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

                                  FORM 10-QSB/A
                                 Amendment No. 1

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

                    FOR THE QUARTER PERIOD ENDED MARCH 31, 2001

                                      OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM           TO

                       COMMISSION FILE NUMBER 0-26943

                          AMERICAN INFLATABLES, INC.
                          --------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                  DELAWARE                              95-4695878
                  --------                              ----------
       (STATE OR OTHER JURISDICTION OF                (IRS EMPLOYER
       INCORPORATION OR ORGANIZATION)               IDENTIFICATION NO.)

       947 NEWHALL STREET, COSTA MESA, CA                      92627
       ----------------------------------                      -----
    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                 (ZIP CODE)

      REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:  949-515-1776

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: COMMON STOCK, PAR
VALUE $.01 PER SHARE

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

As of May 15,  2001,  there were  8,621,346  shares of the  Registrant's  common
stock, $.01 par value per share, issued and outstanding.






<PAGE>




                                                                 PAGE

PART I     FINANCIAL INFORMATION.................................  2

Item 1.    Financial Statements (Unaudited)......................  3

           Balance Sheet.........................................  3

           Statement of Operations for the Three Months
             Ended March 31, 2001 and 2000.......................  4

           Statement of Cash Flows For the Three Months
             Ended March 31, 2001 and 2000.......................  5

           Notes to Financial Statements
             as of March 31, 2001................................  6

Item 2.    Management's Discussion and Analysis of
             Financial Condition and Results of Operations....... 11

PART II    OTHER INFORMATION..................................... 13

Item 1:    Legal Proceedings..................................... 13

Item 2:    Changes in Securities................................. 13

Item 3:    Defaults Upon Senior Securities....................... 13

Item 4:    Submission of Matters to a Vote of Security Holders... 13

Item 5:    Other Information..................................... 13

Item 6(a): Exhibits.............................................. 13

Item 6(b): Reports on Form 8.K................................... 13

SIGNATURES....................................................... 14



                                       1



<PAGE>



PART I - FINANCIAL INFORMATION

NOTE REGARDING FORWARD-LOOKING STATEMENTS.

This Form 10-QSB/A1  contains  forward-looking  statements within the meaning of
the safe harbor" provisions under Section 21E of the Securities  Exchange Act of
1934  and  the  Private  Securities  Litigation  Reform  Act  of  1995.  We  use
forward-looking  statements in our  description  of our plans and objectives for
future  operations  and  assumptions  underlying  these  plans  and  objectives.
Forward-looking  terminology  includes the words "may,"  "expects,"  "believes,"
"anticipates," "intends," "projects," or similar terms, variations of such terms
or the negative of such terms.  These  forward-looking  statements  are based on
management's  current expectations and are subject to factors and uncertainties,
which could cause actual results to differ  materially from those,  described in
such  forward-looking  statements.  We  expressly  disclaim  any  obligation  or
undertaking to release publicly any updates or revisions to any  forward-looking
statements  contained  in this  Form  10-QSB/A1  to  reflect  any  change in our
expectations or any changes in events,  conditions or circumstances on which any
forward-looking  statement is based. Factors,  which could cause such results to
differ materially from those described in the  forward-looking  statements,  and
elsewhere in, or incorporated by reference into this Form 10-QSB/A1.







                                       2


<PAGE>


ITEM 1   Financial Statements

                          AMERICAN INFLATABLES, INC.
                                BALANCE SHEET

                                                      MARCH 31,    December 31,
                                                       2001           2000
                                                   ------------   ------------
                                                    (UNAUDITED)

                                ASSETS
Current assets:
  Cash ............................................$    8,200     $    3,900
  Accounts Receivable.............................     19,400          -0-
  Inventory........................................    10,800         10,800
  Prepaid expenses and other current assets........    51,800         50,400
                                                    ---------      ---------
        Total current assets.......................    90,200         65,100

