SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

|X|  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934
     For the quarterly period ended September 30, 2005.

or

     Transition  Report  Pursuant  to  Section  13 or  15(d)  of the  Securities
     Exchange Act of 1934 For the transition period from           to          .

                         Commission File Number 0-49666

                         TIENS BIOTECH GROUP (USA), INC.
             (Exact name of registrant as specified in its charter)


           Delaware                                              75-2926439
(State or Other Jurisdiction of                               (I.R.S. Employer
Incorporation or Organization)                               Identification No.)

                              No. 6, Yuanquan Road
                         Wuqing New Tech Industrial Park
                              Tianjin, China 301700
           (Address of Principal Executive Offices including zip code)

                               011-86-22-8213-7658
              (Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange  Act during the  preceding 12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days. Yes |X| No |_|

There  were  71,333,586  shares of the  Registrant's  Common  Stock  issued  and
outstanding on November 11, 2005.

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined on Rule 12b-2 of the Exchange Act). Yes |_| No |X|


Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act): Yes |_| No |X|



<PAGE>

                         TIENS BIOTECH GROUP (USA), INC.
                               Index to Form 10-Q

Part I.  Financial Information

         Item 1.  Condensed Financial Statements (unaudited)

         Consolidated Balance Sheets
               as of September 30, 2005 and December 31, 2004

         Consolidated Statements of Income and Other Comprehensive Income
               for the three months and the nine months ended September
               30, 2005 and 2004

         Consolidated Statements of Shareholders' Equity
               for the nine months ended September 30, 2005 and 2004

         Consolidated Statements of Cash Flows
               for the nine months ended September 30, 2005 and 2004

         Condensed Notes to Consolidated Financial Statements

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

         Item 3.  Quantitative and Qualitative Disclosures About Market Risk

         Item 4.  Controls and Procedures

Part II. Other Information

         Item 1.  Legal Proceedings

         Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

         Item 3.  Defaults Upon Senior Securities

         Item 4,  Submission of Matters to a Vote of Security Holders

         Item 5.  Other Information

         Item 6.  Exhibits






                                       2
<PAGE>
<TABLE>
<CAPTION>

                         PART I - FINANCIAL INFORMATION

Item 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                 AS OF SEPTEMBER 30, 2005 AND DECEMBER 31, 2004

                                     ASSETS
                                     ------
                                                                           September 30    December 31
                                                                               2005           2004
                                                                           ------------   ------------
                                                                            (Unaudited)     (Audited)
                                                                           ------------   ------------
<S>                                                                        <C>            <C>
CURRENT ASSETS:
    Cash                                                                   $ 52,006,277   $ 39,243,872
    Accounts receivable - related parties, net of allowance for doubtful
      accounts of $31,145 at September 30, 2005 and $30,442 at
      December 31, 2004, respectively                                         5,313,533      6,058,021
    Other receivables                                                            32,108        529,036
    Other receivables and note receivable - related parties                  15,128,016      8,144,740
    Inventories                                                               9,059,319      4,567,418
                                                                           ------------   ------------
      Total current assets                                                   81,539,253     58,543,087
                                                                           ------------   ------------

BUILDINGS, EQUIPMENT AND AUTOMOBILES, net                                    24,387,551     20,200,806
                                                                           ------------   ------------

OTHER ASSETS:
    Intangible assets, net                                                      499,805        469,765
    Employee advances                                                           498,293         75,212
    Deposits                                                                  5,760,974      4,230,063
                                                                           ------------   ------------
      Total other assets                                                      6,759,072      4,775,040
                                                                           ------------   ------------
         Total assets                                                      $112,685,876   $ 83,518,933
                                                                           ============   ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------

CURRENT LIABILITIES:
    Accounts payable                                                       $  3,279,324   $  1,791,019
    Accounts payable - related parties                                          247,244        209,199
    Advances from customers - related parties                                   742,956        673,349
    Other taxes payable                                                       1,357,539        623,113
    Accrued liabilities                                                         715,464        428,839
    Other payable - related parties                                           1,349,833        945,274
    Distribution payable to minority interest shareholder                     3,084,796           --
    Current portion of long term debt                                              --          155,442
                                                                           ------------   ------------
      Total current liabilities                                              10,777,156      4,826,235

NON-CURRENT LIABILITIES:
    Note payable - related party                                             10,657,742     10,657,742
                                                                           ------------   ------------

         Total liabilities                                                   21,434,898     15,483,977
                                                                           ------------   ------------

MINORITY INTEREST                                                             7,274,290      7,512,057
                                                                           ------------   ------------

SHAREHOLDERS' EQUITY:
    Common stock, $0.001 par value, 260,000,000 shares authorized,
      71,333,586 issued and outstanding                                          71,334         71,334
    Paid-in-capital                                                           8,842,009      8,842,009
    Statutory reserves                                                        9,420,783      9,420,783
    Retained earnings                                                        63,605,883     42,200,940
    Accumulated other comprehensive gain (loss)                               2,036,679        (12,167)
                                                                           ------------   ------------
      Total shareholders' equity                                             83,976,688     60,522,899
                                                                           ------------   ------------
         Total liabilities and shareholders' equity                        $112,685,876   $ 83,518,933
                                                                           ============   ============
</TABLE>



The accompanying notes are an integral part of this statement.


                                      -2-
<PAGE>
<TABLE>
<CAPTION>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

        CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
     FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004

                                                 3 months ended September 30    9 months ended September 30
                                                ----------------------------   ----------------------------
                                                    2005            2004           2005            2004
                                                 (Unaudited)     (Unaudited)    (Unaudited)     (Unaudited)
                                                ------------    ------------   ------------    ------------
<S>                                             <C>             <C>            <C>             <C>
REVENUE - RELATED PARTIES                       $ 19,126,809    $ 18,058,888   $ 50,730,467    $ 46,074,775

COST OF SALES                                      4,954,198       4,304,640     12,609,428      10,922,106
                                                ------------    ------------   ------------    ------------

GROSS PROFIT                                      14,172,611      13,754,248     38,121,039      35,152,669

SELLING, GENERAL AND  ADMINISTRATIVE EXPENSES      2,795,414       2,437,047      7,894,965       5,055,967
                                                ------------    ------------   ------------    ------------

INCOME FROM OPERATIONS                            11,377,197      11,317,201     30,226,074      30,096,702

OTHER (EXPENSE) INCOME, NET                         (126,969)        205,357       (814,133)        523,063
                                                ------------    ------------   ------------    ------------

INCOME BEFORE PROVISION FOR INCOME TAXES
AND MINORITY INTEREST                             11,250,228      11,522,558     29,411,941      30,619,765

PROVISION FOR INCOME TAXES                           869,769            --        2,315,214            --
                                                ------------    ------------   ------------    ------------

INCOME BEFORE MINORITY INTEREST                   10,380,459      11,522,558     27,096,727      30,619,765

MINORITY INTEREST                                  2,175,715       2,327,913      5,691,784       6,183,873
                                                ------------    ------------   ------------    ------------

NET INCOME                                         8,204,744       9,194,645     21,404,943      24,435,892

OTHER COMPREHENSIVE INCOME
     Foreign currency translation adjustment       2,047,847            --        2,048,846            --
                                                ------------    ------------   ------------    ------------

COMPREHENSIVE INCOME                            $ 10,252,591    $  9,194,645   $ 23,453,789    $ 24,435,892
                                                ============    ============   ============    ============

Weighted average number of shares outstanding     71,333,586      71,872,975     71,333,586      71,957,327
                                                ============    ============   ============    ============

Earnings per share, basic and diluted           $       0.14    $       0.13   $       0.33    $       0.34
                                                ============    ============   ============    ============
</TABLE>










The accompanying notes are an integral part of this statement.

                                      -3-
<PAGE>
<TABLE>
<CAPTION>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004


                                             Number           Common          Paid-in         Statutory
                                           of shares          stock           capital          Reserve
                                         -------------    -------------    -------------    -------------
                                          (Unaudited)      (Unaudited)      (Unaudited)      (Unaudited)
                                         -------------    -------------    -------------    -------------
<S>                                      <C>              <C>              <C>              <C>
BALANCE December 31, 2003, audited          71,998,586    $      71,334    $   8,842,009    $   3,730,137

   Cancellation of shares                     (665,000)            --               --               --
   Net income                                     --               --               --               --
   Receipt of stock receivable                    --               --               --               --
                                         -------------    -------------    -------------    -------------
BALANCE, September 30, 2004, unaudited      71,333,586           71,334        8,842,009        3,730,137

   Net income                                     --               --               --               --
   Adjustment to statutory reserve                --               --               --          5,690,646
   Foreign currency translation loss              --               --               --               --
                                         -------------    -------------    -------------    -------------
BALANCE, December 31, 2004, audited         71,333,586           71,334        8,842,009        9,420,783

   Net income                                     --               --               --               --
   Foreign currency translation gain              --               --               --               --
                                         -------------    -------------    -------------    -------------
BALANCE, September 30, 2005, unaudited      71,333,586    $      71,334    $   8,842,009    $   9,420,783
                                         =============    =============    =============    =============

                                                                            Accumulated
                                                                               other
                                           Retained          Stock         comprehensive
                                           earnings        receivable      income (loss)       Totals
                                         -------------    -------------    -------------    -------------
                                          (Unaudited)      (Unaudited)      (Unaudited)      (Unaudited)
                                         -------------    -------------    -------------    -------------

BALANCE December 31, 2003, audited       $  20,453,290    $      (6,650)   $      (3,928)   $  33,086,192

   Cancellation of shares                         --               --               --               --
   Net income                               24,435,892             --               --         24,435,892
   Receipt of stock receivable                    --              6,650             --              6,650
                                         -------------    -------------    -------------    -------------
BALANCE, September 30, 2004, unaudited      44,889,182             --             (3,928)      57,528,734

   Net income                                3,002,404             --               --          3,002,404
   Adjustment to statutory reserve          (5,690,646)            --               --               --
   Foreign currency translation loss              --               --             (8,239)          (8,239)
                                         -------------    -------------    -------------    -------------
BALANCE, December 31, 2004, audited         42,200,940             --            (12,167)      60,522,899

   Net income                               21,404,943             --               --         21,404,943
   Foreign currency translation gain              --               --          2,048,846        2,048,846
                                         -------------    -------------    -------------    -------------
BALANCE, September 30, 2005, unaudited   $  63,605,883    $        --      $   2,036,679    $  83,976,688
                                         =============    =============    =============    =============
</TABLE>




The accompanying notes are an integral part of this statement.

