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

                                    FORM 10-K

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2000    Commission File Number - 1-10184

                                  ABATIX CORP.
             (Exact name of registrant as specified in its charter)

        Delaware                                        75-1908110
----------------------------------       ---------------------------------------
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)

8201 Eastpoint Drive, Suite 500, Dallas, Texas                75227
----------------------------------------------     -----------------------------
(Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code:         (214) 381-1146
                                                     ---------------------------

Securities registered pursuant to Section 12 (b) of the Act:         None
                                                              ------------------

Securities registered pursuant to Section 12 (g) of the Act:     Common Stock
                                                              ------------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during  the  preceding  twelve  months  (or for  such  shorter  period  that the
registrant  was required to file such  reports) and (2) has been subject to such
filing for the past 90 days.
Yes [X]  No [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not 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-K or any amendment to this
Form 10-K. [X]

1,711,148 shares of common stock,  $.001 par value,  were issued and outstanding
on March 14, 2001.

The  aggregate   market  value  of  the   Registrant's   common  stock  held  by
nonaffiliates  of the  Registrant  as of the close of business on March 14, 2001
(an aggregate of 748,914 shares out of a total of 1,711,148  shares  outstanding
at that time) was  $1,310,600  computed by reference to the closing bid price of
$1.750 on March 14, 2001

Portions of the  Registrant's  proxy  statement  for its 2001 annual  meeting of
stockholders are incorporated into Part III, herein, by this reference thereto.
<PAGE>
                                     PART I

ITEM 1.  BUSINESS

(a)      DEVELOPMENT OF BUSINESS

Abatix Corp. (the "Company")  markets and  distributes  personal  protection and
safety  equipment and durable and  nondurable  supplies  predominantly  based on
revenues,  to the asbestos abatement  industry.  The Company also supplies these
products  to the  industrial  safety and  hazardous  materials  industries  and,
combined with tools and tool supplies, to the construction industry.

The Company began  operations in May 1983 as a supply company located in Dallas,
Texas, and was originally  incorporated in Texas as T&T Supply Company,  Inc. in
March 1984.  Abatix was  incorporated  in Delaware on December 5, 1988 to effect
and  complete an Agreement  and Plan of Merger with T&T on December 9, 1988.  In
March 1989, the Company completed its initial public offering of its securities.

During 1994,  because of increased  purchasing  power, the Company,  through its
wholly owned subsidiary International  Enviroguard Systems, Inc. ("IESI"), began
to import  certain  products  sold through not only the  Company's  distribution
channels,  but also other distribution  companies not in direct competition with
Abatix.

Effective January 1, 1999, the Company  consummated an Asset Purchase  Agreement
with Keliher Hardware Company, a California  corporation,  pursuant to which the
Company  assumed the  operations  of  Keliher.  Keliher,  based in Los  Angeles,
California, is an industrial supply distributor,  primarily for the construction
and  industrial  markets.  The estimated  fair value of the assets  acquired was
approximately  $975,000.  The  aggregate  purchase  price was  settled  with the
assumption  of certain  liabilities  (approximately  $900,000),  the issuance of
23,500 shares of the Company's  $.001 par value common stock at a value of $3.45
per share and the remainder in cash.  This  acquisition  has been  accounted for
using the purchase method.

On April 6, 1999, the Company closed its Denver  facility.  The Denver  facility
had sales of approximately  $353,000 and $1,449,000 for the years ended December
31,  1999 and 1998,  respectively.  The  Company  did not incur any  significant
charges related to the shutdown.

Effective June 1, 1999, the Company consummated an Asset Purchase Agreement with
North State Supply Co. of Phoenix, an Arizona corporation, pursuant to which the
Company   assumed  the  operations  of  North  State,   a  construction   supply
distributor.  The estimated fair value of the  identifiable  assets acquired was
approximately  $1,800,000.  The  aggregate  purchase  price was settled with the
assumption of certain  liabilities  (approximately  $785,000) and  approximately
$2,100,000 in cash.  This  acquisition has been accounted for using the purchase
method.

The  Company  intends to expand and  diversify  the  revenue  base  through  the
expansion  of  product  lines,  hiring  additional  personnel,   and  additional
acquisitions,  if  appropriate.  In  addition,  the  Company  is  developing  an
e-commerce  solution to help solidify  relationships  with the existing customer
base and expand its geographic presence.

                                       2
<PAGE>
(b)      FINANCIAL INFORMATION AB0UT OPERATING SEGMENTS

Information about the Company's  operating  segments is included in the Notes to
the Consolidated Financial Statements at Item 14.

(c)      NARRATIVE DESCRIPTION OF BUSINESS

Based on 2000 sales, approximately 33 percent of the Company's products are sold
to asbestos and lead abatement  contractors,  26 percent to construction related
firms,  21  percent to the  industrial  safety  market,  and 20 percent to other
firms,  including  hazardous material  contractors and other  distributors.  The
Company  believes  a  majority  of its sales  for the  foreseeable  future  will
continue  to be  made  to  asbestos  and  lead  abatement  contractors,  project
organizers  and managers  although  these sales should  continue to decline as a
percentage of overall  revenues.  At present the Company  estimates its share of
the asbestos abatement supply market to be approximately 15 to 20 percent in the
geographic markets served by the Company. The Company considers its relationship
with its customers to be excellent.

ASBESTOS ABATEMENT INDUSTRY BACKGROUND

Between 1900 and the early 1970's,  asbestos was extensively used for insulation
and fireproofing in industrial,  commercial and governmental  facilities as well
as  private  residences  in  the  United  States  and  in  other  industrialized
countries.  In the  mid-1980's  it was  estimated  that  in the  United  States,
approximately  20 percent of all  buildings,  excluding  residences and schools,
contain friable asbestos-containing  materials that are brittle, readily crumble
and are  susceptible to the release of asbestos dust.  Various  diseases such as
asbestosis,  lung cancer and  mesothelioma,  linked to the  exposure to airborne
asbestos,  and the presence of asbestos in insulation,  service applications and
finishing  materials  have given rise to the concern about exposure to asbestos.
Public  awareness of the health hazards posed by asbestos has increased,  as the
results of continuing  medical  studies have become  widely known.  Business and
other  publications  and  studies  have  listed  asbestos  abatement  as  one of
America's critical problems,  and legislation  previously introduced to the U.S.
Congress  refers to asbestos as "one of the most dangerous  substances  known to
science."  Litigation involving claimants exposed to asbestos has forced several
firms to seek the protection of the bankruptcy courts, and the volume of pending
claims has  inundated  state and Federal  courts  throughout  the country,  thus
prompting many commentators to propose legislative solutions.

The United States Environmental Protection Agency ("EPA") estimated, in a survey
conducted  in 1984,  that  asbestos  was  present in 30 percent of the  nation's
110,000  schools and in 20 percent of the  nation's 3.6 million  government  and
commercial buildings.  Maintenance,  repair,  renovation or other activities can
disturb  asbestos-containing  material  and, if disturbed  or damaged,  asbestos
fibers  become  airborne  and  pose a  hazard  to  building  occupants  and  the
environment.

                                       3
<PAGE>
Prompted by such concerns,  Congress,  in 1984, authorized the EPA to spend $800
million for asbestos  abatement  in schools  under the  Asbestos  School  Hazard
Abatement Act. In October 1986,  Congress passed the Asbestos  Hazard  Emergency
Response Act, which mandates inspections for asbestos,  the adoption of asbestos
abatement  plans  and the  removal  of  asbestos  from  schools  and  facilities
scheduled for demolition.  In addition,  state and local  governments  have also
adopted asbestos-related regulations.

Notwithstanding  such  legislative  impetus and  continued  awareness  of health
related hazards associated with asbestos, the budgetary constraints and the lack
of improvement in the industrial  sectors continue to limit the number and scope
of asbestos abatement projects.

LEAD ABATEMENT INDUSTRY BACKGROUND

The hazards of  lead-based  paint have been known for many years;  however,  the
federal and state regulations requiring  identification,  disclosure and cleanup
have been  minimal.  In early 1996,  the EPA and the  Department  of Housing and
Urban Development  unveiled rules regarding  lead-based paint in the residential
markets.  These rules give  homebuyers  the right to test for  lead-based  paint
before any contracts are signed. In addition, although a landlord or home seller
is not required to test for lead-based paint, the rules do require disclosure of
a known lead hazard.

Many  asbestos  abatement  contractors  added lead  abatement  to their range of
services in an attempt to enter a market  considered  being in its infancy.  The
asbestos  abatement  contractors  bring  equipment,  a trained labor force,  and
experience working in a regulatory  environment to the lead abatement  industry.
To  date,  the  Company  has not  experienced  a  significant  increase  in lead
abatement  projects;  however,  such rules create a potential long-term positive
impact on the Company through  expenditures for equipment and supplies to ensure
the safe and proper removal and disposal of lead paint.

MOLD REMEDIATION INDUSTRY BACKGROUND

Although  mold  remediation  has  been  around  for  years,   recent  litigation
surrounding  the health  hazards of human  exposure to mold has  created  public
awareness and is forcing property owners and the  construction  industry to deal
with  the  problem.  To grow,  mold  needs  moisture,  a  carbon  source  (wood,
plasterboard, natural fibers, any organic matter), lack of air movement and lack
of light.  The  energy  crisis in the 1970's  inspired  many  energy  efficiency
programs,  including the building of structures that promoted less air movement.
When a moisture source is introduced, the conditions are ripe for mold growth.

