| ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For The Fiscal Year Ended December 31, 2010OR                    |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For The Transition Period from ___________ to ________  |

| Delaware(State or other jurisdiction of incorporation or organization)   | 75-1256622(I.R.S. EmployerIdentification No.)  |
|-------------------------------------------------------------------------------|-----------------------------------------------------|
| 1600 Hwy 6 S, Suite 240Sugar Land, TX(Address of principal executive offices) | 77478(Zip code)                                     |

----

----

TABLE OF CONTENTS

|  PART I                                                                                                                                                                                                                                    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ITEM 1.   BUSINESS                                                                                                                                                                                                               |   |
|                                                                                                                                                                                                                                            | General | 1 |
|                                                                                                                                                                                                                                            | Acquisition of Silsbee Trading and Transportation Company | 1 |
|                                                                                                                                                                                                                                            | United States | 1 |
|                                                                                                                                                                                                                                            | Europe | 2 |
|                                                                                                                                                                                                                                            | United States Specialty Petrochemical Operations | 2 |
|                                                                                                                                                                                                                                            | United States Mineral Interests | 3 |
|                                                                                                                                                                                                                                            | Environmental | 4 |
|                                                                                                                                                                                                                                            | Personnel | 7 |
|                                                                                                                                                                                                                                            | Competition | 7 |
|                                                                                                                                                                                                                                            | Investment in AMAK | 7 |
|                                                                                                                                                                                                                                            | Available Information | 8 |
|                                                                                                                                                                                                                                            |   |   |
| ITEM 1A.  RISK FACTORS                                                                                                                                                                                                                | 8 |
|                                                                                                                                                                                                                                            |   |   |
| ITEM 1B.  UNRESOLVED STAFF COMMENTS                                                                                                                                                                                                   | 14 |
|                                                                                                                                                                                                                                            |   |   |
| ITEM 2.   PROPERTIES                                                                                                                                                                                                             | 14 |
|                                                                                                                                                                                                                                            |   |   |
| ITEM 3.   LEGAL PROCEEDINGS                                                                                                                                                                                                      | 14 |
|                                                                                                                                                                                                                                            |   |   |
| ITEM 4.   RESERVED                                                                                                                                                                                                               | 15 |
|                                                                                                                                                                                                                                            |   |   |
|                                                                                                                                                                                                                                            | PART II  |   |
| ITEM 5.   MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED  STOCKHOLDER   MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES                                                                         | 15 |
|                                                                                                                                                                                                                                            |   |   |
| ITEM 6.   SELECTED FINANCIAL DATA                                                                                                                                                                                                | 16 |
|                                                                                                                                                                                                                                            |   |   |
| ITEM 7.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND   RESULTS OF OPERATION                                                                                                 |   |
|                                                                                                                                                                                                                                            | Forward Looking Statements | 16 |
|                                                                                                                                                                                                                                            | Overview | 17 |
|                                                                                                                                                                                                                                            | Business Environment & Risk Assessment | 17 |
|                                                                                                                                                                                                                                            | Liquidity and Capital Resources | 17 |
|                                                                                                                                                                                                                                            | Results of Operations | 21 |
|                                                                                                                                                                                                                                            | New Accounting Standards | 25 |
|                                                                                                                                                                                                                                            | Critical Accounting Policies | 26 |
|                                                                                                                                                                                                                                            |   |   |
| ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                                                                                                                                             | 27 |
|                                                                                                                                                                                                                                            |   |   |
| ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                                                                                                                      | 28 |
|                                                                                                                                                                                                                                            |   |   |
| ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING   AND FINANCIAL DISCLOSURE                                                                                                            | 28 |
|                                                                                                                                                                                                                                            |   |   |
| ITEM 9A.  CONTROLS AND PROCEDURES                                                                                                                                                                                                     | 28 |
|                                                                                                                                                                                                                                            |   |   |
| ITEM 9B.  OTHER INFORMATION                                                                                                                                                                                                           | 29 |
|                                                                                                                                                                                                                                            |   |   |
|                                                                                                                                                                                                                                            | PART III  |   |
| ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                                                                                                                                                    | 30 |
|                                                                                                                                                                                                                                            |   |   |
| ITEM 11.   EXECUTIVE COMPENSATION                                                                                                                                                                                                | 33 |
|                                                                                                                                                                                                                                            |   |   |
| ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS                    AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS | 49 |

----

Table of Contents

|                                                                                                          |          |   |
|---------------------------------------------------------------------------------------------------------------|---------------|--------|
| ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR  INDEPENDENCE | 50            |
|                                                                                                          |          |   |
| ITEM 14.   PRINCIPAL ACCOUNTING FEES AND SERVICES                                              | 51            |
|                                                                                                          |          |   |
|                                                                                                          | PART IV  |   |
| ITEM 15.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES                                             | 52            |

----

Table of Contents

PART I

Item 1.   Business

General

Acquisition of Silsbee Trading and Transportation Company, Inc.,

United States

----

Table of Contents

Europe

United States Specialty Petrochemical Operations

----

Table of Contents

United States Mineral Interests

----

Table of Contents

Environmental

----

Table of Contents

----

Table of Contents

----

Table of Contents

Personnel

Competition

Investment in AMAK

----

Table of Contents

Available Information

Item 1A.   Risk Factors

----

Table of Contents

----

Table of Contents

| • | Speculation in the press or investment community about, or actual changes in, our executive team, strategic position, business, organizational structure, operations, financial condition, financial reporting and results, effectiveness of cost cutting efforts, prospects or extraordinary transactions; |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Announcements of new products, services, technological innovations or acquisitions by the Company or competitors; and |
|---------|-----------------------------------------------------------------------------------------------------------------------|

| • | Quarterly increases or decreases in revenue, gross margin or earnings, changes in estimates by the investment community or guidance provided by the Company, and variations between actual and estimated financial results. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Combining product offerings and entering into new markets in which we are not experienced; |
|---------|--------------------------------------------------------------------------------------------|

| • | Convincing customers and distributors that the transaction will not diminish client service standards or business focus, preventing customers and distributors from deferring purchasing decisions or switching to other suppliers |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| • | Minimizing the diversion of management attention from ongoing business concerns; |
|---------|----------------------------------------------------------------------------------|

| • | Persuading employees that business cultures are compatible, maintaining employee morale and retaining key employees, engaging with employee works councils representing an acquired company’s non-U.S. employees, integrating employees into the Company, correctly estimating employee benefit costs and implementing restructuring programs; |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Coordinating and combining administrative, manufacturing, and other operations, subsidiaries, facilities and relationships with third parties in accordance with local laws and other obligations while maintaining adequate standards, controls and procedures; |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Achieving savings from supply chain integration; and |
|---------|------------------------------------------------------|

| • | Managing integration issues shortly after or pending the completion of other independent transactions. |
|---------|--------------------------------------------------------------------------------------------------------|

----

Table of Contents

| • | Ongoing instability or changes in a country’s or region’s economic or political conditions, including inflation, recession, interest rate fluctuations and actual or anticipated military or political conflicts; |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Longer accounts receivable cycles and financial instability among customers; |
|---------|------------------------------------------------------------------------------|

| • | Trade regulations and procedures and actions affecting production, pricing and marketing of products; |
|---------|-------------------------------------------------------------------------------------------------------|

| • | Local labor conditions and regulations; |
|---------|-----------------------------------------|

| • | Geographically dispersed workforce; |
|---------|-------------------------------------|

| • | Changes in the regulatory or legal environment; |
|---------|-------------------------------------------------|

| • | Differing technology standards or customer requirements; |
|---------|----------------------------------------------------------|

| • | Import, export or other business licensing requirements or requirements relating to making foreign direct investments, which could affect our ability to obtain favorable terms for labor and raw materials or lead to penalties or restrictions; |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Difficulties associated with repatriating cash generated or held abroad in a tax-efficient manner and changes in tax laws; and |
|---------|--------------------------------------------------------------------------------------------------------------------------------|

| • | Fluctuations in freight costs and disruptions in the transportation and shipping infrastructure at important geographic points of exit and entry for our products and shipments. |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

----

Table of Contents

Item 1B.   Unresolved Staff Comments

Item 2.  Properties

Item 3.  Legal Proceedings

----

Table of Contents

Item 4. Reserved

PART II

Item 5.  Market for Registrant’s Common Equity

|                                   |   | NASDAQ |   |
|----------------------------------------|--------|--------|--------|
|                                   |   | High   |   |   | Low |   |
| Fiscal Year Ended December 31, 2010    |   |   |   |   |   |   |
| First Quarter ended March 31, 2010     |   | $      | 3.15   |   |   | $ | 2.14 |   |
| Second Quarter ended June 30, 2010     |   | $      | 3.30   |   |   | $ | 1.99 |   |
| Third Quarter ended September 30, 2010 |   | $      | 2.60   |   |   | $ | 1.63 |   |
| Fourth Quarter ended December 31, 2010 |   | $      | 4.53   |   |   | $ | 2.20 |   |
|                                   |   |   |   |   |   |   |   |   |
| Fiscal Year Ended December 31, 2009    |   |   |   |
| First Quarter ended March 31, 2009     |   | $      | 1.99   |   |   | $ | 0.60 |   |
| Second Quarter ended June 30, 2009     |   | $      | 3.64   |   |   | $ | 1.21 |   |
| Third Quarter ended September 30, 2009 |   | $      | 3.97   |   |   | $ | 2.68 |   |
| Fourth Quarter ended December 31, 2009 |   | $      | 3.45   |   |   | $ | 2.06 |   |
|                                   |   |   |   |   |   |   |   |   |

----

Table of Contents

Item 6.  Selected Financial Data

|                                               |   | 2010 |    |   | 2009   |   |    | 2008   |   |   | 2007    |   |   | 2006 |    |
|----------------------------------------------------|--------|------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|------|---------|
| Revenues                                           |   | $    | 139,110 |   |   | $      | 117,587 |   |   | $      | 154,630 |   |   | $    | 108,638 |   |   | $ | 98,502 |   |
| Net Income (Loss)                                  |   | $    | 2,686   |   |   | $      | 6,627   |   |   | $      | (10,731 | )      |   | $    | 7,771   |   |   | $ | 7,875 |   |
| Net Income (Loss) Per Share-Diluted                |   | $    | 0.11    |   |   | $      | 0.28    |   |   | $      | (0. 46  | )      |   | $    | 0.33    |   |   | $ | 0.34 |   |
| Total Assets (at December 31)                      |   | $    | 92,528  |   |   | $      | 90,487  |   |   | $      | 96,290  |   |   | $    | 84,221  |   |   | $ | 71,590 |   |
| Notes Payable (at December 31)                     |   | $    | 12      |   |   | $      | 12      |   |   | $      | 12      |   |   | $    | 11,012  |   |   | $ | 11,013 |   |
| Current Portion of Long-Term Debt (at December 31) |   | $    | 1,865   |   |   | $      | 1,400   |   |   | $      | 4,920   |   |   | $    | 31      |   |   | $ | 489 |   |
| Total Long-Term Debt Obligations(at December 31)   |   | $    | 20,836  |   |   | $      | 23,439  |   |   | $      | 23,557  |   |   | $    | 9,078   |   |   | $ | 5,108 |   |

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operation

Forward Looking Statements

----

Table of Contents

Overview

Business Environment and Risk Assessment

Liquidity and Capital Resources

----

Table of Contents

|                                        |   | 2010           |   |   | 2009   |   |   | 2008   |   |
|---------------------------------------------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|
| Net cash provided by (used in)              |   | (in thousands) |   |
|   Operating activities            |   | $              | 11,330 |   |   | $      | 6,515  |   |   | $ | (5,979 | ) |
|   Investing activities            |   |           | (3,149 | )      |   |   | (3,184 | )      |   |   | (15,421 | ) |
|   Financing activities            |   |           | (3,023 | )      |   |   | (3,638 | )      |   |   | 19,369 |   |
| Increase (decrease) in cash and equivalents |   | $              | 5,158  |   |   | $      | (307   | )      |   | $ | (2,031 | ) |
| Cash and cash equivalents                   |   | $              | 7,610  |   |   | $      | 2,452  |   |   | $ | 2,759 |   |

| • | Net income for 2009 included a non-cash deferred tax benefit of $8,977,000 in 2010 as compared to 2010 which included a non-cash deferred tax benefit of $685,000, a change of $8,292,000; |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Trade receivables decreased approximately $1,062,000 (due to decreased sales volume in the fourth quarter) as compared to an increase of $510,000 in 2009; |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | In 2010 the Company received an income tax refund of $4,510,000 which had been recognized as a non-cash credit (increase in tax receivable) in 2009; |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | As the result of changes in demand and production the increase in inventory was approximately $852,000 in 2010 as compared to an increase of about $2,619,000 in 2009; |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Accounts payable and accrued liabilities decreased approximately $504,000 (due to a decrease in the amount owed for federal income tax) while in 2009 the same accounts decreased by about $2,146,000 (due to the payment of derivative related items); |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Net income for 2010 included non-cash compensation charges of $808,000 as compared to $280,000 in 2009, a change of $528,000 |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

| • | No cash flows were derived from the return of derivative instrument deposits in 2010 while in 2009 cash of $3,950,000 was provided from the return of a previous margin call; |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 2009 included a non-cash unrealized gain on derivative instruments of $6,976,000 as compared to a non-cash unrealized gain of $177,000 in 2010, a change of $6,699,000; |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Accrued liabilities in Saudi Arabia decreased approximately $207,000 (due to the payment of amounts owed for termination benefits to Saudi employees) as compared to a decrease of $935,000 (due to the payment of amounts owed to the previous President of the Company and termination of some of the Saudi employees) in 2009. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Net income for 2008 included a non-cash deferred tax charge of $5,528,000 as compared to 2009 which included a non-cash deferred tax benefit of $8,977,000, a change of $14,505,000; |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Other liabilities increased $773,000 (due to funds received from outside parties for capital projects), as compared to no change in 2008; |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| • | Notes receivable decreased about $582,000 as compared to a decrease of $711,000 in 2008 (due to notes receivable being paid down in 2009); |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------|

| •   | Derivative instrument deposits decreased $3,950,000 (due to return of previous margin call deposits), as compared to an increase of $3,950,000 (due to the payment of margin calls) in 2008; |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Trade receivables increased approximately $510,000 (due to additional foreign sales with longer payment terms) as compared to an increase of only $58,000 in 2008; |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Income tax receivable increased by about $4,297,000 (due to carry-back of the current year taxable loss) as compared to a decrease of $641,000 in 2008; |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Inventory increased approximately $2,619,000 (due to increased volume and prices) as compared to a decrease of about $441,000 (due to decreased prices but increased volumes) in 2008; |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Accounts payable and accrued liabilities decreased approximately $2,146,000 (due to the payment of derivative related items) while in 2008 the same accounts increased by about $2,750,000 (due to outstanding derivative related items); |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| •  | Accrued liabilities in Saudi Arabia decreased approximately $958,000 (due to the payment of amounts owed to the previous President of the Company and termination of some of the Saudi employees) while in 2008 there was a increase of about $22,000. |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|   Level |   Leverage Ratio                             | Applicable Margin for Base Rate Loans | Applicable Margin for LIBOR Loans | Applicable Margin for Commitment Fee |
|-------------------|--------------------------------------------------------|---------------------------------------|-----------------------------------|--------------------------------------|
| I                 | Greater than or equal to 1.5:1.0                       | (0.50%)                               | 2.00%                             | 0.25%                                |
| II                | Less than 1.5:1.0 but greater than or equal to 1.0:1.0 | (0.75%)                               | 1.75%                             | 0.25%                                |
| III               | Less than 1.0:1.0                                      | (1.00%)                               | 1.50%                             | 0.25%                                |

| ● | Maintaining a minimum EBITDA of $8.5 million at end of each trailing four fiscal quarter period;                      |
|---------|-----------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                  |
| ● | Maintaining a maximum leverage ratio of 2.0:1.0 measured at end of each fiscal quarter;                               |
|    |                                                                                                                  |
| ● | Prohibition of unfinanced capital expenditures in excess of $4.0 million for trailing four fiscal quarter period; and |
|    |                                                                                                                  |
| ● | Limitations on dividends paid to the parent company of 30% of EDITDA.                                                 |