                                      -4-
<PAGE>
<TABLE>
<CAPTION>

                      TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS
                   FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004

                                                                     2005            2004
                                                                 ------------    ------------
                                                                  Unaudited       Unaudited
                                                                 ------------    ------------
<S>                                                              <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                   $ 21,404,943    $ 24,435,892
    Adjustments to reconcile net income  to cash
      provided by operating activities:
       Minority interest income                                     5,691,784       6,183,873
       Depreciation                                                 1,231,056       1,021,882
       Amortization                                                    66,493          35,823
       (Gain) loss on sale of equipment                               (81,997)         61,009
      (Increase) decrease in assets:
       Accounts receivable - related parties                          598,697      (9,535,479)
       Other receivables                                              496,928        (243,888)
       Other receivables and note receivable - related parties     (9,828,031)      6,756,857
       Inventories                                                 (4,491,901)       (993,589)
       Intangible assets                                              (87,056)           --
       Employee advances                                             (423,081)        749,199
       Deposits                                                    (1,530,911)       (170,308)
      Increase (decrease) in liabilities:
       Accounts payable                                             1,488,305        (577,187)
       Accounts payable - related parties                              38,045        (758,570)
       Advances from customers - related parties                       69,607      (5,141,661)
       Other taxes payable                                            734,426         117,755
       Accrued liabilities                                            286,625         (21,721)
       Other payables - related parties                               404,559        (309,566)
                                                                 ------------    ------------
         Net cash provided by operating activities                 16,068,491      21,610,321
                                                                 ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from sales of equipment                                   25,380          65,129
    Purchase of equipment                                          (5,224,870)     (1,508,242)
                                                                 ------------    ------------
         Net cash used in investing activities                     (5,199,490)     (1,443,113)
                                                                 ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Decrease in stock receivable                                         --             6,650
    Payments, net of borrowings on short term notes payable          (155,442)     (5,324,000)
    Borrowings on long term debt                                         --        10,477,942
                                                                 ------------    ------------
         Net cash (used in) provided by financing activities         (155,442)      5,160,592
                                                                 ------------    ------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                             2,048,846            --
                                                                 ------------    ------------

INCREASE IN CASH                                                   12,762,405      25,327,800

CASH, beginning of period                                          39,243,872      12,725,043
                                                                 ------------    ------------

CASH, end of period                                              $ 52,006,277    $ 38,052,843
                                                                 ============    ============
</TABLE>

The accompanying notes are an integral part of this statement.


                                      -5-
<PAGE>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 1 - Background

Tiens Biotech Group (USA),  Inc. (the  "Company" or "Tiens"),  formerly known as
Strategika,  Inc.  ("Strategika"),  was  incorporated  on July 13, 1990 as Super
Shops,  Inc.  in the State of  Michigan.  In October  2000,  Super  Shops,  Inc.
reincorporated  in Delaware and changed its name to MIA Acquisition  Corp.,  and
subsequently to Strategika in February 2002.

In August 2003,  Strategika and Tianshi  International,  LI Jinyuan, JIAO Wenjun
and  YAN  Yupeng,  all  Chinese  Nationals  who  were  stockholders  of  Tianshi
International  (the  "Tianshi  Stockholders")  entered an Agreement  and Plan of
Reorganization  (the  "Agreement"),  which was effective  September 9, 2003 (the
"Effective  Date").  Pursuant to the  Agreement,  Strategika  received  from the
Tianshi  Stockholders all of the issued and outstanding  common stock of Tianshi
International,  in exchange for the issuance by Strategika of 68,495,000  shares
of its common stock to the Tianshi Stockholders,  representing 95% of the issued
and outstanding  common stock of Strategika,  giving effect to the issuance.  As
additional  consideration,  Rene  Larrave,  the sole  officer  and  director  of
Strategika prior to the reorganization, contributed all of his Strategika common
stock to Strategika without additional consideration.

The  purchase of Tianshi  International  and the issuance of  Strategika  common
stock  has  been  accounted  for  as  a  reverse  acquisition   presented  as  a
recapitalization,  except  no  goodwill  or other  intangible  assets  have been
recorded.  For  accounting  purposes,  the  original  Tianshi  International  is
considered the acquirer in the reverse  acquisition.  The  historical  financial
statements are those of the original Tianshi International.

Tianshi  International was incorporated  March 24, 2003, in the territory of the
British Virgin Islands. On June 18, 2003, Tianshi International  acquired 80% of
Tianjin Tianshi Biological Development Co., Ltd ("Biological").  Biological is a
Chinese-foreign  equity joint venture company  established under the laws of the
PRC on March 27, 1997.  Biological is subject to the Law on Sino Foreign  Equity
Joint Ventures ("Joint Venture Law"), its  implementation  regulations and other
related rules and regulations  ("Joint Venture  Regulations").  Biological is an
independent  legal  entity  having the legal  structure  of a limited  liability
company, similar to a regular corporation with limited liability organized under
state laws in the United  States of  America.  The  Articles of  Association  of
Biological  provides for a 50 year term with registered  capital of $10,000,000.
As an approved Chinese-foreign equity joint venture, Biological receives special
income tax incentive  treatment from both the local (Wuqing  County) and central
governments in China.  The original  partners in this joint venture were Tianshi
Hong Kong International Development Co., Ltd. ("Tianshi Hong Kong") incorporated
in Hong Kong which  owned 80% of the joint  venture,  and  Tianshi  Engineering,
which owned the remaining 20% of Biological.  Tianshi Hong Kong is owned 100% by
LI Jinyuan. Tianshi Engineering is 49% owned by Ms. Li Baolan and 51% by Tianshi
Group.  In June  2003,  Tianshi  Engineering  transferred  its 20%  interest  in
Biological  for  no  consideration  to  Tianshi   Pharmaceuticals   and  Tianshi
International  acquired  80%  of  Biological  from  Tianshi  Hong  Kong  for  no
consideration. This transfer was made for no consideration,  since LI Jinyuan is
president and sole shareholder of both companies.



                                      -6-
<PAGE>
<TABLE>
<CAPTION>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



 Note 1 - Background, (continued)

As result of the above transactions, Tianshi International is now a wholly owned
subsidiary of the Company and Biological  remained as a 80% owned  subsidiary of
Tianshi  International.  The  summary of Tiens'  organization  is  described  as
follows:

Tiens is owned 4.91% by public stockholders,  2.8% by officers and 92.29% by Mr.
Li Jinyuan. Tiens owns 100% of Tianshi International. Tianshi International owns
80% of Biological and 99.4% of Tiens Yihai.

Tianshi  Group is owned 90% by Mr. Li Jinyuan  and 10% by his  daughter,  Ms. Li
Baolan. Tianshi Group owns 87.66% of Tianshi  Pharmaceuticals and 51% of Tianshi
Engineering.  Tianshi  Pharmaceuticals  owns 20% of Biological  and 0.6% of Co.,
Ltd. ("Tiens Yihai").

Ms.  Li  Baolan   owns  49%  of  Tianshi   Engineering   and  7.29%  of  Tianshi
Pharmaceuticals.

Tianjin Feishi Transportation Co., Ltd. owns 5.05% of Tianshi Pharmaceuticals.

Note 2 - Summary of significant accounting policies

The reporting entity
--------------------

The financial  statements in the Strategika  filings became those of Tiens.  The
consolidated  financial  statements  of  Tiens  reflect  the  activities  of the
following Company subsidiaries:

                                                                              Percent
                         Subsidiary                                        Of Ownership
------------------------------------------------------------------------   ------------
<S>                                                                        <C>
Tianshi International Holdings Group, Ltd         British Virgin Islands         100.0%
Tianjin Tianshi Biological Development Co., Ltd   P.R.C.                          80.0%
Tiens Yihai Co. Ltd.                              P.R.C.                          99.4%
</TABLE>


Tianshi  International is a corporation  organized under the laws of the British
Virgin  Islands.  Tianshi  International  is a  holding  company  for  Tiens 80%
investment in Biological and its 99.4% investment in Tiens Yihai.

Biological is a foreign investment joint venture which is incorporated under the
laws of PRC.

Biological is classified as a Foreign Investment Enterprise (FIE) in the PRC and
is  subject  to the FIE  laws of the PRC.  Biological  is a  Chinese  registered
limited   liability  company  with  a  legal  structure  similar  to  a  regular
corporation and a limited  liability  company  organized under state laws in the
United  States of America.  The Articles of  Association  provides for a 50 year
term beginning on March 27, 1998 with registered capital of $10,000,000.




                                      -7-
<PAGE>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 2 - Summary of significant accounting policies, (continued)

The reporting entity, (continued)
---------------------------------

Tiens Yihai Co. Ltd. (Tiens Yihai) is a foreign  investment  joint venture which
is  incorporated  under the laws of PRC.  Tiens Yihai is classified as a Foreign
Investment  Enterprise  (FIE) in the PRC and is  subject  to the FIE laws of the
PRC. Tiens Yihai is a Chinese  registered limited liability company with a legal
structure  similar  to a regular  corporation  and a limited  liability  company
organized  under  state laws in the United  States of America.  The  Articles of
Association  provides  for a 50  year  term  beginning  on  May  27,  2004  with
registered capital of $200,000,000.