Although there are approximately  100,000 species of fungi,  currently about 100
are considered to be pathogenic to humans. Currently, the regulations concerning
mold levels or remediation are few;  however,  there has been some discussion at
the EPA and state  government  levels  about  defining  the level of mold spores
considered to be hazardous.

Many asbestos  abatement  contractors  added mold  remediation to their range of
services.  Beginning in late 2000 the Company  began to see  activity  from this
industry and anticipates continued growth for the immediate future.

                                       4
<PAGE>
CONSTRUCTION TOOLS SUPPLY INDUSTRY BACKGROUND

Besides  the normal  hand and power  tools,  and  associated  consumable  parts,
supplied to the  construction  industry,  the EPA and OSHA have also established
certain rules and  regulations  governing the protection of the  environment and
the protection of workers in this industry.

Currently,  the Company  supplies  the  construction  tools  industry in its Las
Vegas, Los Angeles, and Phoenix facilities and on a limited basis from its other
facilities.  This  industry is  directly  tied to the local  economies  and more
specifically,  the real estate conditions within those markets.  The real estate
market  in the Las Vegas  area is  strong  with  vacancy  rates  for  commercial
properties  low and rental  rates high and  construction  of hotels and  casinos
strong. The condition of the real estate industry in the Company's other markets
remain stable.

SAFETY AND HAZARDOUS MATERIALS INDUSTRIES BACKGROUND

The EPA and the Occupational Safety and Health Administration ("OSHA"), together
over  time,  have   established   numerous  rules  and   regulations   governing
environmental  protection and worker safety and health.  The demand for supplies
and  equipment  by U.S.  businesses  and  governments  to meet  these  rules and
regulations has resulted in the creation of a multi-billion dollar industry.

As research  identifies the degree of  environmental  or health risk  associated
with various substances and working conditions, new rules and regulations can be
expected.  These actions  inevitably will require more  expenditure for supplies
and equipment for handling, remediation and disposal of hazardous substances and
the creation of safe living and working conditions.

GEOGRAPHIC DISTRIBUTION OF BUSINESS

With the acquisition of Keliher and North State in 1999, the Company distributes
over 49,000  industrial,  construction  tool,  personal  protection,  safety and
hazardous waste remediation  products to approximately 7,400 customers primarily
located in the Southwest, Midwest and Pacific Coast.

The Company  maintains sales,  distribution and warehouse centers in Los Angeles
and San Leandro,  California, in Dallas and Houston, Texas, in Phoenix, Arizona,
in Las Vegas, Nevada, and in Kent, Washington.

EQUIPMENT AND SUPPLIES

An estimated 36 percent of the  Company's  sales  include  safety  products,  31
percent included construction tools and supplies,  while environmental  products
accounted for 24 percent of its sales. The remaining 9 percent of sales included
miscellaneous   products  used  by  asbestos  and  lead  abatement  contractors,
construction contractors and industrial manufacturing facilities.

                                       5
<PAGE>
The Company buys products from  manufacturers  based on orders received from its
customers as well as anticipated needs based on prior buying patterns,  customer
inquiries  and  industry  experiences.  The Company  maintains  an  inventory of
disposable  products  and  commodities  as well  as low  cost  equipment  items.
Approximately  78  percent  of the  Company's  sales  for  2000  and 1999 are of
disposable  items and  commodity  products,  which are sold to customers at unit
prices ranging from under $1.00 to $50.00.  The balance of sales is attributable
to items  consisting  of lower  priced  equipment  beginning  at $20.00 to major
product   assemblies   such  as   decontamination   trailers  which  retail  for
approximately  $15,000.  The Company currently does not manufacture or lease any
products and does not perform any repairs thereon. The Company distributes, on a
limited basis, disposable items under its own private label.

Except with  regard to certain  specialty  equipment  associated  with  asbestos
abatement  activities  such as  filtration,  vacuum  and  pressure  differential
systems, many of the Company's products can be used interchangeably  within many
of the industries it supplies.  Equipment  distributed  by the Company  includes
manufacturers' product descriptions and instructions pertaining to use.

MARKETING

The Company's  marketing program is conducted by its sales  representatives,  as
well  as by  senior  management  and  the  leaders  at  each  of  its  operating
facilities. The sales representatives are compensated by a combination of salary
and/or commission, which is based upon negotiated sales standards.

The Company  maintains  24-hours-a-day/7-days-a-week  telephone  service for its
customers and typically delivers supplies and equipment within two or three days
of receipt  of an order.  The  Company is  prepared  to provide  products  on an
expedited  basis in response to requests from  customers  who require  immediate
deliveries because their work is performed during non-business  hours,  involves
substantial  costs because of the specialized  labor crews involved or may arise
on short notice as a result of exigent conditions.

BACKLOG

Substantially  all the  Company's  products are shipped to  customers  within 48
hours following  receipt of the order,  therefore backlog is not material to the
Company's operations.

INFLATION

The inflation  rate for the U.S.  economy has averaged  approximately  3 percent
annually over the past several  years,  with the 2000  inflation  rate being 3.4
percent. The 2001 inflation rate is projected to be in the 3 to 4 percent range.
The  Company  believes  inflation  has not been a  substantial  concern nor will
inflation have a material impact to the Company's operations or profitability in
the near term, if it remains stable.  In the event of increased  inflation,  the
Company anticipates it would be able to pass along increases in product costs to
its customers in the form of higher selling prices, thereby having little effect
on product margins.

                                       6
<PAGE>
ENVIRONMENTAL IMPACT

The Company distributes a variety of products in the asbestos abatement industry
all of which require the Company to maintain on file Material Safety Data Sheets
("MSDS") that inform all  purchasers  and users of any  potential  hazards which
could occur if the products spilled or leaked.  Although the Company provides no
assurance, it reviews all products that could have a potential for environmental
hazards  and tries to  ensure  the  products  are safe for on site  storage  and
distribution.  The Company  currently  distributes no products it believes would
create an  environmental  hazard if leaked or  spilled.  The  Company has safety
procedures in place to minimize any impact if a product were to leak or spill.

SEASONALITY

Historically,  the  asbestos  abatement  services  and supply  business has been
seasonal as a result of the substantial number of abatement  contracts performed
in  educational  facilities  during the summer  months or during other  vacation
periods.  The Company believes  seasonality is not a major characteristic in the
non-educational or private sector, which includes the industrial, commercial and
residential  markets.  In addition to the private sector asbestos business,  the
Company's  expansion  of  the  construction,  industrial  safety  and  hazardous
material  remediation  supply markets have  mitigated  most seasonal  impacts of
government asbestos projects on the Company's sales.

The  Company's  profitability  historically  increases  in the  second and third
quarters,   relative  to  the  first  and  fourth  quarters.  This  increase  is
attributable  to the small  increase  in  revenues  during  the second and third
quarters  without a corresponding  increase in costs, as fixed costs represent a
majority of total selling, general and administrative costs.

GOVERNMENT REGULATION

As a  supplier  of  products  manufactured  by others to the  asbestos  and lead
abatement,   construction  tool,   industrial  safety  and  hazardous  materials
industry,  the Company's internal  operations are not substantially  affected by
federal laws and regulations  including  those  promulgated by the EPA and OSHA.
Most of the  contractors  and other  purchasers of the  Company's  equipment and
supplies  are  subject  to  various  government  regulations.   Developments  in
legislation  and  regulations  affecting  manufacturers  and  purchasers  of the
Company's products could have a substantial effect on the Company.

                                       7
<PAGE>
COMPETITION

The asbestos and lead  abatement,  industrial  safety,  hazardous  materials and
construction tools supply businesses are highly  competitive.  These markets are
served by a limited  number of large national firms as well as many local firms,
none of who can be characterized as controlling the market. The Company competes
on the basis of price,  delivery,  credit  arrangements  and product variety and
quality.   Substantial   regulatory  or  economic   barriers  to  entry  do  not
characterize  the  Company's  business.   Furthermore,   additional   companies,
including  e-commerce based  companies,  could enter any of these industries and
may have greater financial, marketing and technical resources than the Company.

EMPLOYEES

As of February 28, 2001, the Company employed a total of 125 full time employees
including 3 executive  officers,  11 managers,  63 administrative  and marketing
personnel  and  48  clerical  and  warehouse  personnel.  The  Company  believes
relations with its employees are excellent.

ITEM 2.  DESCRIPTION OF PROPERTIES

The Company's headquarters are located in Dallas, Texas and occupy approximately
6,400 square feet of leased general office space. This lease expires in February
2005. As of December 31, 2000, the seven  distribution  facilities lease a total
of 143,495 square feet of general office and warehouse  space.  These facilities
range in size from 9,000  square  feet to 33,600 with  leases  expiring  between
November 2001 and February 2005.

ITEM 3. LEGAL PROCEEDINGS

In  January  and  February  2000,  the  Company  airfreighted  products  to  two
customers,   which   contained   chemicals   classified  by  the  Department  of
Transportation  as  hazardous  material.  During  transportation,  some of these
chemicals leaked. On June 15, 2000, the Federal Aviation  Administration ("FAA")
notified the Company of their findings for the first  incident  which  indicated
the Company did not comply with the  Department  of  Transportation's  Hazardous
Material  Regulations.  In  October  2000,  the FAA  proposed,  and the  Company
accepted,  $25,000 civil penalty for the first incident.  The settlement amount,
less the initial payment of $7,000, is accrued at December 31, 2000. The Company
resolved  the  second  incident  with the FAA;  no  damages  or  penalties  were
assessed.