----

Table of Contents

Results of Operations

|                                     |   | 2010           |    |   | 2009   |   |    | Change |   |   | %Change |   |
|------------------------------------------|--------|----------------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
|                                     |   | (in thousands) |    |   |   |   |
| Petrochemical Product Sales              |   | $              | 133,579 |   |   | $      | 109,179 |   |   | $      | 24,400  |   |   |   | 22.3 | % |
| Transloading Sales                       |   |           | 854     |   |   |   | 4,625   |   |   |   | (3,771  | )      |   |   | (81.5 | %) |
|  Processing                         |   |           | 4,677   |   |   |   | 3,783   |   |   |   | 894     |   |   |   | 23.6 | % |
| Gross Revenue                            |   | $              | 139,110 |   |   | $      | 117,587 |   |   | $      | 21,523  |   |   |   | 18.3 | % |
|                                     |   |           |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Volume of sales (thousand gallons)       |   |           | 46,721  |   |   |   | 49,909  |   |   |   | (3,188  | )      |   |   | (6.4 | %) |
|                                     |   |           |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Cost of Materials                        |   | $              | 93,298  |   |   | $      | 69,474  |   |   | $      | 23,824  |   |   |   | 34.3 | % |
| Petrochemical Facility Operating Expense |   |           | 28,597  |   |   |   | 26,214  |   |   |   | 2,383   |   |   |   | 9.1 | % |
| Natural Gas Expense*                     |   |           | 4,991   |   |   |   | 4,572   |   |   |   | 419     |   |   |   | 9.2 | % |
| General & Administrative Expense     |   |           | 10,930  |   |   |   | 9,145   |   |   |   | 1,785   |   |   |   | 19.5 | % |
|                                     |   |           |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Capital Expenditures                     |   | $              | 2,899   |   |   | $      | 3,184   |   |   | $      | (285    | )      |   |   | (9.0 | %) |

|                                     |   | 2009           |    |   | 2008   |   |    | Change |   |   | %Change |   |
|------------------------------------------|--------|----------------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
|                                     |   | (in thousands) |    |   |   |   |
| Petrochemical Product Sales              |   | $              | 109,179 |   |   | $      | 130,264 |   |   | $      | (21,085 | )      |   |   | (16.2 | %) |
| Transloading Sales                       |   |           | 4,625   |   |   |   | 20,239  |   |   |   | (15,614 | )      |   |   | (77.1 | %) |
|  Processing                         |   |           | 3,783   |   |   |   | 4,127   |   |   |   | (344    | )      |   |   | ( 8.3 | %) |
| Gross Revenue                            |   | $              | 117,587 |   |   | $      | 154,630 |   |   | $      | (37,043 | )      |   |   | (24.0 | %) |
|                                     |   |           |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Volume of sales (thousand gallons)       |   |           | 49,909  |   |   |   | 46,311  |   |   |   | 3,598   |   |   |   | 7.8 | % |
|                                     |   |           |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Cost of Materials                        |   | $              | 69,474  |   |   | $      | 131,665 |   |   | $      | (62,191 | )      |   |   | (47.2 | %) |
| Petrochemical Facility Operating Expense |   |           | 26,214  |   |   |   | 27,562  |   |   |   | (1,348  | )      |   |   | ( 4.9 | %) |
| Natural Gas Expense*                     |   |           | 4,572   |   |   |   | 7,310   |   |   |   | (2,738  | )      |   |   | (37.5 | %) |
| General & Administrative Expense     |   |           | 9,145   |   |   |   | 9,034   |   |   |   | 111     |   |   |   | 1.2 | % |
|                                     |   |           |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Capital Expenditures                     |   | $              | 3,184   |   |   | $      | 15,031  |   |   | $      | (11,847 | )      |   |   | (78.8 | %) |

----

Table of Contents

----

Table of Contents

|                                 |   | 2010           |   |   | 2009   |   |   | Change |   |   | %Change |   |
|--------------------------------------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
| Petrochemical Company                |   | (in thousands) |   |   |   |   |
| General & Administrative Expense |   | $              | 8,396  |   |   | $      | 7,200  |   |   | $      | 1,196   |   |   |   | 16.6 | % |

----

Table of Contents

|                                 |   | 2009           |   |   | 2008   |   |   | Change |   |   | %Change |   |
|--------------------------------------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
| Petrochemical Company                |   | (in thousands) |   |   |   |   |
| General & Administrative Expense |   | $              | 7,200  |   |   | $      | 6,636  |   |   | $      | 564     |   |   |   | 8.5 | % |

| (in thousands)             |   | 2010 |   |   | 2009   |   |   | Change |   |   | % Change |   |
|----------------------------|--------|------|--------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
| General corporate expenses |   | $    | 3,229  |   |   | $      | 1,945  |   |   | $      | 1,284    |   |   |   | 66.0 | % |

| (in thousands)             |   | 2009 |   |   | 2008   |   |   | Change |   |   | % Change |   |
|----------------------------|--------|------|--------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
| General corporate expenses |   | $    | 1,945  |   |   | $      | 2,398  |   |   | $      | (453     | )      |   |   | (18.9 | %) |

|                       |   | Payments due by period |       |
|----------------------------|--------|------------------------|------------|
| Contractual Obligations    |   | Total                  |       |   | Less than1 year |   |   | 1-3 years |   |   | 3-5 years |   |   | More than 5 years |   |
| Long-Term Debt Obligations |   | $                      | 22,700,868 |   |   | $ | 1,864,770 |   |   | $ | 13,960,722 |   |   | $ | 2,925,376 |   |   | $ | 3,950,000 |   |

----

Table of Contents

New Accounting Standards

----

Table of Contents

Critical Accounting Policies

----

Table of Contents

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

----

Table of Contents

Item 8. Financial Statements and Supplementary Data

Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A.  Controls and Procedures

----

Table of Contents

Item 9B.  Other Information

----

Table of Contents

PART III

Item 10. Directors and Executive Officers of the Registrant

| Name; Current Positions Held                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Age            | Director since | Term expires at Annual meeting in |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|----------------|-----------------------------------|
|  Nicholas N. Carter ………………………………………….President, Chief Executive Officer of the Company since July 2009, President of the Petrochemical Company since 1987, Member of AMAK and PEVM Boards                                                                                                                                                                                                                                                                                                  |  63  |  2004     |  2011                        |
|  Robert E. Kennedy ………………………………………….Chairman of the Audit and Compensation Committees; Member of Nominating Committee                                                                                                                                                                                                                                                                                                                                                                      |  66       |  2007     |  2012                        |
|  Ghazi Sultan                                                                           Chairman of the Nominating Committee; Member of  Compensation and Audit Committees and AMAK Board |  74       |  1993     |  2013                        |
| Allen P. McKee                                                                           Member of the Audit, Compensation and Nominating Committees and AMAK Board                                 |  69       |  2009     |  2012                        |
| Mohammed Al Omair                                                                           Member of  Audit, Compensation and NominatingCommittees                                            |  67       |  2007     |  2011                        |
| Charles W. Goehringer, Jr.                                                                           General Counsel and Member of AMAK and PEVM Boards                                                  |  52       |  2007     |  2011                        |

----

Table of Contents

----

Table of Contents

| Name               | Positions                                                                   | Age | Appointed |
|--------------------|-----------------------------------------------------------------------------|-----|-----------|
| Nicholas N. Carter | President, Chief Executive Officer and Director/President - TOCCO           | 63  | 2009/1987 |
| Mark Williamson    | Vice President of Marketing - TOCCO                                         | 55  | 1996      |
| Connie Cook        | Chief Accounting Officer, Secretary, Treasurer/Secretary, Treasurer - TOCCO | 47  | 2008/2004 |
| Ronald Franklin    | Vice President of Manufacturing – TOCCO                               | 52  | 2010      |

----

Table of Contents

Item 11.  Executive Compensation - Compensation Discussion and Analysis

| • | Annual incentive awards consist of cash bonuses generated under our new annual incentive program and our legacy profit sharing.  Cash awards under our annual incentive plan are tied to financial results (Operating Income) and to a lesser extent individual performance. Our profit sharing program is available to all petrochemical segment employees (including our NEOs) and is based on cash flow from the petrochemical segment of the business. Our NEOs have historically participated in the profit sharing program with all of our petrochemical employees.  We have seen a connection between our executives and our other employees when everyone gathers for a quarterly meeting to discuss Company performance.  The checks that are handed out to each participant in attendance reflect the operating results of the previous quarter.  Everyone from our lowest hourly rate petrochemical employee to our CEO feel the excitement or disappointment with the size of their respective profit sharing checks.  We feel that it is important to continue this practice and do not want to disrupt this employee-wide participation and personal connection and identification with corporate’s quarterly results.  For reasons stated below, we implemented a new annual incentive program for our NEOs in 2010 which could have eliminated the need for NEO participation in our profit sharing program.  However, rather than eliminate NEO participation from the profit sharing plan we simply net out any quarterly payment made throughout the year from the bonus generated under the new annual incentive program.  By doing this we maintain the connection between our executives and other employees.  Both bonuses and profit sharing awards are paid in cash and provide a strong link between pay and performance as they are directly determined by operating income and profitability. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | The 2008 long-term incentive program currently issues equity to our executives in the form of stock options. The equity-based reward to our executives is therefore highly correlated to the investment success of our shareholders as options hold value only as our stock price increases above the strike price. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|  Participant Title         | Target Bonus(as % of Base Salary) |  Max | Maximum Bonus(as % of Base Salary) |
|---------------------------------|-----------------------------------|-----------|------------------------------------|
| President and CEO               | 80%                               | 2X        | 160%                               |
| Chief Accounting Officer        | 45%                               | 2X        | 90%                                |
| Vice President of Marketing     | 45%                               | 2X        | 90%                                |
| Vice President of Manufacturing | 50%                               | 2X        | 100%                               |

| • | 20% of the target bonus is based upon individual performance.  Each of the goals are equally weighted in this portion of a participant’s target bonus (i.e., if there are two individual performance goals then 10% of the target bonus each).  The Committee is responsible for determining the President/CEO’s performance relative to any individual goals.  The President/CEO determines the performance of his direct reports and makes a recommendation for approval to the Committee. |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | 80% of the target bonus is based upon corporate performance and is determined by the achievement of a pre-established Operating Income goal.  Actual Operating Income relative to the Operating Income goal determines the multiple to be applied to this portion of a participant’s bonus.  For example, if 100% (“Target” Performance) of the Operating Income goal is met, then a 1.00X multiple is applied to 80% of the participant’s target bonus.  Threshold payouts will occur when 80% of the Operating Income goal is met (“Threshold” Performance).  In this case a 0.50X multiple is applied to 80% of the participant’s Target bonus.  Performance below Threshold (80% Target of Operating Income) results in a zero dollar payout.  The Maximum payout occurs when actual Operating Income is greater than or equal to 140% of the Operating Income goal (“Maximum” Performance).  When Maximum Performance is achieved, a 2.25X multiple is applied to 80% of the participant’s Target bonus (a 2.25X multiple applied to the corporate portion of the Target bonus allows a participant to earn up to two times the Target bonus, assuming the participant successfully achieved his or her individual performance goals).  Payouts are scaled linearly between Threshold and Target for performance levels between 80% and 100% of Target Performance, and between Target and Maximum for performance levels between 100% and 140% of Target Performance. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Base Salary: $250,000                   |   |   |    |
|-----------------------------------------|--------|--------|---------|
| Target Bonus as % of Base Salary: 80%   |   | $      | 200,000 |   |
| Maximum Bonus as % of Base Salary: 160% |   | $      | 400,000 | (1) |

| TARGET BONUS          |   |   |   | Status |     | Multiple |   |   | Payout |   |
|-----------------------|--------|--------|--------|--------|----------|----------|--------|--------|--------|--------|
| Individual Goals      |   |   | 20     | %      | Achieved |     |   | 1      | X      |   | $ | 40,000 |   |
| Corporate Performance |   |   | 80     | %      | Target   |     |   | 1      | X      |   | $ | 160,000 |   |
|                  |   |   | 100    | %      |     |     |   |   |   |   | $ | 200,000 |   |

----

Table of Contents

| MAXIMUM BONUS         |   |   |   |   | Status |     | Multiple |   |   | 2X Target |   |   |
|-----------------------|--------|--------|--------|--------|--------|----------|----------|--------|--------|-----------|--------|--------|
| Individual Goals      |   |   | 10     | %      | (3)    | Achieved |     |   | 1      | X         |   | $      | 40,000 |   |   |
| Corporate Performance |   |   | 90     | %      |   | Target   |     |   | 2.25   | X         |   | $      | 360,000 |   | (2) |
|                  |   |   | 100    | %      |   |     |     |   |   |      |   | $      | 400,000 |   | (1) |
|                  |   |   |   |   |   |     |     |   |   |      |   |   |   |   |   |

| (1)   | $400,000 = 2X the Target Bonus |
|-----------------|--------------------------------|

| (2)   | $360,000 = $200,000 X 80% X 2.25 |
|-----------------|----------------------------------|

| (3)   | There is only a “target” payout related to Individual Goals; therefore, this payout remains the same even in a maximum performance scenario and only accounts for 10% of the total payout; 90% of the maximum award payout is based upon Corporate Operating Income performance |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  Payout level | Corporate PerformanceBonus Multiple |  Performance Achievement |
|--------------------|-------------------------------------|-------------------------------|
| Maximum            | 2.25X(1)                            | 140% of Operating Income goal |
| Target             | 1.00X                               | 100% of Operating Income goal |
| Threshold          | 0.50X                               | 80% of Operating Income goal  |

| (1)   | Applying a multiple of 2.25X the Corporate Performance portion of the target bonus is necessary to allow our participants an opportunity to earn 200% of their target bonus because it is being applied to only 80% of the targeted bonus payout.  The amount of the target bonus paid for achieving individual goals does not change in a maximum corporate performance scenario. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| • | An exercise price equal to closing price of Arabian American Development Company stock on the grant date |
|---------|----------------------------------------------------------------------------------------------------------|

| • | Annual vesting in approximately equal installments over a specified period |
|---------|----------------------------------------------------------------------------|

| • | Expiration seven to ten years after the grant date |
|---------|----------------------------------------------------|

| • | We benchmark our NEOs to comparable positions within the market in terms of specific duties, responsibilities, and job scope. |
|---------|-------------------------------------------------------------------------------------------------------------------------------|

| • | Each position has an established target annual incentive award opportunity, executive benefits and perquisites.  These incentive levels and benefits are reviewed by the Committee on an annual basis to determine their relative level of competitiveness with the market. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | We generally target all elements of pay and total direct compensation to be positioned between the 25th to 50th percentiles of our peer group. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Individual executive pay positioning will vary based on the requirements of the job (competencies and skills), the executive’s experience and performance, and the organizational structure (internal alignment and pay relationships). |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | We also consider internal pay equity when establishing compensation levels.  Currently, we believe that our compensation level for each of our NEOs reflects his or her job responsibility and scope appropriately and scale down from the CEO in a reasonable manner. |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Exceptions to normal practice may be made based on critical business and people needs. |
|---------|----------------------------------------------------------------------------------------|

|   | Role of the Compensation Committee in Establishing Pay Levels |
|--------|---------------------------------------------------------------|

| • | The Compensation Committee, comprised of only independent directors, establishes, reviews and approves all elements of the executive compensation program.  A copy of the Compensation Committee Charter is available on our website.  During 2010 the Committee engaged Pearl Meyer & Partners (“PM&P”) to serve as its independent outside executive compensation consultant.  PM&P’s primary role is to provide advice and perspective regarding market compensation trends that may impact decisions we make about our executive compensation program and practices.  PM&P was instrumental in assisting the Committee in a complete overhaul of our executive compensation program in the latter half of 2010.  The Company incurred expenses during 2010 payable to PM&P in the amount of $47,660.  Management has the responsibility for effectively implementing the executive compensation program.  Additional responsibilities of the Committee, management and the consultant include: |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| • | The Committee reviews and approves business goals and objectives relevant to executive compensation,     evaluates the performance of the President/CEO in light of these goals and objectives, and determines and establishes the President/CEO’s compensation level. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Based on review of market data, individual performance and internal pay comparisons, the Committee independently sets the pay for our President/CEO and reviews and approves all NEO and other executive pay arrangements. |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Role of Management in Establishing Pay Levels |
|--------|-----------------------------------------------|

| • | The President/CEO makes recommendations on program design and pay levels, where appropriate, and oversees the implementation of such programs and directives approved by the Committee. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | The President/CEO develops pay recommendations for his direct reports and other key executives.  This includes all of our NEOs (with the exception of our CEO himself). |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Our Chief Accounting Officer provides the financial information used by the Committee to make decisions with respect to incentive compensation goals and related payouts. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Role of the Compensation Consultant in Establishing Pay Levels |
|--------|----------------------------------------------------------------|

| • | The compensation consultant is responsible for gathering, analyzing and presenting peer group pay practices and relevant data to the Committee.  They do not have the authority to determine pay. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | The consultant provides periodic updates to the Committee regarding various tax, accounting and regulatory issues that could have an impact on executive compensation design, administration and/or disclosure. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | In 2010 the consultant assisted the Committee in revamping the executive compensation program. |
|---------|------------------------------------------------------------------------------------------------|