Tianshi  International  owns 80% of its  subsidiary  Biological and 99.4% of its
subsidiary  Tiens Yihai.  The remaining 20% and 0.6%  respectively  are owned by
Tianshi Pharmaceuticals whose majority shareholder is Tianshi Group.

Nature of operations
--------------------

The Company through its subsidiaries is primarily  engaged in the  manufacturing
and marketing of wellness products,  nutrition  supplement products and personal
care  products.  The  Company  sells its  products  to a sales  force of related
distributors  who in turn sell to  independent  distributors  and  managers  who
resell them to other  distributors or public consumers.  The Company markets its
products in China, South Korea, Japan,  India,  Thailand,  Malaysia,  Indonesia,
Canada, Peru, Brazil, Russia, Kazakhstan, Belarus, Mongolia, Finland, Lithuania,
Britain,  Germany, France, Romania, Ukraine,  Portugal,  Turkey, Italy, Nigeria,
Ghana, South Africa and Australia.

Revenue recognition
-------------------

The Company recognizes revenue from domestic sales by distributors in China, net
of sales  commissions  and  taxes  only  when the  related  Chinese  distributor
recognizes sales of the Company's  products to unaffiliated  third parties.  The
Company  recognizes  revenue  from  international  sales  (non-Chinese)  to both
affiliated and unaffiliated third parties, net of commissions and taxes as goods
are shipped and clear review by the international customs department.

The Company is generally not contractually obligated to accept returns. However,
on a case by case  negotiated  basis,  the Company  permits  customers to return
their products.  In accordance with SFAS No. 48, "Revenue  Recognition  when the
Right of Return  Exists",  revenue is recorded net of an allowance for estimated
returns.  Such  reserves are based upon  management's  evaluation  of historical
experience and estimated costs. The amount of the reserves  ultimately  required
could  differ  materially  in  the  near  term  from  amounts  included  in  the
accompanying consolidated financial statements.

In 2005 and  2004,  Tianshi  Engineering,  a related  company,  owned all of the
related party  distributors  which sell the Company's  products  domestically in
China.



                                      -8-
<PAGE>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 2 - Summary of significant accounting policies, (continued)

Foreign currency translation
----------------------------

The reporting  currency of the Company is the US dollar.  Biological's and Tiens
Yihai's financial records are maintained and the statutory financial  statements
are stated in its local currency,  Renminbi (RMB), as their functional currency.
Results of operations  and cash flow are  translated at average  exchange  rates
during the period,  and assets and  liabilities  are  translated  at the unified
exchange  rate  as  quoted  by the  People's  Bank of  China  at the end of each
reporting period.

This quotation of the exchange rates does not imply free  convertibility  of RMB
to other foreign currencies.  All foreign exchange transactions continue to take
place either through the People's Bank of China or other banks authorized to buy
and sell foreign  currencies at the exchange rate quoted by the People's Bank of
China.

Approval of foreign currency payments by the Bank of China or other institutions
requires submitting a payment application form together with invoices,  shipping
documents and signed contracts.

Translation  adjustments resulting from this process are included in accumulated
other comprehensive income in the consolidated statement of shareholders' equity
and amounted to  $2,036,679  and $(12,167) as of September 30, 2005 and December
31, 2004,  respectively.  The balance sheet amounts with the exception of equity
at September  30, 2005 were  translated  at 8.07 RMB to $1.00 USD as compared to
8.26 RMB at  December  31,  2004.  The  equity  accounts  were  stated  at their
historical  rate. The average  translation  rate of 8.22 RMB for the nine months
ended September 30, 2005 was applied to income statement accounts.

Transaction  gains and losses  that arise from  exchange  rate  fluctuations  on
transactions  denominated in a currency  other than the functional  currency are
included  in the  results of  operations  as  incurred.  These  amounts  are not
material to the consolidated financial statements.

Income taxes
------------

The Company has adopted  Statement of Financial  Accounting  Standards  No. 109,
"Accounting  for Income Taxes" (SFAS 109).  SFAS 109 requires the recognition of
deferred  income  tax  liabilities  and  assets  for  the  expected  future  tax
consequences  of temporary  differences  between  income tax basis and financial
reporting basis of assets and liabilities. Provision for income taxes consist of
taxes  currently due plus deferred  taxes.  There are no deferred tax amounts at
September 30, 2005 and 2004.

The charge for  taxation is based on the  results  for the year as adjusted  for
items, which are non-assessable or disallowed.  It is calculated using tax rates
that have been enacted or substantively enacted by the balance sheet date.

Deferred  tax is  accounted  for using the  balance  sheet  liability  method in
respect of temporary  differences  arising from differences between the carrying
amount  of  assets  and   liabilities  in  the  financial   statements  and  the
corresponding tax basis used in the computation of assessable tax profit.




                                      -9-
<PAGE>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 2 - Summary of significant accounting policies, (continued)

Income taxes, (continued)
-------------------------

In principle,  deferred tax liabilities are recognized for all taxable temporary
differences,  and  deferred tax assets are  recognized  to the extent that it is
probably  that  taxable  profit  will  be  available  against  which  deductible
temporary differences can be utilized.

Deferred  tax is  calculated  at the tax rates that are expected to apply to the
period when the asset is realized or the  liability is settled.  Deferred tax is
charged or  credited  in the income  statement,  except when it related to items
credited or charged  directly to equity,  in which case the deferred tax is also
dealt with in equity.

Deferred tax assets and  liabilities are offset when they relate to income taxes
levied by the same  taxation  authority  and the  Company  intends to settle its
current tax assets and liabilities on a net basis.

The Company is subject to income taxes on an entity  basis on income  arising in
or derived  from the tax  jurisdiction  in which each entity is  domiciled.  The
Company's  subsidiary,  Tianshi  International,  was incorporated in the British
Virgin Islands and is not liable for income taxes.

The Company's  subsidiaries,  Biological and Tiens Yihai, are Sino-Foreign Joint
Ventures  incorporated in the People's Republic of China. Pursuant to the income
tax  laws of the PRC  concerning  Foreign  Investment  Enterprises  and  foreign
Enterprises   and  various  local  income  tax  laws  (the  "Income  Tax  Law"),
Sino-foreign joint venture enterprises generally are subject to income tax at an
effective  rate of 33% (30% state income  taxes plus 3% local  income  taxes) on
income as reported in their statutory financial statements unless the enterprise
is located in  specially-designated  regions or cities for which more  favorable
effective rates apply.

Biological  is located in Special  Economic  Zone and is subject to the  special
reduced income tax rate of 15%. Pursuant to the approval of the relevant PRC tax
authorities,  Biological  is fully  exempt  from PRC income  taxes for two years
starting  from the year  profits are first made,  followed by a 7.5% reduced tax
rate for the next three years.

Prior to the year ended December 31, 2002, Biological suffered operating losses.
Biological  started  generating  taxable  profits in the year ended December 31,
2003.  Effective  January 1, 2005,  the two-year 100% exemption for income taxes
expired for  Biological and it became subject to income tax at a reduced rate of
7.5%.

Tiens Yihai is located in a Special  Industry Zone and is subject to the special
reduced  income tax rate of 15%.  Pursuant to the approval of the relevant local
Chinese tax  authorities,  Tiens Yihai is fully exempt from PRC income taxes for
two years  starting  from the year  profits  are first  made,  followed by a 15%
reduced tax rate for the next three years.  In  addition,  in order to encourage
Tiens Yihai doing  business in the special  industry zone, the local Chinese tax
authorities agreed to refund 50% of the total income tax after the five-year tax
break.

Tiens  Yihai  was  established  for the  purposes  of being in the  business  of
research and development,  production and marketing of healthcare, home care and
personal  care  products.  As of  September  30,  2005,  Tiens  Yihai  is in the
developmental stage of its organization and did not have any operating income.




                                      -10-
<PAGE>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 2 - Summary of significant accounting policies, (continued)

Income taxes, (continued)
-------------------------

The provision for income taxes for the nine months ending September 30 consisted
of the following:

                                                         2005           2004
                                                     ------------   ------------
Provision for China Income Tax                       $  2,315,214   $       --
                                                     ------------   ------------
      Total provision for income taxes               $  2,315,214   $       --
                                                     ============   ============



The  following  table  reconciles  the U.S.  statutory  rates  to the  Company's
effective tax rate:

                                                         2005           2004
                                                      ----------     ----------
U.S. Statutory rates                                        34.0%          34.0%
Foreign income not recoginized in USA                      (34.0)         (34.0)
China income taxes                                           7.5           --
                                                      ----------     ----------
      Total provision for income taxes                       7.5%            -%
                                                      ==========     ==========


Plant and equipment, net
------------------------

Plant  and  equipment  are  stated  at  cost  less   accumulated   depreciation.
Depreciation  is computed  using the  straight-line  method  over the  estimated
useful  lives of the assets.  Depreciation  expense  for the nine  months  ended
September 30, 2005 and 2004 amounted to $1,231,056 and $1,021,882, respectively.

Estimated useful lives of the assets are as follows:

                                                           Estimated Useful Life
                                                           ---------------------
Buildings                                                        20 years
Machinery and equipment                                          10 years
Computer, office equipment and furniture                          5 years
Automobiles                                                       5 years

Construction  in progress  represents the costs incurred in connection  with the
construction of buildings or new additions to the Company's plant facilities. No
depreciation  is provided for  construction  in progress  until such time as the
relevant assets are completed and are ready for their intended use.

The cost and  related  accumulated  depreciation  of  assets  sold or  otherwise
retired are eliminated from the accounts and any gain or loss is included in the
consolidated statements of operations.  Maintenance,  repairs and minor renewals
are charged directly to expenses as incurred.  Major additions and betterment to
buildings and equipment are capitalized.