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

None

                                       8
<PAGE>
                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
         MATTERS

(a) The Company's  common stock trades on The Nasdaq SmallCap Market tier of The
Nasdaq Stock Market under the symbol "ABIX".  The following table sets forth the
high and low bid prices for the common  stock for the periods  indicated.  These
quotations  reflect prices  between  dealers,  do not include  retail  mark-ups,
mark-downs or commissions and may not necessarily represent actual transactions.

<TABLE>
                                           Common Stock
                                             Bid Price
                                   -----------------------------
<S>                                <C>               <C>

          2000                         High              Low
--------------------------         ------------      -----------
      First Quarter                $     3.375       $    1.000
     Second Quarter                      1.844            0.250
      Third Quarter                      2.500            1.344
     Fourth Quarter                      2.250            1.063

          1999
--------------------------
      First Quarter                $     3.625       $    2.500
     Second Quarter                      3.688            2.813
      Third Quarter                      3.188            2.250
     Fourth Quarter                      2.563            1.625
</TABLE>

On March 14, 2001, the closing bid price for the common stock was $1.750.

(b) As of March 14,  2001,  the  approximate  number of holders of record of the
Company's common stock was 700.

(c) The Company has never paid cash  dividends on its common stock.  The Company
presently  intends to retain any future earnings to finance the expansion of its
business or repay borrowings on its lines of credit and does not anticipate that
any cash  dividends  will be paid in the  foreseeable  future.  Future  dividend
policy will depend on the Company's earnings,  capital  requirements,  expansion
plans, financial conditions, and other relevant factors.

(d) At various times since November 1984, the Board of Directors  authorized the
acquisition of the Company's common stock totaling  726,500 shares.  As of March
14, 2001, the Company has acquired 726,166 shares and does not intend to acquire
any additional shares for the foreseeable future.  Included in these shares is a
block of  102,600  shares  purchased  in March  1999,  a block of 51,000  shares
purchased in October 1999,  and 22,766  shares  received in January 1999 from an
officer of the Company as payment for monies owed to the Company of $79,681. All
of these shares are held as treasury shares.

                                       9
<PAGE>
ITEM 6.  SELECTED FINANCIAL DATA

The tables below set forth,  in summary  form,  selected  financial  data of the
Company.  This data, which is not covered by the independent  auditors'  report,
should be read in conjunction  with the  consolidated  financial  statements and
notes thereto which are included  elsewhere  herein (amounts in thousands except
per share amounts).

<TABLE>
                                                                     Year Ended December 31,
                                             -----------------------------------------------------------------------
<S>                                          <C>           <C>            <C>             <C>            <C>

                                               2000            1999           1998           1997            1996
                                             ---------     -----------    -----------     ----------     -----------
Selected Operating Results:
   Net sales                                 $  47,987     $    44,576    $    37,684     $   34,341     $    33,367
   Gross profit                              $  12,982     $    12,217    $    10,837     $   10,037     $     9,502

   Earnings from continuing operations       $     598     $       461    $     1,167     $      841     $       734
   Earnings from discontinued
     operations, net of income taxes                 -               -              -              -              22
                                             ---------     -----------    -----------     ----------     -----------
   Net earnings                              $     598     $       461    $     1,167     $      841     $       756
                                             =========     ===========    ===========     ==========     ===========

Basic and diluted earnings per common share:
   Earnings from continuing operations       $     .35     $       .26    $       .60     $      .43     $       .35
   Earnings from discontinued
     operations                                      -               -              -              -             .01
                                             ---------     -----------    -----------     ----------     -----------
   Net earnings                              $     .35     $       .26    $       .60     $      .43     $       .36
                                             =========     ===========    ===========     ==========     ===========
Weighted average shares outstanding:
     Basic                                       1,711           1,779          1,934          1,934           2,076
                                             =========     ===========    ===========     ==========     ===========
     Diluted                                     1,711           1,779          1,934          1,934           2,111
                                             =========     ===========    ===========     ==========     ===========

</TABLE>

<TABLE>
                                                                       As of December 31,
                                             ------------------------------------------------------------------------
                                                2000            1999           1998           1997            1996
                                             ----------     -----------    -----------     ----------     -----------
<S>                                          <C>            <C>            <C>             <C>            <C>

Selected Balance Sheet Data:
   Current assets                         $     12,075   $      13,220  $       9,918   $      9,003   $       9,722
   Current liabilities                           7,411           9,171          4,408          4,676           6,219
   Total assets                                 14,042          15,204         10,596          9,854          10,678
   Total liabilities                             7,411           9,171          4,408          4,676           6,219
   Retained earnings                             6,312           5,714          5,252          4,085           3,244
   Stockholders' equity                          6,631           6,033          6,187          5,178           4,459
</TABLE>

                                       10
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

Consolidated net sales for the year ended December 31, 2000, increased 8 percent
to $47,987,000 from $44,576,000 in 1999. The Abatix operating  segment net sales
grew 5 percent to $44,145,000  in 2000 and the IESI operating  segment net sales
increased 58 percent to $3,842,000  in 2000.  The increase in  consolidated  net
sales  resulted from efforts to further  expand and diversify the customer base,
including the introduction of a new  distribution  channel for IESI and the 1999
acquisition of North State, a construction supply  distributor.  The acquisition
provides a larger  customer  base and the ability to cross sell products to both
North State and Abatix customers.  The increase in net sales is also a result of
the  stable  economic  conditions  in the  geographic  regions  serviced  by the
Company's facilities. The increase in net sales for 2000 was partially offset by
an 11 percent  decline in sales to  asbestos  abatement  contractors  and by the
April 1999 closure of the  Company's  Denver  facility.  This  facility had 1999
revenues of  approximately  $353,000.  Further  diversification  of the customer
base,  cross  selling  of  products,  along  with the  economic  conditions,  if
maintained, should allow the Company to internally grow its revenues in 2001.

Although the decline in sales to asbestos  abatement  contractors is expected to
continue for the foreseeable  future,  sales to these  contractors for the first
two  months of 2001  were  slightly  higher  than the same  period in 2000.  The
asbestos   abatement  industry  will  likely  diminish  over  time  as  asbestos
containing  materials,  last used in construction during 1977-1980,  are removed
from schools, office buildings, homes and factories.

Sales to the hazardous materials remediation, industrial safety and construction
tools supply markets are increasing both in absolute amounts and as a percentage
of revenues to the Company.  The acquisitions of Keliher and North State,  other
potential  acquisitions,  additional  salespeople  and internal  growth in these
markets  should  decrease the  dependency of the Company on any single  product,
geographic market or on sales to the asbestos abatement  industry.  In addition,
the Company is developing an e-commerce solution to help solidify  relationships
with the existing customer base and expand its geographic presence.

Gross  profit for 2000 of  $12,982,000  increased 6 percent from gross profit in
1999 of $12,217,000 due to increased sales volume.  As expected,  margins varied
from  location to location  due to sales mix and local  market  conditions.  The
Company's  gross  profit  margins,  expressed  as a  percentage  of sales,  were
approximately  27  percent  for 2000 and  1999.  Although  overall  margins  are
expected to remain at their current levels in 2001,  competitive pressures could
negatively  impact any and all  efforts by the  Company to  maintain  or improve
product margins.

                                       11
<PAGE>
Selling, general and administrative expenses for 2000 of $11,395,000 increased 3
percent  over 1999  expenses  of  $11,083,000.  The  increase  was  attributable
primarily to the inclusion of North State costs and increased rent due to larger
facilities  and  higher  rent  rates  for  three  distribution  centers  and the
corporate  offices.  Leases on three facilities were  renegotiated at the end of
1999.  Rental rates are higher with the new leases as a result of improved  real
estate  conditions.  These  expenses  were 24  percent  of sales for 2000 and 25
percent of sales for 1999.  Selling,  general and  administrative  expenses  are
expected to be in the 23 to 24 percent range for 2001.

Interest  expense of $562,000  increased  $175,000 from 1999 interest expense of
$387,000  primarily  due  to the  additional  borrowings  used  to  finance  the
acquisition  of North State and higher  interest  rates.  The  Company's  credit
facilities are variable rate notes tied to the Company's  lending  institution's
prime rate.  Increases in the prime rate could  negatively  affect the Company's
earnings.

Net earnings for the year ended December 31, 2000, of $598,000 or $.35 per share
increased  $137,000 from net earnings of $461,000 or $.26 per share in 1999. The
increase in net earnings is primarily due to the higher sales volume,  partially
offset by the higher general and administrative costs and the increased interest
expense.

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

Consolidated  net sales for the year ended December 31, 1999 improved 18 percent
to $44,576,000 from $37,684,000 in 1998. The Abatix operating  segment net sales
grew 20 percent to $42,147,000 in 1999, and the IESI operating segment net sales
of  $2,429,000 in 1999  remained  constant with the prior year.  The increase in
consolidated  net sales was  primarily  the result of the  acquisition  of North
State in June 1999 and the January 1999 acquisition of Keliher.  The increase in
sales  resulting from these  acquisitions  was partially  offset by a decline in
sales derived from customers in oil related industries. In addition, on April 6,
1999, the Company closed its Denver  facility.  The Denver facility had sales of
approximately  $353,000 and $1,449,000 for the years ended December 31, 1999 and
1998, respectively.

