeolite minerals.  Again management believes that the Company's
product,  Sorbs-A-Lot, can compete  favorably with these other products 
based upon pricing and performance of the product. 
The Company is aware of only one other company which markets a product similar
to  Stall Fresh, a product which eliminates urine-generated ammonia odors and 
wetness caused by livestock.  The competing  product is marketed by a
company which does not own its own zeolite deposits and uses natural zeolite
minerals  purchased from zeolite suppliers. 
Management expects to begin marketing its Stall Fresh product in areas where
the  competing product is sold and believes it can favorably compete with the 
competitor due to the Company's ownership  of  its own zeolite deposits.
 
 The Company is not aware of any other company that produces a product similar
to  its multi-purpose White Buffalo home, farm and ranch absorbs all product.
 
 
 RESEARCH AND DEVELOPMENT:
 
 The Company has been engaged in continuing market research and development
programs.   The Company currently  has available over a dozen products that it 
has researched, developed and test marketed.   Since there are so many
potential uses (estimated at 3,000+) for the zeolite mineral in consumer
products,  future research and development will  be primarily in the area of 
market research.  The Company will be concentrating  its efforts over the
next twelve months to marketing existing products but plans to introduce at
least two new products  during that time period.  During the  development
stage a large percentage of the Company's overhead was allocated to
research and development but the  percentage of overhead allocated to 
research and development has declined as the  Company has moved more toward
the marketing phase.  The Company has developed its zeolite products
in-house andtest  markets each product in a limited  number of stores. 
During the fiscal years ended January 31, 1998 and January 31,  1997, the
Company recorded research  and development expenses of $0 and $0,
respectively.
 
 REGULATIONS:
 
 Current operations on the Harney Basin Claims are subject to federal and state
reclamation  requirements, which means  that the Company must reclaim the
mined area after mining to a useful status pursuant  to regulation 
requirements.
Although others presently perform these mining operations for zeolites on the
Harney  Basin Claims, such operations are  still subject to existing 
federal, state, and local laws and regulations relating  to employee health
and safety.  The Company believes that the cost of such compliance does not
have a material impact  upon the cost of extracting the
zeolite.  In general, mining and milling operations are subject to compliance
with  the regulations promulgated under  the federal Mining and Minerals 
Policy Act of 1970 and the requirements of the
federal  Occupational Safety and Health  Administration (OSHA), as well as 
equivalent state regulations.
 
 Failure to comply with applicable governmental regulations could result in
enforcement  proceedings against the  Company by appropriate agencies.  
Compliance with existing regulations and those  that may come into existence 
in the future may have a substantial impact upon the Company's capital 
expenditures and  could adversely affect its operations. 
The Company believes it is in compliance with all applicable laws and
regulations  at this time. 
 
 ENVIRONMENTAL MATTERS:
 
 The Company's products, being environmental products, have a positive impact
on  the environment and are considered environmentally friendly.  
Compliance in general with regulations relating to the  protection of the
environment has not had, and is not anticipated to have, a material effect
upon the capital expenditures,  earnings or competitive position of  the 
Company.  Because of the limited nature of the mining operations in Oregon
prior  to 1998, the Company has operated under a Total Exemption From 
Reclamation Requirements.  However, the Company's  policy has always been
to reclaim all of its mined areas. In early 1996, the Company's independent
geologist  submitted to  the Federal Bureau  of Land Management, the State of
Oregon Department of Geology and Minerals Industries  and Harney County,
Oregon,  officials, a permanent mining permit application and a reclamation
plan which included  an environmental assessment  which set forth the plan 
of operations, assessed the impact of the operations on  the local
environment and specified the  extent and type of reclamation which would
be accomplished.  The Plan ofOperations  was approved by the various
regulatory commissions and the permanent mining permits were issued on July
10,  1997.  A $15,000  mined land  reclamation bond was posted by the 
Company at the State of Oregon, Departmentof  Geology and Minerals 
Industries to assure compliance with environmental and site reclamation
matters pursuant to  the Plan of Reclamation. 
 
 On portions of the Harney Basin Claims the Company has discovered small
quantities  of erionite in the zeolite deposits. 
The federal Environmental Protection Agency has classified erionite as a
potentially  hazardous mineral which may be  harmful to animals and humans.  
However, no conclusive research has been completed  by the government.  The
Company has no intent to mine areas of the deposit where erionite is present.  
 
 South of the Harney Basin Claims is a small area known as the South Narrows
Area  of Critical Environmental Concern  containing an endangered species known
as the Malheur Wirelettuce.  The Company  has released its claims which border
on this area which management believes satisfactorily minimizes any impact on
the  habitat for this endangered plant species.  The Harney Basin Claims 
are generally surrounded by, and on the east side  adjoin, the Malheur 
Wildlife Area. 
 To the extent that mining operations are visible from the wildlife area, the
Company   utilizes dust abatement and other measures designed to reduce any 
impact on the wildlife area.
 
 
 EMPLOYEES:
 
 At January 31, 1998, the Company had three full-time employees not including
contract  laborers who are employed on  an "as needed" basis. In February, 
1998, the Company employed a full-time Vice President  of Production to
manage the Oregon milling facility and in March, 1998, the facility was
staffed with five additional  production workers.  The Company does not
anticipate adding any significant number of employees in the immediate
future but will continue to  engage contract laborers on an "as needed" 
basis.  After completion of additional  capitalization, the Company does plan
to add a marketing executive, an operations and management information systems
executive  and three to four administrative personnel.
 
 
 
 ITEM 2.  DESCRIPTION OF PROPERTIES:
 
 
  MINING PROPERTIES:
 
 The Company controls 259 unpatented placer mining claims located in the Harney
Basin,  Harney County, Oregon, covering approximately 7.475 square miles
and situated in the center of thesoutheastern  quarter of the State of Oregon
and approximately the center of Harney County approximately 25 miles south of
Burns,  Oregon, and about 214 miles west of Boise, Idaho (Harney Basin
Claims).  The property is crossed by state highway  205 which offers 
virtually year- round access.  Existing ranch and county roads from the
highway offer access to  almost all of the property of interest. 
Also, the Company controls 26 unpatented zeolite placer mining claims in
Malheur  County, Oregon, near the town of Sheaville (Sheaville Claims).  
In addition, the Company controls 10 unpatented lode  zeolite mining claims
situated in Mohave County, Arizona, approximately 60 miles northwest of
Kingman, Arizona, near  the town of Dolan Springs, Arizona (Arizona Claims).
The Company's initial focus is on the Harney BasinClaims  because there is
more geological  data available from previous owners on these claims and
the zeolite deposits are  on or near the surface with little or no
overburden, thus reducing the cost of extraction.  The Company may seek
limited  mining permits  and grants of total  exemption from reclamation 
permits on its Sheaville Claims and Arizona Claims in  order to complete
sampling and  mapping activities on the properties.
 
 The owner of an unpatented mining claim holds possessory title to the claim. 
Possessory  title is not legal title in the  usual sense of that term, nor
does it arise out of any instrument or grant by the  United States or out
of any action taken  by any officer or agency of the state or federal
governments.  Only when a claim  is patented is there any affirmative
government grant under which legal title vests in the usual concept of
property  ownership.  Possessory title arises as a  matter of law out of 
the performance by the locator of the claim of certain acts  of location, 
including the staking of claim  boundaries and the making of certain record
filings in compliance with the requirements  of federal and state laws.  The
validity of an unpatented mining claim cannot be conclusively determined by an
inspection  of public records.  It is  dependent upon the legal
availability of the lands at the time the location is made  and the 
validity of the mineral  discovery within the boundaries of each claim, in
compliance with federal, state  and local laws relative to location
procedures.  Prior to 1992 possessory title was maintained against subsequent
location  by the annual performance of labor or improvements on or for the
benefit of each mining claim.  The Company believes  all past assessment work
requirements relating to the Company's claims were adequately performed. 
Since  1992 possessory title for persons  holding ten or more claims is
maintained by payment to the Bureau of Land Management  of an annual 
claim fee of  $100.00 per 20 acre claim site.  The Company believes it has
met these requirements.   The Company believes the  unpatented mining
claims it holds have been located in compliance with the applicable  state
and federal mining laws  and generally accepted standards in the mining 
industry.  The Company is notaware  of any material conflicts with other
parties concerning the claims and believes it has valid possessory right in
those  claims.
 
 All mining on the Harney Basin Claims is open-pit strip mining of the surface
mineral.   The property will be reclaimed by leveling and planting natural
grasses.  To perform the mining operation,the  Company removes  any 
overburden with  a front-end loader or dozer prior to mining the zeolite.  
The mined material is  stockpiled near the mine and then loaded
onto trucks and hauled to Burns/Hines, Oregon (approximately 25 miles) where
it  is milled and packaged. The Company  is currently using an entity
located in Burns, Oregon, near the claims to perform  mining operations.
 
 The local climate does not favor year-round mining or processing on the
property  because the winter is extremely cold and windy during the months
of December to February.  The rainy season occurs from  October through 
April and could  cause problems in stripping, crushing, and screening of the
zeolite.  Also, the  weather could have a material effect on the ability to
haul large quantities of the material during the rainy season if  permanent 
roads were not constructed.  The  Company does not plan to construct
permanent roads and does not believe its operations  will be restricted 
since sufficient quantities of zeolite can be mined during good weather
conditions and hauled to  the mill facility in Burns/Hines, Oregon
for storage.
 
 
 OFFICE, WAREHOUSE AND MILLING FACILITIES:
 
 The Company's principal executive offices are located in approximately 4,300
square  feet of office space which is being  leased from Austin Young, Inc.,
the Company's major stockholder.  Such space is  being furnished by Austin
Young, Inc.  pursuant to a 5-year lease agreement dated July, 1996. 
Monthly rental for such  office space is $1,900.  Such lease also  includes 
the use of the office furniture and equipment located at such facility.
 
 In October, 1993, the Company acquired a warehouse containing approximately
4,400  square feet of commercial space  located in Austin, Texas. 
This space is used by the Company to package and store  its inventory of
smaller sized products.   The facility is owned subject to an existing
mortgage in the principal amount of  approximately $125,000.  Said mortgage
is payable in monthly interest only payments of approximately $900.00 with a
balloon  payment  of $125,000 due in  August, 1998.  Because said facility
lacks permanent heating and air conditioning,  it is limited for use 
during the months  of extreme cold or heat. The Company plans to improve
this facility to facilitate  year-round use.  This facility has been
used for the packaging of the smaller packaged products and storage of
inventory  for the test marketing programs.  As  the Company has reduced 
test marketing programs and prepared to move into full marketing  from the
Oregon milling  facility, the Company's need for this facility has
decreased and the Company
leased  approximately 40% of the facility
to a tenant for $880 per month.
 
 In October, 1995, the Company completed the acquisition of a milling facility
containing  103,125 square feet and  approximately 3,500,000 cu. ft. of 
production, packaging and storage space inHines,  Oregon, approximately 25 miles
 from its Harney Basin zeolite deposits. This facility has been equipped with
milling  and packaging equipment  purchased from the proceeds of a 
private placement completed during the first part of fiscal  1998.  
The current configuration of the  plant allows for the production of up to
10,000 bags of cat litter per eight hour  shift simultaneosly with the 
production  of raw zeolite material for use in other of the Company's 
products including Stall  Fresh, White Buffalo and Sorbs-A-  Lot.  
Additional milling and packaging equipment has been purchased that will 
allow  the Company to at least triple  its current capacity.  The facility 
is not subject to any existing mortgages.
 
 Management believes that all its properties and equipment are adequately
insured  and in good repair.
 
 
 ITEM 3.  LEGAL PROCEEDINGS:
 
 Neither the Company, any of its properties, nor its subsidiary is a party to
any  material pending legal proceeding or  government action, including any 
material bankruptcy, receivership, or similar proceedings.   
Management of the  Company does not believe that there are any material
proceedings to which any director,  officer or affiliate of the  Company or
its subsidiary, any owner of record, beneficially, of more than 5
percent  of the common stock of the  Company, or any associate of any such 
director, officer or affiliate of the Company,  or security holder is a 
party adverse  to the Company or its subsidiary or has a material interest
adverse to the Company  or its subsidiary.
 