|   | Regulatory Considerations |
|--------|---------------------------|

----

Table of Contents

|      Executive                                                        |   |    AnnualizedBase Salary |    |   | AnnualIncentive Plan Target(Profit Sharing, Cash Bonus andCommissions) |   |    |  Long-Term Incentive Compensation(1) |   |   |  AnnualizedTotal Direct CompensationTarget |   |
|------------------------------------------------------------------------------------------------|--------|-----------------------------------------|---------|--------|------------------------------------------------------------------------|--------|---------|-------------------------------------------|--------|--------|-------------------------------------------------|--------|
| Nicholas N. CarterPresident & CEO     Compensation Amount         |   | $                                       | 250,000 |   |                                                                   | $      | 200,000 |                                      |   | $      | 66,300                                          |   |   | $ | 516,300 |   |
|      Market Targeted Range                                            |   |                                    |    |   |                                                                   |   |    |                                      |   |   |                                            |   |   |   |   |   |
|          Minimum                                  |   | $                                       | 353,000 |   |                                                                   | $      | 396,000 |                                      |   | $      | 146,000                                         |   |   | $ | 878,900 |   |
|          Maximum                                  |   | $                                       | 434,000 |   |                                                                   | $      | 481,000 |                                      |   | $      | 315,000                                         |   |   | $ | 1,104,200 |   |
| Connie J. CookChief Accounting Officer     Compensation Amount        |   | $                                       | 145,000 |   |                                                                   | $      | 65,250  |                                      |   | $      | 33,150                                          |   |   | $ | 243,400 |   |
|      Market Targeted Range                                            |   |                                    |    |   |                                                                   |   |    |                                      |   |   |                                            |   |   |   |   |   |
|          Minimum                                  |   | $                                       | 189,000 |   |                                                                   | $      | 203,000 |                                      |   | $      | 57,000                                          |   |   | $ | 351,900 |   |
|          Maximum                                  |   | $                                       | 218,000 |   |                                                                   | $      | 246,000 |                                      |   | $      | 89,000                                          |   |   | $ | 413,200 |   |
| Mark D. WilliamsonVice President of Marketing     Compensation Amount |   | $                                       | 253,900 | (2     |                                                                   | $      | 74,300  |                                      |   | $      | 44,200                                          |   |   | $ | 372,400 |   |
|      Market Targeted Range                                            |   |                                    |    |   |                                                                   |   |    |                                      |   |   |                                            |   |   |   |   |   |
|          Minimum                                  |   | $                                       | 148,000 |   |                                                                   | $      | 173,000 |                                      |   | $      | 41,000                                          |   |   | $ | 266,300 |   |
|          Maximum                                  |   | $                                       | 181,000 |   |                                                                   | $      | 215,000 |                                      |   | $      | 72,000                                          |   |   | $ | 312,200 |   |
| Ron FranklinVice President of Manufacturing     Compensation Amount   |   | $                                       | 186,000 |   |                                                                   | $      | 93,000  |                                      |   | $      | 24,700                                          |   |   | $ | 303,700 |   |
|      Market Targeted Range                                            |   |                                    |    |   |                                                                   |   |    |                                      |   |   |                                            |   |   |   |   |   |
|          Minimum                                  |   | $                                       | 229,000 |   |                                                                   | $      | 262,000 |                                      |   | $      | 60,000                                          |   |   | $ | 442,200 |   |
|          Maximum                                  |   | $                                       | 265,000 |   |                                                                   | $      | 332,000 |                                      |   | $      | 104,000                                         |   |   | $ | 495,700 |   |

| (1)   | The compensation amount for each NEO shown reflects the value of options granted to the NEOs by the Compensation Committee in the first quarter of 2010 based on the Company’s performance in 2009. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| (2)   | Includes commissions of $89,000 earned in 2010.  Beginning January 1, 2011, the Vice President of Marketing will no longer receive commissions.  However, his base salary for 2011 will be increased proportionately to account for the difference. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Beginning of thePerformance Period                                                                            |  During the Performance Period                                                                                                     |  End of the Performance Period                                                                                                                                                                                                                                                                                                                |
|---------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Operating Income goals are developed by the Committee and management and ultimately approved by the Committee | Operating Income performance is monitored relative to goals Operating Income goals cannot be changed during the performance period | Management presents actual Operating Profit results relative to goals and the Committee reviews actual performance to determine any payouts The Committee may exclude or adjust certain items that are outside the normal course of business, unusual and/or infrequent, and not reflective of our core operating performance for that period |

----

Table of Contents

| • | limits on annual incentive and long-term performance awards, thereby defining and capping potential payouts; |
|---------|--------------------------------------------------------------------------------------------------------------|

| • | application of an annual incentive metric that aligns employees with the common goal of increasing Operating Income; |
|---------|----------------------------------------------------------------------------------------------------------------------|

| • | use of a long-term incentive vehicle—stock option—that vests over a number of years, thereby providing strong incentives for sustained operational and financial performance; |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | Committee discretion to adjust payouts under the annual incentive plan to reflect the core operating performance of the company but prohibits discretion for payouts above stated maximum awards; |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | annual bonuses to executives are awarded after the Company’s Operating Income for the fiscal year is determined which means that 100 percent of annual bonus is delayed and at risk to the executives based on the actual company wide net operating performance of the Company; and |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | no awards of annual bonuses and stock option grants for a given year are based on matrices such as revenue or operating results of particular transactions or units, which would create the potential that personnel might take actions that benefit that matrix in the short-term while exposing the Company to inappropriate risk. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Executive Compensation Program for 2010 and 2011 |
|--------|--------------------------------------------------|

| • | 2010 Target Operating Income of $10 million; therefore Threshold level of $8 million; As noted previously, our 2010 actual Operating Income is $5,589,269 which is less than the Threshold level of $8 million; Consequently, no executive bonuses were earned in 2010. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| • | 2010 South Hampton EBITDA of $11,296,809 |
|---------|------------------------------------------|

|  Position                  |   | Base Salary2010 |    |   | Base Salary2011 |   |    | Increase |   |
|---------------------------------|--------|-----------------|---------|--------|-----------------|--------|---------|----------|--------|
| President and CEO               |   | $               | 250,000 |   |            | $      | 350,000 |     |   | $ | 100,000 |   |
| Chief Accounting Officer        |   | $               | 145,000 |   |            |   | 160,000 |     |   |   | 15,000 |   |
| Vice President of Marketing (1) |   | $               | 165,000 |   |            |   | 255,000 |     |   |   | 90,000 |   |
| Vice President of Manufacturing |   | $               | 185,600 |   |            |   | 225,000 |     |   |   | 39,400 |   |

|    Employee Name |    Title |   | Total Options Granted |    |   | Vesting Period #11/12/11-1/11/12 |   |   | Vesting Period #21/12/12-1/11/13 |   |   | Vesting Period #31/12/13-1/11/14 |   |   | Vesting Period #41/12/14-1/11/15 |   |
|---------------------------------|-------------------------|--------|-----------------------|---------|--------|----------------------------------|--------|--------|----------------------------------|--------|--------|----------------------------------|--------|--------|----------------------------------|--------|
| Nicholas Carter                 | President /CEO          |   |                  | 129,030 |   |                             |   | 32,257 |                             |   |   | 32,258                           |   |   |                             | 32,257 |   |   |   | 32,258 |   |
| Ron Franklin                    | VP Mfg.                 |   |                  | 58,650  |   |                             |   | 14,662 |                             |   |   | 14,663                           |   |   |                             | 14,662 |   |   |   | 14,663 |   |
| Connie Cook                     | Sec/Treas/CAO           |   |                  | 58,650  |   |                             |   | 14,662 |                             |   |   | 14,663                           |   |   |                             | 14,662 |   |   |   | 14,663 |   |
| Mark Williamson                 | VP Marketing            |   |                  | 50,830  |   |                             |   | 12,707 |                             |   |   | 12,708                           |   |   |                             | 12,707 |   |   |   | 12,708 |   |
| Turner Evans                    | Mgr. of Log.            |   |                  | 31,280  |   |                             |   | 7,820  |                             |   |   | 7,820                            |   |   |                             | 7,820  |   |   |   | 7,820 |   |
| Merf Kaufman                    | Plant Mgr.              |   |                  | 31,280  |   |                             |   | 7,820  |                             |   |   | 7,820                            |   |   |                             | 7,820  |   |   |   | 7,820 |   |
| Darren Smith                    | IT Mgr.                 |   |                  | 31,280  |   |                             |   | 7,820  |                             |   |   | 7,820                            |   |   |                             | 7,820  |   |   |   | 7,820 |   |
| Total                           |                    |   |                  | 391,000 |   |                             |   |   |                             |   |   |                             |   |   |                             |   |   |   |   |   |   |

----

Table of Contents

| Name andPrincipal Position                                                                                                                 | Year       |   | Salary($) (1) |    |   | Bonus($)(2) |   |   | StockAward(s)($) |   |   | Option Award(s)($)(3) |   |   | Non-EquityIncentive PlanCompensation($) |   |   | Change in Pension Value and Non-Qualified Deferred Compensation Earnings($) |   |   | All OtherCompensation($)(4)(5)(6)(7)(8) |   |   | Total($) |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|------------|--------|---------------|---------|--------|-------------|--------|--------|------------------|--------|--------|-----------------------|--------|--------|-----------------------------------------|--------|--------|-----------------------------------------------------------------------------|--------|--------|-----------------------------------------|--------|--------|----------|--------|
| Nicholas N. Carter President and ChiefExecutive Officer since July 1, 2009; previouslyExecutive Vice President and Chief Operating Officer | 2010       |   | $             | 250,000 |   |        |   | --     |             |   |   | --                    |   |   | $                                       | 66,300 |   |                                                                        |   | --     |                                    |   |   | --       |   |   | $ | 35,515 |   |   | $ | 351,815 |   |
| 2009                                                                                                                                       |       | $      | 234,837       |    |   | $           | 60,000 |   |             |   | --     |                  |   |   | --                                      |   |   |                                                                        | --     |   |                                    |   | --     |     |   | $ | 56,642 |   |   | $ | 351,479 |   |
| 2008                                                                                                                                       |       | $      | 209,918       |    |   |        | --     |   |             | $      | 99,800 |                  |   |   | --                                      |   |   |                                                                        | --     |   |                                    |   | --     |     |   | $ | 41,260 |   |   | $ | 350,978 |   |
| Connie J. CookChief Accounting Officer                                                                                                     |  2010 |   | $             | 144,997 |   |        |   | --     |             |   |   | --                    |   |   | $                                       | 33,150 |   |                                                                        |   | --     |                                    |   |   | --       |   |   | $ | 27,209 |   |   | $ | 205,356 |   |
|  2009                                                                                                                                 |       | $      | 142,208       |    |   | $           | 30,000 |   |             |   | --     |                  |   |   | --                                      |   |   |                                                                        | --     |   |                                    |   | --     |     |   | $ | 41,248 |   |   | $ | 213,456 |   |
| 2008                                                                                                                                       |       | $      | 133,009       |    |   |        | --     |   |             | $      | 49,900 |                  |   |   | --                                      |   |   |                                                                        | --     |   |                                    |   | --     |     |   | $ | 34,124 |   |   | $ | 217,033 |   |
| Mark D. WilliamsonVice President of Marketing, Petrochemical Company                                                                       | 2010       |   | $             | 253,904 |   |        |   | --     |             |   |   | --                    |   |   | $                                       | 44,200 |   |                                                                        |   | --     |                                    |   |   | --       |   |   | $ | 35,861 |   |   | $ | 333,965 |   |
| 2009                                                                                                                                       |       | $      | 227,500       |    |   | $           | 40,000 |   |             |   | --     |                  |   |   | --                                      |   |   |                                                                        | --     |   |                                    |   | --     |     |   | $ | 46,302 |   |   | $ | 313,802 |   |
| 2008                                                                                                                                       |       | $      | 240,705       |    |   |        | --     |   |             | $      | 49,900 |                  |   |   | --                                      |   |   |                                                                        | --     |   |                                    |   | --     |     |   | $ | 40,585 |   |   | $ | 331,190 |   |
| Gerardo Maldonado,Account Representative,PetrochemicalCompany                                                                              | 2010       |   | $             | 194,404 |   |        |   | --     |             |   |   | --                    |   |   |                                    | --     |   |                                                                        |   | --     |                                    |   |   | --       |   |   | $ | 25,673 |   |   | $ | 220,077 |   |
| 2009                                                                                                                                       |       | $      | 192,543       |    |   |        | --     |   |             |   | --     |                  |   |   | --                                      |   |   |                                                                        | --     |   |                                    |   | --     |     |   | $ | 35,990 |   |   | $ | 228,533 |   |
| 2008                                                                                                                                       |       | $      | 179,158       |    |   |        | --     |   |             |   | --     |                  |   |   | --                                      |   |   |                                                                        | --     |   |                                    |   | --     |     |   | $ | 25,389 |   |   | $ | 204,547 |   |
| Hatem El KhalidiPresident and ChiefExecutive Officer until June 30, 2009                                                                   | 2010       |   |          | --      |   |        |   | --     |             |   |   | --                    |   |   |                                    | --     |   |                                                                        |   | --     |                                    |   |   | --       |   |   |   | -- |   |   |   | -- |   |
| 2009                                                                                                                                       |       | $      | 36,000        |    |   | $           | 31,500 |   |             |   | --     |                  |   | $      | 186,288                                 |   |   |                                                                        | --     |   |                                    |   | --     |     |   | $ | 40,000 |   |   | $ | 293,788 |   |
| 2008                                                                                                                                       |       | $      | 72,000        |    |   |        | --     |   |             |   | --     |                  |   |   | --                                      |   |   |                                                                        | --     |   |                                    |   | --     |     |   | $ | 8,000 |   |   | $ | 80,000 |   |
| Ron FranklinVice President of Manufacturing, Petrochemical Company                                                                         | 2010       |   | $             | 185,577 |   |        |   | --     |             |   |   | --                    |   |   |                                    | 24,700 |   |                                                                        |   | --     |                                    |   |   | --       |   |   | $ | 26,009 |   |   | $ | 236,286 |   |
| 2009                                                                                                                                       |       | $      | 22,115        |    |   |        | --     |   |             |   | --     |                  |   |   | --                                      |   |   |                                                                        | --     |   |                                    |   | --     |     |   | $ | 742 |   |   | $ | 22,857 |   |
| 2008                                                                                                                                       |       |   | --            |    |   |        | --     |   |             |   | --     |                  |   |   | --                                      |   |   |                                                                        | --     |   |                                    |   | --     |     |   |   | -- |   |   |   | -- |   |

| (1) | Includes: |
|-----|-----------|

| (a)   | $88,904, $77,694, and $106,763 in sales commission earned by Mr. Williamson for each of the fiscal years 2010, 2009 and 2008, respectively; |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | $56,916, $57,699, and $49,773 in sales commission earned by Mr. Maldonado for each of the fiscal years 2010, 2009 and 2008, respectively; |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Includes $31,500 in retirement bonus compensation awarded in 2009 to Mr. El Khalidi that was deferred.   |
|-----|--------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| (3) | Restricted stock option awards for fiscal year ended 2010 were granted to the participants based on their performance in fiscal year ended 2009.  Restricted stock option awards include the aggregate grant date fair value of such awards granted in the fiscal year indicated computed in accordance with ASC 718.  For a discussion of the assumptions we made in valuing the stock and option awards, see “Note 2—Significant Accounting Policies—Share-Based Compensation” and “Note 14—Share-Based Compensation” in the notes to our consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Includes $4,000 and $8,000 in termination benefits for each of the fiscal years ended December 31, 2009 and 2008, respectively, that was accrued for Mr. El Khalidi in accordance with Saudi Arabian employment laws. The total amount of accrued termination benefits due to Mr. El Khalidi as of December 31, 2010, was $42,878. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Includes $36,000 in accrued retirement benefits for the fiscal year ended December 31, 2009 that was deferred at the election of Mr. El Khalidi. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Includes: |
|-----|-----------|

| (a)   | $15,000, $14,090, and $12,595 in 401(k) contributions made on behalf of Nicholas N. Carter for each of the fiscal years 2010, 2009 and 2008, respectively; |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | $8,700, $8,533, and $7, in 401(k) contributions made on behalf of Connie J. Cook for each of the fiscal years ended 2010, 2009 and 2008, respectively; |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | $15,234, $13,650, and $14,442 in 401(k) contributions made on behalf of Mark D. Williamson for each of the fiscal years ended 2010, 2009 and 2008, respectively; |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | $11,664, $11,553, and $10,749 in 401(k) contributions made on behalf of Gerardo Maldonado for each of the fiscal years ended 2010, 2009 and 2008, respectively; and |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e)   $7,500 in 401(k) contributions made on behalf of Ron Franklin for the fiscal year ended 2010. |
|--------|--------------------------------------------------------------------------------------------------------------------|

| (7) | Includes: |
|-----|-----------|

| (a)   | $19,884, $42,552, and $28,665 in profit sharing for Nicholas N. Carter for each of the fiscal years 2010, 2009 and 2008, respectively; |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | $18,509, $32,715, and $26,143 in profit sharing for Connie J. Cook for each of the fiscal years ended 2010, 2009 and 2008, respectively; |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | $20,446, $32,652, and $26,143 in profit sharing for Mark D. Williamson for each of the fiscal years ended 2010, 2009 and 2008, respectively; |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | $14,009, $24,437, and $14,640 in profit sharing for Gerardo Maldonado for each of the fiscal years ended 2010, 2009 and 2008, respectively; and |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e)   $18,509 in profit sharing for Ron Franklin for the fiscal year ended 2010. |
|--------|-------------------------------------------------------------------------------------------------|

| (8) | Includes $631 for the vehicle provided to Nicholas N. Carter in fiscal year 2010. |
|-----|-----------------------------------------------------------------------------------|