Gross profit for 1999 of $12,217,000 increased 13 percent from 1998 gross profit
of $10,837,000  due to an increase in sales volume.  As seen in previous  years,
gross  profit  margins  varied  by  location  as a result of sales mix and local
market conditions. Reported as a percentage of sales, the Company's gross profit
margins were 27 percent and 29 percent for 1999 and 1998, respectively.  The two
percent  decline in gross profit margin was  attributable to a change in the mix
of products being sold primarily as a result of the  acquisitions of Keliher and
North State.

Selling, general and administrative expenses increased 27 percent to $11,083,000
over 1998 expenses of $8,729,000. The increase was due to the inclusion of North
State  and  Keliher  costs,  as well as costs  incurred,  including  facilities,
payroll,  travel,  and marketing costs, in preparation for expected  growth.  In
order to accommodate  growth,  the Company relocated several of its distribution
centers to larger facilities,  which also included higher per square foot rental
rates.  This increase in rent expense,  coupled with the costs  associated  with
efforts to further enhance customer  service  contributed to the higher selling,
general and administrative expenses in 1999.

                                       12
<PAGE>
As a percent of sales,  selling,  general and  administrative  expenses  were 25
percent  for 1999 as  compared  to 23 percent  for 1998.  As a percent of sales,
these expenses are higher in 1999 due to the higher  operating cost structure of
Keliher,  expenses related to the integration of North State's  operations,  and
the costs  associated with marketing  initiatives to improve our internal growth
rate. The Company did not incur any  significant  charges related to the closing
of its Denver facility.

Other  expense,  net,  of $374,000  increased  70 percent  from 1998  expense of
$220,000 primarily due to a 62 percent increase in interest expense. In addition
to a higher  prime rate,  borrowings  used to finance the  acquisition  of North
State resulted in the higher interest expense.

Net earnings of $461,000 or $.26 per share in 1999 declined 60 percent from 1998
net earnings of $1,167,000  or $.60 per share.  The decrease in net earnings was
due to a two percent  decline in profit  margins  combined with higher  selling,
general and administrative costs and increased interest expense.

LIQUIDITY AND CAPITAL RESOURCES

The Company's working capital  requirements  historically result from the growth
of its  accounts  receivable  and  inventories,  partially  offset by  increased
accounts  payable and  accrued  expenses,  associated  with  increases  in sales
volume.  Net cash  provided by  operations  during 2000 of  $1,836,000  resulted
principally from the decrease in accounts receivable,  the net earnings adjusted
for depreciation and amortization and the decrease in inventories.  The decrease
in accounts receivable is attributed to higher than normal collections and lower
sales in December  2000 versus 1999.  Cash flow from  operations  for the entire
year of 2001 is expected to be positive,  although at any given point, it may be
negative.

Cash  requirements for non-operating  activities during 2000 resulted  primarily
from the purchases of property and equipment.  In addition,  net working capital
line of  credit  repayments  occurred  primarily  as a  result  of the net  cash
provided by operations.  The equipment  purchases in 2000 were  primarily  costs
associated with building the Company's e-commerce solution, office furniture and
fixtures, warehouse equipment, and a delivery vehicle.

The development of the Company's  e-commerce  solution,  which should begin beta
testing in the first half of 2001,  has required a significant  capital  outlay.
This  solution,  which could cost $200,000 to implement,  market and maintain in
2001, is expected to provide customers a more efficient method of doing business
with Abatix and could provide some cost savings in the future, as well as expand
the customer base.

In early May 2000, the Company increased its working capital line of credit at a
commercial  lending  institution  from  $6,500,000  to  $7,000,000  to help fund
additional  capital  requirements  resulting  from the  business  growth and the
development of its e-commerce site. The working capital line of credit agreement
allows the  Company  to borrow up to 80  percent  of the book value of  eligible
trade  receivables  plus the  lesser of 40  percent  of  eligible  inventory  or
$2,000,000.  As of March 14,  2001,  there are advances  outstanding  under this
credit facility of $3,636,000.  Based on the borrowing formula,  the Company had
the  capacity  to borrow an  additional  $3,364,000  as of March 14,  2001.  The

                                       13
<PAGE>
Company also maintains a $550,000 capital  equipment  credit facility  providing
for  borrowings  at 80 percent of cost on  purchases.  The advances  outstanding
under this  credit  facility as of March 14,  2001,  were  $97,000.  Both credit
facilities  are payable on demand and bear a variable rate of interest  computed
at the prime rate.

Management believes the Company's current credit facilities,  together with cash
provided  by  operations,  will be  sufficient  for its  capital  and  liquidity
requirements  for the next  twelve  months.  In the  event the  Company  pursues
additional  acquisitions  and is unable to use its common stock as payment,  the
Company would need to negotiate with a lender to secure additional borrowings to
be used to acquire another company's assets.

NEW ACCOUNTING STANDARDS

The Company will adopt the reporting  and  disclosure  requirements  of SFAS No.
133,  "Accounting For Derivative  Instruments and Hedging Activities" during the
first  quarter  of  fiscal  2001.  This  statement  establishes  accounting  and
reporting  standards  for  derivative  instruments  and hedging  activities  and
requires the  recognition of all derivatives on the balance sheet at fair value.
If the derivative is a hedge,  depending on the nature of the hedge,  changes in
the fair value of the  derivatives  will either be offset  against the change in
fair  value  of the  hedged  item  through  earnings,  or  recognized  in  other
comprehensive  income  until the hedged  item is  recognized  in  earnings.  The
adoption of this standard will not have a material impact on the Company.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Since the Company's  working  capital and equipment lines of credit are variable
rate notes, the Company is exposed to interest rate risk. Based on the Company's
debt at  December  31, 2000 and 1999,  an  increase  of 100 basis  points in the
United  States  prime rate would have  negatively  impacted  the  Company's  net
earnings for the years then ended by $26,000 and $36,000, respectively.

Except for the historical information contained herein, the matters set forth in
this  Form  10-K  are  forward  looking  and  involve  a  number  of  risks  and
uncertainties.  Among the  factors  that could  cause  actual  results to differ
materially  are the  following:  inability  to hire and  train  quality  people,
funding of environmental related projects,  general economic and commercial real
estate conditions in the local markets,  changes in interest rates, inability to
pass on price  increases  to  customers,  unavailability  of products and strong
competition.  In addition,  further  increases in oil prices or shortages in oil
supply could significantly impact the Company's petroleum based products and its
ability to supply those  products at a reasonable  price.  Furthermore,  lack of
acceptance  of our proposed  e-commerce  solution or the  impairment of goodwill
resulting from the 1999  acquisitions  could also cause actual results to differ
materially.

ITEM 8.  CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated  financial statements and supplementary data are included under
Item 14(a)(l) and (2) of this Report.

                                       14
<PAGE>
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE

None

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

This Item 10 is incorporated  herein by reference from the Company's  definitive
Proxy  Statement to be filed with the  Securities  and Exchange  Commission  not
later than one hundred twenty (120) days after December 31, 2000.

ITEM 11.  EXECUTIVE COMPENSATION

This Item 11 is incorporated  herein by reference from the Company's  definitive
Proxy  Statement to be filed with the  Securities  and Exchange  Commission  not
later than one hundred twenty (120) days after December 31, 2000.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

This Item 12 is incorporated  herein by reference from the Company's  definitive
Proxy  Statement to be filed with the  Securities  and Exchange  Commission  not
later than one hundred twenty (120) days after December 31, 2000.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

This Item 13 is incorporated  herein by reference from the Company's  definitive
Proxy  Statement to be filed with the  Securities  and Exchange  Commission  not
later than one hundred twenty (120) days after December 31, 2000.

                                       15
<PAGE>
                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  1 AND 2. CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

The consolidated financial statements and financial statement schedule listed on
the index to consolidated  financial statements on page F-l are filed as part of
this Form l0-K.

(b)  REPORTS ON FORM 8-K

None

(c)  EXHIBITS

(2)(a)          Agreement  of Merger  (filed as Exhibit (2) to the Registration
                Statement  on Form  S-18,  filed January 11, 1989).

(2)(b)          Asset  Purchase  Agreement  (filed as Exhibit  (2)(b) to the
                Report on Form 8-K,  filed October 19, 1992).

(2)(c)          Asset  Purchase  Agreement for Keliher  Hardware  Company
                (filed as exhibit (2)(c) to the Report on Form 10-K for the year
                ended December 31, 1998).

(2)(d)          Asset  Purchase  Agreement for North State Supply Co. of Phoenix
               (filed with Report on Form 8-K on June 15, 1999).

(3)(a)(1)       Certificate of Incorporation  (filed as Exhibit (3)(a)(1) to the
                Registration  Statement  on Form S-18,  filed  January 11, 1989;
                filed electronically as Exhibit 3(i)(a) to the Form 10-Q for the
                quarter ended December 31, 1995, filed on November 9, 1995).

(3)(a)(2)       Certificate of Amendment of Certificate of Incorporation  (filed
                as Exhibit (3)(a)(2) to the Registration Statement on Form S-18,
                filed January 11, 1989; filed  electronically as Exhibit 3(i)(b)
                to the Form 10-Q for the quarter ended December 31, 1995,  filed
                on November 9, 1995).

(3)(a)(3)       Certificate of Amendment of Certificate of Incorporation  (filed
                as  Exhibit  (3)(i)(c)  to the Form 10-Q for the  quarter  ended
                December 31, 1995, filed November 9, 1995; filed  electronically
                as  Exhibit  3(i)(c)  to the  Form  10-Q for the  quarter  ended
                December 31, 1995, filed on November 9, 1995).

