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

                                   FORM 10-QSB

     (Mark One)

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

     For Quarter Ended: September 30, 2001; or

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

     For the transition period _________ to __________

     Commission File Number: 000-26261

                          AMERICAN FIRE RETARDANT CORP.
             ------------------------------------------------------
             (Exact name of Registrant as specified in its charter)


            NEVADA                                            88-03826245
----------------------------                          -----------------------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                            Identification No.)

9337 Bond Avenue, El Cajon, California                          92021
-------------------------------------------------    ------------------------
(Address of principal executive offices)                      Zip Code)


                                 (619) 390-6888
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


     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 a
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

     On November 27, 2001 there were 9,962,647 shares of the registrant's Common
Stock, $0.001 par value, issued and outstanding.

     Transitional Small Business Disclosure Format: Yes [ ] No [X]

     This Form 10-QSB has 26 pages, the Exhibit Index is located at page 21.
                                       1
<PAGE>
                              INDEX TO FORM 10-QSB

                               September 30, 2001


PART I   Financial Information                                        Page No.
                                                                      --------

Item 1        Financial Statements

              Condensed Consolidated Balance Sheet as of
              September 30, 2001 (unaudited)                             4-5

              Condensed  Consolidated Income Statements (unaudited)
              for the nine months and three months ended  September
              30, 2001 and 2000                                            6

              Condensed  Consolidated   Statements  of  Cash  Flows
              (unaudited)  for the nine months ended  September 30,
              2001 and 2000                                              8-9

              Notes to Financial Statements                               10

Item 2        Management's Discussion and Analysis of Financial
              Condition and Results of Operation                          13

PART II. Other Information

Item 1.       Legal Proceedings                                           19
Item 2.       Changes in Securities and Use of Proceeds                   21
Item 3.       Defaults Upon Senior Securities                             21
Item 4.       Submission of Matters to a Vote of Security Holders         21
Item 5.       Other Information                                           21
Item 6.       Exhibits and Reports on Form 8-K                            22

          Signatures                                                      27




















                                       2
<PAGE>
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

     The financial statements included herein have been prepared by the Company,
without  audit  pursuant  to the  rules and  regulations  of the  United  States
Securities and Exchange Commission (the  "Commission").  Certain information and
footnote  disclosure  normally  included  in  financial  statements  prepared in
accordance with generally accepted accounting  principles have been condensed or
omitted  pursuant to such rules and  regulations,  although the Company believes
that  the  disclosures  are  adequate  to make  the  information  presented  not
misleading.

     Set forth below are the consolidated  financial  statements as of September
30, 2001  (unaudited)  and the results of operations for the nine months and the
three months ended  September  30, 2001 and 2000. In the opinion of the Company,
all adjustments,  consisting of only normal recurring adjustments,  necessary to
present  fairly the financial  position of the Company as of September 30, 2001,
and the results of its  operations  and changes in its  financial  position from
inception  through September 30, 2001, have been made. The results of operations
for such  interim  period is not  necessarily  indicative  of the  results to be
expected for the entire year.

     All other  schedules are not submitted  because they are not  applicable or
not required or because the information is included in the financial  statements
or notes thereto.


              [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]




























                                       3
<PAGE>
                       AMERICAN FIRE RETARDANT CORPORATION
                                 Balance Sheets
                                 --------------

                                     ASSETS
                                     ------

                                            September 30,    December 31,
                                                2001            2000
                                           ---------------  ----------------
                                             (Unaudited)
CURRENT ASSETS

Cash                                        $      2,203     $          -
   Inventory                                      80,140           39,994
   Accounts receivable, net                      440,246          497,325
                                            ------------     ------------

     Total Current Assets                        522,589          537,319
                                            ------------     ------------
PROPERTY AND EQUIPMENT                           178,104          206,110
                                            ------------     ------------
OTHER ASSETS

   Restricted cash                               419,138          318,620
   Intangible assets, net                         20,700           25,500
   Deposits and other assets                      15,199           16,399
                                            ------------     ------------
     Total Other Assets                          455,037          360,519
                                            ------------     ------------

     TOTAL ASSETS                           $  1,155,730     $  1,103,948
                                            ============     ============






















                                       4
<PAGE>
                       AMERICAN FIRE RETARDANT CORPORATION
                           Balance Sheets (Continued)


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                 ----------------------------------------------
                                             September 30,    December 31,
                                                  2001            2000
                                            ---------------  ---------------
                                              (Unaudited)
CURRENT LIABILITIES

   Cash overdraft                            $           -    $     17,441
   Accounts payable                                577,368         229,927
   Accrued expenses                                802,674         666,031
   Unearned revenue                                 42,588          60,811
   Shareholder loans                               185,185         160,646
   Notes payable, current portion                  330,477         243,721
   Capital leases, current portion                   9,466          16,887
   Line of credit                                1,822,340       1,385,303
                                             -------------    ------------
     Total Current Liabilities                   3,770,098       2,780,767
                                             -------------    ------------
LONG-TERM LIABILITIES

   Notes payable                                   197,825         197,825
   Capital leases, long-term portion                14,210          14,210
                                             -------------    ------------

     Total Long-Term Liabilities                   212,035         212,035
                                             -------------    ------------

     Total Liabilities                           3,982,133       2,992,802
                                             -------------    ------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT)

   Common stock, $0.001 par value; 25,000,000
    shares authorized, 4,862,647 and 2,359,647
    shares issued and outstanding, respectively      4,864           2,361
   Additional paid-in capital                    2,221,908       1,490,531
   Accumulated deficit                          (5,053,175)     (3,381,746)
                                             -------------    ------------
     Total Stockholders' Equity (Deficit)       (2,826,403)     (1,888,854)
                                             -------------    ------------
     TOTAL LIABILITIES AND STOCKHOLDERS'
      EQUITY (DEFICIT)                       $   1,155,730    $  1,103,948
                                             =============    ============







                                       5
<PAGE>
                       AMERICAN FIRE RETARDANT CORPORATION
                            Statements of Operations
                                   (Unaudited)
<TABLE>
<S>                                        <C>           <C>            <C>           <C>
                                                      For the                    For the
                                                 Nine Months Ended         Three Months Ended
                                                   September 30,              September 30,
                                           --------------------------   --------------------------
                                                2001          2000          2001          2000
                                           --------------------------   --------------------------
NET SALES                                  $  1,817,095  $  2,352,712   $    228,810  $    811,640

COST OF SALES                                 1,109,689     1,029,010        268,503       396,819
                                           ------------  ------------   ------------  ------------

GROSS MARGIN (DEFICIT)                          707,406     1,323,702        (39,693)      414,821
                                           ------------  ------------   ------------  ------------
EXPENSES

   Selling, general and administrative        1,350,619       475,165        590,513       131,105
   Payroll expense                              451,366       463,467        156,026       123,818
   Travel and entertainment                     120,463       170,286         12,046        48,646
   Depreciation and amortization expense         57,056        36,352         22,218        15,959
   Bad debt expense                              27,869         9,132                            -
                                           ------------  ------------   ------------  ------------
     Total Expenses                           2,007,373     1,154,402        780,803       319,528
                                           ------------  ------------   ------------  ------------
INCOME (LOSS) FROM OPERATIONS                (1,299,967)      169,300       (820,496)      (95,293)
                                           ------------  ------------   ------------  ------------
OTHER EXPENSES

   Interest expense                            (371,462)     (374,494)      (130,828)     (119,812)
                                           ------------  ------------   ------------  ------------
     Total Other Expenses                      (371,402)     (374,494)      (130,828)     (119,812)
                                           ------------  ------------   ------------  ------------
LOSS BEFORE INCOME TAXES                     (1,671,429)     (205,194)      (951,324)      (24,519)..