----

Table of Contents

|   | Grants of Plan-Based Awards |
|--------|-----------------------------|

|                  |      | Estimated Future Payouts Under Non-Equity IncentivePlan Awards | Estimated FuturePayouts underEquity Incentive Plan Awards |       |         |      |       |                                                                           |   |                                              |   |   |                             |   |
|-----------------------|-----------|---------------------------------------------------------------------|----------------------------------------------------------------|------------|--------------|-----------|------------|--------------------------------------------------------------------------------|--------|---------------------------------------------------|--------|--------|----------------------------------|--------|
| Name                  | GrantDate | Threshold($)                                                        | Target($)                                                      | Maximum($) | Threshold(#) | Target(#) | Maximum(#) | All Other Stock Awards:  Number of Shares of Stock or Units (#) |   | All Other Options Awards: Number of Securities(#) |   |   | Exercise Price of Options ($/sh) |   |   | Closing Market Price on Date of Option Grant ($/sh) |   | Grant Date Fair Value of Stock Awards |
| NicholasCarter (1)    | 01/28/10  |                                                                |                                                           |       |         |      |       |                                                                           |   |                                              | 30,000 |   |                             | $      | 2.21 |   |   | $ | 2.21 |   |   |
| Mark Williamson (1)   | 01/28/10  |                                                                |                                                           |       |         |      |       |                                                                           |   |                                              | 20,000 |   |                             | $      | 2.21 |   |   | $ | 2.21 |   |   |
| ConnieCook (1)        | 01/28/10  |                                                                |                                                           |       |         |      |       |                                                                           |   |                                              | 15,000 |   |                             | $      | 2.21 |   |   | $ | 2.21 |   |   |
| Gerardo Maldonado (1) | 01/28/10  |                                                                |                                                           |       |         |      |       |                                                                           |   |                                              | 7,500  |   |                             | $      | 2.21 |   |   | $ | 2.21 |   |   |
| Ronald Franklin (2)   | 06/22/10  |                                                                |                                                           |       |         |      |       |                                                                           |   |                                              | 10,000 |   |                             | $      | 2.47 |   |   | $ | 2.47 |   |   |

| (1)   | Represents stock option grants made on January 28, 2010, to officers and key employees in the amounts shown with an exercise price equal to the closing sale price of such a share on even date.  The options vest over a 2 year period with 50% vesting each year.  The option life is 7 years. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Represents a stock option grant made on June 22, 2010 to Mr. Franklin with an exercise price equal to the closing sale price of such a share on even date.  The options vest over a 2 year period with 50% vesting each year.  The option life is 7 years. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                                                                      | Plan name                |   | Number of years credited service |   |   | Present value of accumulated benefit($) |   |    | Payments during last year ($) |   |
|---------------------------------------------------------------------------|--------------------------|--------|----------------------------------|--------|--------|-----------------------------------------|--------|---------|------------------------------------|--------|
| Hatem El KhalidiPresident and Chief Executive Officer until June 30, 2009 | Retirement Agreement (1) |   |                             | 42     |   |                                    | $      | 851,000 |                               |   | $ | 0 |   |
| Retirement Agreement (2)                                                  |                     |   | 42                               |   |   | $                                       | 31,500 |    |                               | $      | 0 |   |
| Saudi Arabian Termination Benefits (3)                                    |                     |   | 42                               |   |   | $                                       | 42,876 |    |                               | $      | 0 |   |
| Total                                                                     |                     |   |                             |   |   |                                    | $      | 925,376 |                               |   | $ | 0 |   |

| (1) | In January 2008 the retirement agreement entered into in February 2007 with Mr. El Khalidi, then president of the Company, was modified.  The new agreement provides for $6,000 per month in benefits to Mr. El Khalidi upon his retirement for the remainder of his life.  Additionally, upon his death $4,000 per month will be paid to his surviving spouse for the remainder of her life.  A health insurance benefit is also provided.  An additional $382,000 was accrued in January 2008 for the increase in benefits.  A short-term liability of $36,000 is included in accrued liabilities and a long-term liability of approximately $815,000 based upon an annuity single premium value contract was outstanding as of December 31, 2009, and is included in post retirement benefits. Assumptions used for the amortization of post retirement benefits were a life expectancy of 6.8 years for Mr. El Khalidi and 15.8 years for Ms. El Khalidi with a discount rate of 1.62%.  Life expectancies were taken from the 2004 Life Table for the total U.S. population as published under the National Vital Statistics Reports.  In June 2009 the Company’s Board of Directors voted to amend the retirement benefit by allowing a yearly cost of living adjustment to be applied to the agreement based upon the Consumer Price Index which is published annually.  Expense recognized in relation to this adjustment was approximately $21,000 based upon the Consumer Price Index published on January 15, 2010, of 2.7%.  See Note 21 – Post Retirement Obligations in our annual report on Form 10-K. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| (2) | While there is no written policy regarding retirement bonus compensation, the Company has historically awarded all employees (regardless of job position) a retirement bonus equal to $750 for each year of service.  Since Mr. El Khalidi was employed by the Company for 42 years, the Board of Directors voted to award him a $31,500 retirement bonus, consistent with that provided to all other retired employees. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Employer termination benefits required by the Saudi Labor and Workman Law provide for termination benefits equal to one-half month’s total compensation for each year of service for the first five years and one month’s total compensation for each subsequent year of service.  Since Mr. El Khalidi was employed by the Company in Saudi Arabia for 42 years, under Saudi law the total accrued termination benefits due were $320,000 of which approximately $43,000 remained outstanding to Mr. El Khalidi as of December 31, 2010. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|              |   | Option awards                                                      | Stock awards |
|-------------------|--------|--------------------------------------------------------------------|--------------|
| Name              |   | Number of Securities Underlying Unexercised Options(#) Exercisable |         |   | Number of Securities Underlying Unexercised Options (#) Unexercisable |   |   | Equity incentive plan awards: number of securities underlying unexercised unearned options(#) |   |   | Option exercise price($) |   | Option Expiration date | Number of Shares or units of stock that have not vested(#) | Market value of shares or unites of stock that have not vested(#) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested($) |
| HatemEl Khalidi   |   |                                                               | --           |   |   |   | 200,000 |   |   |   | -- |   |   | $ | 3.40 |   | 06/30/12 |   |   |   |   |
| HatemEl Khalidi   |   |                                                               | --           |   |   |   | 200,000 |   |   |   | -- |   |   | $ | 3.40 |   | 06/30/19 |   |   |   |   |
| NicholasCarter    |   |                                                               | --           |   |   |   | 30,000 |   |   |   | -- |   |   | $ | 2.21 |   | 01/27/17 |   |   |   |   |
| Mark Williamson   |   |                                                               | --           |   |   |   | 20,000 |   |   |   | -- |   |   | $ | 2.21 |   | 01/27/17 |   |   |   |   |
| ConnieCook        |   |                                                               | --           |   |   |   | 15,000 |   |   |   | -- |   |   | $ | 2.21 |   | 01/27/17 |   |   |   |   |
| Gerardo Maldonado |   |                                                               | --           |   |   |   | 7,500 |   |   |   | -- |   |   | $ | 2.21 |   | 01/27/17 |   |   |   |   |
| Ronald Franklin   |   |                                                               | --           |   |   |   | 10,000 |   |   |   | -- |   |   | $ | 2.47 |   | 06/22/17 |   |   |   |   |

----

Table of Contents

| Name                    |   | Fees Earned or Paid in Cash($)(1) |   |   | Stock Awards($)(2) |   |   | OptionAwards($)(3)(4) |   |   | Total($) |   |
|-------------------------|--------|-----------------------------------|--------|--------|--------------------|--------|--------|-----------------------|--------|--------|----------|--------|
|                    |   |                              |   |   |               |   |   |                  |   |   |     |   |
| Robert Kennedy          |   | $                                 | 63,000 |   |               | $      | 7,020  |                  |   | $      | 71,870   |   |   | $ | 141,890 |   |
| Ghazi Sultan            |   |                              | 55,000 |   |               |   | 7,020  |                  |   |   | 71,870   |   |   |   | 133,890 |   |
| Mohammed Al Omair       |   |                              | 5,000  |   |               |   | 7,020  |                  |   |   | 15,470   |   |   |   | 27,490 |   |
| Charles Goehringer, Jr. |   |                              | 18,000 |   |               |   | 7,020  |                  |   |   | 71,870   |   |   |   | 96,890 |   |
| Allen McKee             |   |                              | 79,500 |   |               |   | 4,680  |                  |   |   | 66,714   |   |   |   | 150,894 |   |

| (1) | Includes committee fees for 2010 in the amount of $95,000, Company board fees in the amount of $60,000, subsidiary board fees for 2010 in the amount of $40,000 and per diem amounts for 2010 in the amount of $25,500. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Represents 3,000 shares of restricted stock granted to each non-employee director except Mr. McKee who received 2,000 shares for 2009 Board service at $2.34 per share based upon the closing price of the Company’s common stock on the restriction date lapse of July 28, 2010, with a grant date of January 28, 2010. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Represents 32,667 shares of stock options granted to non-employee directors for 2009 Board service at an exercise price of $2.21 per share based upon the closing price of the Company’s common stock on the grant date of January 28, 2010, and 20,000 shares of stock options granted to each non-employee director except Mr. Al Omair for 2010 Board service at an exercise price of $2.82 per share based upon the closing price of the Company’s common stock on the grant date of February 23, 2010. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Stock option awards include the aggregate grant date fair value of such awards granted in the fiscal year indicated computed in accordance with ASC 718. For a discussion of the assumptions we made in valuing the stock and option awards, see Note 2—Significant Accounting Policies—Share-Based Compensation and Note 14—Share-Based Compensation in the notes to our consolidated financial statements contained herein. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                    |   | Option awards                                                      | Stock awards |
|-------------------------|--------|--------------------------------------------------------------------|--------------|
| Name                    |   | Number of Securities Underlying Unexercised Options(#) Exercisable |         |   | Number of Securities Underlying Unexercised Options (#) Unexercisable |   |   | Equity incentive plan awards: number of securities underlying unexercised unearned options(#) |   |   | Option exercise price($) |   | Option Expiration date | Number of Shares or units of stock that have not vested(#) | Market value of shares or unites of stock that have not vested(#) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested($) |
| Ghazi Sultan            |   |                                                               | 7,000        |   |   |   | -- |   |   |   | -- |   |   | $ | 1.39 |   | 01/01/19 |   |   |   |   |
| Mohammed Al Omair       |   |                                                               | 7,000        |   |   |   | -- |   |   |   | -- |   |   | $ | 1.39 |   | 01/01/19 |   |   |   |   |
| Robert Kennedy          |   |                                                               | 7,000        |   |   |   | -- |   |   |   | -- |   |   | $ | 1.39 |   | 01/01/19 |   |   |   |   |
| Charles Goehringer, Jr. |   |                                                               | 7,000        |   |   |   | -- |   |   |   | -- |   |   | $ | 1.39 |   | 01/01/19 |   |   |   |   |
| Ghazi Sultan            |   |                                                               | 7,000        |   |   |   | -- |   |   |   | -- |   |   | $ | 2.21 |   | 01/27/20 |   |   |   |   |
| Mohammed Al Omair       |   |                                                               | 7,000        |   |   |   | -- |   |   |   | -- |   |   | $ | 2.21 |   | 01/27/20 |   |   |   |   |
| Robert Kennedy          |   |                                                               | 7,000        |   |   |   | -- |   |   |   | -- |   |   | $ | 2.21 |   | 01/27/20 |   |   |   |   |
| Charles Goehringer, Jr. |   |                                                               | 7,000        |   |   |   | -- |   |   |   | -- |   |   | $ | 2.21 |   | 01/27/20 |   |   |   |   |
| Allen P. McKee          |   |                                                               | 4,667        |   |   |   | -- |   |   |   | -- |   |   | $ | 2.21 |   | 01/27/20 |   |   |   |   |
| Ghazi Sultan            |   |                                                               | --           |   |   |   | 20,000 |   |   |   | 80,000 |   |   | $ | 2.82 |   | 02/22/20 |   |   |   |   |
| Mohammed Al Omair       |   |                                                               | --           |   |   |   | -- |   |   |   | 80,000 |   |   | $ | 2.82 |   | 02/22/20 |   |   |   |   |
| Robert Kennedy          |   |                                                               | --           |   |   |   | 20,000 |   |   |   | 80,000 |   |   | $ | 2.82 |   | 02/22/20 |   |   |   |   |
| Charles Goehringer, Jr. |   |                                                               | --           |   |   |   | 20,000 |   |   |   | 80,000 |   |   | $ | 2.82 |   | 02/22/20 |   |   |   |   |
| Allen P. McKee          |   |                                                               | --           |   |   |   | 20,000 |   |   |   | 80,000 |   |   | $ | 2.82 |   | 02/22/20 |   |   |   |   |

----

Table of Contents

----

Table of Contents

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

|  Name and AddressOf Beneficial Owner                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | Amount and Nature ofBeneficialOwnership (1)(2) |   |  Percentof Class |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|--------|-----------------------|
|  Fahad Mohammed Saleh Al Athel                                                                               c/o Saudi FalP. O. Box 4900Riyadh, Saudi Arabia  11412           |   |  3,995,745                                |   |  16.7%           |
|  Wellington Trust Company, NA                                                                               Wellington Management Company, LP75 State StreetBoston, MA  02109 |   |  2,049,524                                |   |  8.6%            |
|  Prince Talal Bin Abdul Aziz                                                                               P. O. Box 930Riyadh, Saudi Arabia                                            |   |  1,272,680                                |   |  5.3%            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                           |   |                  |

| (1)   | Unless otherwise indicated, to the knowledge of the Company, all shares are owned directly and the owner has sole voting and investment power. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Wellington Trust Company, NA and Wellington Management Company, LP filed with the Commission on February 14, 2011, reporting that they or certain of their affiliates beneficially owned an aggregate of 2,049,524 shares and that they had shared voting power and shared dispositive power with respect to those shares. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|    Name of Beneficial Owner                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | Amount and Nature ofBeneficialOwnership (1) |   |   Percentof Class |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|--------|-----------------------------|
|  Ghazi Sultan                                                                                               |   |  130,000 (2)(3)                        |   |  0.5%                  |
|  Nicholas N. Carter                                                                                         |   |  472,768(3)                            |   |  2.0%                  |
|  Charles W. Goehringer, Jr.                                                                                 |   |  73,967(2)(3)                          |   |  0.3%                  |
|  Robert E. Kennedy.                                                                                         |   |  50,000(2)(3)                          |   |  0.2%                  |
|  Mohammed O. Al Omair.                                                                                      |   |  41,667(2)(3)                          |   |  0.2%                  |
|  Allen P. McKee.                                                                                            |   |  49,667(2)(3)                          |   |  0.2%                  |
|  Connie J. Cook.                                                                                            |   |  40,350(3)                             |   |  0.2%                  |
|  Mark Williamson.                                                                                           |   |  30,000(3)                             |   |  0.1%                  |
|  Gerardo Maldonado.                                                                                         |   |  3,750(3)                              |   |  0.0%                  |
|  Ronald Franklin.                                                                                           |   |  2,028                                 |   |  0.0%                  |
|  All directors and executive officers as a group (10 persons)                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |  894,197(3)                            |   |  3.7%             |

| (1) | Unless otherwise indicated, to the knowledge of the Company, all shares are owned directly and the owner has sole voting and investment power.  Includes shares of restricted stock. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Includes 71,667 shares which these directors have the right to acquire through the exercise of presently exercisable stock options. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Includes 196,917 shares which certain directors and executive officers have the right to acquire through the exercise of stock options or other rights exercisable presently or within 60 days. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Item 13. Certain Relationships and Related Transactions and Director Independence

----

Table of Contents

Item 14.  Principal Accounting Fees and Services

----

Table of Contents

|               |   | 2010 |    |   | 2009   |   |
|--------------------|--------|------|---------|--------|--------|--------|
| Audit Fees         |   | $    | 262,117 |   |   | $      | 258,477 |   |
| Audit-Related Fees |   | $    | 0       |   |   | $      | 0 |   |
| Tax Fees           |   | $    | 30,649  |   |   | $      | 41,884 |   |
| All Other Fees *   |   | $    | 135,777 |   |   | $      | 45,232 |   |

PART IV

ITEM 15. Exhibits, Financial Statement Schedules

|   | Reports of Independent Registered Public Accounting Firm |
|--------|----------------------------------------------------------|

|   | Consolidated Balance Sheets dated December 31, 2010 and 2009 |
|--------|--------------------------------------------------------------|

|   | Consolidated Statements of Operations for the three years ended December 31, 2010 |
|--------|-----------------------------------------------------------------------------------|

|   | Consolidated Statement of Stockholders’ Equity for the three years ended December 31, 2010 |
|--------|--------------------------------------------------------------------------------------------------|

|   | Consolidated Statements of Cash Flows for the three years ended December 31, 2010 |
|--------|-----------------------------------------------------------------------------------|

|   | Notes to Consolidated Financial Statements |
|--------|--------------------------------------------|

|   | Schedule II -- Valuation and Qualifying Accounts for the three years ended December 31, 2010. |
|--------|-----------------------------------------------------------------------------------------------|

| ExhibitNumber | Description                                                                                                                                                                                                                                                                                                               |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3(a)          | - Certificate of Incorporation of the Company as amended through the Certificate of Amendment filed with the Delaware Secretary of State on July 19, 2000 (incorporated by reference to Exhibit 3(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 0-6247))  |
| 3(b)          | - Restated Bylaws of the Company dated April 26, 2007 (incorporated by reference to Item 5.03 to the Company’s Form 8-K dated April 26, 2007 (File No. 0-6247))                                                                                                                                           |
| 10(a)         | - Loan Agreement dated January 24, 1979 between the Company, National Mining Company and the Government of Saudi Arabia (incorporated by reference to Exhibit 10(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 0-6247))                              |