Fixed assets
  Display and promotional blimps, net..............    15,200         16,600
  Computers, furniture and office equipment, net...    34,300         36,900
  Leasehold improvements, net..........................55,400         57,000
                                                    ---------      ---------
        Total fixed assets..........................  104,900        110,500

Deposits...........................................    15,400         13,400
                                                    ---------      ---------
        Total assets...............................$  210,500     $  189,000
                                                    =========      =========

                   LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
  Notes payable....................................$  330,000     $  330,000
  Accounts payable.................................    62,200         77,700
  Accrued payroll liabilities......................   160,660        162,300
  Accrued liabilities..............................    49,000          6,100
  Due to related party.............................    48,600         43,600
                                                     ---------      ---------
        Total current liabilities..................   650,400        619,700

Stockholders' equity
  Common stock.....................................    86,000         86,000
  Additional paid in capital....................... 3,154,100      3,154,100
  Note receivable..................................  (250,000)      (250,000)
  Accumulated deficit............................. (3,430,000)    (3,420,800)
                                                    ---------      ---------
        Total stockholders' equity (deficit).......  (439,900)      (430,700)
                                                    ---------      ---------
        Total liabilities and
          stockholders' (deficit) equity           $  210,500     $  189,000
                                                    =========      =========

                   See accompanying notes to financial statements

                                       3

<PAGE>




                           AMERICAN INFLATABLES, INC.
                            STATEMENTS OF OPERATIONS
                         FOR THE QUARTER ENDED MARCH 31,

                                                     2001             2000
                                                --------------   --------------
                                                  (UNAUDITED)      (UNAUDITED)

Revenues.........................................$   508,500      $   441,100
     Cost of goods sold..........................    230,000          198,600
                                                  ----------       ----------
Gross profit.....................................    278,500          242,500
                                                  ----------       ----------
Administrative expenses
     Depreciation and amortization...............      5,600            5,300
     Legal and accounting........................     19,700           13,800
     Office expense..............................     73,800           54,300
     Salaries and payroll expenses...............     51,600           67,700
     Marketing...................................     75,900           85,100
     Travel & entertainment......................     61,100           21,000
                                                  ----------       ----------
          Total..................................    287,700          247,200
                                                  ----------       ----------
              Net loss ..........................$    (9,200)      $   (4,700)
                                                  ==========       ==========
     Loss per share..............................$     (0.00)      $    (0.00)
                                                  ==========       ==========
     Weighted average shares.....................  8,621,000        4,565,000
                                                  ==========       ==========










                   See accompanying notes to financial statements





                                       4



<PAGE>





                           AMERICAN INFLATABLES, INC.
                            STATEMENTS OF CASH FLOWS
                             QUARTER ENDED MARCH 31,

                                                     2001           2000
                                                 -----------      -----------
                                                 (UNAUDITED)      (UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES

Net Income (Loss)............................... $    (9,200)     $    (4,700)
Adjustments to Reconcile
Net Income (Loss) to Net Cash Provided
 By (Used In) Operating Activities
Depreciation and amortization...................       5,600            5,300
 (Increase) Decrease in:
 Accounts receivable............................     (19,400)            -0-
Prepaid expense and other assets................      (1,400)          62,300
Inventory.......................................        -0-             6,800
Deposits........................................      (2,000)            -0-
Increase (Decrease) in:
 Accounts payable...............................     (15,500)          10,800
 Accrued expenses...............................     (41,200)          11,800
                                                 -----------      -----------
NET CASH USED IN OPERATING ACTIVITIES...........        (700)         (91,100)
                                                 -----------      -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment/leaseholds................        -0-           (10,600)
Advances to/from related party..................      (5,000)          (4,000)
                                                 -----------      -----------
NET CASH USED IN INVESTMENT ACTIVITIES..........       5,000          (14,600)
                                                 -----------      -----------
CASH FLOW FROM FINANCING ACTIVITIES
Issuance of common stock........................        -0-           115,000
                                                 -----------      -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES.......        -0-           115,000
                                                 -----------      -----------
NET INCREASE (DECREASE) IN CASH.................       4,300            9,300
CASH AT BEGINNING OF PERIOD.....................       3,900              900
                                                 -----------      -----------
CASH AT END OF PERIOD........................... $     8,200      $    10,200
                                                 ===========      ===========

