FORM 3
        
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES

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Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
                      

1. Name and Address of Reporting Person *

IAX Acquisition Corp

2. Date of Event Requiring Statement (MM/DD/YYYY)
12/14/2009 

3. Issuer Name and Ticker or Trading Symbol

INTERNATIONAL ABSORBENTS INC [IAX]

(Last)        (First)        (Middle)

C/O KINDERHOOK INDUSTRIES LLC, 888 SEVENTH AVENUE 16TH FLOOR

4. Relationship of Reporting Person(s) to Issuer (Check all applicable)

_____ Director                            ___ X ___ 10% Owner
_____ Officer (give title below)          _____ Other (specify below)

(Street)

NEW YORK, NY 10106       

(City)              (State)              (Zip)
5. If Amendment, Date Original Filed (MM/DD/YYYY)

 

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   717325   (1) (2) (3) I   See footnote   (3)

Table II - Derivative Securities Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities)
1. Title of Derivate Security
(Instr. 4) 		2. Date Exercisable and Expiration Date
(MM/DD/YYYY) 		3. Title and Amount of Securities Underlying Derivative Security
(Instr. 4) 		4. Conversion or Exercise Price of Derivative Security 5. Ownership Form of Derivative Security: 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

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.

Reporting Owners
Reporting Owner Name / Address
Relationships
Director 10% Owner Officer Other
IAX Acquisition Corp
C/O KINDERHOOK INDUSTRIES LLC
888 SEVENTH AVENUE 16TH FLOOR
NEW YORK, NY 10106
X

KINDERHOOK CAPITAL FUND III LP
888 SEVENTH AVENUE
SUITE 1600
NEW YORK, NY 10106
X

IAX Canada Acquisition Co Inc
C/O KINDERHOOK INDUSTRIES LLC
888 SEVENTH AVENUE 16TH FLOOR
NEW YORK, NY 10106
X

International Absorbents Holdings LLC
C/O KINDERHOOK INDUSTRIES LLC
888 SEVENTH AVENUE 16TH FLOOR
NEW YORK, NY 10106
X

Kinderhook Capital Fund III GP LLC
C/O KINDERHOOK INDUSTRIES LLC
888 SEVENTH AVENUE 16TH FLOOR
NEW YORK, NY 10106
X

Michalik Robert E
C/O KINDERHOOK INDUSTRIES LLC
888 SEVENTH AVENUE 16TH FLOOR
NEW YORK, NY 10106
X

Tuttle Thomas L
C/O KINDERHOOK INDUSTRIES LLC
888 SEVENTH AVENUE 16TH FLOOR
NEW YORK, NY 10106
X

Michalik Christian P
8725 HENDERSON ROAD
REN. 1
TAMPA, FL 33634
X


Signatures
/s/ IAX ACQUISITION CORPORATION, by Thomas L. Tuttle, President 12/23/2009
** Signature of Reporting Person Date

/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
** Signature of Reporting Person Date

/s/ IAX CANADA ACQUISITION COMPANY INC., by Thomas L. Tuttle, Director 12/23/2009
** Signature of Reporting Person Date

/s/ INTERNATIONAL ABSORBENTS HOLDINGS, LLC, by Thomas L. Tuttle, President 12/23/2009
** Signature of Reporting Person Date

/s/ KINDERHOOK CAPITAL FUND III GP, LLC, by Robert E. Michalik, Managing Director 12/23/2009
** Signature of Reporting Person Date

/s/ Robert E. Michalik 12/23/2009
** Signature of Reporting Person Date

/s/ Thomas L. Tuttle 12/23/2009
** Signature of Reporting Person Date

/s/ Christian P. Michalik 12/23/2009
** Signature of Reporting Person Date


Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 5(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.
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