(3)(b)          Bylaws  (filed as Exhibit  (3)(b) to the  Registration Statement
                on Form S-18,  filed  January 11, 1989;  filed  electronically
                as Exhibit 3(ii) to the Form 10-Q for the quarter ended
                December 31, 1995, filed on November 9, 1995).

                                       16
<PAGE>
(4)(a)          Specimen  Certificate  of Common Stock (filed as Exhibit  (4)(a)
                to the  Registration  Statement on Form S-18, filed January 8,
                1989).

(4)(b)          Specimen of Redeemable  Common Stock Purchase  Warrant (filed as
                Exhibit (4)(b) to the Registration Statement on Form S-18, filed
                February 9, 1989).

(10)(a)(vi)     Employment Agreement with Terry W. Shaver effective January 1,
                2001.*

(10)(b)(vi)     Employment Agreement with Gary L. Cox effective January 1,2001.*

(10)(e)         Demand Credit Facility with Comerica  Bank-Texas  dated June 15,
                1989  (filed as  Exhibit  (10)(e) to the Report on Form 10-Q for
                the Quarter ended June 30, 1989, filed August 11, 1989).

(10)(e)(i)      Demand Credit Facility with Comerica  Bank-Texas  dated March 1,
                1993 (filed as Exhibit (10)(e)(i) to the Report on Form 10-K for
                the year ended December 31, 1992).

(10)(e)(ii)     Demand  Credit  Facility  with  Comerica  Bank-Texas  extension,
                renewal  and  increase  dated  June 1, 1993  (filed  as  Exhibit
                (10)(e)(ii)  to the  Report  on Form  10-K  for the  year  ended
                December 31, 1993).

(10)(e)(iii)    Demand  Credit  Facility  with  Comerica  Bank-Texas  extension,
                renewal and increase dated  September 22, 1994 (filed as Exhibit
                (10)(e)(iii)  to the  Report  on Form  10-K for the  year  ended
                December 31, 1994).

(22)            Information  Statement  dated  September  1, 1995 (filed as
                Exhibit (22) to the Report on Form 10-K for the year ended
                December 31, 1995).

(23)            Consent of Independent Auditors.*

* Filed herewith as part of the Company's electronic filing.

                                       17
<PAGE>
                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this Report to be signed on its
behalf by the undersigned;  thereunto duly authorized, on the 21st day of March,
2001.


                                      ABATIX CORP.



                                      By: /s/ Terry W. Shaver
                                      -----------------------
                                      Terry W. Shaver

                                      President, Chief Executive Officer
                                      And Director (Principal Executive Officer)

Pursuant to the requirements of 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 date indicated.

Signatures                 Title                                  Date


/s/ Terry W. Shaver   President, Chief Executive Officer          March 21, 2001
-------------------   and Director (Principal Executive Officer)
Terry W. Shaver


/s/ Gary L. Cox       Executive Vice President,                   March 21, 2001
---------------       Chief Operating Officer and Director
Gary L. Cox


/s/ Daniel M. Birnley Director                                    March 21, 2001
---------------------
Daniel M. Birnley


/s/ Donald N. Black   Director                                    March 21, 2001
-------------------
Donald N. Black


/s/ Frank J. Cinatl   Vice President, Chief Financial Officer     March 21, 2001
-------------------   and Director (Principal Accounting Officer)
Frank J. Cinatl, IV

                                       18
<PAGE>

                           ABATIX CORP. AND SUBSIDIARY

                   Index to Consolidated Financial Statements

                                                                Page
Independent Auditors' Report                                     F-2

Financial Statements:
  Consolidated Balance Sheets as of December 31, 2000 and 1999   F-3

  Consolidated Statements of Operations for the years ended
    December 31, 2000, 1999 and 1998                             F-4

  Consolidated Statements of Stockholders' Equity for the years
    ended December 31, 2000, 1999 and 1998                       F-5

  Consolidated Statements of Cash Flows for the years ended
    December 31, 2000, 1999 and 1998                             F-6

  Notes to Consolidated Financial Statements                     F-7


Financial Statement Schedule:
  II - Valuation and Qualifying Accounts for the years ended
        December 31, 2000, 1999 and 1998                         S-1

All  other   schedules  have  been  omitted  as  the  required   information  is
inapplicable  or the  information  required  is  presented  in the  consolidated
financial statements or the notes thereto.

                                      F-1
<PAGE>
                          INDEPENDENT AUDITORS' REPORT


The Board of Directors and Stockholders
Abatix Corp.:


We have  audited the  consolidated  financial  statements  of Abatix  Corp.  and
subsidiary as listed in the accompanying index. In connection with our audits of
the  consolidated  financial  statements  we also  have  audited  the  financial
statement  schedule  as listed in the  accompanying  index.  These  consolidated
financial  statements and financial statement schedule are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
consolidated  financial statements and the financial statement schedule based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  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  audits  provide  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 Abatix Corp. and
subsidiary as of December 31, 2000 and 1999, and the results of their operations
and  their  cash  flows  for each of the years in the  three-year  period  ended
December 31, 2000 in conformity with accounting principles generally accepted in
the United  States of America.  Also,  in our  opinion,  the  related  financial
statement  schedule,  when  considered  in  relation  to the basic  consolidated
financial  statements  taken  as a  whole,  presents  fairly,  in  all  material
respects, the information set forth therein.



                                    /s/ KPMG LLP


Dallas, Texas
March 2, 2001

                                      F-2
<PAGE>
                           ABATIX CORP. AND SUBSIDIARY

                           Consolidated Balance Sheets
                           December 31, 2000 and 1999

<TABLE>
                                  ASSETS                                               2000               1999
                                                                                  --------------     --------------
<S>                                                                               <C>                <C>

Current assets:
   Cash                                                                           $        5,678      $     106,793
   Trade accounts receivable, net of allowance for doubtful accounts of
     $559,963 in 2000 and $616,678 in 1999 (note 4)                                    6,371,419          7,028,271
   Inventories (note 4)                                                                5,124,727          5,393,355
   Prepaid expenses and other assets                                                     296,254            368,583
   Refundable income taxes                                                                     -             87,986
   Deferred income taxes (note 5)                                                        277,170            235,505
                                                                                  --------------      -------------
       Total current assets                                                           12,075,248         13,220,493

Receivables from officers and employees                                                   14,933              7,750
Property and equipment, net (notes 3 and 4)                                              716,993            629,796
Deferred income taxes (note 5)                                                           197,180            144,916
Goodwill, net of accumulated amortization of $249,275 in 2000
      and $91,756 in 1999                                                                977,361          1,134,880
Other assets                                                                              60,722             66,973
                                                                                  --------------      -------------
                                                                                  $   14,042,437      $  15,204,808
                                                                                  ==============      =============

                   LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Notes payable to bank (note 4)                                                 $    4,334,852      $   5,825,721
   Accounts payable                                                                    2,418,470          2,604,587
   Accrued compensation                                                                  158,668            198,127
   Other accrued expenses                                                                499,119            542,959
                                                                                  --------------     --------------
         Total current liabilities                                                     7,411,109          9,171,394
                                                                                  --------------     --------------

Stockholders' equity (note 6):
   Preferred stock - $1 par value, 500,000 shares authorized; none issued                      -                  -
   Common stock - $.001 par value, 5,000,000 shares authorized; issued
     2,437,314 shares in 2000 and 1999                                                     2,437              2,437
   Additional paid-in capital                                                          2,574,560          2,574,560
   Retained earnings                                                                   6,311,673          5,713,759
   Treasury stock at cost, 726,166 common shares in 2000 and 1999                     (2,257,342)        (2,257,342)
                                                                                  --------------      -------------
       Total stockholders' equity                                                      6,631,328          6,033,414

Commitments and contingencies  (note 10)
                                                                                  --------------      -------------
                                                                                  $   14,042,437      $  15,204,808
                                                                                  ==============      =============
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-3
<PAGE>
                           ABATIX CORP. AND SUBSIDIARY

                      Consolidated Statements of Operations
                   Years ended December 31, 2000, 1999 and 1998
<TABLE>

                                                                  2000                  1999                 1998
                                                             ------------          -------------        -------------
<S>                                                          <C>                   <C>                  <C>
Net sales                                                    $ 47,986,591          $  44,576,180        $  37,683,774
Cost of sales                                                  35,004,764             32,358,985           26,846,279
                                                             ------------          -------------        -------------
       Gross profit                                            12,981,827             12,217,195           10,837,495

Selling, general and administrative expenses                  (11,394,760)           (11,083,429)          (8,729,175)
                                                             ------------          -------------        -------------
       Operating profit                                         1,587,067              1,133,766            2,108,320

Other income (expense):
   Interest income                                                    689                    573               15,824
   Interest expense                                              (561,826)              (386,856)            (238,706)
   Other, net                                                       1,683                 12,436                2,400
                                                             ------------          -------------        -------------
       Earnings before income taxes                             1,027,613                759,919            1,887,838

Income tax expense (note 5)                                      (429,699)              (298,461)            (720,429)
                                                             ------------         --------------        -------------
       Net earnings                                          $    597,914         $      461,458        $   1,167,409
                                                             ============         ==============        =============

Basic and diluted earnings per common share                  $        .35         $          .26        $         .60
                                                             ============         ==============        =============

Basic and diluted weighted average shares outstanding           1,711,148              1,779,029            1,933,769
                                                             ============         ==============        =============
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-4
<PAGE>
                           ABATIX CORP. AND SUBSIDIARY