                  See accompanying notes to financial statements




                                       5

<PAGE>




                    Notes to Financial Statements (Unaudited)


Note A.    BASIS OF PRESENTATION

The unaudited financial  statements of American  Inflatables,  Inc. at March 31,
2001 and for the three  month  periods  ended  March  31,2001 and 2000 have been
prepared  by the  Company  in  accordance  with  generally  accepted  accounting
principles pursuant to Regulation SB of the Securities and Exchange  Commission.
Certain  information  and footnote  disclosures  required by generally  accepted
accounting principles have been condensed or omitted. However, in the opinion of
management,  all adjustments necessary,  including normal recurring adjustments,
for the financial  statements not to be misleading have been made. These interim
statements should be read in conjunction with the financial statements and notes
thereto for the year ended December 31,2000.

Note B.     Note Payable

The note payable of $330,000 and accrued  interest  thereon of $8,500 was due in
May 2001. The note and accrued interest has not been paid and is in default. The
holder of this note has demanded payment.









                                       10



<PAGE>


Item 2:   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

The Company has authorized 20,000,000 shares of $0.01 par value common stock. As
of March 31, 2001 there were 8,594,798 shares issued and outstanding.

THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE MONTHS ENDED MARCH 31, 2000

RESULTS OF OPERATIONS.  Net sales were $508,550 for the three months ended March
31,  2001,  an increase of $67,400 or 15%  compared to net sales of $441,000 for
the three  months  ended  March 31,  2000.  The  increase in sales is due to the
Company  increasing its customer base. Sales for the Company continue to grow at
an increasing  rate not just from repeat  customers but from new customers.  The
Company  continues to increase  its  presence  and  exposure in the  advertising
markets  through  increased  attendance  at trade  shows and  other  advertising
mediums that provide greater exposure.

Gross margin as a percentage  of sales for the three months ended March 31, 2001
was 55%,  which was the same as for the three months  ended March 31, 2000.  The
Company  earned  $278,500 in gross during the three months ended March 31, 2001.
The  increase in net sales  contributed  to the  increase in gross  margin.  The
Company through its use of higher quality  materials for  production,  decreased
replacements  and warranty  coverage and provides a stronger product for sale to
the  customer.  During  Fiscal  2000 and the first  quarter of 2001 the  Company
increased  production  and  manufacturing  staff,  in order to  increase  sales,
enabling the Company to fully  utilize its  production  staff to increase  gross
margins.  This is evident by the  Company's  continuing  ability to increase its
sales and maintain a production facility that keeps up with this growth.

Legal and accounting  costs increased $5,900 or 43% in the first quarter of 2001
compared to the same period in 2000,  primarily  as a result of fees  associated
with the Company's proposed acquisition by National Paintball Supply Co., Inc.

Office expense increased $19,500 or 36% in the first quarter of 2001 compared to
the same period in 2000 as a result of the  Company's  increased  infrastructure
needed to support growth and its proposed merger.

Payroll costs decreased  $16,100 or 24% in the first quarter of 2001 compared to
the first quarter of 2000 due to a more stable work force in 2001, which is more
efficient and resulted in less training time for new employees.

Marketing  costs  decreased  $9,200  or 11%  during  the first  quarter  of 2001
compared to the same period in 2000 as a result of the  Company's  more  focused
approach to its target market.

Travel and entertainment costs increased $40,100 or 191% in the first quarter of
2001  compared to the first  quarter of 2000 as a result of the Company  sending
more  representatives to trade shows and attending trade shows more distant from
its offices.

                                       11

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

At March 31,  2001,  the Company  had cash and cash  equivalents  of $8,200,  an
increase of $4,300 from $3,900 at December 31, 2000.