PROVISION FOR INCOME TAXES                            -             -              -             -

NET LOSS                                   $ (1,671,429) $   (205,194)  $   (951,324) $    (24,519)
                                           ============  ============   ============  ============
BASIC LOSS PER SHARE                       $      (0.53) $      (0.08)  $      (0.25) $      (0.01)
                                           ============  ============   ============  ============
BASIC WEIGHTED AVERAGE SHARES                 3,127,577     2,355,032      3,869,647     2,355,032
                                           ============  ============   ============  ============
</TABLE>
                                       6
<PAGE>
                       AMERICAN FIRE RETARDANT CORPORATION
                  Statements of Stockholders' Equity (Deficit)
<TABLE>
<S>                                  <C>        <C>            <C>            <C>

                                                                 Additional
                                         Common Stock             Paid-in      Accumulated
                                     Shares       Amount          Capital        Deficit
                                    -------------------------------------------------------
Balance, December 31, 1999           2,349,647  $      2,351   $  1,485,541   $ (2,478,908)

May 12, 2000: common stock issued
 for cash valued at $0.50 per share     10,000            10          4,990              -

Net loss for the year ended

 December 31, 2000                           -             -                      (902,838)
                                    ------------------------------------------------------

Balance, December 31, 2000           2,359,647         2,361      1,490,531     (3,381,746)

February 26, 2001: common stock
  issued for services valued at
  $0.50 per share (unaudited)           25,000            25         12,475              -

April 19, 2001: common stock issued
 for debt and services valued at
 $0.26 per share (unaudited)           533,000           533        138,047              -

April 19, 2001: common stock
 issued for services valued at
 $0.26 per share (unaudited)           160,000           160         41,440              -

May 10, 2001: common stock
 issued for services valued at
 $0.78 per share (unaudited)           250,000           250        194,750              -

May 30, 2001: common stock
 issued for services valued at
 $0.78 per share (unaudited)            45,000            45         35,055              -

July 2001: common stock issued
 for services at an average price
 of $0.21 per share (unaudited)      1,490,000         1,490        309,610              -

Net loss for the nine months
 ended September 30, 2001
 (unaudited)                                 -             -              -     (1,671,429)
                                    ------------------------------------------------------
Balance, September 30, 2001
 (unaudited)                         4,862,647  $      4,864   $  2,221,908   $ (5,053,175)
                                    ======================================================
</TABLE>


                                       7
<PAGE>
                       AMERICAN FIRE RETARDANT CORPORATION
                            Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<S>                                                          <C>              <C>
                                                             For the Nine Months Ended
                                                                     September 30,
                                                         ------------------------------------
                                                                 2001             2000
---------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                  $ (1,671,431)    $   (205,194)
   Adjustments to reconcile net loss to net cash
    provided (used) by operating activities:
     Common stock issued for services                             653,881                -
     Depreciation and amortization                                 57,056           48,245
     Bad debt expense                                                   -            4,630
   Change in Assets and Liabilities:
     (Increase) decrease in accounts receivable                    57,079         (286,487)
     (Increase) decrease in deposits                                 (800)             716
     (Increase) decrease in inventory                             (40,146)          61,908
     (Increase) decrease in prepaid expenses and intangibles        2,000           (1,082)
     (Increase) decrease in restricted cash                      (100,518)         (82,042)
     Increase (decrease) in undeposited funds                           -            9,820
     Increase (decrease) in accounts payable                      347,441           (6,865)
     Increase (decrease) in accrued expenses                      216,643           21,980
     Increase (decrease) in unearned revenue                      (18,223)         (15,987)
                                                             ------------     ------------
       Net Cash Provided (Used) by Operating Activities          (497,018)        (450,358)
                                                             ------------     ------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Disposal of fixed assets                                             -            3,070
   Purchase of fixed assets                                       (24,250)         (13,092)
                                                             ------------     ------------
       Net Cash (Used) by Investing Activities                    (24,250)         (10,022)
                                                             ------------     ------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Increase (decrease) in cash overdraft                          (17,441)          13,653
   Proceeds from notes payable - related                           62,577           11,178
   Payments on notes payable - related                            (38,038)         (55,850)
   Proceeds from sale of common stock                                   -            5,000
   Proceeds from notes payable                                    305,910          183,001
   Proceeds from lines of credit                                  437,037          432,751
   Payment on notes payable                                      (226,574)        (132,761)
                                                             ------------     ------------
       Net Cash Provided by Financing Activities                  523,470          456,972
                                                             -----------------------------
NET INCREASE (DECREASE) IN CASH                                     2,203           (3,408)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                        -            3,408
                                                                        ------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                   $      2,203     $          -
                                                             =============================
</TABLE>


                                       8
<PAGE>
                       AMERICAN FIRE RETARDANT CORPORATION
                      Statements of Cash Flows (Continued)
                                   (Unaudited)
<TABLE>
<S>                                                          <C>              <C>
                                                             For the Nine Months Ended
                                                                     September 30,
                                                         ------------------------------------
                                                                 2001             2000
---------------------------------------------------------------------------------------------
SUPPLEMENTAL CASH FLOW INFORMATION

CASH PAID FOR:

   Interest                                                  $    321,076     $     374,494
   Income taxes                                              $          -     $           -

NON-CASH FINANCING ACTIVITIES

   Common stock issued for conversion of accrued salaries    $     80,000     $           -
   Common stock issued for services                          $    653,881     $           -
</TABLE>

































                                       9
<PAGE>
                       AMERICAN FIRE RETARDANT CORPORATION
                        Notes to the Financial Statements
                    September 30, 2001 and December 31, 2000


NOTE 1 -      CONDENSED FINANCIAL STATEMENTS

              The  accompanying  financial  statements have been prepared by the
              Company  without  audit.   In  the  opinion  of  management,   all
              adjustments  (which  include  only normal  recurring  adjustments)
              necessary to present  fairly the  financial  position,  results of
              operations  and cash flows at September  30, 2001 and 2000 and for
              all periods presented have been made.

              Certain information and footnote  disclosures normally included in
              financial   statements   prepared  in  accordance  with  generally
              accepted accounting  principles have been condensed or omitted. It
              is suggested that these condensed financial  statements be read in
              conjunction  with  the  financial  statements  and  notes  thereto
              included in the  Company's  December  31, 2000  audited  financial
              statements.  The  results  of  operations  for the  periods  ended
              September 30, 2001 and 2000 are not necessarily  indicative of the
              operating results for the full years.

NOTE 2 -      GOING CONCERN

              These  financial  statements  are  presented on the basis that the
              Company  is  a  going  concern.  Going  concern  contemplates  the
              realization of assets and the  satisfaction  of liabilities in the
              normal  course of business over a reasonable  length of time.  The
              Company has an accumulated deficit of $5,053,175 which, as well as
              current  liabilities  in excess of current  assets of  $3,247,509,
              raise  substantial  doubt about its ability to continue as a going
              concern.

              Management is presently  pursuing  plans to increase sales volume,
              reduce  administrative  costs,  and improve  cash flows as well as
              obtain additional  financing through stock offerings.  The ability
              of the Company to achieve its  operating  goals and to obtain such
              additional finances, however, is uncertain.

NOTE 3 -      SUBSEQUENT EVENT

              In October 2001,  the Company  issued  4,294,230  shares of common
              stock for conversion of accrued  salaries,  conversion of debt and
              services.  The issuances  were valued at the closing prices on the
              dates of issue and ranged from $0.13 to $0.18 per share.

NOTE 4 -      NEWLY ISSUED ACCOUNTING PRONOUNCEMENTS

              SFAS No.  141  provides  standards  for  accounting  for  business
              combinations.  Among  other  things,  it  requires  that  only the
              purchase method of accounting be used and that certain  intangible
              assets acquired in a business  combination (i.e. those that result


                                       10
<PAGE>
              from  contractual  or other  legal  rights  or are  separable)  be
              recorded  as  an  asset  apart  from   goodwill.   The  transition
              provisions require that an assessment be made of previous business
              combinations and, if appropriate,  reclassifications be made to or
              from goodwill to adjust the  recording of  intangible  assets such
              that the  criteria  for  recording  intangible  assets  apart from
              goodwill is applied to the previous business combinations.