----

Table of Contents

|   ExhibitNumber |    Description                                                                                                                                                                                                                                                                                                                                                 |
|----------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10(b)                | - Mining Lease Agreement effective May 22, 1993 by and between the Ministry of Petroleum and Mineral Resources and the Company (incorporated by reference to Exhibit 10(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 0-6247))                                                                      |
| 10(c)                | - Equipment Lease Agreement dated November 14, 2003, between Silsbee Trading and Transportation Corp. and South Hampton Refining Company (incorporated by reference to Exhibit 10(o) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 0-6247))                                                                 |
| 10(d)                | - Addendum to Equipment Lease Agreement dated August 1, 2004, between Silsbee Trading and Transportation Corp. and South Hampton Refining Company (incorporated by reference to Exhibit 10(q) to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 (File No. 0-6247))                                                 |
| 10(e)                | - Partnership Agreement dated August 6, 2006 between Arabian American Development Company, Thamarat Najran Company, Qasr Al-Ma’adin Corporation, and Durrat Al-Masani’ Corporation (incorporated by reference to Exhibit 10(i) to the Company’s Quarterly Report on Form 10-Q/A for the quarter ended September 30, 2006 (file No. 0-6247))  |
| 10(f)                | - Financial Legal Service and Advice Agreement dated August 5, 2006 between Arabian American Development Company, Nassir Ali Kadasa, and Dr. Ibrahim Al-Mounif.  (incorporated by reference to Exhibit 10(j) to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 (file No. 0-6247))                        |
| 10(g)*               | - Retirement Awards Program dated January 15, 2008 between Arabian American Development Company and Hatem El Khalidi (incorporated by reference to Exhibit 10(h) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 (file No. 001-33926))                                                                               |
| 10(h)*               | - Stock Option Plan of Arabian American Development Company for Key Employees adopted April 7, 2008 (incorporated by reference to Exhibit A to the Company’s Form DEF 14A filed April 30, 2008 (file No. 001-33926))                                                                                                                                     |
| 10(i)*               | - Arabian American Development Company Non-Employee Director Stock Option Plan adopted April 7, 2008 (incorporated by reference to Exhibit B to the Company’s Form DEF 14A filed April 30, 2008 (file No. 001-33926))                                                                                                                                    |
| 10(j)                | - Master Lease Agreement dated February 3, 2009, between Silsbee Trading and Transportation Corp. and South Hampton Resources, Inc. (incorporated by reference to Exhibit 10(j) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 (file No. 001-33926))                                                                |
| 10(k)                | - Memorandum of Understanding relating to formation of AMAK, dated May 21, 2006 (incorporated by reference to Exhibit 10(k) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 (file No. 001-33926))                                                                                                                       |
| 10(l)                | - Memorandum of Understanding relating to formation of AMAK, dated June 10, 2006 (incorporated by reference to Exhibit 10(l) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 (file No. 001-33926))                                                                                                                      |

----

Table of Contents

|   ExhibitNumber |    Description                                                                                                                                                                                                                                                                       |
|----------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10(m)                | - Articles of Association of Al Masane Al Kobra Mining Company, dated July 10, 2006 (incorporated by reference to Exhibit 10(m) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 (file No. 001-33926))                                         |
| 10(n)                | - Bylaws of Al Masane Al Kobra Mining Company (incorporated by reference to Exhibit 10(n) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 (file No. 001-33926))                                                                               |
| 10(o)                | - Letter Agreement dated August 5, 2009, between Arabian American Development Company and the other Al Masane Al Kobra Company shareholders named therein (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on August 27, 2009 (file No. 001-33926))  |
| 10(p)                | - Letter of Intent dated November 30, 2010, between South Hampton Transportation, Inc. and Silsbee Trading and Transportation Corp (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on December 2, 2010 (file No. 001-33926))                        |
| 10(q)                | - Agreement and Plan of Reorganization dated November 30, 2010, between Arabian American Development Company and the Saudi Industrial Development Fund (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on October 27, 2010 (file No. 001-33926))    |
| 10(r)                | - Limited Guarantee dated October 24 30, 2010, between South Hampton Transportation, Inc. and Silsbee Trading and Transportation Corp (incorporated by reference to Exhibit 2.01 to the Company’s Form 8-K filed on December 2, 2010 (file No. 001-33926))                     |
| 14                   | - Code of Ethics for Senior Financial Officers (incorporated by reference to Exhibit 14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 0-6247))                                                                                    |
| 16                   | - Letter re change in certifying accountant (incorporated by reference to Exhibit 16.1 to the Company’s Current Report on Form 8-K dated June 21, 2010 (File No. 001-33926))                                                                                                   |
| 21                   | - Subsidiaries                                                                                                                                                                                                                                                                       |
| 23.1                 | - Consents of Independent Registered Public Accounting Firms                                                                                                                                                                                                                         |
| 24                   | - Power of Attorney (set forth on the signature page hereto).                                                                                                                                                                                                                        |
| 31.1                 | - Certification of Chief Executive Officer pursuant to Rule 13A-14(A) of the Securities Exchange Act of 1934                                                                                                                                                                         |
| 31.2                 | - Certification of Chief Accounting Officer pursuant to Rule 13A-14(A) of the Securities Exchange Act of 1934                                                                                                                                                                        |
| 32.1                 | - Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                  |
| 32.2                 | - Certification of Chief Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                 |

| (b)   | Exhibits required by Regulation 601 S-K |
|-----------------|-----------------------------------------|

| (c)   | Financial Statement Schedules |
|-----------------|-------------------------------|

----

Table of Contents

----

Table of Contents

| Signature                                          | Title                                                                                               |
|----------------------------------------------------|-----------------------------------------------------------------------------------------------------|
| /s/ Nicholas CarterNicholas Carter                 | President, Chief Executive Officer and Director (principal executive officer)                       |
| /s/ Connie CookConnie Cook                         | Chief Accounting Officer(principal financial and accounting officer)                                |
| /s/ Charles Goehringer, Jr.Charles Goehringer, Jr. | Director                                                                                            |
| /s/ Robert KennedyRobert Kennedy                   | Director                                                                                            |
| /s/ Ghazi SultanGhazi Sultan                       |                 Director |
| /s/ Allen McKeeAllen McKee                         |                Director       |
| /s/ Mohammed Al OmairMohammed Al Omair             |                Director  |
| /s/ John R. TownsendJohn R. Townsend               |               Director             |

----

Table of Contents

| INDEX TO FINANCIAL STATEMENTS                                                                        | Page  |
|-----------------------------------------------------------------------------------------------------------|------------|
| Report of Independent Registered Public Accounting Firm – BKM Sowan Horan, LLP                      | F-2        |
|                                                                                                      |       |
| Report of Independent Registered Public Accounting Firm – Travis Wolff, LLP                         | F-3        |
|                                                                                                      |       |
| Consolidated Balance Sheets at December 31, 2010 and 2009                                                 | F-4        |
|                                                                                                      |       |
| Consolidated Statement of Operations For the Years Ended December 31, 2010, 2009 and 2008                 | F-6        |
|                                                                                                      |       |
| Consolidated Statement of Stockholders’ Equity For the Years Ended December 31, 2010, 2009 and 2008 | F-7        |
|                                                                                                      |       |
| Consolidated Statements of Cash Flows For the Years Ended December 31, 2010, 2009 and 2008                | F-8        |
|                                                                                                      |       |
| Notes to Consolidated Financial Statements                                                                | F-10       |
|                                                                                                      |       |
| INDEX TO FINANCIAL STATEMENT SCHEDULES                                                                    |       |
|                                                                                                      |       |
| Schedule II – Valuation and Qualifying Accounts For the Three Years Ended December 31, 2010         | F-34       |

----

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

|     /s/ BKM Sowan Horan, LLPAddison, TexasMarch 18, 2010 |
|------------------------------------------------------------------------------|

----

Index to Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

----

Index to Financial Statements

ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

|                                                                                                                              |   | December 31, |        |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-------------|
|                                                                                                                              |   | 2010         |        |   | 2009 |   |
| ASSETS                                                                                                                            |   |         |        |   |   |   |
| CURRENT ASSETS                                                                                                                    |   |         |        |   |   |   |
|   Cash and cash equivalents                                                                                             |   | $            | 7,609,943   |   |   | $ | 2,451,614 |   |
|   Financial contracts                                                                                                   |   |         | 177,446     |   |   |   | - |   |
|    Trade receivables, net of allowance for doubtful accounts of $155,000 and $126,500, respectively           |   |         | 11,212,290  |   |   |   | 12,302,955 |   |
|    Current portion of notes receivable, net of discount of $684 and $16,109,  respectively (Note 6) |   |         | 34,427      |   |   |   | 372,387 |   |
|    Prepaid expenses and other assets                                                                               |   |         | 669,367     |   |   |   | 739,989 |   |
|    Contractual based intangible assets (Note 1)                                                                    |   |         | 250,422     |   |   |   | - |   |
|    Inventories (Note 5)                                                                                            |   |         | 5,917,283   |   |   |   | 5,065,169 |   |
|    Deferred income taxes (Note 15)                                                                                 |   |         | 487,513     |   |   |   | 640,057 |   |
|    Taxes receivable (Note 15)                                                                                      |   |         | 216,461     |   |   |   | 4,726,708 |   |
|                                                                                                                              |   |         |        |   |   |   |   |   |
|           Total current assets                                                  |   |         | 26,575,152  |   |   |   | 26,298,879 |   |
|                                                                                                                              |   |         |        |   |   |   |   |   |
|   PLANT, PIPELINE, AND EQUIPMENT – AT COST                                                                        |   |         | 54,703,710  |   |   |   | 50,082,441 |   |
|     LESS ACCUMULATED DEPRECIATION                                                                             |   |         | (20,839,442 | ) |   |   | (17,674,938 | ) |
|                                                                                                                              |   |         |        |   |   |   |   |   |
|   PLANT, PIPELINE, AND EQUIPMENT, NET (Note 7)                                                                          |   |         | 33,864,268  |   |   |   | 32,407,503 |   |
|                                                                                                                              |   |         |        |   |   |   |   |   |
|   INVESTMENT IN AMAK (Note 8)                                                                                           |   |         | 30,883,657  |   |   |   | 31,146,157 |   |
|   MINERAL PROPERTIES IN THE UNITED STATES (Note 9)                                                                      |   |         | 588,311     |   |   |   | 588,311 |   |
|   NOTES RECEIVABLE, net of discount of $0 and $684, respectively, net of current portion (Note 6)                  |   |         | -           |   |   |   | 35,001 |   |
|  CONTRACTUAL BASED INTANGIBLE ASSETS, net of current portion (Note 1)                                                   |   |         | 605,185     |   |   |   | - |   |
|   OTHER ASSETS                                                                                                          |   |         | 10,938      |   |   |   | 10,938 |   |
|                                                                                                                              |   |         |        |   |   |   |   |   |
| TOTAL ASSETS                                                                                                                      |   | $            | 92,527,511  |   |   | $ | 90,486,789 |   |

----

Index to Financial Statements

|                                                                                                                                                                                                       |   | December 31, |       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|------------|
|                                                                                                                                                                                                       |   | 2010         |       |   | 2009 |   |
|  LIABILITIES                                                                                                                                                                                          |   |         |       |   |   |   |
|   CURRENT LIABILITIES                                                                                                                                                                            |   |         |       |   |   |   |
|     Accounts payable                                                                                                                                                                   |   | $            | 2,778,161  |   |   | $ | 3,617,043 |   |
|     Accrued interest                                                                                                                                                                   |   |         | 120,533    |   |   |   | 148,538 |   |
|     Current portion of derivative instruments (Notes 4 and 20)                                                                                                                         |   |         | 396,527    |   |   |   | 436,203 |   |
|     Accrued liabilities (Note 11)                                                                                                                                                      |   |         | 1,777,642  |   |   |   | 1,336,219 |   |
|     Accrued liabilities in Saudi Arabia (Note 12)                                                                                                                                      |   |         | 184,593    |   |   |   | 471,280 |   |
|     Notes payable                                                                                                                                                                      |   |         | 12,000     |   |   |   | 12,000 |   |
|     Current portion of post retirement benefit (Note 21)                                                                                                                               |   |         | 246,605    |   |   |   | 31,500 |   |
|     Current portion of long-term debt (Note 10)                                                                                                                                        |   |         | 1,864,770  |   |   |   | 1,400,000 |   |
|     Current portion of other liabilities                                                                                                                                               |   |         | 199,939    |   |   |   | 579,500 |   |
|                                                                                                                                                                                                       |   |         |       |   |   |   |   |   |
|           Total current liabilities                                                                                                                      |   |         | 7,580,770  |   |   |   | 8,032,283 |   |
|                                                                                                                                                                                                       |   |         |       |   |   |   |   |   |
|   LONG-TERM DEBT, net of current portion (Note 10)                                                                                                                                               |   |         | 20,836,098 |   |   |   | 23,439,488 |   |
|   POST RETIREMENT BENEFIT, net of current portion (Note 21)                                                                                                                                      |   |         | 680,196    |   |   |   | 815,378 |   |
|                                                                                                                                                                                                       |   |         |       |   |   |   |   |   |
|   DERIVATIVE INSTRUMENTS, net of current portion (Notes 4 and 20)                                                                                                                           |   |         | 719,693    |   |   |   | 838,489 |   |
|   OTHER LIABILITIES, net of current portion                                                                                                                                                      |   |         | 390,232    |   |   |   | 562,011 |   |
|   DEFERRED INCOME TAXES (Note 15)                                                                                                                                                                |   |         | 5,480,683  |   |   |   | 4,332,911 |   |
|                                                                                                                                                                                                       |   |         |       |   |   |   |   |   |
|           Total liabilities                                                                                                                              |   |         | 35,687,672 |   |   |   | 38,020,560 |   |
|                                                                                                                                                                                                       |   |         |       |   |   |   |   |   |
| COMMITMENTS AND CONTINGENCIES (Note 13)                                                                                                                                                                    |   |         |       |   |   |   |   |   |
|                                                                                                                                                                                                       |   |         |       |   |   |   |   |   |
| EQUITY                                                                                                                                                                                                     |   |         |       |   |   |   |   |   |
|   Common Stock - authorized 40,000,000 shares of $.10 par value; issued and outstanding, 23,682,915 and 23,433,995 shares      in 2010 and 2009, respectively |   |         | 2,368,291  |   |   |   | 2,343,399 |   |
|   Additional Paid-in Capital                                                                                                                                                                     |   |         | 43,162,641 |   |   |   | 41,604,168 |   |
|   Accumulated Other Comprehensive Loss                                                                                                                                                           |   |         | (736,706   | ) |   |   | (841,297 | ) |
|   Retained Earnings                                                                                                                                                                              |   |         | 11,756,390 |   |   |   | 9,070,736 |   |
|  Total Arabian American Development Company Stockholders’ Equity                                                                                                                           |   |         | 56,550,616 |   |   |   | 52,177,006 |   |
|  Noncontrolling interest                                                                                                                                                                              |   |         | 289,223    |   |   |   | 289,223 |   |
|        Total equity                                                                                                                                                     |   |         | 56,839,839 |   |   |   | 52,466,229 |   |
|                                                                                                                                                                                                       |   |         |       |   |   |   |   |   |
|      TOTAL LIABILITIES AND EQUITY                                                                                                                                                 |   | $            | 92,527,511 |   |   | $ | 90,486,789 |   |