                                      -11-
<PAGE>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 2 - Summary of significant accounting policies, (continued)

Plant and equipment, net, (continued)
-------------------------------------

Long-term  assets of the  Company  are  reviewed  annually  as to whether  their
carrying value has become impaired.  The Company considers assets to be impaired
if the  carrying  value  exceeds the future  projected  cash flows from  related
operations.  The  Company  also  re-evaluates  the  periods of  amortization  to
determine whether subsequent events and circumstances  warrant revised estimates
of useful lives.  As of September 30, 2005, the Company  expects these assets to
be fully recoverable.

Plant and equipment consist of the following at:

                                         September 30, 2005    December 31, 2004
                                         ------------------   ------------------
Buildings and improvements               $       11,575,659   $        7,962,799
Office facilities                                   296,550              162,522
Computer equipment and software                   1,265,036              782,846
Equipment                                         6,831,171            6,514,151
Vehicles                                          3,653,518            2,771,364
Construction in progress                          6,009,748            6,023,223
                                         ------------------   ------------------
              Total                              29,631,682           24,216,905
Less accumulated depreciation                     5,244,131            4,016,099
                                         ------------------   ------------------
              Total                      $       24,387,551   $       20,200,806
                                         ==================   ==================


Cash and concentration of risk
------------------------------


Cash  includes  cash on hand and demand  deposits  in accounts  maintained  with
state-owned  banks  within  the  People's  Republic  of  China.  Total  cash  in
state-owned  banks at  September  30, 2005 and  December  31,  2004  amounted to
$52,006,277  and  $39,243,872,  respectively of which no deposits are covered by
insurance.  The  Company has not  experienced  any losses in such  accounts  and
believes it is not exposed to any risks on its cash in bank accounts.


Accounts receivable - related parties
-------------------------------------

The Company's trade accounts  receivables  are 100% due from related  companies.
Management believes that the accounts are fully collectible as these amounts are
being collected  throughout the year.  However,  the Company records a provision
for accounts  receivable trade which ranges from 0.3% to 0.5% of the outstanding
accounts  receivable  balance in accordance with generally  accepted  accounting
principles in the PRC.






                                      -12-
<PAGE>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 2 - Summary of significant accounting policies, (continued)

Use of estimates
----------------

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  of the United States of America  requires  management to
make estimates and assumptions  that affect the amounts reported in the combined
financial  statements  and  accompanying  notes.  Management  believes  that the
estimates  utilized in preparing its financial  statements  are  reasonable  and
prudent. Actual results could differ from these estimates.

Reclassification
----------------

Certain  prior year  amounts  have been  reclassified  to conform to the current
presentation.

Note 3 - Consolidated financial statements and condensed footnotes

The interim condensed  consolidated  financial  statements presented herein have
been prepared by the Company and include the  unaudited  accounts of the Company
and its subsidiaries.  All significant  inter-company  accounts and transactions
have been eliminated in the consolidation.

These  condensed   consolidated  financial  statements  have  been  prepared  in
accordance with generally  accepted  accounting  principles in the United States
for  interim  financial  information  and the  instructions  to Form  10-QSB and
Article 10 of  Regulation  S-X.  Certain  information  and footnote  disclosures
normally included in financial statements presented in accordance with generally
accepted accounting principles have been condensed or omitted. Management of the
Company  believes  the  disclosures  made are  adequate to make the  information
presented not misleading. The condensed consolidated financial statements should
be read in conjunction  with Tiens' audited  financial  statements for the years
ended  December  31,  2004 and 2003 and notes  thereto  included  in Tiens' Form
10-KSB, dated March 31, 2005.

In the opinion of management,  the unaudited  condensed  consolidated  financial
statements   reflect  all  adjustments  (which  include  only  normal  recurring
adjustments)  necessary to present fairly the financial  position of the Company
as of September 30, 2005 and the results of operations for the nine months ended
September 30, 2005 and 2004,  respectively.  Interim results are not necessarily
indicative  of full year  performance  because  of the  impact of  seasonal  and
short-term variations.





                                      -13-
<PAGE>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 4 - Inventories

Inventories  are  stated  at the lower of cost or  market  using  the  first-in,
first-out basis and consist of the following:


                                                   September 30,    December 31,
                                                        2005            2004
                                                   -------------   -------------
                                                    (Unaudited)      (Audited)
                                                   -------------   -------------
Raw materials                                      $   4,730,219   $   2,246,493
Work-in-progress                                          66,328         284,458
Finished goods                                         4,262,772       2,036,467
                                                   -------------   -------------
                                                   $   9,059,319   $   4,567,418
                                                   =============   =============


Note 5 - Deposits-non current

The Company as of  September  30,  2005 and  December  31, 2004 had  outstanding
deposits of $5,760,974 and $4,230,063,  respectively.  The Company has deposited
$3.59 million with a local  government  agency to acquire the land use right for
land in Shanghai in connection with its joint venture project  described in note
10. The land use right is for a term of 50 years and as of  September  30, 2005,
the Company has not legally acquired the right from the government.  The deposit
is non refundable. The balance represents deposits with vendors for purchases of
equipment and construction in progress.

Note 6 - Supplemental disclosure of cash flow information

Income  taxes  paid  for the nine  months  ended  September,  2005  amounted  to
$1,445,440. No income taxes were paid for the nine months ended September, 2004.
Interest  paid  amounted  to $433,353  and  $256,622  for the nine months  ended
September 30, 2005 and 2004, respectively.

The Company  offset  $2,913,525  of its  dividend  payable  due to its  minority
shareholder against other receivables due from related parties.

Note 7 - Earnings per share

The  Company  adopted  Statement  of  Financial  Accounting  Standards  No. 128,
"Earnings per Share" (SFAS 128). SFAS 128 requires the  presentation of earnings
per share (EPS) as Basic EPS and Diluted EPS. There are no  differences  between
Basic and Diluted EPS for the periods ended September 30, 2005 and 2004.

The weighted average number of shares used to calculate EPS for the period ended
September 30, 2005  (71,333,586) and 2004  (71,957,327)  reflect only the shares
outstanding for those periods.

On July 31, 2004, the board of directors of the Company accepted the resignation
of one of the members of the Board. The resigning  director's  665,000 shares of
common  stock of the Company  were  returned to the  Company  and  cancelled  on
September 14, 2004.



                                      -14-
<PAGE>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




Note 8 - Minority interest

Minority  interest  represents  the  outside   shareholders'  20%  ownership  of
Biological and 0.6% ownership of Tiens Yihai.

Note 9 - Related party transactions

The  following  is a  description  of  the  various  individuals  and  companies
discussed in the footnotes and their relationship to the Company.

Tianshi  International  Holdings  Group Limited - British  Virgin Island Company
        owned 100% by Tiens Biotech Group (USA), Inc.

Li Jinyuan - individual - President and majority shareholder

Li Baolan - individual - daughter of Li Jinyuan

Tianjin Tianshi  Biological  Development  Co., LTD - Chinese joint venture which
        Tianshi International Holdings Group Limited owns 80%

Tianshi Hong Kong  International  Development  Co.,  Limited - Hong Kong Company
        owned 100% by Li Jinyuan

Tianjin Tianshi  Biological  Engineering Co., LTD - Chinese company owned 49% by
        Li Baolan and 51% by Tianjing Tianshi Group Co., Ltd.

Tianjin  Tianshi  Pharmaceuticals  Co., LTD - a Chinese company and the majority
        shareholder is Tianjin Tianshi Group Co., Ltd.

Tianjin Tianshi Group Co., Ltd. - owned 90% by Li Jinyuan and 10% by Li Baolan



Sales
-----

The  Company  sells  products  to  distributors  that are related to the Company
through common ownership. The related party distributors in turn market and sell
the Company's products to independent distributors or end users of the products.
The related  party  distributors  are solely  responsible  for all marketing and
payments of sales commissions to independent distributors.

Related party sales  amounted to  $50,730,467  and  $46,074,775  for the periods
ended  September 30, 2005 and 2004 which  represent  100% of total sales for the
periods then ended.  Related party  accounts  receivable  related to these sales
amounted to $5,313,533  and $6,058,021 as at September 30, 2005 and December 31,
2004,  respectively,  net of an allowance  for doubtful  accounts of $31,145 and
$30,442, respectively.




                                      -15-
<PAGE>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 9 - Related party transactions, (continued)

Other receivables and note receivable
-------------------------------------

The Company  through its  Chinese  joint  venture,  Tianjin  Tianshi  Biological
Development  Co.,  Ltd.,  is  owed  additional   amounts   classified  as  other
receivables  and  notes   receivables  from  various  related  parties  totaling
$15,128,016  and  $8,144,740  as of  September  30, 2005 and  December 31, 2004,
respectively and consisted of the following:


                                                   September 30,    December 31,
                                                        2005            2004
                                                   -------------   -------------
Tianjin Juchao Commercial and Trading Co., Ltd     $     318,360   $     311,160
Tianjin Tianshi Biological Engineering Co., LTD       10,960,504       1,710,446
Tianjin Tianshi Pharmaceuticals Co., LTD                    --         2,590,630
Tianjin Tianshi Group Co., Ltd                         3,849,152       3,532,504
                                                   -------------   -------------
            Total                                  $  15,128,016   $   8,144,740
                                                   =============   =============


On  September  1,  2005,  the  Company  issued  a  short-term  note  to  Tianshi
Engineering in the amount of RMB 15, 000,000, translated to $1,857,000. The note
is interest free and will be due on December 31, 2005. On September 1, 2005, the
Company  issued  a  short-term  note  to  Tianshi  Group  in the  amount  of RMB
8,000,000,  translated  to $990,400.  The note bears an annual  interest rate of
5.22% and will be due on December 31, 2005.

Other  receivables are generated by the Company making various cash advances and
short term loans and the  allocation  of various  expenses  to related  parties.
These are recurring transactions.  The Company does not charge interest on these
receivables.