 
 ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS:
 
 During the fiscal year ended January 31, 1998, the Company solicited the
proxies  of its security holders to vote upon the  following matters at the
annual meeting of shareholders held on June 11, 1997: 
          1. Election of three directors
          2. Ratification of all acts of the officers and directors for the
             fiscal  year ended January 31, 1997    
          3. Ratification and approval of transactions with Austin Young, Inc.
             including  the borrowing of working 
             capital funds, use of assets as collateral and 
             office/equipment leases
          4. Ratification of the appointment of  Orton and Company,  Certified
             Public  Accountants to serve as    
             independent auditors of the Company for the fiscal years ended
January  31, 1998
 
 All matters voted upon by the shareholders at the annual meeting of
shareholders  were approved or passed and a letter
 was sent by the Company to all shareholders stating the results of the voting. 
 
          
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                PART II
 
 
 ITEM 5.  MARKET FOR  COMMON EQUITY AND RELATED STOCKHOLDER MATTERS: 
                 
 The common stock of the Company is traded on the over-the-counter market on
NASDAQ's  Bulletin Board.  There
 currently exists a limited trading market for the common stock; however,
management  of the Company does not believe
 that a highly established market exists for the common stock.  The following
table  sets forth the high and low bid
 quotations for the common stock as reported to the Company by market makers
for  the common stock.  These quotations
 reflect inter-dealer prices, without retail mark-up, mark-down or commission
and  may not necessarily represent actual
 transactions. 
 
 <TABLE>
 <S>       <C>     <C>     <C>    <C>        <C>     <C>
   YEAR    HIGH BID PRICELOW BID     YEAR    HIGH BID PRICE LOW BID
   ENDED            PRICE           ENDED              PRICE
  1-31-97                           1-31-98          
 
                                                     
 
 First Quarter $ 2.37 $ 1.37      First Quarter $ 0.81 $ 0.31
 
 Second Quarter $ 2.37 $ 1.12     Second Quarter $ 0.81 $ 0.44
 
 Third Quarter $ 1.50 $ 0.62      Third Quarter $ 1.37 $ 0.44
 
 Fourth Quarter $ 0.90 $ 0.47     Fourth Quarter $ 1.67 $ 0.56
 </TABLE>
 
 As of January 31, 1998, there were approximately 340 holders of record (not
including  shares held in street names in
 street accounts) of the common stock of the Company as reported to the Company
by  its transfer agent.  Based upon
 requests for proxy materials by various proxy services, the Company estimates
that  it currently has approximately 750
 shareholders.
 
 No cash dividends have been declared or paid as yet on the common stock and
the  Board of Directors of the Company
 has not yet decided on a dividend policy.  Whether dividends will be paid will
be  determined by the Board of Directors
 of the Company and will necessarily depend on the Company's earnings,
financial  condition, capital requirements and
 other factors.  The Board of Directors has no current plans to declare any
dividends  in the foreseeable future.  There are
 no restrictions in effect, in loan documents or elsewhere, that would limit or
restrict  the Company's ability to pay
 dividends. 
 
 At January 31, 1998, the Company had 50,000,000 shares of common ($.001 par
value)  stock authorized and had
 6,210,439 common stock shares outstanding.  At March 31, 1998, 6,766,512
common  stock shares were outstanding.
 
 
 ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS 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.
 
 The Company has realized limited sales in each of its fiscal years ended
January  31, 1992 through January 31, 1998 from
 limited test marketing programs for its products while in the development
stage.   During the development stage the
 Company has developed over a dozen products and test marketed these products
in  various parts of the country.
 
 LIQUIDITY AND CAPITAL RESOURCES
 
 Austin Young, Inc., the major stockholder of the Company, has provided,
through  loans and equity funding, any
 deficiencies to the necessary working capital during the development stage,
but  expects funding from private placements
 and other offerings will be sufficient for future development costs.  Austin
Young,  Inc. provided a small portion ($7,000)
 of the Company's operating capital during fiscal year 1997 through advances on
behalf  of the Company.  The Company
 owed  $202,385 to Austin Young, Inc. at January 31, 1997 and $179,052 at
January  31, 1998.  The balance owing to
 Austin Young, Inc. was reduced by $23,333 in principal and $14,167 in accrued
interest  during the fiscal year ended 
 January 31, 1998 by the exercise of options by Mr. Young.  Revenues to date
have  provided insignificant funding of
 working capital because of the development stage status of the company and the
limited  test marketing programs.
 
 When possible, the Company has issued stock for the acquisition of assets or
services  to reduce the need for additional
 operating capital from the major stockholder, additional shareholders or gross
profits  from its limited marketing efforts. 
 A large part of the Company's zeolite mineral deposits were acquired by stock
issuance  which is expected to play an
 integral part of maintaining a competitive edge by keeping supply costs of the
principle  ingredient of its packaged
 products to a minimum.  During the development stage, the Company has also
relied  on favorable office space and
 equipment leases from Austin Young, Inc. to maintain a lower overhead to
conserve  its limited resources for product and
 market development.
 
 During October 1993, the Company issued 66,667 shares of common stock to a
group  of private investors for $200,000
 in a private offering.  The offering also granted a 90-day option to these
investors  to take additional shares and on
 December 17, 1993, the investors exercised their options in the amount of
80,072  shares for $191,400. During the fiscal
 year ended January 31, 1994, the Company issued 12,000 shares of common stock
to  the major stockholder under an
 option agreement for $36,000.    During the fiscal year ended January 31,
1995,  the Company issued 22,500 shares in
 a private placement for $90,000 and  issued a total of 62,750 shares for
services  rendered to the Company and valued
 at $251,735. These services included consulting services for legal work on
securities  issues and trademark defense
 ($72,500), market development and promotion ($140,000) and geological work on
the  Company's Oregon mining claims
 ($38,500).  During the fiscal year ended January 31, 1996, the Company issued
214,168  shares in a private placement
 for $394,362 and issued 9,000 shares for artwork and packaging design services
rendered  to the Company and valued
 at $22,400.  During the fiscal year ended January 31, 1997, the Company issued
130,960  shares in private placements
 for $156,860 and issued 259,620 shares for services rendered to the Company
and  valued at $262,219.  During the fiscal
 year ended January 31, 1998, the Company issued 582,000 shares in private
placements  for $815,000, 129,784 shares
 for services rendered to the Company and valued at $132,380, 13,555 shares for
equipment  valued at $15,250, 25,000
 shares through the exercise of an option to a director for $9,375 and 100,000
shares  through the exercise of an option
 to an officer and director for $37,500 in debt relief.
 
 The Company has $125,000 in bank debt outstanding.  This bank debt is secured
by  an equivalent amount of  CD's that
 are owned by Austin Young, Inc., the major stockholder of the Company.  Austin
Young,  Inc. does not receive any
 compensation for the use of its CD's as collateral.  The debt includes
interest  only payments to the bank in the
 approximate amount of $900 per month.  This bank debt was incurred to pay off
an  existing mortgage on the Austin,
 Texas warehouse facility.  The Company intends to pay the principal amount of
the  bank debt  from proceeds of a public
 or private stock offering or from profits.  All accounts payable and accrued
expenses  are paid when due or sooner when
 discounts are available.
 
 
 RESULTS OF OPERATIONS
 
 During the fiscal years 1997 and 1998, the Company continued to incur losses
that  reflect the development stage activity
 and test marketing of its products.
 
 The company has paid $8,115, $0.00 and $0.00 for research and development for
the  years 1996, 1997 and 1998,
 respectively.  The Company paid $91,700, $29,500 and $29,500 to the Bureau of
Land  Management for claims
 maintenance fees in the fiscal years ended January 31, 1996, 1997 and 1998,
respectively.   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.
 
 Because the Company is a development stage enterprise, it has incurred losses
in  each of its fiscal years ended January
 31, 1995, 1996 and 1997.  This is due to the Company incurring operating
expenses  during a time when most of the
 efforts were expended in product and market development and other areas not
directly  related to marketing while
 positioning the Company to implement various marketing programs.
 
 In fiscal 1992, the Company began test marketing products that it had
developed  and/or to which it had acquired the
 rights from other companies.  Revenues increased from $11,388 in 1992 to
$43,115  in 1993 due to test marketing of
 existing products in limited market areas.  During the fiscal year ended
January  31, 1994, the Company concentrated
 on attractive packaging of its products, Company capitalization and
distribution  networks, with less emphasis on product
 research as it prepared to implement various marketing programs for its
products.   Sales for the fiscal year indicated no
 growth over the previous year and, in fact, showed a decline in sales to
$20,323.   Sales for the fiscal year ended January
 31, 1995, increased to $69,467, or 242% over the previous year, as the Company
expanded  the test marketing of products
 into more outlets.  During the fiscal year ended January 31, 1996, sales
declined  to $26,070 as the Company's
 management concentrated on the revamping of existing marketing structures in
retail  outlets, the design of a marketing
 program to market agricultural products through feed dealers, the development
of  the conceptual framework for
 marketing the smaller packaged products through a direct sales organization,
the  development of a relationship with an
 import company in France to market products in France and the acquisition of a
milling  facility in Oregon.  During the
 fiscal year ended January 31, 1997 revenues increased to $69,293, or 166% over
the  previous year, as the Company began
 to realize revenues from the agricultural marketing programs in the United
States  and France.  During the fiscal year
 ended January 31, 1998 revenues decreased to $47,472 from $69,293 the previous
year,  or, 31%, due to lower orders
 from the French distributor resulting from milder weather conditions in
France.  
 
 The Company realizes gross profit margins generally ranging from 20% to 35% 
on its  product sales depending on  product line and pricing levels.  While 
still in the test marketing phase, for the  fiscal years ended
January 31, 1996,  January 31, 1997, January 31, 1998 and for the period from 
the inception date on  February 9, 1984 to January 31, 1998,
the Company had average gross profit margins of 35%, 30%, 30% and 35%
respectively.  The gross profit margin for
the fiscal year ended January 31, 1995, was negative primarily due to a
write-off  of obsolete and excess inventory in the
amount of $42,702 and to product promotions that involved free product to new
customers  in introductory offers. Profit
margins should increase and then stabilize once production and marketing costs
become  reasonable with higher
production levels and higher sales volume.  Bringing the Oregon milling
facility  into production should also decrease
costs, thereby allowing the Company to increase gross profit margins or reduce
selling  prices to facilitate increasing
market share on each of the products sold by the Company.  Quantity discounts
on  bag purchases for certain of the
Company's products could result in up to a 15% increase in the gross profit
percent.  At current operating expense levels
and with the anticipated product sales mix, the Company estimates its
break-even  at approximately $125,000 in sales
per month or $1,500,000 in sales per year.
  
 Ownership of its own zeolite deposits should allow the Company to better
control  its cost of sales since zeolite is the
 major raw material used in its products.  The Company also has negotiated
mining  arrangements with a mining company
 to eliminate large capital requirements that would be necessary to acquire
equipment.  Milling, packaging, and inventory
 arrangements have eliminated the need to spend additional money for capital
equipment  during the development stage.
 
 General and administrative expenses have increased steadily since January 31,
1991,  as the Company developed more
 products and added personnel to test market products.  Depreciation and
amortization   expenses since inception have
 remained low because the Company has contracted many of its needs that would
otherwise  require capital expenditures. 
 A significant portion (approximately $251,000) of the Company's January 31,
1995  operating expenses relating to
 consulting services were funded through the issuance of common stock pursuant
to  S-8 Registration Statements. 
 Approximately $22,400 of the operating expenses for the fiscal year ended
January  31, 1996, were funded through S-8
 Registration Statements.  Approximately $262,000 of services were acquired
during  the fiscal year ended January 31,
 1997 and $132,380 of services were acquired for the fiscal year ended January
31,  1998  through the issuance of common
 stock.  Net General and Administrative Expenses increased by approximately
$75,000  during the fiscal year ended
 January 31, 1997, from $393,000 to $468,000.  Of this increase in general and
administrative  expenses, legal and
 accounting expenses increased by $9,700, interest expense by $2,400, rent
expense  by $13,000, repairs and maintenance
 by $1,200, miscellaneous expense by $2,200 and professional services by
$190,000.   Professional services included shares
 of stock that were issued to officers and directors as compensation for their
services.   Decreases to the general and
 administrative accounts include zeolite lease expense ($52,500), printing,
postage  and office expenses ($11,100), travel
 and entertainment ($7,700), advertising ($5,700), business promotion ($2,950),
contract  labor ($4,000), insurance
 ($4,000), salaries and wages ($27,000), property taxes ($700), and payroll
taxes  ($1,200).  Other accounts accounted
 for the remaining difference.  Net general and administrative expenses only
increased  by approximately $29,000 during
 the fiscal year ended January 31, 1998.  The increase was mostly due to
increases  in payroll as Terry L. Young was added
 to the Company's payroll.   
 