                 Consolidated Statements of Stockholders' Equity
                  Years ended December 31, 2000, 1999 and 1998

<TABLE>

                                         Common Stock          Additional                      Treasury Stock
                                    ----------------------      Paid-in       Retained    ------------------------       Total
                                     Shares       Amount        Capital       Earnings     Shares        Amount          Equity
                                    ---------   ----------    -----------    ----------   ---------  -------------    -----------
<S>                                 <C>         <C>           <C>            <C>         <C>         <C>              <C>

Balance at December 31, 1997        2,413,814   $    2,414    $ 2,498,508    $4,084,892     476,250  $  (1,408,137)  $  5,177,677

    Purchase of treasury stock              -            -              -             -      41,450       (157,930)      (157,930)

    Net earnings                            -            -              -     1,167,409           -              -      1,167,409
                                    ---------   ----------    -----------    ----------   ---------  -------------   ------------
Balance at December 31, 1998        2,413,814        2,414      2,498,508     5,252,301     517,700     (1,566,067)     6,187,156

    Stock issued for the Purchase
    of Keliher Hardware (note 2)       23,500           23         76,052             -           -              -         76,075

    Purchase of treasury stock              -            -              -             -     185,700       (611,594)      (611,594)

    Stock received to repay debt
    from officer                            -            -              -             -      22,766        (79,681)       (79,681)

    Net earnings                            -            -              -       461,458           -              -        461,458
                                    ---------   ----------    -----------    ----------   ---------  -------------   ------------
Balance at December 31, 1999        2,437,314        2,437      2,574,560     5,713,759     726,166     (2,257,342)     6,033,414

    Net earnings                            -            -              -       597,914           -              -        597,914
                                    ---------   ----------    -----------    ----------   ---------  -------------   ------------
Balance at December 31, 2000        2,437,314   $    2,437    $ 2,574,560    $6,311,673     726,166  $  (2,257,342)  $  6,631,328
                                    =========   ==========    ===========    ==========   =========  =============   ============
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-5
<PAGE>
                           ABATIX CORP. AND SUBSIDIARY

                      Consolidated Statements of Cash Flows
                   Years ended December 31, 2000, 1999 and 1998

<TABLE>
                                                                      2000               1999                1998
                                                                 --------------     --------------      ---------------
<S>                                                              <C>                <C>                 <C>
Cash flows from operating activities:
   Net earnings                                                  $      597,914      $     461,458       $    1,167,409
   Adjustments to reconcile net earnings to net cash
     provided by operating activities:
     Depreciation and amortization                                      521,888            469,032              367,789
     Deferred income taxes                                              (93,929)          (116,798)              (5,626)
     Gain on disposal of assets                                          (5,974)           (19,609)              (3,310)
     Changes in operating assets and liabilities, net of
     business acquisitions:
       Receivables                                                      656,852           (287,808)            (933,035)
       Inventories                                                      268,628           (384,281)             113,441
       Refundable income taxes                                           87,986            (87,986)                   -
       Prepaid expenses and other assets                                 72,329             64,968             (175,439)
       Accounts payable                                                (186,117)           556,542             (271,451)
       Accrued expenses                                                 (83,299)           (96,221)             159,755
                                                                 --------------    ---------------       --------------
Net cash provided by operating activities                             1,836,278            559,297              419,533
                                                                 --------------    ---------------       --------------

Cash flows from investing activities:
   Purchase of property and equipment                                  (476,238)          (444,642)            (191,850)
   Proceeds from sale of property and equipment                          30,646             35,750                8,500
   Business acquisitions, net of cash acquired (note 2)                       -         (2,160,574)                   -
   Advances to officers and employees                                   (39,162)           (63,897)             (40,609)
   Collection of advances to officers and employees                      31,979             60,170               34,833
   Other assets, primarily deposits                                       6,251            (30,515)               3,100
                                                                 --------------    ---------------       --------------
Net cash used in investing activities                                  (446,524)        (2,603,708)            (186,026)
                                                                 --------------    ---------------       --------------

Cash flows from financing activities:
   Purchase of treasury stock                                                 -           (611,594)            (157,930)
   Borrowings on notes payable to bank                               14,137,514         19,927,926           36,258,601
   Repayments on notes payable to bank                              (15,628,383)       (17,389,125)         (36,415,128)
                                                                 --------------    ---------------       --------------
Net cash (used in) provided by  financing activities                 (1,490,869)         1,927,207             (314,457)
                                                                 --------------    ---------------       --------------

Net decrease in cash                                                   (101,115)          (117,204)             (80,950)
Cash at beginning of year                                               106,793            223,997              304,947
                                                                 --------------    ---------------       --------------
       Cash at end of year                                       $        5,678    $       106,793       $      223,997
                                                                 ==============    ===============       ==============
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-6
<PAGE>
                           ABATIX CORP. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

(1)      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (a)  GENERAL

              Abatix  Corp.   ("Abatix")  and  subsidiary   (collectively,   the
              "Company")  market and distribute  personal  protection and safety
              equipment  and durable  and  nondurable  supplies to the  asbestos
              abatement industry,  the industrial safety and hazardous materials
              industries  and,  combined  with  tools  and  tool  supplies,  the
              construction  industry. At December 31, 2000, the Company operated
              seven sales and distribution centers in five states. The Company's
              wholly-owned subsidiary,  International  Enviroguard Systems, Inc.
              ("IESI")  imports  disposable  protective  clothing  products sold
              through the  Company's  distribution  channels  and through  other
              distributors.

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

              The accompanying  consolidated  financial  statements  include the
              accounts of Abatix and IESI. All significant intercompany accounts
              and transactions  have been eliminated in  consolidation.  Certain
              prior year  amounts  have been  reclassified  for  consistency  in
              presentation.

         (b)  INVENTORIES

              Inventories  consist of materials and equipment for resale and are
              stated at the lower of cost or  market.  Cost is  determined  by a
              method that approximates the first-in, first-out method.

         (c)  PROPERTY AND EQUIPMENT

              Property  and  equipment  are  stated  at  cost.  Depreciation  is
              provided by the  straight-line  method over the  estimated  useful
              lives of the assets.

                                      F-7
<PAGE>
         (d)  IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED
              ASSETS TO BE DISPOSED OF

              The Company  reviews  long-lived  assets for  impairment  whenever
              events or changes in circumstances indicate the carrying amount of
              an asset may not be  recoverable.  Recoverability  of assets to be
              held and used is measured by a comparison  of the carrying  amount
              of an asset to future net cash flows  expected to be  generated by
              the asset.  If such  assets are  considered  to be  impaired,  the
              impairment to be recognized is measured by the amount by which the
              carrying  amount  of the  assets  exceeds  the  fair  value of the
              assets.  Assets to be disposed of are reported at the lower of the
              carrying amount or fair value less costs to sell.

         (e)  REVENUE RECOGNITION

              Revenue is  recognized  when the goods are shipped.  In July 2000,
              the Emerging Issues Task Force ("EITF") reached consensus on Issue
              No. 00-10,  "Accounting for Shipping and Handling Fees and Costs",
              which  establishes  standards for how companies should account for
              shipping  and handling  fees billed to  customers.  The  consensus
              reached  was that all  amounts  billed  to a  customer  should  be
              classified as revenue.  No consensus was reached on classification
              of costs,  rather the EITF  reinforced the requirement to disclose
              the policy for accumulating and classifying  shipping and handling
              costs.

              For all years  presented,  the Company has  reclassified  shipping
              fees billed to customers from selling,  general and administrative
              expense.  This  reclassification  increased  revenue by  $408,679,
              $346,422 and $356,145 for the years ended December 31, 2000,  1999
              and 1998.  The costs  related  to this  revenue  are  included  in
              selling,   general  and  administrative   expense  were  $965,019,
              $826,634 and $781,455 for the years ended December 31, 2000,  1999
              and 1998.

         (f)  EARNINGS PER SHARE

              Basic earnings per share is calculated  using the weighted average
              number  of common  shares  outstanding  during  each  year,  while
              diluted  earnings  per share  includes the effects of all dilutive
              potential  common shares.  As of December 31, 2000, 1999 and 1998,
              there were no dilutive securities outstanding.  Basic earnings per
              share and diluted  earnings  per share  amounts were equal for the
              years ended December 31, 2000, 1999 and 1998.

                                      F-8
<PAGE>
         (g)  STATEMENTS OF CASH FLOWS

              For  purposes  of  the  Statements  of  Cash  Flows,  the  Company
              considers  all  highly  liquid  debt   instruments  with  original
              maturities  of three  months or less to be cash  equivalents.  The
              Company held no cash equivalents at December 31, 2000 or 1999.

              The Company paid interest of $565,933, $362,249, $247,298 in 2000,
              1999  and  1998,  respectively,  and  income  taxes of  $352,562,
              $637,957, $667,963 in 2000, 1999 and 1998, respectively. In 1999,
              the Company issued stock for a business  acquisition at a value of
              $76,075  and  received  stock from an officer to repay debt in the
              amount of $79,681.

         (h)  INCOME TAXES

              The  Company  accounts  for  income  taxes  using  the  asset  and
              liability  method.  Under this method the Company records deferred
              income taxes for the temporary  differences  between the financial
              reporting  basis and the tax basis of assets  and  liabilities  at
              enacted tax rates  expected to be in effect when such  amounts are
              realized or settled.  The resulting  deferred tax  liabilities and
              assets are adjusted to reflect changes in tax laws or rates in the
              period that includes the enactment date.