              SFAS No. 142  provides,  among other  things,  that  goodwill  and
              intangible assets with indeterminate lives shall not be amortized.
              Goodwill  shall be  assigned  to a  reporting  unit  and  annually
              assessed for impairment.  Intangible assets with determinate lives
              shall be amortized  over their  estimated  useful lives,  with the
              useful lives  reassessed  continuously,  and shall be assessed for
              impairment  under the provisions of SFAS No. 121,  "Accounting for
              the Impairment of Long-Lived  Assets and for Long-Lived  Assets to
              be Disposed Of."  Goodwill is also  assessed for  impairment on an
              interim basis when events and circumstances warrant. Upon adoption
              of SFAS No. 142,  the Company  will assess  whether an  impairment
              loss should be recognized and measured by comparing the fair value
              of the "reporting unit" to the carrying value, including goodwill.
              If the carrying  value  exceeds fair value,  then the Company will
              compare the  implied  fair value of the  goodwill"  (as defined in
              SFAS No.  142) to the  carrying  amount  of the  goodwill.  If the
              carrying  amount of the  goodwill  exceeds the implied fair value,
              then the goodwill will be adjusted to the implied fair value.

              While the Company has not completed the process of determining the
              effect of these new accounting  pronouncements on its consolidated
              financial  statements,  the Company  currently  expects that there
              will be no  reclassification  in  connection  with the  transition
              provisions  of  SFAS  No.  141  based  on  clarifications  of  the
              transition   provisions  issued  by  the  FASB  in  October  2001.
              Accordingly,  the Company expects that,  after  implementation  of
              SFAS No. 142, all intangible  assets will be  amortizable  and the
              goodwill will not be amortizable.

              SFAS No. 143 -- On August 16, 2001,  the FASB issued SFAS No. 143,
              "Accounting for Asset Retirement  Obligations," which is effective
              for fiscal years  beginning  after June 15, 2002. It requires that
              obligations   associated   with  the   retirement  of  a  tangible
              long-lived asset be recorded as a liability when those obligations
              are incurred,  with the amount of the liability initially measured
              at fair value.  Upon  initially  recognizing  a  liability  for an
              accrued retirement obligation,  an entity must capitalize the cost
              by recognizing  an increase in the carrying  amount of the related
              long-lived  asset.  Over time,  the  liability  is accreted to its
              present value each period, and the capitalized cost is depreciated
              over the useful life of the related asset.  Upon settlement of the
              liability,  an  entity  either  settles  the  obligation  for  its
              recorded  amount or incurs a gain or loss upon  settlement.  While
              the  Company has not  completed  the  process of  determining  the
              effect of this new accounting  pronouncement  on its  consolidated
              financial  statements,  the  Company  currently  expects  that the


                                       11
<PAGE>
              effect of SFAS No.  143 on the  Company's  consolidated  financial
              statements, when it becomes effective, will not be significant.

              SFAS No.  144 - On  October  3,  2001,  the  Financial  Accounting
              Standards   Board  issued  SFAS  No.  144,   "Accounting  for  the
              Impairment  or Disposal of  Long-Lived  Assets" which is effective
              for financial  statements  issued for fiscal years beginning after
              December 15, 2001 and, generally, its provisions are to be applied
              prospectively.  SFAS 144  supercedes  SFAS  Statement No. 121 (FAS
              121),  "Accounting for the Impairment of Long-Lived Assets and for
              Long-Lived  Assets to Be  Disposed  Of." SFAS 144  applies  to all
              long-lived   assets   (including   discontinued   operations)  and
              consequently  amends  Accounting  Principles  Board Opinion No. 30
              (APB 30),  "Reporting Results of Operations  Reporting the Effects
              of Disposal of a Segment of a Business."

              SFAS 144 develops one accounting model (based on the model in SFAS
              121) for long-lived  assets that are to be disposed of by sale, as
              well as addresses the principal  implementation  issues.  SFAS 144
              requires that long-lived assets that are to be disposed of by sale
              be  measured at the lower of book value or fair value less cost to
              sell. That  requirement  eliminates the requirement of APB 30 that
              discontinued  operations  be measured at net  realizable  value or
              that  entities  include  under  "discontinued  operations"  in the
              financial  statements  amounts for operating  losses that have not
              yet  occurred.   Additionally,  SFAS  144  expands  the  scope  of
              discontinued  operations  to include all  components  of an entity
              with operations that (1) can be distinguished from the rest of the
              entity and (2) will be eliminated  from the ongoing  operations of
              the entity in a disposal transaction.

              While the Company has not completed the process of determining the
              effect of this new accounting  pronouncement  on its  consolidated
              financial  statements,  the  Company  currently  expects  that the
              effect of SFAS No. 144 on the Company's financial statements, when
              it becomes effective, will not be significant.

NOTE 5 -      LEGAL PROCEEDINGS.

         In the  ordinary  course  of the  Company's  business,  disputes  arise
involving  the  Company's  business and  operations.  The  following  represents
pending or threatened  litigation  and  administrative  actions that the Company
believes to be material to its financial condition and operations.

      Friloux v. AFRC The Company is a party  defendant in the matter of Friloux
v. American Fire Retardant Corporation,  15th Judicial District Court, Parish of
Lafayette, Louisiana, Docket No. 99-5744 "D". In this matter Mr. Friloux filed a
Petition seeking a pre-trial  judgment alleging (1) that the Company is indebted
to Mr. Friloux under the terms of a promissory  note dated March 7, 1994, in the
principal sum of $100,000  with interest  thereon at the rate of 5.0% per annum,
and that the Company is in breach of said promissory  note; (2) that the Company
is in breach of an employment  contract with Mr. Friloux and is obligated to pay
Mr. Friloux back wages; (3) that the Company is indebted to Mr. Friloux for past
due health and hospitalization costs due under the alleged employment agreement;
and (4) that the Company is  indebted to Mr.  Friloux as a result of the sale by


                                       12
<PAGE>

Mr.  Friloux of shares of common stock owned by Mr. Friloux back to the Company.
The Company  filed  exceptions  to the petition and counsel for both parties has
agreed that any and all claims shall be disposed of at trial rather than through
Mr. Friloux's pre-trial petition. The Company denies the allegations and intends
to vigorously defend the complaint of Mr. Friloux.  At present,  Mr. Friloux and
the Company are  attempting  to resolve  this matter  amicably in order to avoid
further costs to either party.

     Delinquent  Payroll Taxes - The Company owes the Internal  Revenue  Service
$297,224  including interest for prior delinquent payroll taxes by the Company's
former subsidiaries, AFRC Florida and AFRC Louisiana. These payroll taxes became
delinquent starting in the 3rd quarter of 1997 and going through the 4th quarter
of 1998. The total delinquent payroll tax liabilities attributed to AFRC Florida
are $128,604 and $168,621 attributed to AFRC Louisiana. The Company has retained
the tax counsel of J. W. Roysten, E.A. in Lafayette,  Louisiana to represent the
Company  before the Internal  Revenue  Service and the Company had  submitted an
Offer-in-Compromise to obtain a substantial reduction of the outstanding payroll
tax balance  due. The Company is keeping  current  with all present  payroll and
other tax obligations.

     Settlement of ARFC Louisiana and AFRC Florida Payroll Tax Liabilities - The
Internal Revenue Service had tentatively accepted two  offers-in-compromise  for
settlements of the federal payroll tax liabilities  owed by the Company's former
subsidiaries,  AFRC Louisiana and AFRC Florida. The Internal Revenue Service has
voided those two offers-in-compromise due to the delinquent taxes currently owed
by the Company.

     As stated  under the  Delinquent  Payroll  Taxes  section,  the Company has
retained the services of J. W. Roysten, E.A. to represent it before IRS in these
matters.  He is currently  negotiating an installment  plan for the Company that
will cover the liabilities for AFRC Louisiana, AFRC Florida, and AFRC Nevada. It
is  anticipated  that the  negotiations  will be  completed  within 60 days.  No
details are available  since no agreement has yet been reached with the Internal
Revenue Service.