----

Index to Financial Statements

ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                                                                                                                                                         |   | 2010   |        |   | 2009   |   |        | 2008   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|
| Revenues                                                                                                                                                                                     |   |   |        |   |   |   |        |   |   |
|   Petrochemical product sales                                                                                                                                                      |   | $      | 133,579,088 |   |   | $      | 109,178,541 |   |   | $ | 130,264,329 |   |
|   Transloading sales                                                                                                                                                               |   |   | 853,636     |   |   |   | 4,624,681   |   |   |   | 20,238,841 |   |
|   Processing                                                                                                                                                                       |   |   | 4,677,470   |   |   |   | 3,783,457   |   |   |   | 4,127,064 |   |
|                                                                                                                                                                                         |   |   | 139,110,194 |   |   |   | 117,586,679 |   |   |   | 154,630,234 |   |
| Operating costs and expenses                                                                                                                                                                 |   |   |        |   |   |   |        |   |   |   |   |   |
|   Cost of petrochemical product sales and Processing (including depreciation of $2,271,408, $2,246,309, and $1,299,580,      respectively) |   |   | 121,894,912 |   |   |   | 95,688,819  |   |   |   | 159,226,896 |   |
|    Gross Profit (Loss)                                                                                                                                                        |   |   | 17,215,282  |   |   |   | 21,897,860  |   |   |   | (4,596,662 | ) |
|                                                                                                                                                                                         |   |   |        |   |   |   |        |   |   |   |   |   |
| General and Administrative Expenses                                                                                                                                                          |   |   |        |   |   |   |        |   |   |   |   |   |
|   General and administrative                                                                                                                                                       |   |   | 10,930,141  |   |   |   | 9,144,710   |   |   |   | 9,034,366 |   |
|   Depreciation                                                                                                                                                                     |   |   | 433,372     |   |   |   | 443,538     |   |   |   | 331,703 |   |
|                                                                                                                                                                                         |   |   | 11,363,513  |   |   |   | 9,588,248   |   |   |   | 9,366,069 |   |
|                                                                                                                                                                                         |   |   |        |   |   |   |        |   |   |   |   |   |
| Operating income (loss)                                                                                                                                                                      |   |   | 5,851,769   |   |   |   | 12,309,612  |   |   |   | (13,962,731 | ) |
|                                                                                                                                                                                         |   |   |        |   |   |   |        |   |   |   |   |   |
| Other income (expense)                                                                                                                                                                       |   |   |        |   |   |   |        |   |   |   |   |   |
|   Interest income                                                                                                                                                                  |   |   | 16,184      |   |   |   | 63,669      |   |   |   | 204,635 |   |
|   Interest expense                                                                                                                                                                 |   |   | (1,132,968  | )      |   |   | (1,327,530  | )      |   |   | (605,254 | ) |
|   Equity in loss from AMAK (Note 8)                                                                                                                                                |   |   | (262,500    | )      |   |   | --          |   |   |   | (1,856,250 | ) |
|   Miscellaneous income (expense)                                                                                                                                                   |   |   | (84,015     | )      |   |   | (74,332     | )      |   |   | 4,165 |   |
|                                                                                                                                                                                         |   |   | (1,463,299  | )      |   |   | (1,338,193  | )      |   |   | (2,252,704 | ) |
|  Income (loss) before income tax expense (benefit)                                                                                                                                      |   |   | 4,388,470   |   |   |   | 10,971,419  |   |   |   | (16,215,435 | ) |
|                                                                                                                                                                                         |   |   |        |   |   |   |        |   |   |   |   |   |
| Income tax expense (benefit)                                                                                                                                                                 |   |   | 1,702,816   |   |   |   | 4,343,968   |   |   |   | (4,978,846 | ) |
|                                                                                                                                                                                         |   |   |        |   |   |   |        |   |   |   |   |   |
|    Net income (loss)                                                                                                                                                          |   |   | 2,685,654   |   |   |   | 6,627,451   |   |   |   | (11,236,589 | ) |
|                                                                                                                                                                                         |   |   |        |   |   |   |        |   |   |   |   |   |
| Net loss attributable to Noncontrolling Interest                                                                                                                                             |   |   | --          |   |   |   | --          |   |   |   | 505,424 |   |
|                                                                                                                                                                                         |   |   |        |   |   |   |        |   |   |   |   |   |
| Net income (loss) attributable to Arabian  American Development Company                                                                                                            |   | $      | 2,685,654   |   |   | $      | 6,627,451   |   |   | $ | (10,731,165 | ) |
|                                                                                                                                                                                         |   |   |        |   |   |   |        |   |   |   |   |   |
| Net income (loss) per common share                                                                                                                                                           |   |   |        |   |   |   |        |   |   |   |   |   |
|     Basic earnings (loss) per share                                                                                                                                      |   | $      | 0.11        |   |   | $      | 0.28        |   |   | $ | (0.46 | ) |
|     Diluted earnings (loss) per share                                                                                                                                    |   | $      | 0.11        |   |   | $      | 0.28        |   |   | $ | (0.46 | ) |
|                                                                                                                                                                                         |   |   |        |   |   |   |        |   |   |   |   |   |
| Weighted average number of common                                                                                                                                                            |   |   |        |   |   |   |        |   |   |   |   |   |
|   shares outstanding                                                                                                                                                               |   |   |        |   |   |   |        |   |   |   |   |   |
|      Basic                                                                                                                                                          |   |   | 23,769,047  |   |   |   | 23,733,955  |   |   |   | 23,409,458 |   |
|      Diluted                                                                                                                                                        |   |   | 23,780,303  |   |   |   | 23,800,499  |   |   |   | 23,409,458 |   |

----

Index to Financial Statements

ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

|                                                                                               |   | ARABIAN AMERICAN DEVELOPMENT STOCKHOLDERS |       |   |    |   |      |          |   |   |          |   |
|----------------------------------------------------------------------------------------------------|--------|-------------------------------------------|------------|--------|---------|--------|-----------|---------------|--------|--------|---------------|--------|
|                                                                                               |   |                                      |       |   |    |   |      |          |   |   | Accumulated   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                               |   |                                      |       |   |    |   |      | Additional    |   |   | Other         |   |   |   |   |   |   |   |   | Non- |   |   |   |   |
|                                                                                               |   | Common Stock                              |       |   | Paid-In |   |      | Comprehensive |   |   | Retained      |   |   |   |   |   | Controlling |   |   | Total |   |
|                                                                                               |   | Shares                                    |       |   | Amount  |   |      | Capital       |   |   | Income (Loss) |   |   | Earnings |   |   | Total |   |   | Interest |   |   | Equity |   |
|                                                                                               |   |                                      |       |   |    |   |      |          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| DECEMBER 31, 2007                                                                                  |   |                                      | 22,601,994 |   |    | $      | 2,260,199 |          |   | $      | 37,183,206    |   |   | $ | - |   |   | $ | 13,174,450 |   |   | $ | 52,617,855 |   |   | $ | 794,646 |   |   | $ | 53,412,501 |   |
|                                                                                               |   |                                      |       |   |    |   |      |          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common Stock  Issued for Services in  connection with AMAK                     |   |                                      | 750,000    |   |    |   | 75,000    |          |   |   | 3,637,500     |   |   |   | - |   |   |   | - |   |   |   | 3,712,500 |   |   |   | - |   |   |   | 3,712,500 |   |
|   Issued to Directors                                                                    |   |                                      | 30,001     |   |    |   | 3,000     |          |   |   | 226,501       |   |   |   | - |   |   |   | - |   |   |   | 229,501 |   |   |   | - |   |   |   | 229,501 |   |
|   Issued to Employees                                                                    |   |                                      | 40,000     |   |    |   | 4,000     |          |   |   | 278,000       |   |   |   | - |   |   |   | - |   |   |   | 282,000 |   |   |   | - |   |   |   | 282,000 |   |
| Unrealized Loss on                                                                                 |   |                                      |       |   |    |   |      |          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Interest Rate Swap                                                                     |   |                                      |       |   |    |   |      |          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   (net of income tax                                                                     |   |                                      |       |   |    |   |      |          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   benefit of $ 577,007)                                                                  |   |                                      | -          |   |    |   | -         |          |   |   | -             |   |   |   | (1,120,072 | ) |   |   | - |   |   |   | (1,120,072 | ) |   |   | - |   |   |   | (1,120,072 | ) |
|                                                                                               |   |                                      |       |   |    |   |      |          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Net Loss                                                                               |   |                                      |       |   |    |   |      |          |   |   |          |   |   |   |   |   |   |   | (10,731,165 | ) |   |   | (10,731,165 | ) |   |   | (505,423 | ) |   |   | (11,236,588 | ) |
|       Comprehensive Loss                                             |   |                                      | -          |   |    |   | -         |          |   |   | -             |   |   |   | - |   |   |   | - |   |   |   | (11,851,237 | ) |   |   | - |   |   |   | - |   |
|                                                                                               |   |                                      |       |   |    |   |      |          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| DECEMBER 31, 2008                                                                                  |   |                                      | 23,421,995 |   |    | $      | 2,342,199 |          |   | $      | 41,325,207    |   |   | $ | (1,120,072 | ) |   | $ | 2,443,285 |   |   | $ | 44,990,619 |   |   | $ | 289,223 |   |   | $ | 45,279,842 |   |
|                                                                                               |   |                                      |       |   |    |   |      |          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock options                                                                                      |   |                                      |       |   |    |   |      |          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Issued to Directors                                                                    |   |                                      | -          |   |    |   | -         |          |   |   | 234,922       |   |   |   | - |   |   |   | - |   |   |   | 234,922 |   |   |   | - |   |   |   | 234,922 |   |
|   Issued to Employees                                                                    |   |                                      | -          |   |    |   | -         |          |   |   | 4,439         |   |   |   | - |   |   |   | - |   |   |   | 4,439 |   |   |   | - |   |   |   | 4,439 |   |
| Stock issued to Directors                                                                          |   |                                      | 12,000     |   |    |   | 1,200     |          |   |   | 39,600        |   |   |   | - |   |   |   | - |   |   |   | 40,800 |   |   |   | - |   |   |   | 40,800 |   |
| Unrealized Gain on Interest Rate Swap (net  of income tax expense of $143,612) |   |                                      | -          |   |    |   | -         |          |   |   | -             |   |   |   | 278,775 |   |   |   | - |   |   |   | 278,775 |   |   |   | - |   |   |   | 278,775 |   |
| Net Income                                                                                         |   |                                      | -          |   |    |   | -         |          |   |   | -             |   |   |   | - |   |   |   | 6,627,451 |   |   |   | 6,627,451 |   |   |   | - |   |   |   | 6,627,451 |   |
|   Comprehensive Income                                                                   |   |                                      | -          |   |    |   | -         |          |   |   | -             |   |   |   | - |   |   |   | - |   |   |   | 6,906,226 |   |   |   | - |   |   |   | - |   |
|                                                                                               |   |                                      |       |   |    |   |      |          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| DECEMBER 31, 2009                                                                                  |   |                                      | 23,433,995 |   |    | $      | 2,343,399 |          |   | $      | 41,604,168    |   |   | $ | (841,297 | ) |   | $ | 9,070,736 |   |   | $ | 52,177,006 |   |   | $ | 289,223 |   |   | $ | 52,466,229 |   |
|                                                                                               |   |                                      |       |   |    |   |      |          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock options                                                                                      |   |                                      |       |   |    |   |      |          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Issued to Directors                                                                    |   |                                      | -          |   |    |   | -         |          |   |   | 293,060       |   |   |   | - |   |   |   | - |   |   |   | 293,060 |   |   |   | - |   |   |   | 293,060 |   |
|   Issued to Employees                                                                    |   |                                      | -          |   |    |   | -         |          |   |   | 102,403       |   |   |   | - |   |   |   | - |   |   |   | 102,403 |   |   |   | - |   |   |   | 102,403 |   |
|   Issued to Former Director                                                              |   |                                      | -          |   |    |   | -         |          |   |   | 372,576       |   |   |   | - |   |   |   | - |   |   |   | 372,576 |   |   |   | - |   |   |   | 372,576 |   |
| Common Stock                                                                                       |   |                                      |       |   |    |   |      |          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Issued to Directors                                                                    |   |                                      | 14,000     |   |    |   | 1,400     |          |   |   | 29,540        |   |   |   |   |   |   |   |   |   |   |   | 30,940 |   |   |   |   |   |   |   | 30,940 |   |
|   Issued to Employees                                                                    |   |                                      | 2,750      |   |    |   | 275       |          |   |   | 8,663         |   |   |   |   |   |   |   |   |   |   |   | 8,938 |   |   |   |   |   |   |   | 8,938 |   |
|   Issued for STTC purchase                                                               |   |                                      | 232,170    |   |    |   | 23,217    |          |   |   | 752,231       |   |   |   |   |   |   |   |   |   |   |   | 775,448 |   |   |   |   |   |   |   | 775,448 |   |
| Unrealized Gain on Interest Rate Swap (net  of income tax expense of $53,880)  |   |                                      | -          |   |    |   | -         |          |   |   | -             |   |   |   | 104,591 |   |   |   | - |   |   |   | 104,591 |   |   |   | - |   |   |   | 104,591 |   |
| Net Income                                                                                         |   |                                      |       |   |    |   |      |          |   |   |          |   |   |   |   |   |   |   | 2,685,654 |   |   |   | 2,685,654 |   |   |   |   |   |   |   | 2,685,654 |   |
|   Comprehensive Income                                                                   |   |                                      | -          |   |    |   | -         |          |   |   | -             |   |   |   | - |   |   |   | - |   |   |   | 2,790,245 |   |   |   | - |   |   |   | - |   |
|                                                                                               |   |                                      |       |   |    |   |      |          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| DECEMBER 31, 2010                                                                                  |   |                                      | 23,682,915 |   |    | $      | 2,368,291 |          |   | $      | 43,162,641    |   |   | $ | (736,706 | ) |   | $ | 11,756,390 |   |   | $ | 56,550,616 |   |   | $ | 289,223 |   |   | $ | 56,839,839 |   |

----

Index to Financial Statements

ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                                                     |   | 2010   |       |   | 2009   |   |       | 2008   |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Operating activities                                                                                                     |   |   |       |   |   |   |       |   |   |
|   Net income (loss) attributable to Arabian    American Development Co.                    |   | $      | 2,685,654  |   |   | $      | 6,627,451  |   |   | $ | ( 10,731,165 | ) |
|   Adjustments to reconcile net income (loss)                                                                   |   |   |       |   |   |   |       |   |   |   |   |   |
|     to Arabian American Development Co. to Net cash provided by (used in) operating activities: |   |   |       |   |   |   |       |   |   |   |   |   |
|     Depreciation                                                                                     |   |   | 2,613,164  |   |   |   | 2,689,847  |   |   |   | 1,631,283 |   |
|     Accretion of notes receivable discounts                                                          |   |   | (16,109    | )      |   |   | (53,628    | )      |   |   | (101,619 | ) |
|     Unrealized (gain) loss on derivative instruments                                                 |   |   | (177,448   | )      |   |   | (6,976,232 | )      |   |   | 5,485,914 |   |
|     Share-based compensation                                                                         |   |   | 807,917    |   |   |   | 280,161    |   |   |   | 282,000 |   |
|     Provision for doubtful accounts                                                                  |   |   | 28,500     |   |   |   | 111,154    |   |   |   | 465,000 |   |
|     Deferred income taxes                                                                            |   |   | 684,582    |   |   |   | 8,977,317  |   |   |   | (5,528,129 | ) |
|     Postretirement obligation                                                                        |   |   | -          |   |   |   | 23,378     |   |   |   | 202,000 |   |
|     Impairment loss                                                                                  |   |   | -          |   |   |   | -          |   |   |   | 496,306 |   |
|     Loss attributable to noncontrolling interest                                                     |   |   | -          |   |   |   | -          |   |   |   | (505,423 | ) |
|     Equity in loss from AMAK                                                                         |   |   | 262,500    |   |   |   | -          |   |   |   | 1,856,250 |   |
|   Changes in operating assets and liabilities:                                                                 |   |   |       |   |   |   |       |   |   |   |   |   |
|     (Increase) decrease in trade receivables                                                         |   |   | 1,062,165  |   |   |   | (510,083   | )      |   |   | (58,465 | ) |
|     Decrease in notes receivable                                                                     |   |   | 389,070    |   |   |   | 582,177    |   |   |   | 711,396 |   |
|     (Increase) decrease in income tax receivable                                                     |   |   | 4,510,247  |   |   |   | (4,297,082 | )      |   |   | 640,781 |   |
|     (Increase) decrease in inventories                                                               |   |   | (852,114   | )      |   |   | (2,618,969 | )      |   |   | 441,436 |   |
|     (Increase) decrease in prepaid expenses and other assets                                    |   |   | 70,622     |   |   |   | 59,353     |   |   |   | (151,029 | ) |
|     (Increase) decrease in derivative instruments deposits                                      |   |   | -          |   |   |   | 3,950,000  |   |   |   | (3,950,000 | ) |
|     Increase in other liabilities                                                                    |   |   | -          |   |   |   | 773,000    |   |   |   | - |   |
|      Increase (decrease) in accounts payable and accrued liabilities                       |   |   | (504,088   | )      |   |   | (2,146,279 | )      |   |   | 2,750,258 |   |
|     Increase (decrease) in accrued interest                                                          |   |   | (28,005    | )      |   |   | 1,077      |   |   |   | 61,909 |   |
|     Increase (decrease) in accrued liabilities in Saudi Arabia                                  |   |   | (206,764   | )      |   |   | (957,876   | )      |   |   | 22,355 |   |
|     Net cash provided by (used in) operating activities                                         |   |   | 11,329,893 |   |   |   | 6,514,766  |   |   |   | (5,978,942 | ) |
|                                                                                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Investing activities                                                                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
|   Additions to mineral properties in Saudi Arabia                                                              |   |   | -          |   |   |   | -          |   |   |   | (390,579 | ) |
|   Additions to property, pipeline and equipment                                                                |   |   | (2,898,752 | )      |   |   | (3,184,140 | )      |   |   | (15,030,593 | ) |
|   Purchase of STTC transportation company                                                                      |   |   | (250,000   | )      |   |   | -          |   |   |   | - |   |
|     Net cash used in investing activities                                                            |   |   | (3,148,752 | )      |   |   | (3,184,140 | )      |   |   | (15,421,172 | ) |
|                                                                                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
| Financing Activities                                                                                                     |   |   |       |   |   |   |       |   |   |   |   |   |
|   Additions to long-term debt                                                                                  |   |   | 1,396,751  |   |   |   | 2,530,761  |   |   |   | 25,900,000 |   |
|   Repayment of long-term debt                                                                                  |   |   | (4,419,563 | )      |   |   | (6,169,009 | )      |   |   | (6,530,574 | ) |
|     Net cash provided (used) in financing activities                                                 |   |   | (3,022,812 | )      |   |   | (3,638,248 | )      |   |   | 19,369,426 |   |

