Earful of Books Agrees to Merger; Audiobooks Chain Merging to Accelerate National Expansion

Business Wire, July 6, 2001

Business Editors

AUSTIN, Texas--(BUSINESS WIRE)--July 6, 2001

Earful of Books, the nation's first and largest audiobooks-only chain, and American Absorbents Natural Products, Inc. (Nasdaq-BB:AMAB), both based in Austin, Texas, have completed an agreement to merge.

Shareholders will now be asked to approve the adoption of the Earful of Books, Inc. name for the surviving company; an appropriate stock option plan; a reincorporation from Utah to Delaware, and the election of new directors. Earful of Books (www.earful.com) will retain corporate headquarters in Austin and will seek "EARS" as its new trading symbol.

Total shares of common stock outstanding post-merger are 17,804,579 of which Earful shareholders of record as of June 22, 2001 own 13,531,480 common shares and AANP shareholders of record on that date will own 4,273,099 common shares. American Absorbents Natural Products (www.aanpi.com) is currently traded on the Over The Counter Bulletin Board (OTC-BB) under the symbol of AMAB.

Earful will announce the selection of five investment firms as market makers to support the stock when the merger is finalized.

"Management expects that AANP shareholders will be able to maximize their investment through this transaction," said AANP CEO Robert L. Bitterli. "With a full appreciation by the investment community of Earful's growth opportunities, we intend to seek qualification of Earful for listing in the Nasdaq National Market System."

Bitterli, who will continue in a consulting capacity to Earful until the AANP assets are sold, is a long-time Earful customer, as well as the author of the award-winning novel "The Hoover Print," a mystery-thriller released by Devin Lane Publishing in 2000.

AANP markets products containing the volcanic mineral zeolite, which is used primarily for odor control, gas or liquid absorption, the slow release of nutrients into the soil and in animal feed supplements. Barso Global Management, Ltd. of Toronto, Canada, has been retained to sell AANP's primary assets, the nation's largest zeolite mine and its plant in south central Oregon.

"We intend to use the capital generated from the sale of AANP assets to accelerate our ongoing national expansion and to reduce our outstanding debt," said Paul A. Rush, Earful founder and President, who will assume the title of Chairman and Chief Executive Officer of the new company. "We expect to announce by mid-July the earnings guidance for 2001 and to name a new President from our national search."

Earful and Audiobooks Industry Growth

The eight-year-old chain, which launched an aggressive franchising program in 1998, now has more than 200,000 members at 15 stores, including locations in Texas, California, Maryland, North Carolina, Ohio, Oregon, Virginia, and Washington. Earful currently has 32 new stores under contract in those areas as well as Florida.

Additionally, Earful of Books has co-located four units at premier Blockbuster Video (NYSE:BBI) store sites, and is approaching the first anniversary of a plan with Blockbuster that calls for up to 150 co-located stores by mid-2003.

"Our new capital structure will allow us to take full advantage of our relationship and opportunity with Blockbuster," Rush emphasized.

"Although the audiobooks industry grew to $2.4 billion last year, there are only about 70 audiobooks-only stores in the nation," explained Rush, who just completed his second term as President of the Audio Publishers Association (www.audiopub.org), a 700-member trade organization.

According to the APA, about 22.5% of all U.S. households (11.3 million) listen to audiobooks with varying regularity each year (May 2001 study). Nearly 80,000 spoken audio titles are currently on publishers' lists, with annual revenues and sales exceeding 60 million units and new titles exceeding 12,000 annually. The most loyal listeners are 35-to-64 years old, married, college-educated, professionals with upper middle income.

"Limited time, a frantic pace and a mobile society are key reasons an increasing number of readers and learners are turning on cassette or CD players to listen to books," Rush observed. "Sprawling metropolitan areas with linked suburbs, daily traffic problems and throngs of bored commuters are our targeted growth markets," he noted.

"Earful customers, often termed 'Road Scholars,' are as diverse as truck drivers, retirees, salespeople, college students and business executives. They find that mail order is too slow, underfunded public libraries are challenged to keep current titles and quality audiobooks, and retail bookstores don't rent and have only limited selections for sale," Rush said. "Each Earful store offers up to 7,000 titles of abridged and unabridged books on cassette or compact disc for rent or purchase."

Audiobookcafe.com...Electronic Delivery

Earful also owns a controlling interest (90%) in Audiobookcafe.com, a one-year-old Internet site billed as "Where spoken word is spoken about." The on-line audiobook magazine has emerged as the prime destination for audiobook-related consumers because of "its robust and constantly changing content, its upbeat, interactive approach and its cadre of respected writers and reviewers," Rush stated.