 The Company's note payable to its major stockholder increased by approximately
$65,000  during the fiscal year ended
 January 31, 1995, and by another $46,000 during the fiscal year ended January
31,  1996 as the Company borrowed funds
 to help cover overhead expenses and accrued rent expenses owing to Austin
Young,  Inc.  During the fiscal year ended
 January 31, 1997, the note payable to the major stockholder increased by only
$20,000  mostly due to accrued interest
 that was rolled into the note plus approximately $7,000 of advances made to
the  Company.  During the fiscal year ended
 January 31, 1998, the balance of the note decreased to $179,052 due to the
exercise  of options through debt relief in the
 amount of $37,500 consisting of $23,333 in principal and $14,167 in accrued
interest.    The balance of the note is
 expected to be paid from earnings and/or capital resources available to the
 Company.
 
 In August, 1996, the Company paid off a note payable of approximately $125,000
on  the warehouse facility in Austin,
 Texas from the proceeds of a bank loan that was secured by using CD's owned by
the  Company's major stockholder.
 
 The Company has maintained current ratios of 0.77, 0.47 and 1.10,
respectively,  for the fiscal years ended January 31,
 1998, 1997and 1996.  The lower current ratio for the fiscal years ended
January  31, 1998 and 1997, results from the
 classification as short term debt of  the note payable owing to Austin Young,
Inc.,  the major stockholder of the Company. 
 This debt may or may not be paid during the next fiscal year, depending upon
profits  and/or capital resources available
 to the Company.
 
 
 INFLATION 
 
 The Company does not expect inflation to have any material effect on its
revenues,  costs or overall operation.  Since the
 Company owns its own zeolite deposits for the main raw material used in its
products,  inflation would generally give
 the Company a competitive edge over companies that do not own their own
deposits.   The Company expects that any
 increased paper costs for the packaging used in its products can be off-set by
price  increases without losing any
 competitive edges since all other competitors will face the same price
increases.   The Company is using quality, less
 expensive plastic packaging for its Stall Fresh product and may pursue
plastic  packaging for other products as well.
 
 
 PLAN OF OPERATIONS
 
 Management believes that it can continue to fund its operations through
private  placements or funds received from the
 major stockholder until a public stock offering can be completed or revenues
reach  the level (approximately $1,500,000
 per year) at which the gross profits attained will sustain and finance the
operations.   The Company will have to raise a
 more significant amount of equity in order to expand its operations at a more
rapid  rate.
 
 Management has begun a limited marketing campaign, based on available capital,
of  its products in certain market areas
 of the United States and in France.  Several distributors have been signed to
distribute  the products and discussions are
 being held with others and are in different stages of completion which usually
requires  extensive testing and approval
 by each of the wholesale or retail outlets.  The Company continues to sell
some  of its smaller packaged products through
 several of the retail outlets that participated in the test marketing program
for  the products.  In November, 1995, the
 Company began shipping some of its agricultural products to E.N.S.R./S.A.R.L.,
an  import company located in France.
 
 The Company has completed design and packaging for products such as Mother
Earth  Cat Litter and Soil Enhancer,
 White Buffalo, Stall Fresh, Stinky Pinkys and Shoe Fresh as well as eight
other  products.  The Company is also
 working the conceptual framework of various other products using the zeolite
minerals  present in its existing product
 line.  This includes the impregnation of zeolites with pesticides, herbicides
and  fertilizers for use in fields, pastures and
 gardens as well as chemicals to help eradicate fire ants.  The Company is also
planning  the introduction of at least two
 new products during the next fiscal year.
 
 In October, 1995, the Company purchased a production plant containing 103,125
sq.  ft. and approximately 3,500,000
 cu. ft. of production, packaging and storage space  near its zeolite
properties  in Oregon.  The facility is not subject to any
 existing mortgages.  The Company completed a private placement offering in the
early  part of fiscal 1998 that was
 sufficient to equip this facility with crushing, milling, drying, screening,
packaging  and storage equipment.  The
 construction of the milling facility equipment has been completed and the
plant  has begun operating.  The Company has
 purchased additional milling equipment that will at least triple the milling
facility's  capacity when installed.  If the
 Company is successful in completing a public stock offering, the Company
expects  to spend approximately $400,000
 for additional equipment; $55,000 on warehouse facilities in Texas; $600,000
for  market development of its product line
 and marketing programs; $250,000 for inventory;  $50,000 for repairs and
maintenance,  and $650,000 for general and
 administrative, working capital and contingency operations.  
 ITEM 7.  FINANCIAL STATEMENTS:
 
 
 <TABLE>
 <S>     <C>
         
         ORTON & COMPANY
         CERTIFIED PUBLIC ACCOUNTANTSA PROFESSIONAL CORPORATION
         
 </TABLE>
50 West Broadway, Suite 1130, Salt Lake City, Utah 84101 . (801)
                     537-7044, fax. (801) 363-0615
 
                      INDEPENDENT AUDITORS' REPORT
                                    
                                    
 To the Board of Directors and Stockholders
 of American Absorbents Natural Products, Inc
 
 We have audited the accompanying balance sheet of American Absorbents Natural
Products,  Inc. and subsidiary ( a Utah
 corporation) ( a development stage company) as of January 31, 1998 and 1997,
and  the related statements of income,
 retained earnings, and cash flows for the years then ended and for the period 
February  9, 1984 to January 31, 1998. 
 These financial statements are the responsibility of the Company's management.
  Our responsibility is to express an
 opinion on these financial statements based on our audit.
 
 We conducted our audit in accordance with generally accepted auditing
standards.   Those standards require that we plan
 and perform the audit to obtain reasonable assurance about whether the
financial  statements are free of material
 misstatement.  An audit includes examining, on a test basis, evidence
supporting  the amounts and disclosures in the
 financial statements.  An audit also includes assessing the accounting
principles  used and significant estimates made
 by management, as well as evaluating the overall financial statement
presentation.   We believe that our audit provides
 a reasonable basis for our opinion.
 
 In our opinion, the financial statements referred to above present fairly, in
all  material respects, the financial
 position of American Absorbents Natural Products, Inc. as of  January 31, 1998
and  1997, and the results of its
 operations and its cash flows for the years then ended and for the period
February  9, 1984 to January 31, 1998 in
 conformity with generally accepted accounting principles.
 
 
 Orton & Company
 Salt Lake City, Utah
 March 7, 1998
 
 
 
 
 
 
 
 
 
           
 
 
 
 
 
 
 
 
 
 
                                    
               AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
                             AND SUBSIDIARY
                     (A Development Stage Company)
 
                   Consolidated Financial Statements
 
                       January 31, 1998 and 1997
                                    
                                    
           
 
 
 
 
 
 
 
 
 
 INDEPENDENT AUDITOR=S REPORT
 
 
 
 To the Board of Directors and Stockholders
 of American Absorbents Natural Products, Inc
 
 We have audited the accompanying consolidated balance sheet of American
Absorbents  Natural
 Products, Inc. and subsidiary ( a Utah corporation) ( a development stage
company)  as of January 31,
 1998 and 1997, and the related consolidated statements of income, retained
earnings,  and cash flows
 for the years then ended and for the period  February 9, 1984 to January 31,
1998.   These consolidated
 financial statements are the responsibility of the Company=s management.  Our
responsibility  is to
 express an opinion on these financial statements based on our audit.
 
 We conducted our audit in accordance with generally accepted auditing
standards.   Those standards
 require that we plan and perform the audit to obtain reasonable assurance
about  whether the financial
 statements are free of material misstatement.  An audit includes examining, on
a  test basis, evidence
 supporting the amounts and disclosures in the financial statements.  An audit
also  includes assessing
 the accounting principles used and significant estimates made by management,
as  well as evaluating the
 overall financial statement presentation.  We believe that our audit provides
a  reasonable basis for our
 opinion.
 
 In our opinion, the consolidated financial statements referred to above
present  fairly, in all material
 respects, the financial position of American Absorbents Natural Products, Inc.
and  subsidiary as of 
 January 31, 1998 and 1997, and the results of its operations and its cash
flows  for the years then ended
 and for the period February 9, 1984 to January 31, 1998 in conformity with
generally  accepted
 accounting principles.
 
 
 
 
 
 Salt Lake City, Utah
 May 7, 1998
 
               AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
                             AND SUBSIDIARY
                     (A Development Stage Company)
                      Consolidated Balance Sheets
                       January 31, 1998 and 1997
 
                                 ASSETS
                                                    
                                                   <TABLE>
                   <S>                              <C>  <C> <C>
                      January 31,
                                </TABLE>
<TABLE>
          <S>                                       <C>        <C><C>
                                   1998          1997
                                                    
CURRENT ASSETS                                          
 </TABLE>
<TABLE>
      <S>                                       <C>        <C><C>
 Cash                                    $             $         
                                       24,642         1,078
                                                    
Accounts receivable (Note 1)                      972        18,144
                                                    
Prepaid expenses (Note 1)                      89,208        57,208
                                                    
Inventory (Note 1)                            242,406        99,952
                                                    
                                                            
                                                   
Total Current Assets                          357,228       176,382
                                                    
                                                                
                                                    
PROPERTY AND EQUIPMENT (Note 7)               538,151       214,598
                                                    
                                                       
                                                    
OTHER ASSETS                                            
                                                    
Mining claims (Note 8)                    5,081,669     5,081,669
                                                   
Notes receivable (Note 5)                     5,000         5,000
                                                    
Certificates of Deposits (Note 15)        15,000             -
                                          
                                           
                                         
Total Other Assets                          5,101,669     5,086,669
                                            
                                                           
                                                    
                                       $     5,997,048$     5,477,649
 </TABLE>
                                                     
  
            
 
 
 
 
 
 
 
 
 
 
 
                                    
                                    
                              (continued)
The accompanying notes are an integral part of these financial statements
                                    
               AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
                             AND SUBSIDIARY
                     (A Development Stage Company)
                Consolidated Balance Sheets (Continued)
                       January 31, 1998 and 1997
 
                  LIABILITIES AND STOCKHOLDERS' EQUITY
                                                    
                                                    <TABLE>
                  <S>                              <C>  <C> <C>
                           January 31,
                                                    </TABLE>
<TABLE>
    <S>                                       <C>        <C><C>
                                           1998          1997
        
CURRENT LIABILITIES                                     
                                                    </TABLE>
<TABLE>
         <S>                                       <C>        <C><C>
                                                      
                                               
Accounts payable and accrued expenses     $        156,915$        49,119
                                                   
Note payable - related party (Note 9)         179,052       202,385
                                                    
Note payable (Note 10)                        125,000       125,000
                                                    
                                                    
                                                    
Total Current Liabilities                     460,967       376,504
            
                                                  
COMMITMENTS AND CONTINGENCIES (Note 11)                 
                                                            
                                                   
STOCKHOLDERS' EQUITY                                    
                                                    
                                                          
                                                    
Common stock; authorized 50,000,000                  
common shares at $0.001 par value;                            
6,210,439 and 5,360,100 shares issued
and outstanding, respectively                      
                                              6,211         5,361
                                                    
Capital in excess of par value           8,194,427     7,270,816
                                                    
Deficit accumulated during the                       
delopment stage                        (2,664,557)       (2,175,032)
                                                         
                                                    
                                                                
                                                    
Total Stockholders' Equity             5,536,081     5,101,145
                                                   
                                                       
                                                    
                                   $     5,997,048$     5,477,649
 </TABLE>

 
 
 
 
 
 
 
 
 
 
                                    
                                    
                                    
                                    
                                    
                                    
                                    
The accompanying notes are an integral part of these financial statements
                                    
               AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
                             AND SUBSIDIARY
                     (A Development Stage Company)
                 Consolidated Statements of Operations
                                    
 
 <TABLE>
 <S>                            <C><C><C>                 <C><C>
                                          From InceptionOn February  9, 1984
                                                              Through
                                                            January 31,
                                     For the Years Ended    
                                         January 31,        
 </TABLE>
<TABLE>
 <S>                                <C>       <C><C>      <C><C>
                                       1998        1997        1998
 