         Payroll Tax Still  Owing.  The Company  still owes the IRS  $10,279.22,
including  interest  and  penalties,  for  the  4th  quarter  1999,  $47,452.24,
including  interest  and  penalties,  for  the  1st  quarter  2000,  $48,347.37,
including  interest and  penalties,  for the 2nd quarter  2000,  and  $44,179.67
including  interest and  penalties,  for the 3rd quarter  2000,  and  $39,210.04
including  interest and  penalties,  for the 4th quarter 2000,  $45,186.21,  not
including interest and penalties, for the 2nd quarter 2001.

         With the  exception of the legal  proceedings  and tax matter set forth
above,  the  Company  is not  presently  a party to any  litigation,  claim,  or
assessment.  Further,  the  Company  is  unaware  of  any  unasserted  claim  or
assessment,  which  will have a material  effect on the  financial  position  or
future operations of the Company.








                                       13
<PAGE>

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

Forward Looking Statements

     Certain statements contained in this report that are not historical fact
are  "forward-looking  statements  " as that  term  is  defined  in the  Private
Securities  Litigation  Reform Act of 1995.  The words or phrases  "will  likely
result," "are expected to," "will continue,  " "is anticipated,  " "believes,  "
"estimates,  " "projects" or similar  expressions are intended to identify these
forward-looking   statements.   These   statements  are  subject  to  risks  and
uncertainties beyond our reasonable control that could cause our actual business
and results of  operations  to differ  materially  from those  reflected  in our
forward-looking   statements.   The  safe  harbor  provisions  provided  in  the
Securities  Litigation Reform Act do not apply to forward-looking  statements we
make in this report.  Forward-looking  statements  are not  guarantees of future
performance.  Our  forward-looking  statements  are  based  on  trends  which we
anticipate  in our industry  and our good faith  estimate of the effect on these
otrends  of  such  factors  as  industry  capacity,  product  demand and product
pricing.  The  inclusion  of  projections  and other forward-looking  statements
should not be regarded a representation  by us or any other  person that we will
realize our projections or that any of the forward-looking statements  contained
in this prospectus will prove to be accurate.

         The following  discussion  and analysis  should be read in  conjunction
with the financial  statements and notes thereto appearing elsewhere herein. The
notes  accompanying  the  financial  statements  are  an  integral  part  of our
financial statements.

December 31, 2000 and September 30, 2001

         Changes in Financial Condition

         The  balance  of  current  assets at  December  31,  2000 was  $537,319
compared to a balance of $522,589 at September 30, 2001.  The balance of current
liabilities was $2,780,767 and $3,770,098,  respectively,  for the same periods.
The resulting  current ratio at December 31, 2000 was .2 to 1. The current ratio
at  September  30,  2001  was .14 to 1. The  current  ratio  indicates  that the
Company's  ability to pay its obligations has stayed constant over the course of
the third quarter of 2001.

         The increase of current  assets at September 30, 2001 over December 31,
2000  reflects an  increased  need for the Company to maintain an  inventory  of
materials for its projects as it enters its busy season of the year.

         The other material component of current assets is accounts  receivable.
The  balance of accounts  receivable  at  September  30,  2001 was  $440,246,  a
decrease of $57,079. The receivables  decreased due to better collection efforts
by the Company.

         The increase in current  liabilities  of $989,331 is  indicative of the
Company's  continued  liquidity  problems.  The line of credit  extended  to the
Company increased by $437,037, or 31.5% from December 31, 2000 to the end of the


                                       14
<PAGE>
third  quarter.  The  Company  used cash of  $497,018  in its  operations  as it
continues to focus itself as a market leader in the fire retardant industry.

         $502,365 of the Company's  accrued expenses were past due payroll taxes
owed to the  Internal  Revenue  Service  ("IRS")  and several  states  where the
Company does business.  The Company previously submitted Offers in Compromise to
the IRS which  were  voided in the second  quarter.  The  Company  is  currently
negotiating  an  installment  plan with the IRS and attempting to get current on
its payroll tax obligations for the year 2001.

         The Company  continues to borrow funds against its future  contracts on
its line of credit. The factoring agreement charges 8% of the amount borrowed as
a fee for the funds. This significantly decreases the Company's profitability on
its contracts.  The Company has also borrowed against contracts for which it has
not yet provided  services and  therefore the Company must continue the cycle by
raising more capital through factoring to complete those projects.

         At September 30, 2001 the Company  needed  approximately  $2,500,000 in
working capital to bring itself out its present  situation and back onto an even
footing with its creditors.  The Company hopes to raise this capital through the
sale of its new aerosol  product in 2002.  At September 30, 2001 the Company has
insufficient  cash flow from  operations  to meet its current cash  obligations.
Until  such  time,  if at all,  that the  Company  is able to  raise  sufficient
capital,  it intends to continue to finance itself through its available line of
credit.

         Results of Operations

For the nine months ended  September  30, 2000 compared to the nine months ended
September 30, 2001.

         The Company's  net sales  decreased by $535,617  through  September 30,
2001  compared  to the same  period in 2000.  This is a  decrease  of 23% and is
mainly due to the Company  having to repair a large job at its own expense.  The
gross  margin  for the period in 2000 was 56% of sales  compared  to 39% for the
same period in 2001,  again  mainly due to  repairing a job at its own  expense.
Also,  management believes that the Company needs to establish itself as a major
player in the fire retardant field in order to compete effectively.

         The Company's selling, general and administrative expenses increased by
$875,454 or 184% for the period ended September 30, 2001 over the same period in
2000, mainly due to expenses  incurred for consulting  services in regard to the
Company's common stock.  Payroll expenses have decreased by $12,101 for the year
to date period or 2.6%, as compared with the same period in 2000.  This decrease
reflects a tightening by management on its payroll.  Management anticipates that
it will be able to hold these payroll costs constant the remainder of 2001.

For the three months ended September 30, 2000 compared to the three months ended
September 30, 2001

         The Company's net sales decreased by $582,830 in the three months ended
September  30,  2001  compared  to the same  period  last year  2000.  This is a
decrease of 72% and is mainly due to the Company having to repair a large job at


                                       15
<PAGE>
its own expense.  The gross margin for 2000 was 51% of sales compared to a gross
deficit of 17% in the three month period ended September 30, 2001,  again mainly
due to repairing a job at its own expense.  Management believes that the Company
needs to establish  itself as a major player in the fire  retardant  industry in
order to compete effectively.

         The Company's selling, general and administrative expenses increased by
$459,408 or 350% mainly due to expenses for consulting services in regard to the
Company's  common stock issued pursuant to the consulting  services  agreements.
Payroll expense increased by $32,208 or 26% for the three months ended September
30, 2001 over the same period in 2000.  Although  this  increased  for the third
quarter  of  this  year  compared  to  the  third  quarter  of  last  year,  the
year-to-date  payroll  expense  is  actually  less than the same time last year.
Management anticipates that it will be able to hold these payroll costs constant
the remainder of 2001.

         Management  is seeking to increase the Company's  marketing  efforts in
the coming year. However, the Company is subject to the current economic decline
and risks  associated with the decline in the use of construction  materials and
fire retardant  chemical products  associated with the construction  industry in
general.