Accounts payable
----------------

Accounts  payable due to related  parties  amounted to $247,244  and $209,199 at
September  30, 2005 and  December  31, 2004,  respectively.  These  amounts were
generated  from the purchases of raw  materials,  rent expense and the Company's
transportation costs.

Other payables
--------------

The Company has amounts  classified  as other  payables  due to related  parties
which  amounted to $1,349,833 and $945,274 as of September 30, 2005 and December
31, 2004,  respectively.  These  amounts  arose from cash  advances from related
parties   such  as   management   fees  due  to  related   parties  and  various
non-operational transactions incurred with related parties.

The Company borrowed  $300,000 from a related company during the second quarter.
The amount  borrowed is  non-interest  bearing and was due on June 25, 2005. The
loan was paid off in September 2005.




                                      -16-

<PAGE>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 9 - Related party transactions, (continued)

Note payable
------------

On September 10, 2004, Tianshi  International entered into a loan agreement with
Tianyuan Capital  Development Corp. Ltd.  ("Tianyuan  Capital") to borrow $10.65
million in order to fund their capital  contribution  due to Tiens Yihai. Mr. Li
Jin Yuan, the president and major  shareholder of the Company,  is a director of
Tiens Yihai and a director of Tianyuan Capital.

The  principal  of  the  loan  will  be  paid  in  ten  consecutive   semiannual
installments of $1,065,742 on the last day of each June and December  commencing
December 31, 2006, and ending December 31, 2011. The first interest  payment was
to be paid on  December  31,  2004 at an  annual  interest  rate of 5%.  Accrued
interest  of  $429,293  at June 30,  2005 was paid  during  the  quarter  ending
September  30,  2005.  Accrued  interest  expense  for the  three  months  ended
September  30, 2005 amounted to $135,777 and will be paid by the end of December
2005. The principal payment requirements for the next five years are as follows:

    Ending
September 30,              Amount
-------------           -----------
     2006               $      --
     2007                 1,065,000
     2008                 2,130,000
     2009                 2,130,000
     2010                 2,130,000
  Thereafter              3,202,742


Rent expense
------------

On June 30,  2003,  the Company  entered  into a written  lease  agreement  with
Tianshi  Group to pay  annual  rent on  these  facilities  at 1% of total  gross
revenues.  The term of this agreement is for five years commencing on January 1,
2003.

In addition,  the Company is obligated to pay insurance,  maintenance  and other
expenses  related to the premises.  The total amount paid on this lease amounted
to $504,470 and $460,748 for the nine months ended  September 30, 2005 and 2004,
respectively.






                                      -17-
<PAGE>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 10 - Investment in Tiens Yihai Co. Ltd.

On April 20, 2004, Tianshi  International  entered a joint venture contract (the
"Joint Venture Project") with Tianshi  Pharmaceuticals to establish Tiens Yihai.
On September 15, 2004, the board of directors of Tianshi International  ratified
the Joint Venture Project. Tiens Yihai is located in Shanghai, P.R.C., and is in
the  business  of  research  and   development,   production  and  marketing  of
healthcare, home care and personal care products.

In the footnotes of the  Company's  financial  statements  for the quarter ended
June 30, 2004, we described  this  investment as Tiens Ocean Going Co., Ltd. Due
to the translation from Chinese to English, the Company has officially confirmed
that the English name is Tiens Yihai Co., Ltd.

The total amount to be invested in Tiens Yihai will amount to $400  million,  of
which $200  million  will be  registered  capital.  Tianshi  International  will
contribute $198.8 million,  representing  approximately  99.4% of the registered
capital of Tiens Yihai, and Tianshi Pharmaceuticals will contribute $1.2 million
representing   0.6%  of  the   registered   capital  of  Tiens  Yihai.   Tianshi
International will secure additional financing for the remaining $200 million.

A total  of 15% or  approximately  $30,000,000,  of the  registered  capital  is
required to be  contributed by the joint venture  partners,  within three months
after the business  license has been issued.  The remaining  registered  capital
amounts are required to be  contributed  by each joint  venture  partner  within
three years of the  issuance of the business  license or May 27,  2004.  Tianshi
International  has made its  required  capital  contribution  in the  amount  of
$29,861,853.













                                      -18-
<PAGE>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 11 - Minority interest distributions

Minority  interest  represents  the  outside   shareholders'  20%  ownership  of
Biological  and 0.6%  ownership  of Tiens  Yihai.  The  board  of  directors  of
Biological has authorized the following  distributions to their  shareholders in
direct proportion to their ownership percentages.


                             TIANSHI             MINORITY
     Date                 INTERNATIONAL        SHAREHOLDER            Totals
-------------------       -------------       -------------       -------------

March 22, 2004        RMB    82,430,670    RMB   20,607,668   RMB   103,038,338
June 30, 2004                80,525,905          20,131,476         100,657,381
December 31, 2004           100,000,000          25,000,000         125,000,000
Amount paid                (182,430,670)        (65,739,144)       (248,169,814)
                          -------------       -------------       -------------
Outstanding at
  December 31, 2004          80,525,905                --            80,525,905

June 30, 2005               195,985,153          48,996,288         244,981,441
Amount paid                 (49,105,499)        (24,078,713)        (73,184,212)
                          -------------       -------------       -------------
Outstanding at
 September 30, 2005   RMB   227,405,559   RMB    24,917,575   RMB   252,323,134
                          =============       =============       =============
                      USD    28,152,808   USD     3,084,796   USD    31,237,604
                          =============       =============       =============






Prior to June 30, 2005, the amounts paid to Tianshi  International had been used
to invest in its investment Tiens Yihai Co., Ltd described in note 10. Dividends
were declared during June 2005 and $6,000,000 was paid to Tianshi  International
during the quarter ending September 30, 2005. At September 30, 2005, this amount
remains in the cash accounts of Tianshi  International.  The remaining amount of
the dividend payable was eliminated in the consolidation.



























                                      -19-
<PAGE>

Item 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

FORWARD-LOOKING STATEMENTS:

The following  discussion  of the financial  condition and results of operations
should be read in conjunction  with the  consolidated  financial  statements and
related  notes  thereto.  The  following  discussion  contains   forward-looking
statements. The words or phrases "would be," "will allow," "expect to", "intends
to," "will likely result," "are expected to," "will continue," "is anticipated,"
"estimate,"   "project,"  or  similar   expressions  are  intended  to  identify
"forward-looking  statements".  Such  statements  include those  concerning  our
expected  financial  performance,  our corporate strategy and operational plans.
Actual   results   could  differ   materially   from  those   projected  in  the
forward-looking  statements as a result of a number of risks and  uncertainties,
including:  (a) those  risks  and  uncertainties  related  to  general  economic
conditions in China,  including regulatory factors that may affect such economic
conditions;  (b)  whether  the  Company  is able to manage  its  planned  growth
efficiently and operate profitable operations,  including whether its management
will be able to identify,  hire,  train,  retain,  motivate and manage  required
personnel or that  management  will be able to  successfully  manage and exploit
existing and potential market opportunities;  (c) whether the Company is able to
generate  sufficient  revenues  or  obtain  financing  to  sustain  and grow its
operations;  and (d) whether it is able to successfully fulfill its requirements
for cash which are  explained  below under  "Liquidity  and Capital  Resources".
Statements  made  herein are as of the date of the filing of this Form 10-Q with
the Securities  and Exchange  Commission and should not be relied upon as of any
subsequent date.

Unless otherwise required by applicable law, the Company does not undertake, and
the Company specifically disclaims any obligation, to update any forward-looking
statements  to  reflect  occurrences,  developments,   unanticipated  events  or
circumstances after the date of such statement.

OVERVIEW

Tiens  Biotech  Group (USA),  Inc.  ("Tiens  USA")  conducts  its main  business
operations   through  its  80%-owned   subsidiary   Tianjin  Tianshi  Biological
Development  Co.,  Ltd.  ("Biological"),  which is based  in  Tianjin,  People's
Republic  of  China  (PRC).  Tiens  USA and its  subsidiaries  are  referred  to
collectively  herein  as  the  "Company."  The  Company  researches,   develops,
manufactures,  and markets nutrition  supplement  products,  including  wellness
products and dietary  supplement  products,  and  personal  care  products.  The
Company  derives its  revenues  principally  from  product  sales to  affiliated
companies  around the world.  The Company has developed and produced seven major
product  series,  six of which are nutrition  supplement  products.  The seventh
series is personal  care  products.  The Company  develops  its  products at its
product  research  and  development  center,   which  employs  highly  qualified
professionals  in the  fields  of  pharmacology,  biology,  chemistry  and  fine
chemistry. The Company has obtained all required certificates and approvals from
government regulatory agencies to manufacture its products in China, including a
Certificate  of Good  Manufacturing  Practices  (GMP)  issued by the State  Drug
Administration and a Sanitary  Certificate for food manufacturers in China ("Jin
(Wuqing)  Wei Shi Zheng Zi" 2004,  No.  0049) and a Sanitary  Certification  for
wellness products  manufacturers ("Jin Wei Jian Zheng Zi" 2004, No. 0006) issued
by the PRC Ministry of Health. In addition,  all of the Company's  products have
been  certified by appropriate  government  regulatory  agencies,  including the
State  Food  and  Drug  Administration   (SFDA)  and  the  Bureau  of  Technical
Supervision, for manufacture and sale in China.