 REVENUE                                                    
 
                                                            
 
 Net Sales                          $        47,472$        69,293$      287,128
 
 Cost of goods sold                     33,167      48,716      185,857
 
                                                            
 
 Gross Profit                           14,305      20,577      101,271
 
                                                            
 
 EXPENSES                                                   
 
 General and administrative            496,586     467,524    2,685,126
 
 Depreciation and amortization          15,224      17,615       86,235
 
                                                            
 
 Total Expenses                        511,810     485,139    2,771,361
 
                                                            
 </TABLE>
<TABLE>
 <S>                                <C>       <C><C>      <C><C>
 Other Income/ (Expense)                                    
 
     Rent (Note 17)                      7,905           -       7,905
 
     Interest                              175           -         175
 
                                                            
 
 Net loss before provision for       (489,425)   (464,562)  (2,662,010)
 income taxes                                               
 
                                                            
 
 Provision for income taxes (Note 4)       100         100       2,547
 
                                                            
 
 NET LOSS                           $    (489,525)$     (464,662)$  (2,664,557)
 
                                                            
 
 WEIGHTED AVERAGE LOSS PER SHARE     $           $           $        
                                         (.09)       (.09)      (1.29)
 
                                                            
 
 AVERAGE SHARES OUTSTANDING          5,731,102   5,172,860   2,062,475
 </TABLE>

 
 
 
 
 
 
 
 

                                    
                                    
                                    
                                    
The accompanying notes are an integral part of these financial statements
                                    
               AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
                             AND SUBSIDIARY
                     (A Development Stage Company)
            Consolidated Statements of Stockholders' Equity
                              From Inception on February 9, 1984 to January
                                31, 1998
                                    Deficit
Accumulated
                                    Additional        
During the
          Common Stock                      Paid-in         
Development
       Shares             Amount            Capital               
Stage                                                
<TABLE>
<S>                                     <C>      <C><C>   <C><C>   <C><C>
                                                                     

Balance at Inception-February 9, 1984       -      $  -        $  -       $  -
                                                                     
                                                                     

                                                                     

Issuance of common stock for cash          37,500       38      962      -
(Note 3)                                                             

                                                                     
</TABLE>
<TABLE>
<S>                                     <C>      <C><C>   <C><C>   <C><C>
Expenses paid by shareholders for the                                
years ended January 31, 1990                -        -          518      -
</TABLE>
<TABLE>
<S>                                     <C>      <C><C>   <C><C>   <C><C>
                                                                     

Net loss for the years ended January        -        -        -        (1,618)
31, 1990                                                             

                                                                     

Balance, January 31, 1990                  37,500       38    1,480    (1,618)

                                                                     

Issuance of common stock for services     391,000      391    7,429      -
rendered in August 1990                                              

                                                                     

Issuance of common stock in September                                
1990 for various                           50,000       50  198,890          -
assets from Austin-Young, Inc. (Note 5)                              

                                                                     

Issuance of common stock for                                         
distribution licenses from Global                                             
Environmental  Industries (GEI) for UT     50,000       50   37,070          -
& WA, September                                                      
1990 (Note 3)                                                        

                                                                     

Contribution from Austin-Young, Inc.        -        -       13,500      -

                                                                     

Issuance of common stock for services      12,500       12   37,488      -
rendered in October                                                  
1990                                                                 

                                                                     

Net loss for the year ended January         -        -        -       (57,756)
31, 1991                                                             

                                                                     

Balance, January 31, 1991                 541,000        541 295,857  (59,374)

                                                                     

Common stock returned in exchange for                                
common stock of GEI in March 1991        (17,000)     (17) (85,423)          -
(Note 5)                                                             

                                                                     

Repurchase of common stock from                                      
Austin-Young, Inc. in                   (338,000)    (338) (64,682)          -
May 1991 (Note 5)                                                    

                                                                     

Cancellation of common shares            (20,000)     (20)       20      -

                                                                     

Issuance of common stock for the                                     
purchase of product from                   10,000       10   74,990          -
Steelhead Specialty Minerals in August                               
1991 (Note 6)                                                        
 </TABLE>

 
       The accompanying notes are an integral part of these financial statements
 
               AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
                             AND SUBSIDIARY
                     (A Development Stage Company)
      Consolidated Statements of Stockholders' Equity (Continued)
         From Inception on February 9, 1984 to January 31, 1998
                                    
                   Deficit
    Accumulated
                                        Additional    
During the
                                    Common Stock               Paid-in     
Development
       Shares                              Amount          Capital            
Stage                                 
<TABLE>
<S>                                      <C>     <C><C>  <C><C>    <C><C>
Issuance of common stock for the                                    
purchase of mining claims in              13,214       13   184,987         -
October 1991 (Note 8)                                               

                                                                    

Common stock canceled by                 (20,000)    (20)        20     -
officers/directors in January 1992                                  

                                                                    
</TABLE>
<TABLE>
<S>                                      <C>     <C><C>  <C><C>    <C><C>
Contribution from Austin-Young, Inc.        -        -       17,000     -
</TABLE>
<TABLE>
<S>                                      <C>     <C><C>  <C><C>    <C><C>
                                                                    

Net loss for the year ended January 31, 1992   -     -        -      (93,315)

                                                                    

Balance, January 31, 1992                 169,214      169  422,769 (152,689)

                                                                    

Issuance of common stock for the                                    
acquisition of Geo-                       701,800     702    96,442     -
Environment Services, Inc. in February                              
1992 (Note 5)                                                       

                                                                    

Issuance of common stock for the                                    
purchase of mining claims                 243,000     243  4,859,757    -
in March 1992 (Note 5)                                              

                                                                    

Common stock canceled by officers and                               
directors in June 1992                   (32,430)    (32)        32     -
(Note 6)                                                            

                                                                    

Cancellation of fractional shares due        (21)    -        -         -
to reverse stock split                                              

                                                                    

Contribution by Austin-Young, Inc.          -        -       10,000     -

                                                                    

Issuance of common stock (pursuant to a                             
repurchase agreement                                                         
in May, 1991) to Austin-Young, Inc. for  3,380,000  3,380    61,620         -
relief of debt in July                                              
1992 (Note 5)                                                       

                                                                    

Net loss for the year ended January 31, 1993   -     -        -     (136,304)

                                                                    

Balance, January 31, 1993                4,461,563  4,462  5,450,620(288,993)

                                                                    

Issuance of common stock for services                               
rendered in June 1993                      17,800      18    26,682     -
(Note 6)                                                            

                                                                    

Issuance of common stock to                                         
Austin-Young, Inc. in June 1993            12,000      12    35,988     -
(Note 5)                                                            

                                                                    

Issuance of common stock for cash          66,667      67   199,936     -
October 1993 (Note 11)                                              
</TABLE>



The accompanying notes are an integral part of these financial statements

AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Continued)
From Inception on February 9, 1984 to January 31, 1998
                
                      Deficit
                                                                    Accumulated
                                      Additional      
During the
           Common Stock                  Paid-in         
Development
       Shares                           Amount       Capital        
Stage                               
<TABLE>
<S>                                    <C>     <C><C>   <C><C>    <C><C>
Issuance of common stock as down                                    
payment on building                       6,000        6    29,994     -
October 1993 (Note 5)                                               

                                                                    

Issuance of common stock for services                               
rendered October 1993                    17,000       17    50,983     -
 (Note 6)                                                           

                                                                    
</TABLE>
<TABLE>
<S>                                    <C>     <C><C>   <C><C>    <C><C>
Issuance of common stock for cash        80,072       80   191,321     -
December 1993 (Note 11)                                             
</TABLE>
<TABLE>
<S>                                    <C>     <C><C>   <C><C>    <C><C>
                                                                    

Contribution by Austin-Young, Inc.        -         -       36,000     -

                                                                    

Net loss for the year ended January       -         -        -      (310,862)
31, 1994                                                            

                                                                    

Balance, January 31, 1994              4,661,102   4,662   6,021,524   (599,855)

                                                                    

Issuance of common stock for services                               
rendered February                         6,000        6    29,994     -
1994                                                                
(Note 6)                                                            

                                                                    

Issuance of common stock for services                               
Rendered in June 1994 (Note 6)           41,750       42   175,458     -

                                                                    

Issuance of common stock in a private offering  22,500     22  89,978   -

                                                                    

Issuance of common stock for services                               
rendered in November                     15,000       15    46,235     -
1994 (Note 6)                                                       

                                                                    

Contribution by Austin-Young, Inc.        -         -       36,000     -

                                                                    

Net loss for the year ended January       -         -        -      (709,048)
31, 1995                                                            

                                                                    

Balance, January 31, 1995              4,746,352   4,747   6,399,189(1,308,903)

                                                                    

Issuance of common stock for services     9,000        9    22,391     -
(Note 6)                                                            

                                                                    

Issuance of common stock in a private   214,168      214   394,148     -
offering (Note 11)                                                  

                                                                    

Contribution by Austin-Young, Inc.        -         -       36,000     -

                                                                    

Net loss for the year ended January       -         -        -      (401,467)
31, 1996                                                            

                                                                    

Balance at January 31, 1996            4,969,520   4,970   6,851,728(1,710,370)
</TABLE>


The accompanying notes are an integral part of these financial statements

AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Continued)
From Inception on February 9, 1984 to January 31, 1998
 
                       Deficit
   Accumulated
                                      Additional       
During the
          Common Stock                        Paid-in          
Development
       Shares                          Amount       Capital          
Stage                               
<TABLE>
<S>                                 <C>       <C><C>   <C><C>    <C><C>
Issuance of common stock for cash                                  
in a private offering                  130,960      131   156,729      -
(Note 11)                                                          

                                                                   

Issuance of common stock for           259,620      260   262,359      -
services (Note 5 & 6)                                              

                                                                   
</TABLE>
<TABLE>
<S>                                 <C>       <C><C>   <C><C>    <C><C>
Net loss for the year ended             -          -        -       (464,662)
January 31, 1997                                                   
</TABLE>
<TABLE>
<S>                                 <C>       <C><C>   <C><C>    <C><C>
                                                                   

Balance, January 31, 1997            5,360,100     5,3617,270,816  (2,175,032)

                                                                   

Issuance of common stock for cash                                  
in a private offering                  582,000    582     729,843      -
   (Note 11) (net of commissions                                   
of $84,575)                                                        

                                                                   

Issuance of common stock for           129,784      130   131,782      -
services (Note 6)                                                  

                                                                   

Issuance of common stock for                                       
purchase of equipment                   13,555       13    15,236      -
   (Note 6)                                                        

                                                                   

Issuance of common stock for cash                                  
pursuant to a stock                   25,000         25     9,350      -
    option plan (Note 16)                                          

                                                                   

Issuance of common stock for                                       
partial redemption of a              100,000      100      37,400      -
   note pursuant to a stock option                                 
plan (Note 16)                                                     

                                                                   

Net loss for the year ended             -          -        -       (489,525)
January 31, 1998                                                   

                                                                   

Balance, January 31, 1998            6,210,439  $  6,211$8,194,427 $(2,664,557)
</TABLE>

   












The accompanying notes are an integral part of these financial statements


AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Cash Flows
<TABLE>
<S>                         <C><C><C>                 <C><C>
                                 From Inception    On 
                                      February 9,
                 For the Years Ended     1984 ThroughJanuary 31,
                                     January 31,         
                                                         
</TABLE>
<TABLE>
<S>                            <C>       <C><C>        <C><C>
                                  1998         1997          1998

Cash Flows From Operating
ActivitiesNet loss             
Depreciation and 
amortization        $(489,525)    15,224 $ (464,662) 17,615 $(2,664,557) 86,235
(Increase) decrease
in receivablesDecrease
(increase) in        17,172       (10,002)   (972)
prepaid expenses                 (32,000)  (21,550)      (77,208)
Decrease (increase)
in inventoryIncrease
(decrease) in payablesLoss
from disposal of fixed
assetStock issued for
services                        (142,454)    9,146     (169,231)
Expenses paid by shareholder      121,963    36,059     170,092
                                        -  1,560         1,560
                                  131,912  262,619       791,701
                                        -  -             149,018
                                                         
                                                         

                                                         

                                                         

Net Cash Used by Operating Activities (377,708)   (169,215) (1,713,362)

                                                         