Risk Factors

     Several of the matters  discussed in this document contain  forward-looking
statements  that involve risks and  uncertainties.  Factors  associated with the
forward-looking  statements that could cause actual results to differ materially
from those projected or forecasted  appear in the statements  below. In addition
to other  information  contained  in this  document,  readers  should  carefully
consider the following cautionary statements and risk factors:

         We May Face  Interruption  Of Production  And Services Due To Increased
         -----------------------------------------------------------------------
Security Measures In Response To Terrorism.
------------------------------------------

         Our business  depends on the free flow of products and services through
the channels of commerce.  Recently,  in response to terrorists'  activities and
threats aimed at the United States,  transportation,  mail,  financial and other
services have been slowed or stopped altogether.  Further delays or stoppages in
transportation,  mail, financial or other services could have a material adverse
effect  on  our  business,   results  of  operations  and  financial  condition.
Furthermore, we may experience an increase in operating costs, such as costs for
transportation,  insurance  and  security  as a  result  of the  activities  and
potential  activities.  We may also experience delays in receiving payments from
payers  that  have been  affected  by the  terrorist  activities  and  potential
activities.  The U.S.  economy  in general is being  adversely  affected  by the
terrorist  activities and potential  activities and any economic  downturn could
adversely impact our results of operations,  impair our ability to raise capital
or otherwise adversely affect our ability to grow our business.

     Future Capital Requirements; Uncertainty of Future Funding.
     -----------------------------------------------------------

                                       16
<PAGE>
     The Company's plan of operation calls for additional  capital to facilitate
growth and support its  long-term  development  and  marketing  programs.  It is
likely that the Company would need to seek additional  financing  through future
public or private sales of its  securities,  including  equity  securities.  The
Company may also seek funding for the  development and marketing of its products
through strategic  partnerships and other arrangements with investment partners.
There can be no assurance,  however,  that such  collaborative  arrangements  or
additional  funds will be available when needed,  or on terms  acceptable to the
Company,  if at all. Any such  additional  financing  may result in  significant
dilution  to existing  stockholders.  If adequate  funds are not  available  the
Company may be required to curtail one or more of its future programs.

     Substantial Doubt that the Company Can Continue as a Going Concern.
     -------------------------------------------------------------------

     The Company expects to continue to incur significant capital expenses in
pursuing  its plans to increase  sales  volume,  expanding  its product line and
obtaining  additional  financing  through  stock  offerings  or  other  feasible
financing  alternatives.  In order for the Company to continue its operations at
its existing levels,  the Company will require $700,000 of additional funds over
the next twelve  months.  While the  Company can  generate  funds  necessary  to
maintain  its  operations,  without  these  additional  funds  there  will  be a
reduction  in the number of new projects  that the Company  could take on, which
may have an effect on the Company's ability to maintain its operations.

         Therefore,  the Company is dependent on funds raised  through equity or
debt offerings.  Additional financing may not be available on terms favorable to
the Company,  or at all. If these funds are not available the Company may not be
able to execute its business plan or take  advantage of business  opportunities.
The ability of the Company to obtain such  additional  financing  and to achieve
its operating goals is uncertain.  In the event that the Company does not obtain
additional  capital or is not able to increase cash flow through the increase of
sales,  there is a  substantial  doubt of its being able to  continue as a going
concern.

     Additionally, it should be noted that the Company's independent auditors
have included a going concern  opinion in the note to the financial  statements.
The  auditor's  have  included  this  provision   because  the  Company  has  an
accumulated deficit that the auditor believes raises substantial doubt about the
Company's ability to continue as a going concern. Until such time as the Company
does  receive  additional  debt or  equity  financing,  there is a risk that the
Company's  auditors will  continue to include a going  concern  provision in the
notes to financial statements.

     Patents and Proprietary Rights.
     -------------------------------

     The  Company  relies  on  patents,   contractual  rights,   trade  secrets,
trademarks,  and copyrights to establish and protect its  proprietary  rights in
its products and its components. The Company has patented the technology that is
incorporated  into its  products  and  believes  that,  since it is a technology
patent,  competitors  will  have  a  more  difficult  time  developing  products
functionally  similar to the  Company's.  To further  protect its products,  the
Company will apply for additional  patents for its inventions and non-commercial
available  components  designed and developed by the Company integral to product
performance.

                                       17
<PAGE>
     Prosecuting  Intellectual  Property  Infringement Claims Could Be Expensive
     ---------------------------------------------------------------------------
and Could Disrupt Business.
--------------------------

     The Company intends to closely monitor competing product  introductions for
any infringement of the Company's proprietary rights. The Company believes that,
as the demand for  products  such as those  developed  by the Company  increase,
infringement of intellectual  property rights may also increase. If infringement
of the  Company's  proprietary  rights  is by  industry  competitors,  they have
substantially  greater  financial,  technical,  and  legal  resources  than  the
Company,  which  could  adversely  affect  the  Company's  ability to defend its
rights. In addition,  the Company could incur substantial costs in defending its
rights.

     Further,  the Company's patents are U.S. patents,  and the Company does not
have patent protection  outside the United States. The Company will be unable to
obtain patent  protection in most Non-U.S.  jurisdictions,  including Europe and
Japan. Some competitors may have operations in Non-U.S  jurisdictions where U.S.
Patent rights are not  effective.  This could permit  competitors to infringe on
the Company's proprietary rights without violating U.S. law.

     The Company  anticipates that based on the size and  sophistication  of its
competitors  and the history of the  industry's  rapid  technological  advances,
which  several  competitors  may be working to develop  the  Company's  patented
technology.  The  Company  intends to closely  monitor any  infringement  of the
Company's  proprietary  rights.  Competitors  may have  patent  applications  in
progress in the United  States that,  if issued,  could relate to the  Company's
products.  If such  patents were to issue,  there can be no  assurance  that the
patent  holders or licensees  will not assert  infringement  claims  against the
Company or that such claims  will not be  successful.  The  Company  could incur
substantial costs in defending itself and its customers against any such claims,
regardless  of the  merits.  Parties  making  such  claims may be able to obtain
injunctive or other equitable relief that could  effectively block the Company's
ability  to sell  its  products,  and each  claim  could  result  in an award of
substantial  damages.  In the event of a successful claim of  infringement,  the
Company and its  customers  may be required to obtain one or more  licenses from
third parties. There can be no assurance that the Company or its customers could
obtain  the  necessary  licenses  from  third  parties  or  at a  reasonable  or
acceptable  cost.  Patent  litigation  could be very expensive,  and there is no
assurance  that it would not have an adverse  effect on the Company's  business,
financial condition and results of operations.

     Dependence on Key Employees.
     ----------------------------

     Historically,  the Company  has been  heavily  dependent  on the ability of
Bruce E. Raidl to contribute essential technical and management  experience.  In
the  event of future  growth in  administration,  marketing,  manufacturing  and
customer  support  functions,  the Company  may have to  increase  the depth and
experience of its management team by adding new members.  The Company's  success
will depend to a large degree upon the active  participation of its key officers
and  employees.  Loss of services of any of the current  officers and  directors


                                       18
<PAGE>
could have a significant  adverse  effect on the operations and prospects of the
Company.  There can be no  assurances  that it will be able to employ  qualified
persons on acceptable terms to replace officers that become unavailable.

     Need for Additional Specialized Personnel.
     -----------------------------------------

     Although  the  management  of the Company is  committed to the business and
continued  development  and growth of the business,  the addition of specialized
key  personnel  and sales  persons to assist the Company in its expansion of its
national  operations  will be  necessary.  There can be no  assurances  that the
Company will be able to locate and hire such specialized personnel on acceptable
terms.

     Competition
     -----------

     There are numerous corporations,  firms and individuals that are engaged in
the type of business  activities that the Company is presently  engaged in. Many
of those  entities  are  more  experienced  and  possess  substantially  greater
financial, technical and personnel resources than the Company. While the Company
hopes to be competitive with other similar companies, there can be no assurances
that such will be the case.

     Voting control
     --------------

     Due to the joint ownership of a majority of the shares of the Company's
outstanding common stock by Angela M. Raidl and her brother Bruce Raidl,
collectively,  these  individuals have the ability to elect all of the Company's
directors, who in turn elect all executive officers, without regard to the votes
of other stockholders.


     Ability to Maintain Adequate Inventory Levels
     ---------------------------------------------

     The size of the fire retardant and fire protection  markets and the need to
maintain  adequate  inventories  regarding such products could force the Company
into implementing additional  manufacturing and warehousing programs.  There can
be no assurances that the Company will have the necessary  capital  resources or
manpower to implement such manufacturing and warehousing programs.