In China,  the Company  conducts the marketing and sales of its products through
its  affiliated  company,  Tianjin  Tianshi  Biological  Engineering  Co.,  Ltd.
("Tianshi  Engineering"),  a company  incorporated in China. Tianshi Engineering
markets  and sells the  Company's  products  in China  through  its  sixty-seven
branches,  representative offices and chain stores, and nine domestic affiliated
companies.  Six of the  nine  domestic  affiliated  companies  are 51%  owned by
Tianshi  Engineering  and 49% by Ms. Baolan Li, the daughter of Mr.  Jinyuan Li,



                                      -20-
<PAGE>

the Company's  Chairman and Chief  Executive  Officer.  The other three domestic
affiliated  companies  are owned by Ms.  Baolan Li and Mr. Li's other  immediate
family  members.  Outside of China,  the Company  sells its products  through an
extensive direct sales force, or multi-level  marketing sales force, of overseas
affiliates and independent  distributors who use the products  themselves and/or
resell them to other distributors or consumers.  These affiliates are located in
approximately  90  countries,  including  the United  States,  India,  Malaysia,
Indonesia,   Canada,  Peru,  Brazil,  Russia,  Kazakhstan,   Mongolia,  Finland,
Lithuania,  Britain, Germany, France, Romania, Ukraine, Portugal, Turkey, Italy,
Nigeria, Ghana, South Africa and Australia. The Company's direct sales marketing
scheme is subject to governmental regulation in each of these countries.

In April 2004,  the Company's  wholly-owned  subsidiary,  Tianshi  International
Holdings  Group  Ltd.,  a  corporation  organized  under the laws of the British
Virgin Islands ("Tianshi International"),  entered a joint venture contract with
Tianjin Tianshi Pharmaceuticals Co., Ltd. ("Tianshi Pharmaceuticals"), a Chinese
company in which the majority  shareholder  is Tianjin  Tianshi  Group Co., Ltd.
("Tianshi  Group"),  a company  organized under the PRC laws, to establish Tiens
Yihai Co. Ltd., a Chinese-Foreign Equity Joint Venture ("Tiens Yihai").  Tianshi
Group is 90%  owned by Mr.  Jinyan Li and 10% owned by Mr.  Li's  daughter,  Ms.
Baolan  Li.  On  September   15,  2004,   the  Board  of  Directors  of  Tianshi
International ratified and approved the Tiens Yihai Joint Venture Project. Tiens
Yihai is  99.4%  owned  by  Tianshi  International  and  0.6%  owned by  Tianshi
Pharmaceuticals.  Tiens Yihai,  located in Shanghai,  PRC,  was  established  to
conduct  research  and  development,  produce  and market  nutrition  supplement
products,  home care and personal care products. As of September 30, 2005, Tiens
Yihai  was  a  developmental  stage  company  and  had  not  yet  conducted  any
operations.

The Company  receives  administrative  support from Tianshi Group in the form of
administrative  services and use of office space. The Company pays Tianshi Group
1% of its annual  sales  income  (excluding  value  added  taxes,  or "VAT") for
administrative services (except for services provided by the officers of Tianshi
Group).

A summary of the Company's organization is described as follows:

Tiens USA is owned 4.91% by public stockholders,  2.8% by officers and 92.29% by
Mr.  Jinyuan  Li.  Tiens  USA  owns  100%  of  Tianshi  International.   Tianshi
International owns 80% of Biological and 99.4% of Tiens Yihai.

Tianshi Group is owned 90% by Mr. Jinyuan Li and 10% by his daughter, Ms. Baolan
Li.  Tianshi  Group owns  87.66% of Tianshi  Pharmaceuticals  and 51% of Tianshi
Engineering.  Tianshi  Pharmaceuticals  owns 20% of Biological and 0.6% of Tiens
Yihai.

Ms.   Baolan  Li  owns  49%  of  Tianshi   Engineering   and  7.29%  of  Tianshi
Pharmaceuticals.

CRITICAL ACCOUNTING POLICIES

Management's  discussion and analysis of its financial  condition and results of
operations are based upon the Company's consolidated financial statements, which
have been prepared in accordance with accounting  principles  generally accepted
in the United States. The Company's  financial  statements reflect the selection
and  application  of  accounting  policies  which  require  management  to  make
significant  estimates and judgments.  See note 2 to the Company's  consolidated
financial statements,  "Summary of Significant  Accounting Policies." Management
bases its estimates on historical  experience  and on various other  assumptions
that are believed to be reasonable under the  circumstances.  Actual results may
differ from these  estimates  under  different  assumptions or  conditions.  The
Company  believes  that  the  following  reflect  the more  critical  accounting
policies that currently affect the Company's  financial condition and results of
operations.



                                      -21-
<PAGE>
<TABLE>
<CAPTION>

Revenue recognition
-------------------

The Company recognizes revenue from domestic sales by distributors in China, net
of sales commissions and taxes, when the related Chinese distributor  recognizes
sales of the  Company's  products to  unaffiliated  third  parties.  The Company
recognizes revenue from international (non-Chinese) sales to both affiliated and
unaffiliated third parties, net of commissions and taxes, when goods are shipped
and cleared by the international customs department.

The Company is generally not contractually obligated to accept returns. However,
on a case by case  negotiated  basis,  the Company  permits  customers to return
product. In accordance with SFAS No. 48, "Revenue  Recognition when the Right of
Return Exists",  revenue is recorded net of an allowance for estimated  returns.
Such reserves are based upon  management's  evaluation of historical  experience
and estimated costs. The amount of the reserves ultimately required could differ
materially  in  the  near  term  from  amounts   included  in  the  accompanying
consolidated financial statements.

As of September 30, 2005, Tianshi Engineering,  an affiliated company, owned all
of the related party distributors which sell the Company's products domestically
in China.

Bad debts
---------

The Company's business  operations are conducted  primarily in China. During the
normal  course  of  business,  the  Company  extends  unsecured  credit  to  its
customers.  Management  reviews its accounts  receivable  on a regular  basis to
determine  if the bad debt  allowance  is adequate at each fiscal year end.  The
Company records a provision for accounts receivable trade which ranges from 0.3%
to 0.5% of the  outstanding  accounts  receivable  balance  in  accordance  with
generally accepted accounting principles in China.

Inventories
-----------

The Company  records  reserves  against its  inventory to provide for  estimated
obsolete or unsalable inventory based on assumptions about future demand for its
products and market conditions.  If future demand and market conditions are less
favorable than management's assumptions,  additional reserves could be required.
Likewise,  favorable future demand and market conditions could positively impact
future operating results if previously reserved for inventory is sold.


RESULTS OF  OPERATIONS  FOR THE THREE AND NINE MONTHS ENDED  SEPTEMBER  30, 2005
COMPARED TO THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004

                                            Three Months Ended                        Nine Months Ended
                                              September 30,                              September 30,
                                          2004             2005         Change       2004             2005         Change
                                      ------------     ------------    --------  ------------     ------------    --------
<S>                                   <C>              <C>             <C>       <C>              <C>             <C>
Revenue                               $ 19,126,809     $ 18,058,888        5.9%  $ 50,730,467     $ 46,074,775       10.1%

Cost of Sales                         $  4,954,198     $  4,304,640       15.1%  $ 12,609,428     $ 10,922,106       15.5%
Gross Profit                          $ 14,172,611     $ 13,754,248        3.0%  $ 38,121,039     $ 35,152,669        8.4%
Gross Profit Margin                           74.1%            76.2%                     75.1%            76.3%
Selling, General and Administrative   $  2,795,414     $  2,437,047       14.7%  $  7,894,965     $  5,055,967       56.2%
Expenses
Selling, General and Administrative           14.6%            13.5%       1.1%          15.6%            11.0%       4.6%
Expenses as a Percentage of Sales
Other Income (Expense), Net           ($   126,969)    $    205,357     (161.8%) $   (814,133)    $    523,063     (255.7%)
Provision for Income Taxes            $    869,769             --           N/A  $  2,315,214             --           N/A
Net Income                            $  8,204,744     $  9,194,645      (10.8%) $ 21,404,943     $ 24,435,892      (12.4%)
Net Profit Margin                             42.9%            50.9%      (8.0%)         42.3%            53.0%     (10.7%)
</TABLE>

REVENUE.  For the three  months  ended  September  30,  2005,  revenue was $19.1
million  compared to $18.1  million for the same period in 2004,  an increase of
5.9%.  For the nine months ended  September 30, 2005,  revenue was $50.7 million
compared to $46.1 million for the same period in 2004, an increase of 10.1%. The
breakdown of revenue between domestic and international sales is as follows.



                                      -22-
<PAGE>
<TABLE>
<CAPTION>

Domestic and International Revenue
----------------------------------

                    Three Months Ended                     Nine Months Ended
                       September 30,                          September 30,
Revenue             2004          2005       Change        2004          2005       Change
-------------   -----------   -----------   --------   -----------   -----------   --------
<S>             <C>           <C>           <C>        <C>           <C>           <C>
Domestic        $ 9,181,333   $ 6,183,549      48.5%   $27,494,733   $23,421,659      17.4%
International   $ 9,945,476   $11,875,339     (16.3)%  $23,235,734   $22,653,116       2.6%
</TABLE>

For the three months ended  September 30, 2005,  domestic  revenue  increased to
$9.2  million,  or 48.5%  compared to $6.2  million for the same period in 2004.
Domestic  sales for the nine months ended  September 30, 2005 increased to $27.5
million  from $23.4  million,  or 17%  compared to the same period in 2004.  The
increase  reflects  a  significant  increase  in the  demand  for the  Company's
products in China, resulting from the increase in the Company's networking sales
forces in China and the establishment of 44 new branches in China.

For the three months ended September 30, 2005,  international sales decreased to
$9.9 million,  or (16.3%) compared to $11.9 million for the same period in 2004.
The sharp  increase in sales in China during the third  quarter in 2005 resulted
in the overall market demand for the Company's products exceeding its production
capability.  In  order to  maintain  a stable  market  share in the  competitive
Chinese  market,  the Company  decided to meet the domestic market demand first.
Therefore, the overseas market demand could not be fully satisfied.

The  Company's  international  sales during the nine months ended  September 30,
2005 was $23.2 million compared to $22.7 million for the same period in 2004, an
increase  of 3%. This  reflects a slight  increase in sales in Africa and Russia
during that period.