Cash Flows From Investing ActivitiesPurchase of fixed assets
Purchase of product tradenames (323,528)              -     (550,643)
Purchase of note receivable        -                  -      (26,958)
Purchase of certificates of depositOrganization costs    -     (5,000) (5,000)
Purchase/sale of mining         (15,000)              -       (1,524)
development costs                  -                  -      (15,000)
Purchase of mining claims          -                  -         7,920
Sale of licenses                   -                  -      (58,599)
Purchase of stock                  -                  -       150,000
                                   -                  -      (65,000)
                                   -                     

                                                         

Net Cash Used by Investing Activities (338,528)     (5,000)   (564,804)

                                                         

Cash Flows From Financing ActivitiesIssuance of common stock
Issuance of notes payable         739,800       156,860     1,910,423
Principal payments on                   -       144,846       647,210
long-term debt                          -     (127,520)     (254,825)
                                                         

                                                         

Net Cash Provided by              739,800       174,186     2,302,808
Financing Activities                                     

                                                         

Net (Decrease) Increase In Cash    23,564          (29)        24,642
</TABLE>
<TABLE>
<S>                            <C>       <C><C>        <C><C>
                                                         

Cash at Beginning of Period         1,078         1,107       -

                                                         

Cash at End of Period          $        24,642$          1,078$          24,642
</TABLE>



The accompanying notes are an integral part of these financial statements

AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Cash Flows (Continued)
<TABLE>
<S>                            <C><C><C>                <C><C>
                                                          From Inception    On 
                                                          February 9,
                              For the Years Ended    1984 ThroughJanuary 31,
                                       January 31,        
                                                          
</TABLE>
<TABLE>
<S>                                <C>       <C><C>     <C><C>
                                      1998       1997         1998

Supplemental cash flow information:                       

                                                          

Cash Paid For:                                            
Interest                            $           $          $          
Income Taxes                            8,974     18,834        25,359
                                          100        100         2,447
                                                          

                                                          

                                                          

Non-Cash Transactions:                                    
Stock issued for mining claims       $   5,045,000      30,000
Stock issued for down payment on
buildingStock issued for services                         791,701
Stock issued for stock of Geo-Environment
 Services, Inc.                                         -        -            
Stock issued for Inventory       131,912       262,619               97,144
Stock issued for assets from                -          -        75,000
Austin-Young, Inc. and                      -          -              
Global Environmental Industries                                236,060
   Stock issued for purchase of equipment
   Stock issued for partial          -        -      15,249
redemption of note                       15,249      37,500        -      37,500
                                                       -  
                                                          
                                                          
</TABLE>























The accompanying notes are an integral part of these financial statements

AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
AND SUBSIDIARY
(A Development Stage Company)
Notes to the Consolidated Financial Statements
January 31, 1998 and 1997

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 tooperating on compressed natural gas.  That 
developing business was sold on April 23, 1991(see Note 3).
 
    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 whichis 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 wasaccounted 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 recognized income and expenses according to the accrual
method ofaccounting.         
        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 currently outstanding
were not used in calculating earnings per share since the effect would be
antidilutive.  The fiscal year of the Company ends 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.  
These transactions are recorded at fair market value as determined by the
board of directors.
                                    
                                    
                                    
               AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
                             AND SUBSIDIARY
                     (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                       January 31, 1998 and 1997
 
 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
        Inventories
        Inventories are stated at the lower of cost (FIFO method) or market, and
consist         of the following:
        
        <TABLE>
        <S>             <C>       <C>
        Finished Goods            $        18,415
        
        Packaging Products            70,658
        
        Raw Materials                153,333
        
                                     $      
                                     242,406
        </TABLE>

        Accounts Receivable
        Accounts receivable are shown net of the allowance for doubtful 
accounts. This amount was determined to be $0 and $0 at January 31, 1998 
and 1997. 
 
        Prepaid Expenses
        Prepaid expenses at January 31, 1998 and 1997 consist of the following:
 
 <TABLE>
 <S>                                  <C>      <C><C>
                                        1998       1997
 
 Prepaid mining land lease               $       $     17,208
                                        17,208   
 
 Prepaid fees and commissions            52,000    40,000
 
 Prepaid Purchases                       20,000     -
 
                                      $     89,208$     57,208
 </TABLE>
 
  Mining Claims
 Mining claims are stated at the lower of cost or market, whichever is lower.
 
 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 offto operations over  the expected economic life of
the claims.
 
        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
he policy of the Company to annually review the future economic benefit of all 
long- lived assets and to charge off to operationsany 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 ofthe balance sheet date. 
        Operations have been devoted to raising capital, purchasing zeolite 
property and  establishing a marketing plan.  The Company is currently
installing a plant in Oregon and expects to begin full 
operation during 1998.
 
  
               AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
                             AND SUBSIDIARY
                     (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                       January 31, 1998 and 1997
 
 NOTE 3 - COMMON STOCK AND STOCKHOLDERS'  EQUITY
 
        During the periods shown, the Company had a one-for-two reverse stock 
split and  a one-for-ten reverse stock split.  The financial statements have 
been retroactively restated to reflect the stock splits.
 
        Stock of the Company has been issued for cash, license agreements, 
mining claims, compensation  for services, and in exchange for other stock.
 
        On February 10, 1984, the Company issued 37,500 shares of its stock to
TPI, Inc.  for $1,000 cash. 
        On June 30, 1984, TPI, Inc. distributed the 37,500 shares to its 
stockholders in a partial liquidating dividend.
 
        In August and September 1990, control of the Company was acquired by
Austin-Young, Inc. and shares of stock were issued to Austin-Young, Inc. and to 
some of its officers and  directors (see Note  5).
 
        In September 1990, the Company acquired four license agreements to 
distribute the products of Natural Gas Resources, Inc., (NGRI) a wholly-owned 
subsidiary of Global Environmental Industries, Inc.  NGRI was engaged in 
the business of licensing the operations of compressed naturalgas 
conversion centers and natural gas refueling stations.  NGRI had certain
patented products used in the conversion of vehicles from gasoline and diesel 
to the use of natural gas.  Under these license agreements, the Company 
acquired the right to distribute the products of NGRI in  San Antonio,
Texas (metropolitan area); Burnet County, Texas; state of Utah; and the state
of Washington.  On April 23, 1991, the Company sold the license agreements
along with stock of Global EnvironmentalIndustries, Inc. and Natural Gas
Industries, Inc. for $150,000.  All assets were sold at book value
and no gain or loss was recognized on the sale.
 
        In August of 1991 the Company issued 10,000 shares of stock at 
$7.50 per share forthe rights to two zeolite products of Steelhead Specialty 
Mineral, Inc. (see Note 9).
 
        In October 1991 the Company issued 13,214 shares of stock at $14 per 
share for ining  claims in  Harney County, Oregon and in March 1992, issued 
243,000 shares at $20 per share for additional zeolite mining claims in the
same area (see Note 8).
 
 In February 1992 the Company issued 701,800 shares at $0.14 per share for all
the  outstanding stock of American Absorbents, Inc. (AAI) which became a wholly 
owned subsidiary. AAI had, prior to being acquired, purchased zeolite mining 
claims in Mohave County, Arizona (see Note 5).
 
 NOTE 4 - INCOME TAXES
 
        The Company adopted Statement of Financial Accounting Standards No. 109
"Accounting  for Income Taxes" in the fiscal year ended January 31, 1996 and
has applied the provisions  of the statement on a retroactive basis to the 
previous fiscal year which resulted in no  significant        adjustment.
 
            
                     AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
                             AND SUBSIDIARY
                     (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                       January 31, 1998 and 1997
 
 NOTE 4 - INCOME TAXES (continued)
        
  Statement of Financial Accounting Standards No. 109 "Accounting for Income
Taxes"requires an asset and liability approach for financial accounting and 
reporting for income tax  purposes.  This  statement recognizes (a) the 
amount of taxes payable or refundable for the current  year and (b) deferred
tax liabilities and assets for future tax consequences of events that have
been recognized in the financial statements or tax returns.
 
Deferred income taxes result from temporary differences in the recognition of
accounting  transactions for tax and financial reporting purposes.  There were
no temporary differences at January 31, 1998 and earlier years, and
accordingly, no deferred tax liabilities have been recognized  for all years.
 
The Company had cumulative net operating loss carryforwards of approximately
$1,300,000   atJanuary 31, 1998 and $820,000 at January 31, 1997.
No effect has been shown in  the financial statements for the net
operating loss carryforwards as the likelihood of future  tax benefit 
from such net operating loss carryforwards is not presently determinable. 
Accordingly,the  potential tax benefits of the net operating loss
carryforwards, estimated based upon current tax   rates of $440,000
at January 31, 1998 and $278,000 at January 31, 1997 have been offset by
valuation  reserves of the same amount.  The net change in deferred tax asset 
and offsetting valuation reserve   amounted to $162,000 for 1998 and
$156,000 for 1997.
        
        The net operating losses begin to expire in the year 2016.
 
 NOTE 5 - RELATED PARTY TRANSACTIONS
 
        The majority of the outstanding shares of the Company are owned by
Austin-Young,Inc., a Utah
corporation that has its primary office in Austin, Texas.  Some individuals
are officers and directors
in both Austin-Young, Inc. and the Company.  During the periods shown, there
were  several transactions involving the majority shareholder and the Company's
officers and directors,  as  follows:
        
        August 10, 1990 - Common investment shares of 250,000
        were issued to Austin-Young,Inc. and 1,000 shares were 
        issued to two officers and directors of the Company for services
        rendered.
 
        August 13, 1990 - Common investment shares of 100,000 were 
        issued to Terry Young, president of the Company, for serving as
        president.  Such shares were subsequently sold to Austin-
        Young, Inc.
 
        August 13, 1990 - Common investment shares of 5,000 were issued to 
        Susan Young for bookkeeping services.  Susan Young was the wife of
        Terry Young at the time of issuance.
        
 
               AMERICAN ABSORBENT NATURAL PRODUCTS, INC.
                             AND SUBSIDIARY
                     (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                       January 31, 1998 and 1997
 
 NOTE 5 - RELATED PARTY TRANSACTIONS (Continued)
        
        August 17, 1990 - An option was given to Austin-Young, Inc. to purchase 
an additional 2,000,000 shares (pre-split)(100,000 shares post-split) of stock
at the price of one centper share.  Also, an option plan was approved which
provides that the board of directors is authorized to issue up to 1,000,000
shares (pre-split) (50,000 shares post-split) to current and future
employees at a price of one cent per share.  None of these options were
exercised.  These options were later rescinded by the  board of directors
in July 1993.
 
        August 17, 1990 - Common investment shares of 12,500 were issued to
an officer and director for services.
 
        September 3, 1990 - 50,000 shares were issued at $3.98 per share to
Austin-Young,Inc. in exchange for distributorship license agreements, stock 
in Global Environmental Industries, Inc. and Natural Gas Industries, Inc., 
and cash.  The assets acquired in the transaction were recorded at
historical cost.  The Company subsequently transferred 178,000 shares of Global 
stock back to the original transferor in exchange for 17,000 shares of Company 
stock.  The remaining 200,000 shares of Global stock were sold as part of the 
transaction which occurred on April 23,1991 (see Note 3).
 
        May 13,1991 - 3,380,000 shares of common stock were purchased for 
$65,000 cash from  Austin- Young, Inc. and canceled.  The Company agreed that 
Austin-Young, Inc. had the right to repurchase these shares for the same price 
at any time up to June 1, 1993 (see July, 1992 comment below).
 
        February 1992 - the Company issued 701,800 shares of common stock at
$0.14 per shareto the shareholders of Geo Environment Services, Inc., (now AAI) 
for their stock. Officers  of the corporation were major shareholders of AAI.
 
        July 1992 - 3,380,000 shares of common stock were issued at $0.02 per
share to Austin-Young, Inc. for debt relief of $65,000.
 
        February 1, 1993 - the Company issued to Austin-Young, Inc. an option to
purchase up to 1,000,000 shares of common stock at a price of $3 per share.  
This option expires on February 1, 1998, and  there have been 12,000 shares
exercised to date at a price of $36,000.  These options were cancelledin 1997.
 
        July 27, 1993 - the Company issued an option to the employees, officers
and directors to purchase up to a maximum of 250,000 shares of common stock
at a price of $3 per share. This option was canceled on June 5, 1995.
        