     Dependence on Ability to Market Products and Services
     -----------------------------------------------------

     Due to the  Company's  limited  resources,  the sales and  marketing of its
products has been limited to date.  The success of the Company is dependent upon
its ability to market and sell the  products  and  services of the Company  with
such limited resources.

     Risk That The Company's Common Stock May Be Deemed A "Penny Stock"
     -------------------------------------------------------------------

     The  Company's  common stock is a "penny  stock" as that term is defined in
Reg. Section 240.3a51-1 of the Securities and Exchange Commission.  Penny stocks

                                       19
<PAGE>
are stocks (i) with a price of less than five  dollars per share;  (ii) that are
not traded on a  "recognized"  national  exchange;  (iii)  whose  prices are not
quoted on the NASDAQ automated quotation system (NASDAQ-listed stocks must still
meet requirement (i) above);  or (iv) of an issuer with net tangible assets less
than  US$2,000,000 (if the issuer has been in continuous  operation for at least
three years) or  US$5,000,000  (if in  continuous  operation for less than three
years),  or with average annual revenues of less than  US$6,000,000 for the last
three years.

     Section 15(g) of the 1934 Act and Reg. Section  240.15g-2 of the Commission
require  broker-dealers  dealing in penny stocks to provide potential  investors
with a document  disclosing  the risks of penny  stocks and to obtain a manually
signed  and  dated  written  receipt  of  the  document  before   effecting  any
transaction in a penny stock for the investor's account.  Potential investors in
the  Company's  common  stock  are  urged to  obtain  and read  such  disclosure
carefully before purchasing any shares that are deemed to be "penny stock."

     Moreover,  Reg. Section 240.15g-9 of the Commission requires broker-dealers
in penny stocks to approve the account of any investor for  transactions in such
stocks before selling any penny stock to that investor.  This procedure requires
the broker-dealer to (i) obtain from the investor information  concerning his or
her financial situation,  investment experience and investment objectives;  (ii)
reasonably  determine,  based on that  information,  that  transactions in penny
stocks are  suitable  for the  investor  and that the  investor  has  sufficient
knowledge and experience as to be reasonably  capable of evaluating the risks of
penny stock  transactions;  (iii) provide the investor with a written  statement
setting forth the basis on which the  broker-dealer  made the  determination  in
(ii) above;  and (iv) receive a signed and dated copy of such statement from the
investor,  confirming  that it  accurately  reflects  the  investor's  financial
situation,  investment  experience and investment  objectives.  Compliance  with
these  requirements  may make it more  difficult  for investors in the Company's
common stock to resell their shares to third parties or to otherwise  dispose of
them.

     In the event that the  Company's  stock is deemed a penny  stock,  it could
limit and  inhibit an  investor  from  buying the  Company's  stock  because the
procedures  that an  investor  and  broker  must  adhere to may be viewed as too
burdensome by the  investor.  Additionally,  because the Company's  stock may be
designated  as a penny  stock,  prior  to the  sale of a penny  stock  that  was
recommended  by the  broker  and  to an  investor  who  is not an  institutional
accredited  investor,  the  broker  must  approve  the  customer's  account  for
transaction  in penny stocks in accordance  with the rules outlined  above.  The
time,  effect and burden in  approving a  customer's  account to be approved for
trading in penny  stocks  could  hamper or limit the  market  for the  Company's
common stock as  broker-dealers  may be less inclined to recommend an investment
to a new customer in a penny stock.

                          PART II - OTHER INFORMATION.

Item 1.  Legal Proceedings.

         In the  ordinary  course  of the  Company's  business,  disputes  arise
involving  the  Company's  business and  operations.  The  following  represents
pending or threatened  litigation  and  administrative  actions that the Company
believes to be material to its financial condition and operations.

                                       20
<PAGE>
      Friloux v. AFRC The Company is a party  defendant in the matter of Friloux
v. American Fire Retardant Corporation,  15th Judicial District Court, Parish of
Lafayette, Louisiana, Docket No. 99-5744 "D". In this matter Mr. Friloux filed a
Petition seeking a pre-trial  judgment alleging (1) that the Company is indebted
to Mr. Friloux under the terms of a promissory  note dated March 7, 1994, in the
principal sum of $100,000  with interest  thereon at the rate of 5.0% per annum,
and that the Company is in breach of said promissory  note; (2) that the Company
is in breach of an employment  contract with Mr. Friloux and is obligated to pay
Mr. Friloux back wages; (3) that the Company is indebted to Mr. Friloux for past
due health and hospitalization costs due under the alleged employment agreement;
and (4) that the Company is  indebted to Mr.  Friloux as a result of the sale by
Mr.  Friloux of shares of common stock owned by Mr. Friloux back to the Company.
The Company  filed  exceptions  to the petition and counsel for both parties has
agreed that any and all claims shall be disposed of at trial rather than through
Mr. Friloux's pre-trial petition. The Company denies the allegations and intends
to vigorously defend the complaint of Mr. Friloux.  At present,  Mr. Friloux and
the Company are  attempting  to resolve  this matter  amicably in order to avoid
further costs to either party.

     Delinquent  Payroll Taxes - The Company owes the Internal  Revenue  Service
$297,224  including interest for prior delinquent payroll taxes by the Company's
former subsidiaries, AFRC Florida and AFRC Louisiana. These payroll taxes became
delinquent starting in the 3rd quarter of 1997 and going through the 4th quarter
of 1998. The total delinquent payroll tax liabilities attributed to AFRC Florida
are $128,604 and $168,621 attributed to AFRC Louisiana. The Company has retained
the tax counsel of J. W. Roysten, E.A. in Lafayette,  Louisiana to represent the
Company  before the Internal  Revenue  Service and the Company had  submitted an
Offer-in-Compromise to obtain a substantial reduction of the outstanding payroll
tax balance  due. The Company is keeping  current  with all present  payroll and
other tax obligations.

     Settlement of ARFC Louisiana and AFRC Florida Payroll Tax Liabilities - The
Internal Revenue Service had tentatively accepted two  offers-in-compromise  for
settlements of the federal payroll tax liabilities  owed by the Company's former
subsidiaries,  AFRC Louisiana and AFRC Florida. The Internal Revenue Service has
voided those two offers-in-compromise due to the delinquent taxes currently owed
by the Company.

     As stated  under the  Delinquent  Payroll  Taxes  section,  the Company has
retained the services of J. W. Roysten, E.A. to represent it before IRS in these
matters.  He is currently  negotiating an installment  plan for the Company that
will cover the liabilities for AFRC Louisiana, AFRC Florida, and AFRC Nevada. It
is  anticipated  that the  negotiations  will be  completed  within 60 days.  No
details are available  since no agreement has yet been reached with the Internal
Revenue Service.

         Payroll Tax Still  Owing.  The Company  still owes the IRS  $10,279.22,
including  interest  and  penalties,  for  the  4th  quarter  1999,  $47,452.24,
including  interest  and  penalties,  for  the  1st  quarter  2000,  $48,347.37,
including  interest and  penalties,  for the 2nd quarter  2000,  and  $44,179.67
including  interest and  penalties,  for the 3rd quarter  2000,  and  $39,210.04
including  interest and  penalties,  for the 4th quarter 2000,  $45,186.21,  not
including interest and penalties, for the 2nd quarter 2001.

                                       21
<PAGE>
         With the  exception of the legal  proceedings  and tax matter set forth
above,  the  Company  is not  presently  a party to any  litigation,  claim,  or
assessment.  Further,  the  Company  is  unaware  of  any  unasserted  claim  or
assessment,  which  will have a material  effect on the  financial  position  or
future operations of the Company.

Item 2.  Changes in Securities.
         ---------------------

     Not required.

Item 3.  Defaults Upon Senior Securities.
         -------------------------------

     Not required.

Item 4.  Submission of Matters to a Vote of Security Holders.
         ---------------------------------------------------

     None.