----

Index to Financial Statements

|                                           |   | 2010   |      |   | 2009   |   |      | 2008   |   |
|------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
|                                           |   |   |      |   |   |   |      |   |   |
| Net increase (decrease) in cash                |   |   | 5,158,329 |   |   |   | (307,622  | )      |   |   | (2,030,688 | ) |
|                                           |   |   |      |   |   |   |      |   |   |   |   |   |
| Cash and cash equivalents at beginning of year |   |   | 2,451,614 |   |   |   | 2,759,236 |   |   |   | 4,789,924 |   |
|                                           |   |   |      |   |   |   |      |   |   |   |   |   |
| Cash and cash equivalents at end of year       |   | $      | 7,609,943 |   |   | $      | 2,451,614 |   |   | $ | 2,759,236 |   |

|                                                                                                    |   | 2010   |       |   | 2009   |   |      | 2008   |   |
|---------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|-----------|--------|--------|
| Supplemental disclosure of cash flow information:                                                       |   |   |       |   |   |   |      |   |   |
|   Cash payments for interest                                                                  |   | $      | 1,160,972  |   |   | $      | 1,334,453 |   |   | $ | 918,845 |   |
|   Cash payments (net of refunds) for taxes                                                    |   | $      | (3,547,394 | )      |   | $      | (278,622  | )      |   | $ | 4,814 |   |
|                                                                                                    |   |   |       |   |   |   |      |   |   |   |   |   |
| Supplemental disclosure of non-cash items:                                                              |   |   |       |   |   |   |      |   |   |   |   |   |
|   Capital expansion amortized to depreciation expense                                         |   | $      | 551,340    |   |   | $      | 621,864   |   |   | $ | 630,731 |   |
|   Investment in AMAK                                                                          |   | $      | --         |   |   | $      | --        |   |   | $ | 33,002,407 |   |
|   Issuance of common stock for settlement of accrued  Directors’ compensation |   | $      | --         |   |   | $      | --        |   |   | $ | 229,501 |   |
|   Unrealized loss/(gain) on interest rate swap, net of tax benefit/expense               |   | $      | (104,591   | )      |   | $      | (278,775  | )      |   | $ | 1,120,072 |   |
| Net assets acquired in purchase of STTC Transportation Company                                     |   | $      | 1,025,448  |   |   | $      | --        |   |   | $ | -- |   |

----

Index to Financial Statements

|   | NOTE 1 - BUSINESS AND OPERATIONS OF THE COMPANY |
|--------|-------------------------------------------------|

|   | Business and Operations of the Company |
|--------|----------------------------------------|

Arabian American Development Company (the “Company”) was organized as a Delaware corporation in 1967.  The Company’s principal business activity is manufacturing various specialty petrochemical products (also referred to as the “Petrochemical Operations”).  The Company also owns 

| Fair value consideration given                  |   |   |      | Fair value assets acquired |                                           |   |   |
|-------------------------------------------------|--------|--------|-----------|----------------------------|------------------------------------------------|--------|--------|
|   Cash                                |   | $      | 250,000   |                       |   Transportation equipment           |   | $      | 1,651,516 |   |
|   Equity instruments (232,170 shares) |   |   | 775,448   |                       |   Real property                      |   |   | 71,000 |   |
|   Note payable (Note 10)              |   |   | 300,000   |                       |   Contractual based intangible asset |   |   | 855,601 |   |
|                                            |   |   |      |                       | Fair value liabilities assumed                 |   |   |   |   |
|                                            |   |   |      |                       |   Deferred taxes                     |   | $      | (561,855 | ) |
|                                            |   |   |      |                       |   Equipment debt                     |   |   | (584,186 | ) |
|                                            |   |   |      |                       |   Income tax payable                 |   |   | (106,628 | ) |
| Total                                           |   | $      | 1,325,448 |                       | Total                                          |   | $      | 1,325,448 |   |

----

Index to Financial Statements

----

Index to Financial Statements

----

Index to Financial Statements

| a)   | The Company has a non-contingent and immediate obligation to stand ready to make payments if certain future triggering events occur. For certain guarantees, a liability is recognized for the stand ready obligation at the inception of the guarantee; and |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)   | The Company has an obligation to make future payments if those certain future triggering events do occur. A liability for the payment under the guarantee is recognized when 1) it becomes probably that one or more future events will occur triggering the requirement to make payments under the guarantee and 2) when the payment can be reasonably estimated. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index to Financial Statements

----

Index to Financial Statements

----

Index to Financial Statements

| Level 1 inputs | Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.                                                                                                                                                                                                                                                                                                                        |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Level 2 inputs | Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.  Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. |
| Level 3 inputs | Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity.                                                                                                                                                                                                                                                                                          |

----

Index to Financial Statements

|                         |   |   |      |   | Fair Value Measurements Using |   |
|------------------------------|--------|--------|-----------|--------|-------------------------------|--------|
| December 31, 2010            |   |   |      |   | Level 1                       |   |   | Level 2 |   |   | Level 3 |   |
| Assets:                      |   |   |      |   |                          |   |   |   |   |   |   |   |
| Financial swaps on feedstock |   | $      | 177,446   |   |                          | $      | 177,446 |   |   |   | - |   |   |   | - |   |
|                         |   |   |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                 |   |   |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Interest Rate Swap           |   | $      | 1,116,220 |   |                          |   | - |   |   | $ | 1,116,220 |   |   |   | - |   |

|               |   |   |      |   | Fair Value Measurements Using |   |
|--------------------|--------|--------|-----------|--------|-------------------------------|--------|
| December 31, 2009  |   |   |      |   | Level 1                       |   |   | Level 2 |   |   | Level 3 |   |
| Liabilities:       |   |   |      |   |                          |   |   |   |   |   |   |   |
| Interest Rate Swap |   | $      | 1,274,692 |   |                          |   | - |   |   | $ | 1,274,692 |   |   |   | - |   |

|              |   | 2010   |      |   | 2009   |   |
|-------------------|--------|--------|-----------|--------|--------|--------|
|              |   |   |      |   |   |   |
| Raw material      |   | $      | 4,023,324 |   |   | $      | 3,376,943 |   |
| Finished products |   |   | 1,893,959 |   |   |   | 1,688,226 |   |
|              |   |   |      |   |   |   |   |   |
| Total inventory   |   | $      | 5,917,283 |   |   | $      | 5,065,169 |   |

|                                                         |   | 2010   |   |   | 2009   |   |
|--------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                         |   |   |   |   |   |   |
| Note with processing customer (A)                            |   | $      | 35,111 |   |   | $      | 424,181 |   |
|   Less discount                                    |   |   | (684   | )      |   |   | (16,793 | ) |
|                                                         |   |   | 34,427 |   |   |   | 407,388 |   |
|                                                         |   |   |   |   |   |   |   |   |
| Less current portion                                         |   |   | 34,427 |   |   |   | 372,387 |   |
|  Total long-term notes receivable, less current portion |   | $      | -      |   |   | $      | 35,001 |   |

----

Index to Financial Statements

| Year Ending December 31, |   | Long-Term Notes Receivable |   |
|--------------------------|--------|----------------------------|--------|
| 2011                     |   | $                          | 35,111 |   |
| Less: discount           |   |                       | 684    |   |
|                     |   | $                          | 34,427 |   |

|                                                  |   | December 31, |        |
|-------------------------------------------------------|--------|--------------|-------------|
|                                                  |   | 2010         |        |   | 2009 |   |
| Platinum catalyst                                     |   | $            | 1,497,285   |   |   | $ | 1,497,285 |   |
| Land                                                  |   |         | 727,363     |   |   |   | 689,363 |   |
| Plant, pipeline and equipment                         |   |         | 52,469,062  |   |   |   | 47,885,793 |   |
| Construction in progress                              |   |         | 10,000      |   |   |   | 10,000 |   |
| Total plant, pipeline and equipment                   |   |         | 54,703,710  |   |   |   | 50,082,441 |   |
|     Less accumulated depreciation |   |         | (20,839,442 | ) |   |   | (17,674,938 | ) |
| Net plant, pipeline and equipment                     |   | $            | 33,864,268  |   |   | $ | 32,407,503 |   |

----

Index to Financial Statements

|                                                   |   |   |        |
|--------------------------------------------------------|--------|--------|-------------|
| Accumulated costs of mineral Interests in Saudi Arabia |   | $      | 40,289,907  |   |
| Contribution of AMAK organization costs                |   |   | 3,712,500   |   |
| Loan payable assumed by AMAK                           |   |   | (11,000,000 | ) |
| Net initial investment in AMAK                         |   | $      | 33,002,407  |   |

----

Index to Financial Statements

| Initial investment in AMAK                       |   | $      | 33,002,407 |   |
|--------------------------------------------------|--------|--------|------------|--------|
| Share of net loss of AMAK                        |   |   | (1,856,250 | )      |
| Investment in AMAK at December 31, 2009 and 2008 |   |   | 31,146,157 |   |
| Share of 2008 Zakat Tax                          |   |   | (262,500   | )      |
| Investment in AMAK at December 31, 2010          |   | $      | 30,883,657 |   |

----

Index to Financial Statements

|                                                                     |   | 2010   |       |   | 2009   |   |
|--------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Notes payable:                                                           |   |   |       |   |   |   |
|   Other                                                        |   |   | 12,000     |   |   |   | 12,000 |   |
|      Total                                      |   | $      | 12,000     |   |   | $      | 12,000 |   |
|                                                                     |   |   |       |   |   |   |   |   |
| Long-term debt:                                                          |   |   |       |   |   |   |   |   |
|   Revolving note to domestic bank (A)                          |   |   | 10,489,488 |   |   |   | 12,489,488 |   |
|   Term notes to domestic bank (B)                              |   |   | 10,950,000 |   |   |   | 12,350,000 |   |
|   Term notes to domestic bank (C)                              |   |   | 564,628    |   |   |   | - |   |
|   Term note to CEO (D)                                         |   |   | 300,000    |   |   |   | - |   |
|   Term note to domestic bank (E)                               |   |   | 396,752    |   |   |   | - |   |
|                                                                     |   |   |       |   |   |   |   |   |
|      Total long-term debt                       |   |   | 22,700,868 |   |   |   | 24,839,488 |   |
|                                                                     |   |   |       |   |   |   |   |   |
|   Less current portion                                         |   |   | 1,864,770  |   |   |   | 1,400,000 |   |
|                                                                     |   |   |       |   |   |   |   |   |
|      Total long-term debt, less current portion |   | $      | 20,836,098 |   |   | $      | 23,439,488 |   |

|              (A) | On May 25, 2006 South Hampton entered into a $12.0 million revolving loan agreement with a domestic bank secured by accounts receivable and inventory. The loan was originally due to expire on October 31, 2008, but has been amended to extend the termination date to June 30, 2012.  Additional amendments were entered into during 2008 and 2009 which ultimately increased the availability of the line to $18,000,000 based upon the Company’s accounts receivable and inventory.  At December 31, 2010, and 2009, there was a long-term amount outstanding of $10,489,488 and $12,489,488, respectively. The credit agreement contains a sub-limit of $3.0 million available to be used in support of the hedging program.  The interest rate on the loan varies according to several options and the amount outstanding.  At December 31, 2010 the rate was 2.75%, and approximately $2.9 million was available to be drawn.  A commitment fee of 0.25% is due quarterly on the unused portion of the loan.  If the amount outstanding surpasses the amount calculated by the borrowing base, a principal payment would be due to reduce the amount outstanding to the calculated base.    Interest is paid monthly.  Covenants that must be maintained include EBITDA, capital expenditures, dividends payable to parent, and leverage ratio. |
|------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B)   | On September 19, 2007 South Hampton entered into a $10.0 million term loan agreement with a domestic bank to finance the expansion of the petrochemical facility.  An amendment was entered into on November 26, 2008 which increased the term loan to $14.0 million due to the increased cost of the expansion.  This note is secured by property, pipeline and equipment. The agreement expires October 31, 2018.  At December 31, 2010, and 2009, there was a short-term amount of $1,400,000 and $1,400,000 and a long-term amount of $9,550,000 and $10,950,000 outstanding, respectively.  The interest rate on the loan varies according to several options.  At December 31, 2010 the variable interest rate under the loan was 2.75%.  However, as discussed in Note 20, effective August 2008 the Company entered into a pay-fixed, receive-variable interest rate swap with the lending bank which has the effect of converting the interest rate on $10.0 million of the loan to a fixed rate. Principal payments of $350,000 are paid quarterly with interest being paid monthly. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (C)   | On November 30, 2010 as part of the acquisition of STTC, various notes payable by STTC to JPMorgan Chase bank were assumed.  Principal and interest are due monthly on each note for a total of approximately $23,000.  The total notes assumed equaled $584,186.  Interest rates vary on these notes between 6.6% and 10%.   At December 31, 2010, there was a short-term amount of $271,526 and a long-term amount of $293,102 outstanding. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (D)   | On November 30, 2010, as part of the consideration paid for the acquisition of STTC, a note payable issued to Nicholas Carter, previous owner of STTC, for $300,000.  Principal of $100,000 plus accrued interest at 4.0% per annum is payable annually on November 30th of each year.  At December 31, 2010, there was a short-term amount of $100,000 and a long-term amount of $300,000 outstanding. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index to Financial Statements

| (E)   | On December 7, 2010, STTC entered into a note agreement with JPMorgan Chase Bank for the purchase of transportation equipment.  The amount of the note was $396,752 with principal and interest at 4.0% per annum payable monthly over 48 months at approximately $9,000 per month.  At December 31, 2010, there was a short-term amount of $93,244 and a long-term amount of $303,508 outstanding. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Year Ending December 31, |   | Long-Term Debt |       |
|--------------------------|--------|----------------|------------|
| 2011                     |   | $              | 1,864,770  |   |
| 2012                     |   |           | 12,268,247 |   |
| 2013                     |   |           | 1,692,478  |   |
| 2014                     |   |           | 1,525,373  |   |
| 2015                     |   |           | 1,400,000  |   |
| Thereafter               |   |           | 3,950,000  |   |
| Total                    |   | $              | 22,700,868 |   |

|                                  |   | 2010   |      |   | 2009   |   |
|---------------------------------------|--------|--------|-----------|--------|--------|--------|
| Accrued state taxes                   |   | $      | 109,779   |   |   | $      | 103,573 |   |
| Accrued payroll                       |   |   | 656,139   |   |   |   | 546,720 |   |
| Accrued directors’ fees         |   |   | 5,000     |   |   |   | 105,387 |   |
| Accrued officers’ compensation  |   |   | -         |   |   |   | 76,001 |   |
| Accrued environmental costs (Note 13) |   |   | 350,000   |   |   |   | - |   |
| Other liabilities                     |   |   | 656,724   |   |   |   | 504,538 |   |
|                                  |   |   |      |   |   |   |   |   |
|    Total               |   | $      | 1,777,642 |   |   | $      | 1,336,219 |   |

|                    |   | 2010   |    |   | 2009   |   |
|-------------------------|--------|--------|---------|--------|--------|--------|
| Salaries                |   | $      | 20,798  |   |   | $      | 202,920 |   |
| Termination benefits    |   |   | 66,942  |   |   |   | 213,649 |   |
| Other liabilities       |   |   | 96,853  |   |   |   | 54,711 |   |
|                    |   |   |    |   |   |   |   |   |
|    Total |   | $      | 184,593 |   |   | $      | 471,280 |   |

----

Index to Financial Statements

----

Index to Financial Statements

| Expected volatility      | 338% to 467%   |
|--------------------------|----------------|
| Expected dividends       | None           |
| Expected term (in years) | 5-10           |
| Risk free interest rate  | 2.37% to 3.68% |

----

Index to Financial Statements

| Expected volatility      | 139% to 402%   |
|--------------------------|----------------|
| Expected dividends       | None           |
| Expected term (in years) | 1.5-10         |
| Risk free interest rate  | 0.50% to 3.14% |