        October 8, 1993 - 6,000 shares of stock were issued at $5 per share to 
Susan Young as down  payment on the purchase of a building.
 
        During 1994, Austin-Young, Inc. issued several promissory notes to the 
Company to cover cash shortages.  Total promissory notes issued was $61,424. 
(See Note 10)
 
 
               AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
                             AND SUBSIDIARY
                     (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                       January 31, 1998 and 1997
 
 NOTE 5 - RELATED PARTY TRANSACTIONS (Continued)
 
        In June 1995, the Company adopted a 1995 stock option plan for the 
employees,officers  and directors to purchase up to 1,000,000 shares of
common stock at market price. 

The options expirein seven years from the date of offer. The Company is
leasing its office space from a related party pursuant to a 60 month lease
agreement dated July 30, 1996 on a month to month basis at $1,900 per month.
 
        During 1996, Austin-Young, Inc. issued $38,000 in promissory notes to 
cover cash shortages. $5,000 was paid back during the year.
 
        For the years 1990 to 1996, The Company's major stockholder, 
Austin-Young, Inc. provided compensation to one of the Company's officers and 
directors while working on projects related to Company business.  The 
compensation is shown as an expense to the Company and capital
contribution.
 
        For 1997, the Company issued 128,869 shares of common stock in lieu of 
cash to its officers and directors for services performed.  The stock was 
valued at $128,869, or $1 per share, the trading value of the stock at the 
time of issuance.
 
        In 1997, the Company was required to pay a balloon payment due on its
warehouse in September, 1996.  Instead of finding long term funding through
a mortgage company, Austin-Young, Inc., the majority shareholder provided
$125,000 in certificates of deposit for collateral on a one year note
of $125,000 provided by a local bank to pay the balloon payment.  The note was
due in September,1997 (See Note 10), but has been extended to 1998.
 
        In 1997, the Company issued 16,751 shares of stock to Austin-Young, Inc.
for rent for the use of office space.  Total rent for fiscal year 1997 was
$13,000.  The office space is rented pursuant to a 60 month lease agreement.  
In 1998, the Company paid cash for use of office space. Total rent paid in
1998 was $22,800.
 
        In 1997, the Company contracted with American Crisis Publishing
(a wholly owned  subsidiary of Austin-Young, Inc.) to provided $40,000 (40,000 
shares of common stock) of future "mail out" services for company literature 
and future advertising promotions.  American Crisis Publishing specializes 
in "the creation and preparation of booklets and mailouts for the
dissemination  of information to the public." The services have not yet been 
performed and is classified as a prepaid expense at January 31, 1998.
 
        In 1997, the Company purchased for $5,000 from Austin-Young, Inc. 
a $20,000 note   receivable from a former officer and director for the purchase
of common stock.  The note was discounted due to the poor probability of
collection.  The Company intends to make a demand for payment on the note 
or cancel the shares that were issued under the note.  In 1998, the
Company filed suit to cancel the shares.
  
        In January, 1997, the Board of Directors approved a compensation 
package for David Redding, President, at $7,000 per month, $3,500 cash and
$3,500 in stock until the Company could compensate entirely with cash.  In 
1998, the cash compensation increased to $5,000  per month withan equal
reduction in stock compensation.
        
               AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
                             AND SUBSIDIARY
                     (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                       January 31, 1998 and 1997
 
 NOTE 5 - RELATED PARTY TRANSACTIONS (Continued)
 
  In future years, when the Company operations become more fully developed, the
 compensation  will increase in proportion to the time and expertise given by 
the officer/director  and will be paid directly from company funds.
 
 NOTE 6 - NONMONETARY TRANSACTIONS
 
      Nonmonetary transactions consist of the transactions detailed in Note 5 
above and the transfer of  common investment shares to individuals and 
corporations for services and distributorship  license  agreements, as follows:
 
  September 24, 1990 - 50,000 shares of common stock were issued at $0.74 per
share to two corporations for distributorship license agreements.
 
  October 25, 1990 - 12,500 shares of common stock were issued at $3 per share
to  individuals for  services.
 
  August 1991 - 10,000 shares of stock were issued at $7.50 per share for
trademarks  and patents  for two zeolite products.
 
   October 1991 - 13,214 shares of stock were issued at $14 per share for 
zeolite mining  claims (see  Note 8).
 
   January, 1992 - 20,000 shares of common stock were returned to the treasury
and canceled. 
 
  February 1992 - 701,800 shares were issued at $0.14 per share for 100% of the
shares  of Geo-Environment Services, Inc. (see Note 5).
 
  March 1992 - 243,000 shares were issued at $20 per share for zeolite mining
claims  (see Note 8).
   June 1992 - 32,430 shares were canceled by officers and directors.
   June 1993 - 17,800 shares were issued at $1.50 per share for services
   performed.
        
   October 1993 - 6,000 shares were issued at $5 per share for down payment on
plant  facility.
 
  October 1993 - 17,000 shares were issued at $3 per share for advisory
services.
  
  February 1994 - 6,000 shares were issued at $5 per shares for legal services.
  
  June 1994 - 25,750 shares were issued at $4 per shares for services rendered.
        
  June 1994 - 11,000 shares were issued at $5 per share for services rendered.
  June 1994 - 5,000 shares were issued at $3.50 per share for services rendered.
        
               AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
                             AND SUBSIDIARY
                     (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                       January 31, 1998 and 1997
 
 NOTE 6 - NONMONETARY TRANSACTIONS (Continued)
 
  November 1994 - 10,000 shares were issued at $3.50 per share for services
rendered.  
  November 1994 - 5,000 shares were issued at $2.25 per share for services
rendered.
     
  During 1995 - 9,000 shares were issued at an average price of $2.49 per share
for services rendered.
 
  During 1997, 259,620 shares (185,620 related party) were issued at an average
price of $1.01 per share for various services rendered.
 
  In 1998, 129,784 shares (82,449 related party) were issued at an average price
of$1.02 per share for services rendered.
        
  In 1998, 13,555 shares were issued at an average price of $1.125 for the
purchase of equipment.
        
        All nonmonetary transactions, with related parties and non related 
parties, transacted with stock of the Company were measured either at the
estimated fair value of the stock being issued (stock market quotations) or 
fair value of goods or services being rendered, whichever was more readily
measurable.
 
 NOTE 7 - PROPERTY AND EQUIPMENT
 
        Property and equipment consists of the following:
        <TABLE>
        <S>                         <C>
                                          January 31,
        </TABLE>
<TABLE>
        <S>                         <C>         <C><C>
                                        1998         1997
        
        Plant                       $          279,327$      244,978
        
        Machinery and equipment          263,510      10,582
        
        Mining site improvements          51,500      -
        
        Accumulated depreciation              (56,186)  (40,962)
        
                                    $          538,151$      214,598
        </TABLE>
        
Machinery and equipment is depreciated on the straight-line method over the
estimated  useful lives of five to seven years.  Plant is being depreciated
over the estimated useful life  of 20 years. 
Depreciation expense is $15,224 and $14,365 for the years January 31, 1998 and
1997respectively. 
        
In the past, the Company had agreements with various vendors to do the mining
and milling of its  zeolite mineral and products; this has resulted in minimal 
investment in machinery  and equipment. 
        During 1997-1998, the Company has began construction of a new milling 
and packaging plant inBurns, Oregon.  The plant will be operational during 
1998.
 
        In October, 1995, the Company purchased from a defunct logging 
operation, a 103,125 square foot building containing approximately 3,500,000 
cubic feet of milling, packaging and inventory storage space for a cash
price of $65,000.  The building is to be used to house the Company's 
zeolite milling operations in Oregon. 
        
               AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
                             AND SUBSIDIARY
                     (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                       January 31, 1998 and 1997
 
 NOTE 7 - PROPERT AND EQUIPMENT (Continued)
 
        The Company has completed approximately $34,000 worth of repairs that 
needed to be made to the building and has installed approximately $250,000 of 
mining and milling equipment.
 
 NOTE 8 - 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 an 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.
 
         To date no depletion has been taken on any of these claims.  Depletion
of these assets will begin once material mining operations on these claims 
begins.
 
 NOTE   9 - RELATED PARTY NOTES PAYABLE
 
 The notes payable-related party consist of advances from Austin-Young, Inc.,
a major  shareholder of the Company.  The balances are as follows:
          
 <TABLE>
 <S>                           <C>
                                   January31,
 </TABLE>
<TABLE>
 <S>                           <C>      <C><C>
                                 1998      1997
 
 Notes payable -                         
 Austin-young, bearing                   
 
 interest at 7% and payable              
 on demand.                              
 
 Unsecured.                    $    179,052$   202,385
 </TABLE>
                                                      
AMERICAN A          BSORBENTS NATURAL PRODUCTS, INC.
                             AND SUBSIDIARY
                     (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                       January 31, 1998 and 1997
 
 NOTE 10- NOTES PAYABLE
 
        Notes payable consist of the following:
 
 <TABLE>
 <S>                          <C><C>
                                    January 31,
 </TABLE>
<TABLE>
 <S>                          <C><C>     <C><C>
                                  1998       1997
 
   Note payable to a bank,                 
 bearing interest                          
 
   at 8.5%, due August,                    
 1998. Secured                             
 
   by $125,000 CD's (see         $    125,000$  125,000
 Note 5)                                   
 
                                           
 
 Total interest expense for                
 1998 was $23,141.                         
 </TABLE>

 NOTE 11 - PRIVATE PLACEMENT OF COMMON STOCK
 
During October 1993, the Company issued 66,667 shares of restricted common
stock in a private  placement.  The shares sold for $3 per share and carried 
an option to purchase additional  shares within 120 days.
 
         During December 1993, the Company issued 38,170 and 41,902 shares of
restricted  common stock in a private placement at $3 and $1.84 per share, 
respectively.  The shares issued  were under an option agreement as part of
the private placement that occurred during October 1993.
         
       On July 5, 1994, 22,500 shares of common stock were issued at $4 per 
share in Regulation D  private stock offering.
         
         In 1996, the Company issued 214,168 shares of common stock in a 
Regulation D private placement for total consideration of $394,362.
         
         In 1997, the Company issued 130,960 shares of common stock in a 
Regulation D private placement for total consideration of $156,860.
 
         In 1998, the Company issued 582,000 shares at an average price of
$1.40 in three separate private placements.  One private placement was with a
foreign customer that purchased 80,000 shares for $100,000.
         
         The first private placement was sold in blocks of 4,000 shares 
(minimum investment) at $1.25 per share with a royalty that pays from the gross
tonage of production from the zeolite  claims in Oregon, once under production.
The royalty pays $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 second private placement was sold in blocks of 4,000 shares
(minimum investment) at $2.50per share with a similar royalty that pays $2.00 
per ton per minimum investment.  Total royalties paid per minimum investment 
will be $20,000 (10,000 tons).
         
         The Company sold 432,000 shares under the first private placement 
($540,000) and 70,000 shares under the second private placement ($175,000).  
The second private placement is  ongoing while the first private placement has 
been closed. 
         
               AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
                             AND SUBSIDIARY
                     (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                       January 31, 1998 and 1997
 
   The royalty will be paid simultaneously ($5.00 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
filings with the Securities and Exchange Commission and determined
the total tonnage that has been mined, milled and sold during the reporting 
quarter.
 
 NOTE 12 - ECONOMIC DEPENDENCY
 
         During the current fiscal year, the Company has developed an overseas
customer that provided 31% of the years sales volume.  Two other customers
had 11%  each of sales volume.
 
 NOTE  13 - USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
 
         The preparation of financial statements in conformity with generally
accepted accounting principlesrequires 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 14 - FAIR VALUES OF FINANCIAL INSTRUMENTS
 
         The following listing of the estimated fair value of financial 
instruments is madein accordance withthe requirements of SFAS No. 107, 
"Disclosure About Fair Value of Financial Instruments".  
The  carrying amounts and fair value of the Company's financial instruments at
January 31, 1998 and 1997 are as follows:
         
         <TABLE>
         <S>                  <C>
           January 31, 1998   January 31, 1997
         </TABLE>

         <TABLE>
         <S>               <C><C>   <C><C>   <C><C>    <C><C>
                         Carrying Amounts Fair Carrying Amounts Fair
                                   Values              Values
         </TABLE>
<TABLE>
         <S>               <C><C>   <C><C>   <C><C>    <C><C>
                                                          
         
         Cash and Cash Equivalents$  24,642$ 24,642$   1,107$  1,107
         
         Notes Payable IncludingCurrent Maturities        
                             304,052  304,052   327,385   327,385
         
                                                          
         </TABLE>
The following methods and assumptions were used by the Company in
estimating its fair value disclosures for financial instruments:
         
  Cash and Cash Equivalents
   The carrying amounts reported on the balance sheet for cash and cash
equivalents  approximate  their fair value.
         