         (i)  GOODWILL

              Goodwill  represents  the excess of purchase  price over the fair
              value of net assets acquired.  Amortization is provided using the
              straight-line method over estimated useful lives of three and ten
              years.

              The  Company   assesses   the   recoverability   of  goodwill  by
              determining  whether the  amortization  of the asset balance over
              its remaining life can be recovered through  undiscounted  future
              operating  cash flows of the  acquired  operation.  The amount of
              impairment,  if any, is measured  based on  projected  discounted
              future  operating  cash flows using a discount rate  commensurate
              with that attainable by the Company for secured borrowings.

(2)      ACQUISITION AND DISPOSITION OF ASSETS

         Effective  January 1, 1999,  the Company  consummated an asset purchase
         agreement  with Keliher  Hardware  Company,  a California  corporation,
         pursuant  to which the  Company  assumed  the  operations  of  Keliher.
         Keliher,  based in Los Angeles,  California,  is an  industrial  supply
         distributor, primarily for the construction and industrial markets. The
         estimated fair value of the assets acquired was approximately $975,000.
         The aggregate purchase price was settled with the assumption of certain
         liabilities  (approximately $900,000), the issuance of 23,500 shares of
         the  Company's  $.001  par value  common  stock at a value of $3.45 per

                                      F-9
<PAGE>
         share and $35,000 in cash.  This  acquisition  has been  accounted  for
         using the purchase  method of accounting and,  accordingly,  results of
         Keliher's  operations  are  included  in  the  Company's   consolidated
         financial  statements  since the  acquisition  date.  The excess of the
         purchase  price  over the fair value of net  assets  acquired  is being
         amortized on a straight-line basis over three years.

         On April 6, 1999, the Company closed its Denver sales and  distribution
         center.  The Denver  facility had sales of $353,000 and  $1,449,000 for
         the years  ended  December  31, 1999 and 1998,  respectively.  Expenses
         related to the closing of this location were not material.

         Effective  June 1, 1999,  the  Company  consummated  an asset  purchase
         agreement   with  North  State  Supply  Co.  of  Phoenix,   an  Arizona
         corporation,  pursuant to which the Company  assumed the  operations of
         North State,  a  construction  supply  distributor.  The estimated fair
         value  of  the  assets  acquired  was  approximately  $1,800,000.   The
         aggregate  purchase  price was settled with the  assumption  of certain
         liabilities  (approximately  $785,000) and approximately  $2,100,000 in
         cash. This acquisition has been accounted for using the purchase method
         of accounting and, accordingly, the results of North State's operations
         are included in the Company's  consolidated  financial statements since
         the  acquisition  date.  The excess of the purchase price over the fair
         value of net assets  acquired  is being  amortized  on a  straight-line
         basis over ten years.

         Unaudited  pro  forma  results,  as if  the  Keliher  and  North  State
         acquisitions had occurred at the beginning of 1998, are as follows:

                                                   For the years ended
                                                       December 31,
                                            ------------------------------------
                                                1999                    1998
                                            ------------           -------------
Net sales                                   $ 47,087,585           $  47,031,222
                                            ============           =============
Net income                                  $    484,561           $   1,039,893
                                            ============           =============
Basic and diluted earnings per
   common share                             $        .27           $         .53
                                            ============           =============

                                      F-10
<PAGE>
(3)      PROPERTY AND EQUIPMENT

         Property and  equipment  consists of the following at December 31, 2000
         and 1999:

<TABLE>
                                                Estimated
                                               Useful Life              2000              1999
                                              -------------         ------------      ------------
<S>                                           <C>                   <C>               <C>
Furniture and equipment                        3 - 10 years         $  2,512,994      $  2,183,305
Transportation equipment                       3 - 5 years               523,743           489,917
Leasehold improvements                         3 - 5 years               153,966            85,141
                                                                    ------------      ------------
                                                                       3,190,703         2,758,363
Less accumulated depreciation and
   amortization                                                        2,473,710         2,128,567
                                                                    ------------      ------------
Net property and equipment                                          $    716,993      $    629,796
                                                                    ============      ============
</TABLE>

(4)      NOTES PAYABLE TO BANK

         At December 31, 2000,  the Company had two lines of credit with a bank.
         The  working  capital  facility  allows the  Company to borrow up to 80
         percent of the book value of eligible trade receivables plus the lesser
         of 40 percent of eligible  inventory or $2,000,000,  up to a maximum of
         $7,000,000.  Under this formula,  the Company had the ability to borrow
         $6,865,000 at December 31, 2000, of which approximately  $4,221,000 was
         used. A capital equipment facility provides for individual  borrowings,
         aggregating up to $550,000,  at 80 percent of the purchased equipment's
         cost.  At December  31, 2000,  the Company had  borrowed  approximately
         $114,000 on this facility.  Each borrowing under the capital  equipment
         line  is due  on  the  earlier  of  demand  or in  terms  ranging  from
         thirty-six  to sixty  monthly  installments  of principal and interest.
         Both credit  facilities  are payable on demand and bear a variable rate
         of interest  computed at the prime  rate.  As of December  31, 2000 and
         1999,  the  Company's  rate of  interest  on these  agreements  was 9.5
         percent and 8.5  percent,  respectively.  These credit  facilities  are
         secured by accounts receivable, inventories and equipment.

                                      F-11
<PAGE>
(5)      INCOME TAXES

         Income tax expense  (benefit)  for the years ended  December  31, 2000,
         1999 and 1998 consists of:

<TABLE>
                                                     2000               1999               1998
                                                ------------       -------------       ------------
<S>                                             <C>                <C>                 <C>
  Current:
     Federal                                    $    424,224       $     342,903       $    605,621
     State                                            99,404              72,355            120,433
  Deferred:
     Federal                                         (77,366)            (88,946)            (5,766)
     State                                           (16,563)            (27,851)               141
                                                ------------       -------------       ------------
 Total income tax expense                       $    429,699       $     298,461       $    720,429
                                                ============       =============       ============
 </TABLE>

         A  reconciliation  of expected federal income tax expense (based on the
         U.S.  corporate  income tax rate of 34  percent)  to actual  income tax
         expense for the years ended December 31, 2000, 1999 and 1998 follows:

<TABLE>
                                                         2000               1999               1998
                                                   --------------      -------------      -------------
<S>                                                <C>                 <C>                <C>
  Expected income tax expense                      $      349,388      $     258,372      $     641,865
  State income taxes, net of related federal
     tax benefit                                           65,536             29,373             79,579
  Nondeductible meals, entertainment expense
     and penalties                                         15,402             10,667              6,479
  Other                                                      (627)                49             (7,494)
                                                   --------------      -------------      -------------
  Actual income tax expense                        $      429,699      $     298,461      $     720,429
                                                   ==============      =============      =============
</TABLE>

                                      F-12
<PAGE>
         The tax effects of temporary  differences that give rise to significant
         portions of the  deferred  tax assets and  liabilities  at December 31,
         2000 and 1999 follow:

<TABLE>
                                                             2000               1999
                                                         -----------        -----------
<S>                                                      <C>                <C>
Deferred tax assets:
     Allowance for doubtful accounts                     $   223,985        $   238,801
     Inventory reserve                                        73,587             36,637
     Goodwill, due to differences in amortization
         periods                                             150,666             16,982
     Property and equipment, principally due to
         differences in depreciation                          46,514            127,933
     Other                                                         -              7,466
                                                         -----------        -----------
         Total gross deferred tax assets                     494,752            427,819
Deferred tax liabilities - prepaid expenses                  (20,402)           (47,398)
                                                         -----------        -----------
         Net deferred tax assets                         $   474,350        $   380,421
                                                         ===========        ===========
</TABLE>

         Management  has  determined,  based on the  Company's  history of prior
         operating  earnings  and its  expectations  for the  future,  operating
         earnings will more likely than not be sufficient to realize the benefit
         of the deferred tax assets. Accordingly, the Company has not provided a
         valuation allowance for deferred tax assets in any period presented.

(6)      STOCKHOLDERS' EQUITY

         The Board of Directors has authorized the  acquisition of up to 726,500
         shares of the  Company's  common  stock.  As of February 28, 2001,  the
         Company has acquired  726,166 shares and does not intend to acquire any
         additional shares for the foreseeable future.  Included in these shares
         is a block of 102,600 shares purchased in March 1999, a block of 51,000
         shares  purchased in October 1999,  and 22,766 shares  received from an
         officer of the  Company in January  1999 as payment  for monies owed to
         the  Company  of  $79,681.  All of these  shares  are held as  treasury
         shares.

(7)      BENEFIT PLANS

         The Company has a 401(k)  profit  sharing  plan,  under which  eligible
         employees may request the Company to deduct and contribute a portion of
         their   compensation  to  the  plan.  The  Company  may  also,  at  its
         discretion,  match a portion  of  employee  contributions  to the plan.
         Contributions  by the  Company to the 401(k) plan  aggregated  $46,346,
         $42,366, and $38,154 during 2000, 1999 and 1998, respectively.

                                      F-13
<PAGE>
(8)      FAIR VALUE OF FINANCIAL INSTRUMENTS

         The reported amounts of financial  instruments  such as cash,  accounts
         receivable,  accounts  payable and accrued  expenses  approximate  fair
         value  because of their short  maturity.  The  carrying  value of notes
         payable to bank  approximates fair value because these instruments bear
         interest at current market rates.