----

Index to Financial Statements

|                             |   | Stock Options |      |   | WeightedAverageExercisePricePer Share |   |   | WeightedAverageRemainingContractualLife |   |   | IntrinsicValue(in thousands) |   |
|----------------------------------|--------|---------------|-----------|--------|---------------------------------------|--------|--------|-----------------------------------------|--------|--------|------------------------------|--------|
| Outstanding at December 31, 2008 |   |          | 500,000   |   |                                  | $      | 1.20   |                                    |   |   |                         |   |   |   |
|    Granted        |   |          | 439,000   |   |                                  |   | 3.22   |                                    |   |   |                         |   |   |   |
|    Expired        |   |          | (100,000  | )      |                                  |   | 2.00   |                                    |   |   |                         |   |   |   |
|    Cancelled      |   |          | (400,000  | )      |                                  |   | 1.00   |                                    |   |   |                         |   |   |   |
| Outstanding at December 31, 2009 |   |          | 439,000   |   |                                  | $      | 3.22   |                                    |   |   | 6.3                          |   |   |   | -- |   |
| Exercisable at December 31, 2009 |   |          | 39,000    |   |                                  | $      | 1.36   |                                    |   |   | 9.0                          |   |   |   |   |   |
|                             |   |          |      |   |                                  |   |   |                                    |   |   |                         |   |   |   |   |   |
| Outstanding at December 31, 2009 |   |          | 439,000   |   |                                  | $      | 3.22   |                                    |   |   |                         |   |   |   |   |   |
|    Granted        |   |          | 637,667   |   |                                  |   | 2.69   |                                    |   |   |                         |   |   |   |   |   |
|    Expired        |   |          | --        |   |                                  |   | --     |                                    |   |   |                         |   |   |   |   |   |
|    Cancelled      |   |          | --        |   |                                  |   | --     |                                    |   |   |                         |   |   |   |   |   |
| Outstanding at December 31, 2010 |   |          | 1,076,667 |   |                                  | $      | 2.91   |                                    |   |   | 8.6                          |   |   |   | -- |   |
| Exercisable at December 31, 2010 |   |          | 71,667    |   |                                  | $      | 1.75   |                                    |   |   | 8.5                          |   |   |   |   |   |

|   | NOTE 15 – INCOME TAXES |
|--------|------------------------------|

|                                 |   | Year ended December 31, |      |
|--------------------------------------|--------|-------------------------|-----------|
|                                 |   | 2010                    |      |   | 2009 |   |   | 2008 |   |
| Current federal provision (benefit)  |   | $                       | 1,021,949 |   |   | $ | (4,866,532 | ) |   | $ | 376,030 |   |
| Current state provision              |   |                    | 5,549     |   |   |   | 89,571 |   |   |   | 173,323 |   |
|                                 |   |                    |      |   |   |   |   |   |   |   |   |   |
| Deferred federal provision (benefit) |   |                    | 662,817   |   |   |   | 8,959,098 |   |   |   | (5,388,895 | ) |
| Deferred state provision (benefit)   |   |                    | 12,501    |   |   |   | 161,831 |   |   |   | (139,304 | ) |
|                                 |   |                    |      |   |   |   |   |   |   |   |   |   |
| Income tax expense (benefit)         |   | $                       | 1,702,816 |   |   | $ | 4,343,968 |   |   | $ | (4,978,846 | ) |

|                                                |   | 2010   |      |   | 2009   |   |      | 2008   |   |
|-----------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Income taxes at U.S. statutory rate                 |   | $      | 1,492,080 |   |   | $      | 3,736,766 |   |   | $ | (5,513,248 | ) |
| State taxes, net of federal benefit                 |   |   | 96,144    |   |   |   | 230,187   |   |   |   | (42,141 | ) |
| Prior year overpayments                             |   |   | (14,566   | )      |   |   | (13,998   | )      |   |   | (49,872 | ) |
| Permanent and other items                           |   |   | 10,158    |   |   |   | 25,720    |   |   |   | (4,710 | ) |
| Increase in valuation allowance                     |   |   | 119,000   |   |   |   | 365,293   |   |   |   | 631,125 |   |
|     Total tax expense (benefit) |   | $      | 1,702,816 |   |   | $      | 4,343,968 |   |   | $ | (4,978,846 | ) |

----

Index to Financial Statements

|                                              |   | December 31, |       |
|---------------------------------------------------|--------|--------------|------------|
|                                              |   | 2010         |       |   | 2009 |   |
| Deferred tax liabilities:                         |   |         |       |   |   |   |
|   Plant, pipeline and equipment         |   | $            | (6,029,283 | ) |   | $ | (4,863,610 | ) |
|   Unrealized loss on swap agreements    |   |         | (61,503    | ) |   |   | - |   |
|   Total deferred tax liabilities        |   | $            | (6,090,786 | ) |   | $ | (4,863,610 | ) |
|                                              |   |         |       |   |   |   |   |   |
| Deferred tax assets:                              |   |         |       |   |   |   |   |   |
|   Accounts receivable                   |   |         | 162,250    |   |   |   | 148,174 |   |
|   Inventory                             |   |         | 35,437     |   |   |   | 42,726 |   |
|   Mineral interests                     |   |         | 365,293    |   |   |   | 365,293 |   |
|   Capital loss carry-forward            |   |         | -          |   |   |   | 1,228,090 |   |
|   Unrealized loss on interest rate swap |   |         | 379,515    |   |   |   | 433,395 |   |
|   Environmental                         |   |         | 119,000    |   |   |   | - |   |
|   Post retirement benefits              |   |         | 351,911    |   |   |   | 314,758 |   |
|                                              |   |         |       |   |   |   |   |   |
| Investment in AMAK                                |   |         | 631,125    |   |   |   | 631,125 |   |
| Stock-based compensation                          |   |         | 355,505    |   |   |   | 81,383 |   |
| Acquisition costs                                 |   |         | -          |   |   |   | 135,597 |   |
| Charitable contributions                          |   |         | -          |   |   |   | 14,723 |   |
|   Gross deferred tax assets             |   |         | 2,400,036  |   |   |   | 3,395,264 |   |
| Valuation allowance                               |   |         | (1,115,418 | ) |   |   | (2,224,508 | ) |
| Total net deferred tax assets                     |   | $            | 1,284,618  |   |   | $ | 1,170,756 |   |
|                                              |   |         |       |   |   |   |   |   |
|   Net deferred tax liabilities          |   | $            | (4,806,168 | ) |   | $ | (3,692,854 | ) |

|                                    |   | 2010   |       |   | 2009   |   |
|-----------------------------------------|--------|--------|------------|--------|--------|--------|
|                                    |   |   |       |   |   |   |
| Current deferred tax asset              |   | $      | 487,513    |   |   | $      | 640,057 |   |
|                                    |   |   |       |   |   |   |   |   |
| Non-current deferred tax liability:     |   |   |       |   |   |   |   |   |
|                                    |   |   |       |   |   |   |   |   |
| Deferred tax assets                     |   |   | 1,822,834  |   |   |   | 2,755,207 |   |
| Deferred tax liability                  |   |   | (6,001,097 | )      |   |   | (4,863,610 | ) |
| Valuation allowance                     |   |   | (1,115,418 | )      |   |   | (2,224,508 | ) |
| Non-current deferred tax liability, net |   |   | (5,293,681 | )      |   |   | (4,332,911 | ) |
|                                    |   |   |       |   |   |   |   |   |
| Total deferred liabilities, net         |   | $      | (4,806,168 | )      |   | $      | (3,692,854 | ) |

----

Index to Financial Statements

|                                        |   | December 31, 2010 |        |
|---------------------------------------------|--------|-------------------|-------------|
|                                        |   | Petrochemical     |        |   | Mining*** |   |   | CorporateAnd Other** |   |   | Total |   |
| Continuing operations                       |   |              |        |   |   |   |   |   |   |   |   |   |
|   Revenue from external customers |   | $                 | 139,110,194 |   |   | $ | - |   |   | $ | - |   |   | $ | 139,110,194 |   |
|   Depreciation*                   |   |              | 2,703,952   |   |   |   | - |   |   |   | 828 |   |   |   | 2,689,847 |   |
|   Operating income (loss)         |   |              | 8,819,580   |   |   |   | - |   |   |   | (2,967,811 | ) |   |   | 5,851,769 |   |
|                                        |   |              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                |   | $                 | 60,846,568  |   |   | $ | - |   |   | $ | 31,680,943 |   |   | $ | 92,527,511 |   |

|                                        |   | December 31, 2009 |        |
|---------------------------------------------|--------|-------------------|-------------|
|                                        |   | Petrochemical     |        |   | Mining*** |   |   | CorporateAnd Other** |   |   | Total |   |
| Continuing operations                       |   |              |        |   |   |   |   |   |   |   |   |   |
|   Revenue from external customers |   | $                 | 117,586,679 |   |   | $ | - |   |   | $ | - |   |   | $ | 117,586,679 |   |
|   Depreciation*                   |   |              | 2,688,705   |   |   |   | - |   |   |   | 1,142 |   |   |   | 2,689,847 |   |
|   Operating income (loss)         |   |              | 14,255,160  |   |   |   | - |   |   |   | (1,945,548 | ) |   |   | 12,309,612 |   |
|                                        |   |              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                |   | $                 | 58,752,321  |   |   | $ | - |   |   | $ | 31,734,468 |   |   | $ | 90,486,789 |   |

|                                        |   | December 31, 2008 |        |
|---------------------------------------------|--------|-------------------|-------------|
|                                        |   | Petrochemical     |        |   | Mining*** |   |   | CorporateAnd Other** |   |   | Total |   |
| Continuing operations                       |   |              |        |   |   |   |   |   |   |   |   |   |
|   Revenue from external customers |   | $                 | 154,630,234 |   |   | $ | - |   |   | $ | - |   |   | $ | 154,630,234 |   |
|   Depreciation*                   |   |              | 1,630,428   |   |   |   | - |   |   |   | 856 |   |   |   | 1,631,284 |   |
|   Operating income (loss)         |   |              | (11,563,597 | ) |   |   | (995,474 | ) |   |   | (1,403,660 | ) |   |   | (13,962,731 | ) |
|                                        |   |              |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                |   | $                 | 64,555,422  |   |   | $ | 588,311 |   |   | $ | 31,146,157 |   |   | $ | 96,289,890 |   |

----

Index to Financial Statements

|                                                        |   | Year ended December 31, |       |
|-------------------------------------------------------------|--------|-------------------------|------------|
|                                                        |   | 2010                    |       |   | 2009 |   |   | 2008 |   |
|                                                        |   |                    |       |   |   |   |   |   |   |
| Net income (loss)                                           |   | $                       | 2,685,654  |   |   | $ | 6,627,451 |   |   | $ | (10,731,165 | ) |
|                                                        |   |                    |       |   |   |   |   |   |   |   |   |   |
| Basic earnings (loss) per common share:                     |   |                    |       |   |   |   |   |   |   |   |   |   |
|     Weighted average shares outstanding |   |                    | 23,769,047 |   |   |   | 23,727,995 |   |   |   | 23,409,458 |   |
|                                                        |   |                    |       |   |   |   |   |   |   |   |   |   |
|     Per share amount                    |   | $                       | 0.11       |   |   | $ | 0.28 |   |   | $ | (0.46 | ) |
| Diluted earnings (loss) per common share:                   |   |                    |       |   |   |   |   |   |   |   |   |   |
|     Weighted average shares outstanding |   |                    | 23,780,303 |   |   |   | 23,800,449 |   |   |   | 23,409,458 |   |
|                                                        |   |                    |       |   |   |   |   |   |   |   |   |   |
|     Per share amount                    |   | $                       | 0.11       |   |   | $ | 0.28 |   |   | $ | (0.46 | ) |

|                                                                            |   | Year ended December 31, |       |
|---------------------------------------------------------------------------------|--------|-------------------------|------------|
|                                                                            |   | 2010                    |       |   | 2009 |   |   | 2008 |   |
| Weighted average shares-denominator  basic computation                |   |                    | 23,769,047 |   |   |   | 23,727,995 |   |   |   | 23,409,458 |   |
| Effect of dilutive stock options                                                |   |                    | 11,256     |   |   |   | 72,454 |   |   |   | - |   |
| Weighted average shares, as adjusted  denominator diluted computation |   |                    | 23,780,303 |   |   |   | 23,800,449 |   |   |   | 23,409,458 |   |

|         |   | Year Ended December 31, 2010 |   |
|--------------|--------|------------------------------|--------|
|         |   | FirstQuarter                 |   |   | SecondQuarter |   |   | ThirdQuarter |   |   | FourthQuarter |   |   | Total |   |
|         |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues     |   | $                            | 31,995 |   |   | $ | 36,542 |   |   | $ | 37,050 |   |   | $ | 33,523 |   |   | $ | 139,110 |   |
| Gross profit |   |                         | 3,726  |   |   |   | 3,717 |   |   |   | 5,418 |   |   |   | 4,354 |   |   |   | 17,215 |   |
| Net income   |   |                         | 404    |   |   |   | 2 |   |   |   | 1,671 |   |   |   | 609 |   |   |   | 2,686 |   |
| Basic EPS    |   | $                            | 0.02   |   |   | $ | 0.00 |   |   | $ | 0.07 |   |   | $ | 0.02 |   |   | $ | 0.11 |   |
| Diluted EPS  |   | $                            | 0.02   |   |   | $ | 0.00 |   |   | $ | 0.07 |   |   | $ | 0.02 |   |   | $ | 0.11 |   |

|              |   | Year Ended December 31, 2009 |   |
|-------------------|--------|------------------------------|--------|
|              |   | FirstQuarter                 |   |   | FirstQuarter |   |   | FirstQuarter |   |   | FirstQuarter |   |   | FirstQuarter |   |
|              |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues          |   | $                            | 27,397 |   |   | $ | 28,585 |   |   | $ | 30,648 |   |   | $ | 30,957 |   |   | $ | 117,587 |   |
| Gross profit      |   |                         | 8,962  |   |   |   | 6,426 |   |   |   | 4,294 |   |   |   | 2,216 |   |   |   | 21,898 |   |
| Net income (loss) |   |                         | 4,173  |   |   |   | 2,564 |   |   |   | 528 |   |   |   | (638 | ) |   |   | 6,627 |   |
| Basic EPS         |   | $                            | 0.18   |   |   | $ | 0.11 |   |   | $ | 0.02 |   |   | $ | (0.03 | ) |   | $ | 0.28 |   |
| Diluted EPS       |   | $                            | 0.18   |   |   | $ | 0.11 |   |   | $ | 0.02 |   |   | $ | ( 0.03 | ) |   | $ | 0.28 |   |

----

Index to Financial Statements

----

Index to Financial Statements

|                          |   | December 31, |   |
|-------------------------------|--------|--------------|--------|
|                          |   | 2010         |   |   | 2009 |   |   | 2008 |   |
|                          |   |         |   |   |   |   |   |   |   |
| Realized gain (loss)          |   | $            | 28     |   |   | $ | (5,856 | ) |   | $ | 1,721 |   |
| Write off derivative premiums |   |         | -      |   |   |   | - |   |   |   | (14,103 | ) |
| Unrealized gain (loss)        |   |         | 177    |   |   |   | 6,976 |   |   |   | (6,793 | ) |
| Net gain (loss)               |   | $            | 205    |   |   | $ | 1,120 |   |   | $ | (19,175 | ) |

|                           |   | December 31, |   |
|--------------------------------|--------|--------------|--------|
|                           |   | 2010         |   |   | 2009 |   |
|                           |   |         |   |   |   |   |
| Fair value of derivative asset |   | $            | 177    |   |   | $ | - |   |

----

Index to Financial Statements

|   | Interest Rate Swaps |
|--------|---------------------|

|                                                                              |   | December 31, |   |
|-----------------------------------------------------------------------------------|--------|--------------|--------|
|                                                                              |   | 2010         |   |   | 2009 |   |   | 2008 |   |
| Other Comprehensive Loss                                                          |   |         |   |   |   |   |   |   |   |
|            Cumulative loss |   | $            | (1,116 | ) |   | $ | (1,275 | ) |   | $ | (1,697 | ) |
| Deferred tax benefit                                                              |   |         | 379    |   |   |   | 434 |   |   |   | 577 |   |
| Net cumulative loss                                                               |   | $            | (737   | ) |   | $ | (841 | ) |   | $ | (1,120 | ) |
|                                                                              |   |         |   |   |   |   |   |   |   |   |   |   |
| Interest expense reclassified from other  comprehensive loss            |   | $            | 468    |   |   | $ | 510 |   |   | $ | 93 |   |

|                               |   | December 31, |   |
|------------------------------------|--------|--------------|--------|
|                               |   | 2010         |   |   | 2009 |   |
|                               |   |         |   |   |   |   |
| Fair value of derivative liability |   | $            | 1,116  |   |   | $ | 1,275 |   |

----

Index to Financial Statements

----

Index to Financial Statements

ARABIAN AMERICAN DEVELOPMENT COMPANY AND SUBSIDIARIES

| Description                                 |   | Beginningbalance |      |   | Charged(credited)to earnings |   |    | Deductions(a) |   |   | Endingbalance |   |
|---------------------------------------------|--------|------------------|-----------|--------|------------------------------|--------|---------|---------------|--------|--------|---------------|--------|
| ALLOWANCE FOR DEFERRED  TAX ASSET |   |             |      |   |                         |   |    |          |   |   |          |   |
|                                        |   |             |      |   |                         |   |    |          |   |   |          |   |
| December 31, 2008                           |   |             | 1,228,090 |   |                         |   | 631,125 |          |   |   | -             |   |   |   | 1,859,215 |   |
| December 31, 2009                           |   |             | 1,859,215 |   |                         |   | 365,293 |          |   |   | -             |   |   |   | 2,224,508 |   |
| December 31, 2010                           |   |             | 2,224,508 |   |                         |   | -       |          |   |   | (1,228,090    | )      |   |   | 996,418 |   |

| Description                                |   | Beginningbalance |    |   | Chargedto earnings |   |    | Deductions |   |   | Endingbalance |   |
|--------------------------------------------|--------|------------------|---------|--------|--------------------|--------|---------|------------|--------|--------|---------------|--------|
| ALLOWANCE FOR DOUBTFUL  ACCOUNTS |   |             |    |   |               |   |    |       |   |   |          |   |
|                                       |   |             |    |   |               |   |    |       |   |   |          |   |
| December 31, 2008                          |   |             | 35,000  |   |               |   | 465,000 |       |   |   | -             |   |   |   | 500,000 |   |
| December 31, 2009                          |   |             | 500,000 |   |               |   | 111,154 |       |   |   | (484,654      | )      |   |   | 126,500 |   |
| December 31, 2010                          |   |             | 126,500 |   |               |   | 28,500  |       |   |   |          |   |   |   | 155,000 |   |

----