         
                              
                    AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
                             AND SUBSIDIARY
                     (A Development Stage Company)
             Notes to the Consolidated Financial Statements
                       January 31, 1998 and 1997
         
 NOTE 14 - FAIR VALUES OF FINANCIAL INSTRUMENTS (continued)
 
         Notes Payable
         The fair values of notes payable are estimated using discounted cash 
flow analyses based on the Company's incremental borrowing rate as the discount
rate.
 
         NOTE 15 During 1998, the Company was required to place a $15,000
bond to insure the reclamation of any mining done on the mining claims in 
Oregon.  The Company has placed $15,000 in certificates  of deposits as
pledge against any reclamation work that has to be done after
mining operations have ceased.  The mining operations will continue for some 
time and the certificates  will not be useable as working capital for a number
of years.  The interest earned on the certificates  are directly deposited
to the Company's account.
 
         NOTE 16 During the year, the Company approved a stock option plan to 
the officers and directors of the  Company.  A total of 250,000 options to
purchase 250,000 shares were offered at  a price of $.375 (the market price
at the time of offering).  The options expire on June 17, 2004.  During the
year,125,000 options were exercised at the option price of $.375 for total
consideration  of $46,875 ($9,375 cash and $37,500 in relief of debt).
 
         NOTE 17 The Company has leased out a portion of its warehouse in 
Austin, Texas to another individual for $880 per month.  The lease is month to
month.
 
 
  ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING  
           AND FINANCIAL DISCLOSURE:
 
 There were no changes in or disagreements with the independent certified
public  accountants relating to  accounting principles or practices, 
financial statement disclosure or auditing scope  or procedure in any of the
three  most recent fiscal years of the Company.
 
 
 
                              PART III
 
 
 ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;    
                 COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT:
                                                                               
                                                  
 <TABLE>
 <S>               <C>                   <C>    <C>
                                                 SERVED AS
                     POSITIONS WITH THE         DIRECTOR OR
        NAME              COMPANY          AGE  OFFICER SINCE
 
                                                
 
 Terry L. Young    Chairman of the         51       1990
                   Board, Chief                 
                   Executive Officer, Director  
 
                                                
 
 David W. Redding  President, Chief        49       1993
                   Financial Officer,           
                   Assistant Secretary, Treasurer,Director
                                                
 
                                                
 
 William C. Branch Director                45       1995
 
                                                
 
 Nicholas N. WentworthDirector             63       1998
 
                                                
 
 James R. Toney    Vice President of Production  49    1998
 
                                                
 
 Kimberly A. Love  Corporate Secretary     35       1995
 </TABLE>

 Directors and officers are elected annually on the date of the annual meeting
of  shareholders to serve until the earlier
of the next annual shareholders' meeting date or the date on which their
services  to the Company cease.
 
 Terry L. Young became a director of the Company in 1990.  He has served as
Chairman  of the Board of Directors of the
Company from 1991 to present.  Mr. Young has also served as President of the
Company  from August 1990 until May
1991, and from June 1992 to December 1993.  Mr. Young has been the Chief
Executive  Officer of the Company since
1990.  He is also President and a director of Austin Young, Inc., the major
stockholder  of the Company, and is Chairman
and Chief Executive Officer of American Absorbents, Inc., the wholly owned
subsidiary  of the Company.  He served in
the United States Military from 1968 to 1971 when he received an honorable
discharge.   Beginning in the early 1970's
he became involved in real estate development and continues to be involved
now.   Mr. Young has also been involved
in corporate development and has worked in the development of several
companies.   Mr. Young received an associate
degree in business from San Antonio College in 1967 and attended the
University  of Texas at Austin for two years.  Age
51.
 
 David W. Redding became a director of the Company in 1993.  He has served as
President  of the Company since
February 1997.  He has served as Chief Financial Officer, Executive Vice
President  and Treasurer of the Company since
November 1993.  He has also served as Assistant Secretary of the Company since
December  1994. Mr. Redding is also
Chief Financial Officer, Treasurer, Secretary and a Director of American
Absorbents,  Inc., the wholly owned subsidiary
of the Company.    From May 1988 until November 1993, he was self-employed
providing  tax, management and
financial services.  From November 1978 until May 1988 he was Chief Financial
Officer,  Executive Vice President,
Secretary, Director and a member of the Executive Committee of ASK
Corporation,  a publicly held, NASDAQ National
Market listed company engaged in manufacturing and marketing of alternative
energy  equipment in the emerging solar
energy industry.  He was nominated for and accepted  for inclusion in Who's
Who  Worldwide in Business in 1993 and
International Who's Who of Professionals in 1997.  He received a bachelors
degree  in business and accounting from the
University of Texas at Austin in 1974.  Age 49.
 
William C. Branch became a director of the Company in June 1995.  He was
President  and Chief Executive Officer of
Charles P. Davis Hardware, Inc. from 1978 until 1982 when the business was
sold  to Handyman, Inc. in San Diego,
California. Following a period of retirement, he became the Chairman of the
Board  and President of Branch
International, Inc., operating Branch Travel and has served in that capacity
from  1985 until present.  Mr. Branch
attended and received an AA degree from Marion Military Institute, Marion,
Alabama,  in 1973.  He received a BS degree
in International Business from The American College, Leysin, Switzerland, in
1977.   After that, he pursued graduate
studies in International Business at the International Business Institute in
Switzerland.   Mr. Branch spends less than 10%
of his time involved with Company business.  Age 45.
 
Nicholas N. Wentworth has served as a director of the Company since January
1998.   Mr. Wentworth was president of
Investment Advisors Incorporated, a Houston, Texas based investment counseling
firm  with individual and institutional
clients before retiring in 1996 after 28 years with the firm.  He held various
management  positions with the firm
including president of a no-load mutual fund specializing in small to medium
sized  capitalization companies, economist
and chief investment officer of fixed income.  He is a Chartered Financial
Analyst  and a Chartered Investment Counselor
and is a past president of the Houston Society of Financial Analysts.  Prior
to  joining Investment Advisors Incorporated
he work for Underwood, Neuhaus and Company providing institutional research
and  portfolio management for non-
discretionary accounts managed by the firm.  Early in his career, Mr.
Wentworth  worked in the corporate offices of Gulf
Oil Corporation as a member of the crude oil and product supply department,
for  Texas Eastern Transmission
Corporation as a member of the treasurer's staff working with investment
bankers  in long and short term borrowings
and for Funds Incorporated as their analyst in energy and regulated
industries.   He served in the United States Army
Finance Corps and holds a Bachelor's and Master's degree in Business
Administration  from Babson College in
Wellesley, Massachusetts.  Age 63. 
 
James R. Toney has served as Vice President of Production of the Company since
February  1998.  Mr. Toney served as
the maintenance and operations superintendent of the ore preparation plant and
the  milling operations for Calaveras
Asbestos, Ltd. from April, 1976 to December, 1990, when the operations were
acquired  by Sanifill, Inc.  After the
acquisition by Sanifill, Inc. he served as the operations manager for
California  Asbestos Monofill, a subsidiary of Sanifill,
Inc. until February, 1998.  Mr. Toney served three years in the United States
Marine  Corps from 1967 to 1970 when he
received an honorable discharge.  He attended Diablo Valley College and
Columbia  College in California.  Age 49.

Kimberly A. Love has served as secretary of the Company since October 1995. 
From  September 1992 until October
1995, she was the owner of Harvest Company, a company specializing in the
harvesting  and selling of timber to
companies such as Champion Corporation, Louisiana Pacific and Kirby
Industries.   From July 1990 until September
1992, Ms. Love worked for Baker Oil Tools in Houston, Texas as a departmental
specialist,  where she assisted in budget
analysis and planning for the manufacturing department.  She also has
experience  as a market manager for F.M.I. and
B.D.S. in California, marketing new products for companies such as R.J.
Reynolds  and other consumer products
marketing companies in various industries.  She attended Southwest Texas State
University,  San Marcos, Texas for two
years.  Age 35.
 
 
ITEM 10.  EXECUTIVE COMPENSATION:
 
The following table sets forth the aggregate remuneration paid or accrued for
the  fiscal years ended January 31,  1996,
1997 and 1998, as to each officer of the Company whose aggregate remuneration
exceeds  $100,000, and as to the
aggregate remuneration of all officers as a group:
   
 <TABLE>
 <S>         <C>  <C>                   <C>                  <C>
                  ANNUAL COMPENSATION (1)LONG-TERM COMPENSATION
 
                                                AWARDS       
                                                PAYOUTS      
 </TABLE>
                                                                    
                                                                                
                                 
                                                                           
 <TABLE>
 <S>         <C>  <C>   <C>  <C>        <C>    <C>    <C>    <C>
                                        RESTRICTED STOCKAWARDS
 NAME AND OTHER ANNUALCOMPENSATION    ($)  ($)OPTIONS/ SAR'S LTIPALL OTHER
 PRINCIPAL SALARY($)BONUS($)              (#)  PAYOUTS  ($)COMPENSATION   ($)
 POSITIONS   YEAR                                            
 
 Terry L. Young,CEO                                          
             1996  -0-   -0-     -0-      -0-    -0-    -0-     -0-
 
             1997  -0-  7,000    -0-    56,500   -0-    -0-     -0-
 
             1998 60,000 -0-     -0-     7,188 100,000  -0-     -0-
 
                                                             
 All                                                              
 Officers    1996 44,7141,000    -0-      -0-    -0-    -0-     -0-
 as a                                                        
 Group (3 persons)                                           
 
             1997 64,8007,000    -0-    106,592  -0-    -0-     -0-
 (3 persons)                                                 
 
             1998 143,400 -0-    -0-    46,325 225,000  -0-     -0-
 (3 persons)                                                 
 </TABLE>

 1)  Excludes the value of personal use of Company office facilities and
certain  other personal benefits.  The value of such
personal benefits cannot be specifically or precisely ascertained without
unreasonable  effort.  After reasonable inquiry,
however, the Company believes that the aggregate annual amount of such
personal  benefits does not exceed $50,000 per
person or 10% of the total annual salary and bonus for the named executive 
officer.
 
 The Company does not have any pension, retirement, deferred compensation or
similar  plan for its officers, directors
or employees.  It does have an incentive stock option plan for its officers,
directors,  employees and other persons who
perform substantial services for or on behalf of the Company.  The 1995 Stock
Option  Plan provides for the granting of
 options on a maximum of 1,000,000 shares of the Company's common stock (which
number  is subject to adjustments
 in the event of stock dividends, stock splits and other similar events).  The
1995  Stock Option Plan is administered by
 the Board of Directors , or, at its option, a duly authorized committee of the
Board.   Options may be granted at the
 market bid price of the common stock at the time of issuance and can be
exercised  by the payment of cash, surrender of
 shares of common stock of the Company equivalent to the option exercise price
or  through a reduction in the number
 of shares received pursuant to the option exercise equivalent to the amount of
the  option exercise price.  The term of any
 option granted may extend for seven years from the date of grant.  On June 17,
1997  the following options were granted
 pursuant to the 1995 Stock Option Plan to Officers and Directors at the
closing  bid price of the common stock:
 
                 OPTION/SAR GRANTS IN LAST FISCAL YEAR
                          (INDIVIDUAL GRANTS)
                                    
 <TABLE>
 <S>            <C>        <C>          <C>        <C>
                           PERCENT OF TOTALOPTIONS/SARS
                            GRANTED TO                    
                OPTIONS/SARS  GRANTEDEMPLOYEES INEXERCISE ORBASE PRICE       
                    (#)     FISCAL YEAR   ($/SH)          
 NAME                                              EXPIRATION DATE
 
 Terry L.         100,000       40         0.375    June 17, 2004
 Young, CEO                                        
 
 David W. Redding  100,000      40         0.375    June 17, 2004
 
 William C. Branch  25,000      10         0.375    June 17, 2004
 
 Kimberly A. Love  25,000       10         0.375    June 17, 2004
                               </TABLE>
 
 Currently, directors do not receive any cash compensation for serving in their
roles  as directors of the Company. 
 
