<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                   Quarterly Report Under Section 13 or 15 (d)
                     of the securities Exchange Act of 1934
                                      10Q\A

For Quarter Ended:                                           September 30, 1997

Commission File Number 0-14983

                                    AMBI INC.
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             (Exact name of registrant as specified in its charter)

New York                                                              11-2653613
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(State or other jurisdiction of             (IRS Employer Identification Number)
incorporation of organization)

771 Old Saw Mill River Road, Tarrytown, New York                           10591
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(Address of principal executive offices)                              (Zip Code)

                                 (914) 347-5767
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(Registrant's telephone number, including area code)


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        (Former name, former address and former fiscal year, if changed
                               since last report)

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 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

                                    YES     X          NO _______

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.


Common Stock, Par Value $.005          19,288,950 shares as of November 10, 1997
-----------------------------          -----------------------------------------


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                             AMBI INC. & SUBSIDIARY


PART I                     FINANCIAL INFORMATION


Item 1                     Financial Statements

This amended report on Form 10Q\A is being filed to correct the Condensed
Consolidated Statement of Cash Flows for the three months ended September 30,
1997 and September 30, 1996.



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                             AMBI INC. & SUBSIDIARY

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
   
<TABLE>
<CAPTION>
                                                                              Three Months Ended
                                                                                 September 30

                                                                            1997                1996
                                                                            $000                $000
                                                                           -------          ---------

<S>                                                                        <C>                 <C>
Cash flows from operating activities:
  Net loss                                                                    (724)            (4,385)
Adjustments to reconcile net loss
  to net cash used in operating activities:
     Depreciation and amortization                                             172                242
Changes in assets and liabilities net of 
  the acquisition of Nutrition 21:
    (Increase)/decrease in trade accounts receivable                          (721)               299
    Decrease in inventories                                                    234                253
    Increase in other current assets                                          (331)              (152)
    (Decrease)/Increase in accounts payable
      and accrued expenses                                                     (22)               322
    Increase/decrease in preferred dividends payable                           114               (240)
    Increase in contingent payments payable                                     61             
                                                                            -------          ---------
    Net cash used in operating activities                                   (1,217)            (3,661)
                                                                            -------          ---------

Cash flows from investing activities:
   Acquisition of Nutrition 21                                             (10,000)
   Acquisitions of property and equipment                                      (14)              (344)
   Patent costs                                                                (95)               (41)
   Increase in other assets                                                   (519)             _____
                                                                            -------          ---------

Net cash used in investing activities                                      (10,628)              (385)
                                                                           --------           --------

Cash flows from financing activities:
   Borrowings under term loan                                                3,300
   Borrowings under revolving line of credit                                 2,455
   Capital lease obligation repayments                                         (60)               (73)
   Dividends paid                                                             (114)
   Proceeds from issuance of common stock                                                         287
                                                                            -------          ---------
 Net cash provided by  financing activities                                  5,581                214
                                                                             -----               ----


Net (decrease) in cash and cash equivalents                                 (6,264)            (3,832)
Cash and cash equivalents at beginning of period                             8,615              8,431
Effect of exchange rate movement                                                                    7
                                                                           -------            -------
Cash and cash equivalents at end of period                                   2,351              4,606
                                                                            ======             ======

Supplementary disclosure of cash flow information:
  Interest paid                                                                 24                  2
  Tax paid                                                                       7                  4
</TABLE>
    

On August 11, 1997 the Company acquired the net assets of N21 in exchange for
$10,000,000 in cash and 500,000 shares of the Company's common stock. In
connection with the acquisition; liabilities were assumed as follows

<TABLE>
<S>                                                                        <C>
             Fair value of asset acquired                                  $11,644
              Cash purchase price                                           10,000
             Stock issued                                                    1,187
                                                                           -------
             Liabilities assumed                                              $457
</TABLE>


See notes to condensed consolidated financial statements


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                                    AMBI INC.

                                   SIGNATURES

Pursuant to the requirements 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.


                                                   AMBI INC.
                                                   Registrant


Date: November 25, 1997              By: /S/ Fredric D. Price
                                         --------------------
                                         Fredric D. Price
                                         President and Chief Executive Officer