Cash used in operating  activities  was $700 during the quarter  ended March 31,
2001. Use of cash in operating  activities  consisted mainly of the net loss for
the three month period of $9,200,  the offsetting  effects of  depreciation  and
amortization of $5,600, and fluctuations in certain assets and liabilities.

To date,  the Company has not  invested in  derivative  securities  or any other
financial  instruments that involve a high level of complexity or risk. Cash has
been, and the Company contemplates that it will continue to be, used for general
operating purposes.

From time to time, the Company may evaluate potential  acquisitions of products,
businesses,  and  technologies  that may  complement  or  expand  the  Company's
business.  Any such transactions  consummated may use a portion of the Company's
working capital and/or require the issuance of equity or debt.

The Company  believes  that its current cash and cash  equivalent  balance along
with the  additional  financing  is  insufficient  to meet its  working  capital
expenditures  through  the near term and will  require  the  Company  in seeking
additional  capital and/or equity.  The Company is currently  exploring  various
financing  and credit  facilities  and is in the  process of being  acquired  by
National Paintball Supply Co., Inc.

RECENT ACCOUNTING PRONOUNCEMENTS

During 2000 the  Emerging  Issues Task Force issued EITF 00-10  "Accounting  for
Shipping and  Handling  Fees abd Costs" and EITF 00-14  "Accounting  for Certain
Sales  Incentives."  Both of these  require  implementation  during  the  second
quarter of 2001.  The Company does not believe the  implementation  of either of
these pronouncements will have a material effect on its financial statements.

In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting Standards No. 133 ("SFAS 133"),  "Accounting for Derivative
Instruments and Hedging  Activities." SFAS 137 defers for one year the effective
date of SFAS 133. The rule will now apply to all fiscal  quarters o0f all fiscal
years beginning after June 15, 2000. Management does not anticipate the adoption
of the new  statement  will have an effect on the results of  operations  or the
financial position of the Company.

In July 2001 the FASB issued  SFAS 141,  "Business  Combinations"  and SFAS 142,
"Goodwill  and Other  Intangible  Assets."  SFAS 141 requires  that the purchase
method of  accounting be used to account for all business  combinations  entered
into after June 30,2001.  SFAS 142 requires  that goodwill and other  intangible
assets  with  indefinite  lives be tested  for  impairment  annually  and not be
subjected to amortization.  The provisions of SFAS 142 will apply to the Company
beginning January 1,2002.  The implementation of these  pronouncements  will not
have a significant effect of The Company's financial statements.

                                       12

<PAGE>


PART II.   OTHER INFORMATION

Item 1.    LEGAL PROCEEDINGS

There are no material  legal  proceedings  to which the  Company is  currently a
party or to which the property of the Company is subject.

Item 2.    CHANGES IN SECURITIES

           None

Item 3.    DEFAULTS UPON SENIOR SECURITIES

           None

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

           None

Item 5.    OTHER INFORMATION

           None

Item 6.    EXHIBIT AND REPORTS ON FORM 8-K

           a) Exhibits

           b)   Reports on Form 8-K

                None.



                                       13




<PAGE>




                                 SIGNATURES

In accordance  with Section 13 or 15(d) of the Securities  Exchange Act of 1934,
the Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

Date:  October 31, 2001                     By: /s/ Gregg Mulholland
                                            ---------------------------
                                                Gregg Mulholland
                                                Chief Executive Officer

         In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following  persons on behalf of the  Registrant  and in
the capacities and on the dates indicated.

Date:  October 31, 2001                     By: /s/ Gregg Mulholland
                                            ---------------------------
                                                Gregg Mulholland
                                                Chairman of the Board
                                                Chief Executive Officer

Date:  October 31,2001                      By: /s/ Jeffrey Jacobsen
                                            ---------------------------
                                                Jeffrey Jacobsen
                                                Chief Operating Officer
                                                Director

Date: October 31, 2001                      By: /s/ David Ariss
                                            ---------------------------
                                                David Ariss
                                                Director


                                       14