Item 5.  Other Information.
         -----------------

         On May 10, 2001 the Company filed a registration statement on Form S-8,
registering  various stock options  issued  pursuant to AFRC's 2001 Stock Option
Plan.  Specifically,  the non-statutory stock options registered were granted to
Stephen F. Owens in the amount of 533,334  shares,  Gregory Bartko in the amount
of 50,000 shares,  Sherry Wilson in the amount of 250,000  shares,  Bridgestream
Partners, LLC in the amount of 45,000 shares, Richard Rosenberg in the amount of
108,000  shares,  Lewis  Rosenberg  in the amount of 30,000  shares,  and Samuel
Todaro.

         During the nine month period ended  September 30, 2001, the Company was
required to make arrangements satisfactory to its depository bank, to resolve an
account  debit  created when the Company  deposited  into its general  operating
account,   certain  checks  totaling  $106,000,  which  checks  ultimately  were
dishonored by the bank upon which they were drawn. The Company's depository bank
carried  this amount as an account  deficit  through the quarter  ended June 30,
2001 and  thereafter.  At June 30, 2001,  the amount of our account  deficit was
reduced to $59,556.23.  The account deficit was further reduced to $57,200 as of
August 3, 2001.  After that date, the Company arranged two short-term loans from
two non-affiliated  persons to satisfy the remainder of the account deficit, and
as of August 6, 2001,  the account  deficit was  satisfied by  application  of a
total of $57,200 in loan proceeds.  These two short-term loans are unsecured and
are due on or before September 6, 2001.

         On July 13, 2001,  the Company filed a  registration  statement on Form
S-8, seeking registration of 300,000 shares of the Company's common stock issued
pursuant  to the  terms of a  consulting  agreement  entered  into with a Tomina
Associates, Ltd.


                                       22
<PAGE>
         On July 16, 2001, the Company  entered into a series of agreements that
were intended to arrange certain consulting  services,  introductions,  business
and  advisory   expertise  and  services  designed  to  assist  the  Company  in
distribution  and marketing of its fire retardant  products  (collectively,  the
"Marketing and Consulting Agreements").  These agreements were entered into with
David W. Keaveney,  Jason M. Genet  ("Keaveney  and Genet") and their  marketing
enterprise, Breakout Investment Marketing, LLC ("Breakout"). A Loan and Security
Agreement was also entered into between the Company,  Keaveney and Genet,  which
contemplated  that in addition to the  above-described  services to the Company,
Keaveney and Genet would provide a $150,000  loan to the Company  secured by the
issuance and delivery of 850,000  shares of  restricted  common stock pledged to
Keaveney and Genet,  which the Company would  qualify as a private  placement of
its securities under Section 4(2) of the Securities Act of 1933.

         The Company  ultimately  received  only $74,800 in loan  proceeds  from
Keaveney  and  Genet,  and  as  a  result,  the  Company,   Keaveney  and  Genet
subsequently  entered into an Amended Loan and Security Agreement dated July 27,
2001 ("Amended Loan  Agreement").  The Amended Loan Agreement  provides that the
total loan would be reduced  from  $150,000  to  $74,800.  As a full  accord and
satisfaction among the Company,  Keaveney and Genet with respect to the July 16,
2001  series of  agreements,  the  Company  granted to  Keaveney  and Genet,  as
consultants,  a non-qualified  stock option agreement providing for the issuance
of 425,000 shares of the Company's common stock under the Company's Amended 2001
Stock  Option  Plan  and  registered  on Form  S-8,  intending  to  satisfy  all
obligations  of the Company to Keaveney,  Genet and Breakout under the Marketing
and Consulting Agreements. These shares are now issued and outstanding.

         After the end of the Company's  current quarter,  and as filed with the
Securities  and  Exchange  Commission  on October 9, 2001,  the Company  filed a
registration  statement  on Form S-8 for the  purpose of  registering  4,000,000
shares of its common stock under the  Company's  2001  Directors'  and Officers'
Stock  Option and Stock Award Plan (the "2001  Plan").  Pursuant to the terms of
the 2001 Plan, the Company  reserved for issuance under the 2001 Plan, up to the
4,000,000  shares of common  stock that were the  subject of the October 9, 2001
Form S-8 filed with the Commission.

Item 6.  Exhibits and Reports on Form 8-K.

     (a) List of Exhibits  attached or  incorporated  by referenced  pursuant to
Item 601 of Regulation S-B.

     Exhibit
     Number      Description*
     -------     -----------

        2.1(a)(+)  Certificate  of Merger  from the State of  Wyoming  regarding
Merger of AFRC Louisiana with and into AFRC Wyoming.

        2.1(b)(+)  Certificate  of Merger from the State of Louisiana  regarding
Merger of AFRC Louisiana with and into AFRC Wyoming.

        2.1(c)(+) Articles of Merger regarding Merger of AFRC Louisiana with and
into AFRC Wyoming.

        2.1(d)(+)  Acquisition  Agreement and Plan of Merger regarding Merger of
AFRC Louisiana with and into AFRC Wyoming.

                                       23
<PAGE>
        2.2(a)(+)  Certificate  of Merger  from the State of  Florida  regarding
Merger of AFRC Florida with and into AFRC Wyoming.

        2.2(b)(+)  Certificate  of Merger  from the State of  Wyoming  regarding
Merger of AFRC Louisiana with and into AFRC Wyoming.

        2.2(c)(+)  Florida Articles of Merger regarding Merger of AFRC Louisiana
with and into AFRC Wyoming.

        2.2(d)(+)  Wyoming Articles of Merger regarding Merger of AFRC Louisiana
with and into AFRC Wyoming.

        2.2(e)(+)  Acquisition  Agreement and Plan of Merger regarding Merger of
AFRC Florida with and into AFRC Wyoming.

        2.3(a)(+)  Articles of Merger  regarding Merger regarding Merger of AFRC
        Wyoming with and into AFRC Nevada (the "Company") to change the Domicile
        of the Company.

        2.3(b)(+)  Acquisition  Agreement and Plan of Merger regarding Merger of
        AFRC  Wyoming  with and into AFRC Nevada (the  "Company")  to change the
        Domicile of the Company.

        3.1(+) Articles of  Incorporation of American Fire Retardant Corp. filed
        on January 20, 1998.

        3.2(+) Restated By-laws of American Fire Retardant Corp.

        3.3(+) Qualification  of  American  Fire  Retardant  Corp., as a Foreign
        Corporation in the State of Florida.

        3.4(+) Qualification  of  American  Fire  Retardant  Corp., as a Foreign
        Corporation in the State of Louisiana.

        3.5(+) Statement  and Designation of American Fire Retardant Corp., as a
        Foreign Corporation in California.

        3.6(+) Qualification  of  American  Fire  Retardant  Corp., as a Foreign
        Corporation in the State of Colorado.

        3.7(+) Qualification  of  American  Fire  Retardant  Corp., as a Foreign
        Corporation in the State of Mississippi.

        10.1(a)(+) Letter of  Intent  Between American Fire Retardant Corp., and
        Fabritek Industries, LLC.

        10.1(b)(+) Amendment to Letter of Intent Between American Fire Retardant
        Corp., and Fabritek Industries, LLC.

        10.2(+)Royalty  Agreement  between  American  Fire  Retardant Corp., and
        Norman O. Houser.

                                       24
<PAGE>
        10.3(+)Sale,  Assignment  and Assumption Agreement between American Fire
        Retardant Corp. and  Patrick  L. Brinkman with regard to the purchase of
        manufacturing rights to De-Fyre X-238.

        10.4(a)(+) Merchant  Service  Agreement  between American Fire Retardant
        Corp., and St. Martin Bank.

        10.4(b)(+) St.Martin Bank $100,090 Promissory Note Dated March 11, 1997.

        10.4(c)(+) Edward E. Friloux  Commercial Guaranty to St. Martin Bank re:
        $100,090 Promissory Note.