COST OF SALES.  Cost of sales for the three  months  ended  September  30,  2005
increased to $5.0 million, or 15.1% compared to $4.3 million for the same period
in 2004.  For the nine months ended  September  30, 2005 cost of sales was $12.6
million  compared to $10.9  million for the same period in 2004,  an increase of
15.5%.  The increase was primarily  due to the increased  overhead for expanding
the Company's production space and hiring more production workers.

GROSS PROFIT. Gross profit increased to $14.2 million for the three months ended
September  30, 2005,  or 3.0%,  compared to $13.8 million for the same period in
2004. For the nine months ended  September 30, 2004,  gross profit  increased by
8.4% to $38.1  million,  compared to $35.2  million for the same period in 2004.
The gross profit  margins for the three  months and nine months ended  September
30, 2005 were 74.1% and 75.1%, respectively, compared to 76.2% and 76.3% for the
same periods in 2004,  respectively.  This 1 to 2% decrease was primarily due to
normal fluctuations in costs for materials.

SELLING,   GENERAL   AND   ADMINISTRATIVE   EXPENSES.   Selling,   general   and
administrative  expenses  increased  to $2.8  million for the three months ended
September  30, 2005,  or 14.7%,  compared to $2.4 million for the same period in
2004.  For the nine  months  ended  September  30,  2005,  selling,  general and
administrative  expenses  increased to $7.9 million,  or 56.2%  compared to $5.1
million for the same period in 2004.  This sharp  increase for the third quarter
reflects the steps the Company has taken to support an increase in future sales,
and was mainly attributable to:

o    an  increase  in head count,  resulting  in an increase in related  salary,
     welfare and insurance costs. In addition, the Company increased salaries of
     existing employees to meet market salary rates; and

o    an increase in low cost  supplies  expense  relating to  additional  office
     space required by the additional employees.




                                      -23-
<PAGE>

The selling and  administrative  expenses as a percentage of sales  increased to
14.6%  and  15.6%  for the  three and nine  months  ended  September  30,  2005,
respectively, from 13.5% and 11.0% for the same periods in 2004, respectively.

OTHER INCOME (EXPENSE), NET

Other income (expense), net was $0.1 million and $0.8 million of expense for the
three and nine months ended September 30, 2005, respectively, compared to income
of $0.2 and $0.5  million for the same  periods in 2004,  respectively.  For the
three months ended September 30, 2005, the Company incurred $135,777 of interest
relating to the terms of its long-term  loan  agreement  with  Tianyuan  Capital
Development  Corp.  Ltd.,  as more fully  described  under the caption  "Certain
Relationships and Related  Transactions--Notes  Payable." For the same loan, the
interest  incurred  to the  Company  was  $401,554  for the  nine  months  ended
September  30, 2005.  Another  significant  item  included in other  expense was
$328,441  of  additional  taxes and  penalties  paid by the  Company  to the PRC
government  during the first quarter in 2005 as the result of a VAT  examination
by the local government. This was a one-time charge.

PROVISION FOR INCOME TAXES

Provision  for income  taxes  increased to $0.9 million and $2.3 million for the
three and nine months ended September 30, 2005,  respectively,  compared to none
for the same periods in 2004. This was due to the Company's operating subsidiary
in China,  Biological,  becoming subject to an annual income tax rate of 7.5% in
2005. In 2003 and 2004, Biological was exempt from paying income taxes in China.
From January 1, 2005 through  December  31,  2007,  Biological  is subject to an
income tax at a reduced rate of 7.5%.  From January 1, 2008 forward,  Biological
will be subject to a 15% income tax rate.

NET INCOME

As a result of the  foregoing  factors,  net income for the three  months  ended
September  30,  2005 was $8.2  million,  a decrease  of 10.8%  compared  to $9.2
million for the same period in 2004.  For the nine months  ended  September  30,
2005,  net income was $21.4  million,  a decrease of 12.4%  compared to the same
period in 2004.  The  decrease  was  primarily  the result of increases in other
expense and provision for income taxes.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  Company  markets  most  of  its  products   through  various  domestic  and
international  affiliated  companies  that are  related to the  Company  through
common  ownership by Mr. Jinyuan Li and his immediate  family  members.  Related
party sales amounted to 100% of total sales. Internationally,  the Company sells
its products directly to its overseas  affiliates.  Due to the common ownership,
there are no formal sales or  administrative  agreements  among  Biological  and
those overseas  related  parties.  The business  operations  among these related
entities are regulated through internal ordinances. For the domestic market, the
Company sells its products to Tianshi  Engineering,  which in turn sells them on
through its 67  representative  offices,  and 9 other  affiliated  companies  in
China. The Company has a sales contract with Tianshi  Engineering which requires
Tianshi  Engineering  to purchase  all of the  Company's  products to be sold in
China.

Other receivables and note receivable
-------------------------------------

Through  Biological,  the  Company's 80% owned  subsidiary,  the Company is owed
$15,128,016  and  $8,144,740  as of  September  30, 2005 and  December 31, 2004,
respectively,  classified  as other  receivables  from  related  parties.  These
receivables  have been  generated by the Company  making  various cash advances,
short-term  loans and the  allocation  of various  expenses to related  parties.
These are recurring transactions.

On  September  1,  2005,  the  Company  entered a loan  agreement  with  Tianshi
Engineering,  to which the Company  lent  $1,857,000.  The loan is  non-interest
bearing and shall be paid by December 31, 2005.  The purpose of the loan was for
the market  expansion:  the initial stage  investment for the 44 new branches in
China.



                                      -24-
<PAGE>

On September 7, 2005,  the Company  entered a loan agreement with Tianshi Group,
to which the Company  lent  $990,400.  Tianshi  Group shall pay  interest to the
Company at an annual rate of 5.22%.  Both the  principal and the interest of the
loan shall be paid by December  31, 2005,  and $242,000 of the  principal of the
loan was already paid at the end of September  2005. The purpose of the loan was
for the adoption of an  Enterprise  Resource  Planning  system and an electronic
human resources system.

For the nine months  ended  September  30,  2005,  dividends  payable to Tianshi
Pharmaceuticals   in  the  amount  of  $2,913,525  were  used  to  offset  other
receivables from Tianshi Pharmaceuticals.

Accounts payable
----------------

Accounts  payable as of September 30, 2005 and December 31, 2004, due to related
parties were  $247,244  and  $209,199 as of September  30, 2005 and December 31,
2004,  respectively.  These  amounts were  generated  from the  purchases of raw
materials, rent expense and transportation costs.

Other payables
--------------

Other  payables  as of  September  30,  2005  and  December  31,  2004,  include
$1,349,833  and  $945,274,  respectively,  classified  as other  payables due to
related parties. These amounts arose from cash advances from related parties for
payment of management  fees due to related  parties and various  non-operational
transactions incurred with related parties.

On March 25, 2005 the Company entered a loan agreement with Tian Yuan Investment
Ltd, a company owned by Mr. Jinyuan Li, pursuant to which Tianshi  International
borrowed $300,000.  The loan was non-interest  bearing and was paid in September
2005.

Note payable
------------

On September  10, 2004, in order to fund the capital  contribution  due to Tiens
Yihai Co., Ltd. ("Tiens Yihai"),  Tianshi International entered a loan agreement
with Tianyuan  Capital  Development  Corp. Ltd.  ("Tianyuan  Capital") to borrow
$10.65  million.  Mr.  Jinyuan Li is a director of Tiens Yihai and a director of
Tianyuan Capital.

The principal of the loan is required to be paid in ten  consecutive  semiannual
installments  of each  $1,065,774  on June 30 and  December  31st of each  year,
commencing  on December 31, 2006 and ending June 30, 2011.  Interest is required
to be paid on the  outstanding  and  principal  amount  of the loan at an annual
interest rate of 5% on June 30 and December 31, commencing on December 31, 2004.
As of September 30, 2005, the $429,293 of interest  payment for the period ended
June 30, 2005 has been made, and the $135,777 of interest  expense for the three
months ended September 30, 2005 has been accrued.

Rent expense
------------

On June 30, 2003,  the Company  entered a written lease  agreement  with Tianshi
Group to pay annual rent on office facilities  occupied by the Company at a rate
of 1% of total  gross  revenues.  The term of this  agreement  is for five years
commencing  on January 1, 2003.  In  addition,  the Company is  obligated to pay
insurance,  maintenance  and other expenses  related to the premises.  The total
amount  paid on this  lease  amounted  to  $504,470  for the nine  months  ended
September 30, 2005.



                                      -25-
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

The  Company  typically  generates  positive  cash flow from  operations  due to
favorable gross margins.  Net cash provided by operating activities decreased to
$16.1  million for the nine  months  ended  September  30,  2005,  a decrease of
approximately  26%,  compared to $21.6 million for the same period in 2004.  The
decrease primarily reflects an increase in inventories and the increase in other
receivables  and note  receivable-related  parties,  offset  by an  increase  in
advance  from  customers  -  related  parties,  and  the  decrease  in  accounts
receivable  from  related  parties.  Compared to the  decrease in advances  from
customers-related  parties for the nine months ended  September  30, 2004,  $5.1
million, the advances from  customers-related  parties for the nine months ended
September 30, 2005 increased by $69,607,  since more customers made  prepayments
to the  Company  to insure  that  they  could get  enough  products  to meet the
increasing market demands. The account receivable - related parties decreased by
$598,697 for the nine months  ended  September  30, 2005;  while it increased by
$9,535,479 for the nine months ended September 30, 2004. The  approximately  $10
million difference was mainly the result of the Company's  strengthened internal
control  procedures  and  shortened  payoff  periods,  resulting  in  Biological
collecting more money from customers.

Compared to the nine  months  ended  September  30,  2004,  the net cash used in
investing  activities as of September 30, 2005 increased by $3.8 million,  which
was mainly due to the purchase of fixed assets and  construction  in progress by
Biological  and Tiens Yihai.  About 70% of the increase  occurred in Biological,
which was primarily for the construction of new production  facilities,  renewal
of production equipment and the purchase of IT equipment.