(9)      SEGMENT INFORMATION

         Identification   of  operating   segments  is  based  principally  upon
         differences  in the types and  distribution  channel of  products.  The
         Company's  reportable  segments  consist of Abatix and IESI. The Abatix
         operating  segment  includes  seven  aggregated  branches,  principally
         engaged in distributing environmental, safety and construction supplies
         to contractors and industrial  manufacturing  facilities in the western
         half of the United States and the Company's corporate  operations.  The
         IESI operating  segment,  which consists of the Company's  wholly-owned
         subsidiary,  International Enviroguard Systems, Inc., is engaged in the
         wholesale  distribution of disposable  protective clothing to companies
         similar  to,  and  including,   Abatix.   The  IESI  operating  segment
         distributes products throughout the United States.

         The accounting policies of the operating segments are the same as those
         described in Note 1 of the Notes to Consolidated  Financial Statements.
         The Company  evaluates the performance of its operating  segments based
         on earnings  before income taxes and accounting  changes,  and after an
         allocation of corporate expenses. Intersegment sales are at agreed upon
         pricing and intersegment profits are eliminated in consolidation.

                                      F-14
<PAGE>
         Summarized  financial  information  concerning the Company's reportable
         segments  is  shown  in  the  following  table.   There  are  no  other
         significant noncash items.

<TABLE>
                                                       Abatix               IESI                 Total
                                                    -----------          ----------           -----------
<S>                                                 <C>                  <C>                  <C>
                    2000
----------------------------------------------
Sales from external customer                        $44,145,042          $3,841,549           $47,986,591
Intersegment sales                                            -             579,733               579,733
Interest income                                             689                   -                   689
Interest expense                                        561,826                   -               561,826
Depreciation and amortization                           514,538               7,350               521,888
Segment profit                                          661,051             362,239             1,023,290
Segment assets                                       13,705,980             439,444            14,145,424
Capital expenditures                                    474,700               1,538               476,238

                    1999
----------------------------------------------
Sales from external customers                       $42,146,862          $2,429,318           $44,576,180
Intersegment sales                                            -             876,734               876,734
Interest income                                             573                   -                   573
Interest expense                                        386,856                   -               386,856
Depreciation and amortization                           461,924               7,108               469,032
Segment profit                                          478,441             292,862               771,303
Segment assets                                       15,141,406             712,996            15,854,402
Capital expenditures                                    439,941               4,701               444,642

                    1998
----------------------------------------------
Sales from external customers                       $35,258,053          $2,425,721           $37,683,774
Intersegment sales                                            -             872,332               872,332
Interest income                                          15,767                  57                15,824
Interest expense                                        238,706                   -               238,706
Depreciation and amortization                           363,089               4,700               367,789
Segment profit                                        1,585,546             305,333             1,890,879
Segment assets                                       10,706,982             993,048            11,700,030
Capital expenditures                                    177,670              14,180               191,850
</TABLE>

                                      F-15
<PAGE>
         Below is a  reconciliation  of (i) total  segment  profit  to  earnings
         before income taxes on the Consolidated  Statements of Operations,  and
         (ii) total segment assets to total assets on the  Consolidated  Balance
         Sheets for all periods  presented.  The sales from  external  customers
         represent the net sales on the Consolidated Statements of Operations.

<TABLE>
                                                        2000                 1999                 1998
                                                  -------------         -------------        ------------
<S>                                               <C>                   <C>                  <C>
    Profit for reportable segments                $   1,023,290         $     771,303        $  1,890,879
    Elimination of intersegment profits                   4,323               (11,384)             (3,041)
                                                  -------------         -------------        ------------
    Earnings before income taxes                  $   1,027,613         $     759,919        $  1,887,838
                                                  =============         =============        ============

    Total assets for reportable segments          $  14,145,424         $  15,854,402        $ 11,700,030
    Elimination of intersegment  assets                (102,987)             (649,594)         (1,104,525)
                                                  -------------         -------------        ------------
    Total assets                                  $  14,042,437         $  15,204,808        $ 10,595,505
                                                  =============         =============        ============
</TABLE>

         The  Company's  sales,  substantially  all of which are on an unsecured
         credit basis, are to various customers from its distribution centers in
         Texas,  California,   Arizona,   Washington  and  Nevada.  The  Company
         evaluates  credit risks on an individual  basis before extending credit
         to its customers  and it believes the  allowance for doubtful  accounts
         adequately  provides for loss on uncollectible  accounts.  During 2000,
         1999 and 1998, no single customer accounted for more than 10 percent of
         net sales,  although sales to asbestos and lead  abatement  contractors
         were  approximately  33  percent,   40  percent,   and  48  percent  of
         consolidated  net  sales in  2000,  1999  and  1998,  respectively.   A
         reduction  in spending on asbestos  or lead  abatement  projects  could
         significantly impact sales.

         Although no vendor accounted for more than 10 percent of purchases, one
         product class accounted for approximately 13 percent,  16 percent,  and
         19 percent of net sales in 2000, 1999 and 1998, respectively.   A major
         component  of these  products is  petroleum.  Further  increases in oil
         prices or shortages in supply could significantly  impact sales and the
         Company's  ability to supply its customers  with certain  products at a
         reasonable price.

                                      F-16
<PAGE>
(10)     COMMITMENTS AND CONTINGENCIES

         The Company  leases  warehouse and office  facilities  under  long-term
         noncancelable  operating  leases  expiring  at  various  dates  through
         February  2005.  The  following is a schedule of future  minimum  lease
         payments under these leases as of December 31, 2000:

         2001       $      985,506
         2002              801,572
         2003              600,835
         2004              546,373
         2005               41,267
                    --------------
                    $    2,975,553
                    ==============

         Rental expense under operating  leases for the years ended December 31,
         2000, 1999 and 1998 was $950,199, $776,435 and $589,658, respectively.

         The Company has  employment  agreements  with five key  employees.  The
         agreements provide for minimum aggregate cash compensation as follows:

         2001        $     563,100
         2002              459,000
                     -------------
                     $   1,022,100
                     =============

         In January and February 2000, the Company airfreighted  products to two
         customers,  which contained  chemicals  classified by the Department of
         Transportation as hazardous material.  During  transportation,  some of
         these  chemicals  leaked.  On  June  15,  2000,  the  Federal  Aviation
         Administration  ("FAA")  notified the Company of their findings for the
         first  incident  which  indicated  the  Company did not comply with the
         Department  of  Transportation's  Hazardous  Material  Regulations.  In
         October 2000, the FAA proposed, and the Company accepted, $25,000 civil
         penalty for the first incident. The settlement amount, less the initial
         payment  of $7,000,  is  accrued at  December  31,  2000.  The  Company
         resolved the second incident with the FAA; no damages or penalties were
         assessed.

                                      F-17
<PAGE>
(11)     SELECTED QUARTERLY DATA

<TABLE>
                                                           Quarter
                             ---------------------------------------------------------------------
                                  First            Second            Third            Fourth            Total
                             ---------------- ----------------- ----------------- ---------------- -----------------
<S>                          <C>              <C>               <C>               <C>              <C>
2000
----------------------------
Net sales                        $11,361,744       $13,220,965       $12,353,517      $11,050,365       $47,986,591
Gross profit                       3,169,854         3,566,964         3,332,820        2,912,189        12,981,827
Operating profit                     232,444           647,973           517,994          188,656         1,587,067
Net earnings                          52,307           301,903           223,304           20,400           597,914
Basic and diluted
   earnings per
   common share                  $       .03       $       .18       $       .13      $       .01       $       .35



1999
----------------------------
Net sales                        $ 9,959,158       $11,345,680       $11,904,709      $11,366,633       $44,576,180
Gross profit                       2,815,980         3,159,827         3,323,329        2,918,059        12,217,195
Operating profit                     259,234           434,286           428,895           11,351         1,133,766
Net earnings                         115,259           209,733           193,628          (57,162)          461,458
Basic and diluted
   earnings per
   common share                  $       .06       $       .12       $       .11      $      (.03)      $       .26

</TABLE>

                                     F-18
<PAGE>
                                   Schedule II
                          ABATIX CORP. AND SUBSIDIARY

                        Valuation and Qualifying Accounts
                    Years ended December 31, 2000, 1999 and 1998

<TABLE>
                                                             Additions
                                          Balance at         charged to
                                         beginning of        costs and                                            Balance at
                                             year             expenses            Other           Deductions      end of year
                                        ---------------    ---------------    -------------    ---------------    ------------
<S>                                     <C>                <C>                <C>              <C>                <C>
Year ended December 31:
Allowance for Doubtful Accounts:

       2000                             $       616,678             85,247                -            141,962 A  $     559,963
                                        ===============    ===============    =============    ===============    =============

       1999                             $       514,696            125,370                -             23,388 A  $     616,678
                                        ===============    ===============    =============    ===============    =============

       1998                             $       495,092            114,515                -             94,911 A  $     514,696
                                        ===============    ===============    =============    ===============    =============


   Inventory Reserve:

       2000                             $       205,222             95,823                -             12,636 C  $     288,409
                                        ===============    ===============    =============    ===============    =============

       1999                             $        69,321             89,823          109,993 B           63,915 C  $     205,222
                                        ===============    ===============    =============    ===============    =============

       1998                             $             -             69,321                -                  -    $      69,321
                                        ===============    ===============    =============    ===============    =============


A     Represents the write-off of uncollectible accounts.
B     Represents the reserve  required to state  inventory  acquired from
      Keliher at fair value.
C     Represents the write-off of obsolete inventory.
</TABLE>