 The following table sets forth the aggregated option/SAR exercises in the last
fiscal  year and the fiscal year-end
 option/SAR values:
 
        AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
                        FY-END OPTION/SAR VALUES
                                    
 <TABLE>
 <S>           <C>         <C>         <C>        <C>
NUMBER OF    VALUE OF 
SHARES UNEXERCISEDOPTIONS/SARSAT FY-END
(#)EXERCISABLE/UNEXERCISABLE  UNEXERCISED 
                 ACQUIRED                           IN-THE-MONEY
                    ON        VALUE                 OPTIONS/SARS
                 EXERCISE    REALIZED              AT FY-END ($)
      NAME         (#)         ($)                  EXERCISABLE/
                                                   UNEXERCISABLE
 
 Terry L.        100,000      75,000       -0-          -0-
 Young, CEO                                       
 
 David W. Redding    -0-       -0-      100,000 E     112,500
 
 William C. Branch   25,000   21,875       -0-          -0-
 
 Kimberly A. Love    -0-       -0-      25,000 E       28,125
                               </TABLE>
 
 On June 17, 1997, Austin Young, Inc. returned to the Company for cancellation,
an  option it held to purchase 988,000
 shares of common stock.  On January 21, 1998, when the bid price on the common
stock  in the public market was
 $1.125, Terry L. Young exercised the option he held to purchase 100,000 shares
of  common stock by reducing the
 amount of the note payable from the Company to Austin Young, Inc. by $37,500
and  on January 23, 1998, when the bid
 price on the common stock in the public market was $1.25, William C. Branch
exercised  the option he held to purchase
 25,000 shares of common stock by issuing a check to the Company for $9,375.
 
 
 ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:
 
 The following table sets forth certain information furnished by the following
persons  concerning the common stock
 ownership as of March 31, 1998, of (i) each person who is known to the Company
to  be the beneficial owner of more
 than 5 percent of the common stock; (ii) all directors and executive officers;
(iii)  directors and executive officers of the
 Company as a group:
 
 
 <TABLE>
 <S>                    <C>             <C>             <C>
NAME AND ADDRESS    NUMBER OF SHARESOF COMMON 
STOCKCOMMON STOCK SUBJECT TO OPTIONS OR
   OF BENEFICIAL OWNER                      WARRANTS    PERCENT OF CLASS
                                                        
 
                                                        
 
 Austin Young, Inc.        3,182,403          -0-        47.03
 3800 Hudson Bend Rd.                                   
 Austin, TX 78734                                       
 
                                                        
 
 Terry L. Young            3,182,403          -0-        47.03
 3800 Hudson Bend Rd.                                   
 Austin, TX 78734                                       
 
                                                        
 
 David W. Redding           272,620         100,000       5.43
 3800 Hudson Bend Rd.                                   
 Austin, TX 78734                                       
 
                                                        
 
 William C. Branch          232,662           -0-         3.44
 3800 Hudson Bend Rd.                                   
 Austin, TX 78734                                       
 
                                                        
 
 Nicholas N. Wentworth       5,000            -0-         0.07
 3800 Hudson Bend Rd.                                   
 Austin, TX 78734                                       
 
                                                        
 
 James R. Toney              6,500            -0-         0.10
 3800 Hudson Bend Rd.                                   
 Austin, TX 78734                                       
 
                                                        
 
 Kimberly A. Love            15,026          25,000       0.59
 3800 Hudson Bend Rd.                                   
 Austin, TX 78734                                       
 
                                                        
 
 Officers and Directors    3,714,211        125,000      55.71
 as a Group (6 Persons)                                 
 </TABLE>
 
 1)   Unless otherwise indicated, the second column reflects amounts as to
which  the beneficial listed in the first column
 has sole voting power and sole investment power.
 
 2)   The total number of shares of common stock outstanding as of March 31,
1998,  was 6,766,512.  Option shares to
 each named director or officer, which are not currently outstanding but which
are  subject to option exercise, are deemed
 to be outstanding for the purpose of computing that director's or officer's
percentage  of ownership of outstanding shares
 of common stock, but are not deemed to be outstanding for computing the
percentage  of common stock owned by any
 other person.
 
 3)   Austin Young, Inc. is approximately 90% controlled by Terry L. Young, its
Chairman  and CEO.  Mr. Young is a
 director, officer and 47.03% controlling shareholder of the Company through
his  control position in Austin Young, Inc. 
 Of the shares set forth above, 47,000 are held in brokerage accounts in the
name  of Austin Young, Inc.
 
 4)   Of the shares set forth above for Terry L. Young, 2,922,091 are owned of
record  by Austin Young, Inc., a corporation
 controlled by Mr. Young;   47,000 are held in brokerage accounts in the name
of  Austin Young, Inc.;  85,598 are held
 in the name of Mr. Young;  100,000 are held in the name of Terry L. Young and
Austin  Young, Inc.;   3,500 are owned
 of record by the spouse of Mr. Young;  4,214 are held in the name of Kim E.
Coleman  as custodian for Gretchen
 Coleman, and, 20,000 are owned of record by the children of Mr. Young.
 
 5)   Of the shares set forth above for David W. Redding, 235,313 are held in
the  name of David W. Redding;  27,000
 are held in the name of David W. Redding for the benefit of family members,
and,  500 are owned of record by the spouse
 of Mr. Redding.
 
 6)   Of the shares set forth above for William C. Branch, 177,189 are owned of
record  by Mr. Branch, 29,000 are owned
 of record by Mr. Branch as custodian for the Charles P. Davis Trust and 26,473
are  held of record by Mr. Branch as
 custodian for family members.
 
 
 
 ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
 
 Austin Young, Inc. is the major stockholder of the Company, beneficially
owning  3,182,403 shares, or approximately
 47.03% of the common stock at March 31, 1998, which amount includes the shares
beneficially  owned by Austin Young,
 Inc. as described above.  Austin Young, Inc. is controlled by Terry L. Young,
the  Chief Executive Officer, Chairman
 and controlling shareholder of the Company.  Austin Young, Inc. is a publicly
held  Texas corporation which operates
 as a real estate developer principally in the Austin, Texas, area.  It also
owns  a publishing company, American Crisis
 Publishing, Inc., which publishes drug and alcohol abuse literature,
educational  books and magazines for ages 5 through
 adult, and coloring books for children ages one through four.  Mr. Young owns
approximately  90% and the public
 shareholders own approximately 10% of the outstanding common stock of Austin
Young,  Inc.
 
 In February 1993 the Company issued to Austin Young, Inc. a five-year option
to  purchase up to 1,000,000 shares of
 common stock at an exercise price of $3.00 per share.  On June 16, 1993,
Austin  Young, Inc. exercised its option to
 purchase 12,000 shares.  On June 17, 1997, Austin Young, Inc. returned the
remaining  988,000 options to the Company
 for cancellation.
 
 Austin Young, Inc. furnishes to the Company the office space and some
equipment  currently used by the Company
pursuant to a 5-year lease dated July, 1996, for a monthly lease rate of $1,900.
 
 Austin Young, Inc. has advanced funds to the Company from time to time for
operating  expenses.  At January 31, 1998,
 the Company owed approximately $179,052 in principal to Austin Young, Inc.,
which  amount was evidenced by a
 promissory note bearing interest at 7% per annum and due on demand.  The note
payable  to Austin Young, Inc. was
 reduced by $37,500 on January 21, 1998, when Mr. Young exercised an option he
held  to acquire 100,000 shares of
 common stock at $0.375 per share.  In addition, Austin Young, Inc. has pledged
$125,000  in CD's against a $125,000
 note payable to a bank relative to the Austin warehouse facility.  Austin
Young,  Inc. receives no compensation for the
 use of its CD's as collateral on the note. 
 
 
 
 ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K:
 
                                                                               
                                                                        Page
 (a)   (1)   The following financial statements are included in Part II, Item 7:
 
                    Report of Independent
Auditors..............................................................  12
 
                     Financial Statements:
 
                         Consolidated Balance Sheets - January 31, 1998 and
1997...................................         17     
 
                         Consolidated Statements of Operations - Years ended
January  31, 1998,
                              and
1997........................................................          19
 
                         Consolidated Statements of Stockholders' Equity
(Deficit)  - From inception 
                               on February 9, 1984 to January 31,
1998........................................................          20
 
                         Consolidated Statements of Cash Flows - Years ended
January  31, 1998
                                and 1997 and from inception on February 9,1984
to  January 31, 1998.........         24
 
                         Notes to Consolidated Financial
Statements.........................................................           26
 
       (2)   There are no financial schedules for the years ended January 31,
1998  and 1997, 
                   submitted herewith.  Registrant is exempted from filing such
schedules  because of its
                   Form SB-2 Registration Statement filing.
 
        (3)   The following exhibits for the years ended January 31, 1998 and
1997,  and from
                   inception on February 9, 1984 to January 31, 1998 are
submitted  herewith:
 
                           Exhibit 11 - Computation of Per Share Earnings
(Loss)........................................       44
 
                           Exhibit 21 - Subsidiary of the
Registrant.............................................       45
 
                           Exhibit 23 - Consent of Experts and
Counsel........................................................        46
 
  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 or not present in sufficient  amount.
 
 
 (b)   There were no reports filed on Form 8-K during the last quarter of the
period  covered by this report.
 
 
                                              
                              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/Terry  L. Young____________________________
                                                                              
Terry  L. Young, Chairman of the Board 
                                                                              
and  Chief Executive Officer
 
 Date:  May 13, 1998
 
 
 
 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.
 
 
 <TABLE>
 <S>                   <C>  <C>                   <C>
       SIGNATURE                    TITLE               DATE
 
                                                  
 
          s/Terry L. Young  Chairman, Chief         May 13, 1998
                            Executive Officer     
 
 Terry L. Young             and Director          
 
                                                  
 
                                                  
 
           s/David W. ReddingPresident, Chief       May 13, 1998
                            Financial Officer,    
 
 David W. Redding           Principal Accounting Officer,
 
                            Assistant Secretary,  
                            Treasurer and         
 
                            Director              
 
                                                  
 
                                                  
 
            s/William       Director                May 13, 1998
 C. Branch                                        
 
 William C. Branch                                
 
                                                  
 
                                                  
 
                            Director                May 13, 1998
 s/Nicholas N. Wentworth                          
 
 Nicholas N. Wentworth                            
 </TABLE>

                                    
                                    
                                    
                                    
 
 
     
                                                                     
                                    
                                    
                                    
               AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
  EXHIBIT 11 - STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS (LOSS)
 
 
 
 <TABLE>
 <S>                           <C>
                               From Inception    on 
                               February 9,1984 Through January 
                                  31, 
 For the Years Ended January 31,
                               
                               
 </TABLE>
<TABLE>
 <S>                <C>             <C>            <C>
 Primary and Fully Diluted:      1998     1997        1998
 
                                                   
 
 Average Shares Outstanding   5,731,102   5,172,860 2,062,475
 
                                                   
 
 Net Loss             $ (489,525)     $ (464,662)  $ (2,664,557)
 
                                                   
 
 Earnings (Loss)        $ (0.09)       $ (0.09)     $ (1.29)
 Per Share                                         
 </TABLE>

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
               AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
               EXHIBIT 21 - SUBSIDIARY OF THE REGISTRANT
                                    
 
 
 
 
 <TABLE>
 <S>                    <C>     <C>
          NAME                  JURISDICTION OF INCORPORATION
 
                                
 
 American Absorbents, Inc.                Texas
 </TABLE>

 
 The corporation listed is a wholly owned subsidiary of the Registrant, and is
included  in the consolidated financial
 statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
               AMERICAN ABSORBENTS NATURAL PRODUCTS, INC.
              EXHIBIT 23 - CONSENT OF EXPERTS AND COUNSEL
                                    
                                    
                                    
                                    
                                    
                          ACCOUNTANT'S CONSENT
                                    
                                    
                                    
 We hereby consent to the use of our audit report of American Absorbents
Natural  Products, Inc. dated March 7, 1998
 for the year ended January 31, 1998 in the 10-KSB Annual Report.
 
 
 
 
 Orton & Company
 May 8, 1998
 Salt Lake City, Utah