Net cash used in  financing  activities  was  $155,442 for the nine months ended
September  30, 2005,  compared to net cash  provided by financing  activities of
$5.2 million in the same period for 2004.  For the nine months  ended  September
30, 2005, the Company did not have any new long-term  borrowings,  and there was
no much payment on short term notes payable to make during this period.  For the
same period in 2004, the Company  borrowed $10.5 million in long-term  debt, and
made a $5 million of payment on short-term notes payable.

As of September  30, 2005 and  December  31,  2004,  the Company had cash of $52
million  and  $39  million,   respectively,   an  increase  of  $12.8   million.
Approximately 50% of the cash was held in the bank account of Biological and 39%
in the  bank  account  of  Tiens  Yihai.  The  balance  of the  cash,  which  is
accumulated  retained  earnings,  is held by  Biological.  In the third quarter,
2005, $6 million of dividend was paid by Biologicl to Tianshi International. For
the nine months ended  September 30, 2005,  $5,870,986 was paid by Biological to
its minority shareholder, Tianshi Pharmaceuticals, by offsetting account payable
due, and $57,565 was paid in cash.

The inventories at September 30, 2005 increased sharply to $9.1 million compared
to $4.6 million at December 31, 2004. The increased amount of inventories was
mainly due to the increased orders from customers, and the increased number of
domestic branches. Tianshi Engineering established 44 new branches for the nine
months ended September 30, 2005, which new branches required inventories to be
reserved. Therefore, more inventories, including finished goods, raw materials,
packaging materials, work-in-process, and low cost supplies, were built up at
the end of the third quarter in 2005.

As of September 30, 2005 and December 31, 2004, the Company had accounts payable
of $3,279,324  and  $1,791,019,  respectively.  The $1.5 million of increase was
mainly due to an increase  in  purchases  of  materials  due to the  increase in
sales.

Going forward, the Company's primary requirements for cash consist of:

o        the continued  production of existing products and general overhead and
         personnel related expenses to support these activities;
o        continued promotion of networking sales activities;
o        the development costs of new products;
o        construction and development of the business plan for Tiens Yihai, and
o        expansion of production scale to meet the demands of the Company's fast
         growing markets.



                                      -26-
<PAGE>

The Company anticipates that its current operating activities will enable it to
meet the anticipated cash requirements for the 2005 fiscal year.

MANAGEMENT ASSUMPTIONS

Management anticipates,  based on internal forecasts and assumptions relating to
our current  operations  that existing cash and funds  generated from operations
will be sufficient to meet working  capital for at least the next 12 months.  In
the event that plans change,  our assumptions  change or prove  inaccurate or if
other  capital   resources  and  projected  cash  flow  otherwise  prove  to  be
insufficient  to  fund  operations  (due  to  unanticipated  expense,  technical
difficulties,  or otherwise), we could be required to seek additional financing.
There can be no assurance that we will be able to obtain additional financing on
terms acceptable to it, or at all.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

EFFECTS OF INFLATION

We are subject to commodity  price risks arising from price  fluctuations in the
market  prices of the various raw materials  that  comprise our products.  Price
risks are managed by each business unit through  productivity  improvements  and
cost-containment  measures.  For the time being, the management does not believe
that  inflation risk is material to our business or our  consolidated  financial
position, results of operations or cash flows.

EFFECT OF FLUCTUATION IN FOREIGN EXCHANGE RATES

The Company's operating  subsidiary,  Biological,  is located in China, and buys
all of its raw  materials  in China and sells 50% of the  Company's  products in
China using the Chinese  Renminbi ("RMB") as the functional  currency.  Based on
Chinese  government  regulations,  all foreign  currencies under the category of
current accounts are allowed to be freely exchanged with hard currencies.

On July 21, 2005, the Chinese government  approved the increase in the valuation
of RMB against the US dollar by 2%. Because the Company  reports its revenues in
US dollars, changes in the valuation of RMB may impact the Company's net income.
Given the uncertainty of exchange rate fluctuations, the Company cannot estimate
the  effect of these  fluctuations  on its  future  business,  product  pricing,
results of  operations  or financial  condition.  Currently  the Company has not
entered  agreements or purchased  instruments  to hedge its exchange rate risks,
although it may do so in the future.

Item 4. CONTROLS AND PROCEDURES

Our management has evaluated,  with the participation of our principal executive
and  financial  officers,  the  effectiveness  of our  disclosure  controls  and
procedures (as defined in Exchange Act Rules  13a-15(f) and 15d-15(f)) as of the
end of the  period  covered  by  this  report.  Based  on this  evaluation,  our
principal  executive  and  financial  officers  have  concluded,  subject to the
following paragraph,  that our disclosure controls and procedures were effective
to provide reasonable assurance that information required to be disclosed by our
company  in  reports  that  it  files  or  submits  under  the  Exchange  Act as
accumulated  and  communicated  to  our  management,   including  our  principal
executive  and  principal  financial  officers,  or persons  performing  similar
functions,   as  appropriate  to  allow  timely  decisions   regarding  required
disclosure.

During the  quarterly  period  covered by this report,  we did not disclose in a
timely manner on a current report on Form 8-K two material definitive agreements
made  outside the ordinary  course of  business.  Our  principal  executive  and
financial  officers  continue to assess  whether  our  disclosure  controls  and
procedures require correction, in light of these circumstances.


                                      -27-
<PAGE>

                           PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

We are not presently  involved in litigation  that we expect  individually or in
the  aggregate to have a material  adverse  effect on our  financial  condition,
results of operation or liquidity.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.
















                                      -28-
<PAGE>

Item 5. OTHER INFORMATION

The Company's 80% owned subsidiary,  Tianjin Tianshi Biological Development Co.,
Ltd. ("Biological"), entered a Term Loan Agreement, dated September 7, 2005 (the
"Tianshi  Group Term Loan  Agreement"),  with  Tianjin  Tianshi  Group Co.  Ltd.
("Tianshi  Group"),  a  company  incorporated  in  China  and  an  affiliate  of
Biological through common ownership.

Under the Tianshi Group Term Loan Agreement,  Biological  agreed to lend RMB 8.0
million, or approximately  US$988,000,  to Tianshi Group. The loan is payable on
December  31, 2005.  Tianshi  Group will pay interest on the loan at the rate of
5.22% per annum. Tianshi Group may repay the loan before December 31, 2005, with
approval from Biological.

Biological  entered  a  Term  Loan  Agreement,  dated  September  1,  2005  (the
"Engineering Term Loan Agreement"),  with Tianjin Tianshi Biological Engineering
Co., Ltd.  ("Engineering"),  a company incorporated in China and an affiliate of
Biological through common ownership.

Under the Engineering  Term Loan Agreement,  Biological  agreed to lend RMB 15.0
million, or approximately US$1,852,500,  to Engineering.  The loan is payable on
December 31, 2005.  The loan does not bear any interest.  Engineering  may repay
the loan prior to December 31, 2005, with approval from Biological.

Jinyuan Li, the Chief Executive  Officer,  President and Chairman of the Company
is a majority shareholder of the Company, Tianshi Group and Engineering. Tianshi
Group is the majority shareholder of Tianjin Tianshi  Pharmaceuticals Co., Ltd.,
which owns 20% of Biological.

The  loan to  Engineering  will be used by  Engineering  for  preliminary  stage
investment  in 44 new branches in China.  Biological  conducts the marketing and
sales of its products in China  through  Engineering.  The loan to Tianshi Group
will be used by Tianshi Group to implement ERP and human resource  systems.  The
loans were  ratified by the audit  committee  of the Board of  Directors  of the
Company on November 7, 2005.

Item 6. EXHIBITS

(b)      Exhibits

10.1     Certificates  Change  and  Technology  Transfer  Agreement  of the  Six
         Wellness Products, dated as of October 26, 2005, by and between Tianjin
         Tianshi biological Development Co., Ltd. and Tianjin Tianshi Biological
         Engineering Ltd.

10.2     Technology Sharing Agreement of Dietary Supplement  Products,  dated as
         of  October  26,  2005,  by  and  between  Tianjin  Tianshi  biological
         Development Co., Ltd. and Tianjin Tianshi Biological Engineering Ltd.

10.3     Certificates  Change and  Technology  Transfer  Agreement  of  Eighteen
         Wellness Products, dated as of October 26, 2005, by and between Tianjin
         Tianshi biological Development Co., Ltd. and Tianjin Tianshi Biological
         Engineering Ltd.

10.4     Term Loan  Agreement,  dated  September 7, 2005, by and between Tianjin
         Tianshi Biological  Development Co., Ltd. and Tianjin Tianshi Group Co.
         Ltd.

10.5     Term Loan  Agreement,  dated  September 1, 2005, by and between Tianjin
         Tianshi Biological Development Co., Ltd. and Tianjin Tianshi Biological
         Engineering Co., Ltd.

31.1     Certification  of the Principal  Executive  Officer pursuant to Section
         302 of the Sarbanes-Oxley Act of 2002.

31.2     Certification  of the Principal  Financial  Officer pursuant to Section
         302 of the Sarbanes-Oxley Act of 2002.

32.1     Certification  of  the  Principal   Executive   Officer  and  Principal
         Financial Officer pursuant to Section 906 of the  Sarbanes-Oxley Act of
         2002.














                                      -29-
<PAGE>

                                   Signatures

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.


Dated:  November 14, 2005               TIENS BIOTECH GROUP (USA), INC.

                                        By: /s/ Jinyuan Li
                                           -------------------------------------
                                           Jinyuan Li
                                           Chief Executive Officer and President
                                           (Principal Executive Officer)

Dated: November 14, 2005
                                        By: /s/ Wenjun Jiao
                                           -------------------------------------
                                           Wenjun Jiao
                                           Chief Financial Officer
                                           (Principal Financial Officer)











                                      -30-