SEC Form 3

FORM 3

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person* IAX Acquisition Corp (Last) (First) (Middle) C/O KINDERHOOK INDUSTRIES LLC 888 SEVENTH AVENUE 16TH FLOOR (Street) NEW YORK NY 10106 (City) (State) (Zip)	2. Date of Event Requiring Statement (Month/Day/Year) 12/14/2009	3. Issuer Name and Ticker or Trading Symbol INTERNATIONAL ABSORBENTS INC [ IAX ]
		4. Relationship of Reporting Person(s) to Issuer (Check all applicable) Director X 10% Owner Officer (give title below) Other (specify below)	5. If Amendment, Date of Original Filed (Month/Day/Year)
			6. Individual or Joint/Group Filing (Check Applicable Line) Form filed by One Reporting Person X Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Beneficially Owned
1. Title of Security (Instr. 4)	2. Amount of Securities Beneficially Owned (Instr. 4)	3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	4. Nature of Indirect Beneficial Ownership (Instr. 5)
Common Shares, No Par Value	717,325(1)(2)(3)	I	See footnote(3)

Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 4)	2. Date Exercisable and Expiration Date (Month/Day/Year)		3. Title and Amount of Securities Underlying Derivative Security (Instr. 4)		4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
	Date Exercisable	Expiration Date	Title	Amount or Number of Shares

1. Name and Address of Reporting Person* IAX Acquisition Corp (Last) (First) (Middle) C/O KINDERHOOK INDUSTRIES LLC 888 SEVENTH AVENUE 16TH FLOOR (Street) NEW YORK NY 10106 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* KINDERHOOK CAPITAL FUND III LP (Last) (First) (Middle) 888 SEVENTH AVENUE SUITE 1600 (Street) NEW YORK NY 10106 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* IAX Canada Acquisition Co Inc (Last) (First) (Middle) C/O KINDERHOOK INDUSTRIES LLC 888 SEVENTH AVENUE 16TH FLOOR (Street) NEW YORK NY 10106 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* International Absorbents Holdings LLC (Last) (First) (Middle) C/O KINDERHOOK INDUSTRIES LLC 888 SEVENTH AVENUE 16TH FLOOR (Street) NEW YORK NY 10106 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* Kinderhook Capital Fund III GP LLC (Last) (First) (Middle) C/O KINDERHOOK INDUSTRIES LLC 888 SEVENTH AVENUE 16TH FLOOR (Street) NEW YORK NY 10106 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* Michalik Robert E (Last) (First) (Middle) C/O KINDERHOOK INDUSTRIES LLC 888 SEVENTH AVENUE 16TH FLOOR (Street) NEW YORK NY 10106 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* Tuttle Thomas L (Last) (First) (Middle) C/O KINDERHOOK INDUSTRIES LLC 888 SEVENTH AVENUE 16TH FLOOR (Street) NEW YORK NY 10106 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* Michalik Christian P (Last) (First) (Middle) 8725 HENDERSON ROAD REN. 1 (Street) TAMPA FL 33634 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

Explanation of Responses:

1. IAX Acquisition Corporation ("Parent") and IAX Canada Acquisition Company Inc., a wholly-owned subsidiary of Parent ("Canada Sub"), and the Issuer entered into an Arrangement Agreement, dated December 14, 2009 (the "Arrangement Agreement"), pursuant to which Parent, through Canada Sub, will acquire all of the outstanding common shares of the Issuer for $4.75 per common share ("Common Shares") in cash through a plan of arrangement under the laws of British Columbia (the "Arrangement"). Under the Arrangement Agreement, upon consummation of the Arrangement (the "Effective Time"), (i) Canada Sub will acquire all of the outstanding Common Shares for $4.75 per Common Share, (ii) all stock options granted by the Issuer that have not been exercised into Common Shares prior to the Effective Time will be cancelled for cash consideration equivalent to the positive difference, if any, between $4.75 less the exercise price thereof, all in accordance with the terms of a plan of arrangement and (iii) all of the outstanding restricted stock units ("RSUs") that have not been converted into Common Shares prior to the Effective Time will be cancelled for $4.75 per RSU. The consummation of the Arrangement is subject to various closing conditions, including obtaining the approval of the Arrangement both by the Issuer's shareholders and by the Supreme Court of British Columbia.

2. Parent is a wholly owned subsidiary of International Absorbents Holdings, LLC ("Holdings"). All of the outstanding capital stock of Holdings is owned by Kinderhook Capital Fund III, L.P. (the "Fund"). Kinderhook Capital Fund III GP, LLC (the "Fund GP") is the general partner of the Fund. Thomas L. Tuttle, Robert E. Michalik and Christian P. Michalik own 71.4% of the outstanding capital stock of the Fund GP.

3. Parent, Canada Sub and certain shareholders of the Issuer (the "Shareholders") entered into a Support Agreement, dated December 14, 2009 ("Support Agreement"), pursuant to which the Shareholders agreed, among other things, to vote all the Issuer's Common Shares held by them in favor of the approval of the Arrangement and against other actions which could reasonably be expected to impede, delay or adversely affect the Arrangement, including a competing offer to enter into an arrangement, subject to the terms and conditions of the Support Agreement. The Reporting Persons do not have any pecuniary interest in the shares held by the Shareholders and each expressly disclaims beneficial ownership of any shares covered by the Support Agreement.

	/s/ IAX ACQUISITION CORPORATION, by Thomas L. Tuttle, President	12/23/2009
	/s/ KINDERHOOK CAPITAL FUND III, L.P., by Kinderhook Capital Fund III GP, LLC, its general partner, by Robert E. Michalik, Managing Director	12/23/2009
	/s/ IAX CANADA ACQUISITION COMPANY INC., by Thomas L. Tuttle, Director	12/23/2009
	/s/ INTERNATIONAL ABSORBENTS HOLDINGS, LLC, by Thomas L. Tuttle, President	12/23/2009
	/s/ KINDERHOOK CAPITAL FUND III GP, LLC, by Robert E. Michalik, Managing Director	12/23/2009
	/s/ Robert E. Michalik	12/23/2009
	/s/ Thomas L. Tuttle	12/23/2009
	/s/ Christian P. Michalik	12/23/2009
	** Signature of Reporting Person	Date
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