        10.4(d)(+) Stephen F. Owens  Commercial  Guaranty to St. Martin Bank re:
        $100,090 Promissory Note.

        10.4(e)(+) Angela M. Raidl  Commercial  Guaranty  to St. Martin Bank re:
        $100,090 Promissory Note.

        10.4(f)(+) St. Martin Bank $250,000 Promissory Note Dated May 21, 1998.

        10.4(g)(+) St.Martin Bank Business Loan Agreement Dated August 18, 1998.

        10.4(h)(+) St. Martin Bank  $172,725.73 Promissory Note Dated August 18,
        1998.

        10.4(i)(+) Edward E. Friloux Commercial Guaranty to  St. Martin Bank re:
        $172,725.73 Promissory Note.

        10.4(j)(+) Stephen F. Owens  Commercial  Guaranty to St. Martin Bank re:
        $172,725.73 Promissory Note.

        10.4(k)(+) Angela M. Raidl  Commercial  Guaranty  to St. Martin Bank re:
        $172,725.73 Promissory Note.

        10.4(l)(+) St. Martin Bank  Commercial  Pledge Agreement re: $172,725.72
        Promissory Note.

        10.4(m)(+) St. Martin  Bank  Pledge  of  Collateral  Mortgage  Note  re:
        $172,725.72 Promissory Note.

        10.4(n)(+) St.Martin Bank Agreement to Provide Insurance re: $172,725.72
        Promissory Note.

        10.4(o)(+) St.Martin Bank-Collateral Mortgage re: $172,725.72 Promissory
        Note.

        10.4(p)(+) St.Martin Bank - $54,059.29 Promissory Note Dated February 4,
        1999.

        10.5(a)(+) Private Capital, Inc. - Purchase and Security Agreement Dated
        April 17, 1997.

        10.5(b)(+) Private Capital, Inc. - Angela M. Raidl Continuing Guaranty &
        Waiver.

                                       25
<PAGE>
        10.5(c)(+) Private Capital,Inc. - Stephen F. Owens and Edward E. Friloux
        Continuing Guaranty & Waiver.

        10.6(a)(+) Bank of Erath $15,030 Promissory Note Dated June 16, 1997.

        10.6(b)(+) Bank of Erath Loan Extension Agreement Dated October 20,1998.

        10.7(+) American Fire Retardant Corp. - El Cajon,  California Industrial
        Lease

        10.8(a)(+) Whitney Bank - $74,400 Secured Promissory Note Dated

        10.8(b)(+) Whitney  Bank - Collateral  Mortgage, Security  Agreement and
        Assignment of Leases and Rents

        10.9(+) American  Fire  Retardant  Corp. - Standard  Lease for Louisiana
        Corporate Apartment

        10.10(+) Oil, Gas & Mineral Lease with Penwell Energy Inc.

        10.11(a)(+) Whitney National Bank - $42,888.46 Promissory Note

        10.11(b)(+) Whitney National Bank - Security Agreement

        10.12(+) Presidio Capital Consulting Agreement

        10.13(+) Warren Guidry Letter Promissory Note

        10.14(a)(+) Agreement with Richard Rosenberg

        10.14(b)(+) Amendment to Agreement with Richard Rosenberg

        10.14(c)(+) Richard Rosenberg - $43,134.39 Promissory Note

        10.15(+) Investment  Banking  and  Consulting  Agreement  with  Capstone
        Partners LLC.

        10.16(+) March 7, 1999 $100,000 Promissory Note.

        10.17(+) August  25,  1999   Equipment  Lease   with  Preferred  Capital
        Corporation

        10.18(+) December 7, 1999 $100,000 Promissory Note with Private Capital,
        Inc.

        10.19(+) May 10, 2001  Form S-8:  2001 Stock  Option Plan adopted by the
        Registrant's Directors on April 30, 2001

        10.20(+) May 10, 2001 Form S-8:  Specimen  Form  of  Non-statutory Stock
        Option Agreement.

        10.21(+) May 10,  2001  Form  S-8:  Nonstatutory   Stock   Option   Plan
        Agreement dated April 30, 2001,  between  American  Fire Retardant Corp.
        and Gregory Bartko, Esq.

                                       26
<PAGE>
        10.22(+) May 10, 2001 Form S-8: Attorney/Client  Fee  Arrangement  dated
        Fedruary 15, 2001,   between  American  Fire Retardant Corp. and Gregory
        Bartko, Esq.

        10.23(+) May  10,  2001  Form  S-8:   Nonstatutory   Stock  Option  Plan
        Agreement  dated April 30,  2001,  between American Fire Retardant Corp.
        and Sherry Wilson.

        10.24(+) May 10, 2001 Form S-8:  Consulting  Agreement  dated  April 30,
        2001,  between  American Fire Retardant Corp. and Sherry Wilson.

        10.25(+) May  10, 2001  Form  S-8:   Nonstatutory   Stock   Option  Plan
        Agreement  dated April 30,  2001,  between American Fire Retardant Corp.
        and Stephen F. Owens.

        10.26(+) May  10, 2001  Form  S-8:   Nonstatutory   Stock   Option  Plan
        Agreement  dated April 30,  2001,  between American Fire Retardant Corp.
        and Richard Rosenberg.

        10.27(+) May 10, 2001 Form S-8:  Consulting  Agreement  dated  April 30,
        2001,  between American Fire Retardant Corp. and Richard Rosenberg.

        10.28(+) May  10,  2001  Form  S-8:   Nonstatutory   Stock  Option  Plan
        Agreement  dated April 30,  2001,  between American Fire Retardant Corp.
        and Lewis Rosenberg.

        10.29(+) May 10, 2001  Form S-8:  Consulting  Agreement  dated April 30,
        2001,  between  American Fire Retardant Corp. and Lewis Rosenberg.

        10.30(+) May 10, 2001  Form S-8:  Consulting  Agreement  dated April 30,
        2001,  between  American Fire Retardant Corp. and BridgeStream Partners,
        LLC.

        10.31(+) May  10,  2001  Form  S-8:   Nonstatutory   Stock  Option  Plan
        Agreement  dated April 30,  2001,  between American Fire Retardant Corp.
        and BridgeStream Partners, LLC.

       10.32(+) May 10, 2001 Form S-8: Opinion of Gregory Bartko, Esq.

       10.33(+) May 10, 2001 Form S-8: Consent of HJ & Associates, LLC.

       10.34(+) May 10, 2001 Form S-8: Consent of Gregory Bartko, Esq.

       10.35(+) May 10, 2001 Form S-8: Power of Attorney.

       10.35(+) July  31, 2001  Form S-8:   Consulting  Agreement  dated July 6,
       2001,  between  American Fire Retardant Corp. and Tomina Associates, Ltd.

       99.1(+) Consumer  Product  Safety  Commission's  Notice of Public Hearing
       and  Request for Comments with regard to the proposed rule  pertaining to
       Flame  Retardant  Chemicals  that  may be suitable for use in upholstered
       furniture.

       99.2(+) A copy  of  the  Article  "1998 Fire Loss in the  United  States"
       from the NFPA Journal, September/October 1999.

                                       27
<PAGE>
       99.3(+) See  National  Fire  Data Center Statistics as posted on the NFDC
       website at "www.usfa.fema.goc/nfdc/statistics.htm"

       (+) Previously filed.

       (++) Attached hereto.

        (b)   Reports on Form 8-K.


         There were no other reports on Form 8-K filed during the period covered
by this report.


                                   SIGNATURE

     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.

                                              AMERICAN FIRE RETARDANT CORP.
                                                  A Nevada Corporation


Date: December 3, 2001.                           /S/ Stephen F. Owens
                                                  ---------------------------
                                                  By: Stephen F. Owens
                                                  Its: President and Director


Date: December 3, 2001.                           /S/ Angela M. Raidl
                                                  ---------------------------
                                                  By: Angela M. Raidl
                                                  Its: Vice President,
                                                    Chief Financial Officer
                                                    Secretary and Director


















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