U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

 /X/QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                     FOR THE PERIOD ENDED SEPTEMBER 30, 2004

     / /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 small business issuer 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)                          (Zip Code)


                REGISTRANT'S TELEPHONE NUMBER: (86) 22-8213-7658
                                              ------------------

                            (Former Name and Address)

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 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  Company's  common  stock  outstanding  on
November 15, 2004.

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----


PART I - FINANCIAL INFORMATION.................................................2

  ITEM 1. FINANCIAL STATEMENTS...............................................;.2

  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS...............................................15

PART II - OTHER INFORMATION...................................................22

  ITEM 1. LEGAL PROCEEDINGS...................................................22

  ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.........22

  ITEM 3. DEFAULTS UPON SENIOR SECURITIES.....................................22

  ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................22

  ITEM 5. OTHER INFORMATION...................................................22













                                       i
<PAGE>
<TABLE>
<CAPTION>


                         PART I - FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                 AS OF SEPTEMBER 30, 2004 AND DECEMBER 31, 2003

                                     ASSETS
                                     ------
                                                                         September 30,    December 31,
                                                                              2004             2003
                                                                         -------------    -------------
                                                                          (Unaudited)       (Audited)
                                                                         -------------    -------------
<S>                                                                      <C>              <C>
CURRENT ASSETS:
    Cash                                                                 $  38,052,843    $  12,725,043
    Accounts receivable - related party, net of allowance for doubtful
      accounts of $39,204 at September 30, 2004 and $-0- at
      December 31, 2003, respectively                                        9,544,012            8,533
    Other receivables                                                          383,708          139,820
    Other receivables and note receivable - related party                   18,668,451       26,831,339
    Inventories                                                              4,997,805        4,004,216
                                                                         -------------    -------------
      Total current assets                                                  71,646,819       43,708,951
                                                                         -------------    -------------

BUILDINGS, EQUIPMENT AND AUTOMOBILES, net                                   10,911,518       11,156,268
                                                                         -------------    -------------

OTHER ASSETS:
    Intangible asset, net                                                      327,507          363,330
    Employee advances                                                           72,337          821,536
    Deposits                                                                 1,221,865        1,051,557
                                                                         -------------    -------------
      Total other assets                                                     1,621,709        2,236,423
                                                                         -------------    -------------
         Total assets                                                    $  84,180,046    $  57,101,642
                                                                         =============    =============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable                                                     $   1,954,642    $   2,531,829
    Accounts payable - related party                                              --            758,570
    Advances from customers - related parties                                     --          5,141,661
    Other taxes payable                                                        324,478          206,723
    Accrued liabilities                                                         30,977           52,698
    Other payable - related party                                            1,002,722        1,312,288
    Distribution payable to minority interest                                3,327,273             --
    Short term notes payable                                                      --          5,324,000
    Current portion of long term debt                                          235,155          259,364
                                                                         -------------    -------------
      Total current liabilities                                              6,875,247       15,587,133

NON-CURRENT LIABILITIES:
    Notes Payable - Related Party                                           10,657,742          155,591
                                                                         -------------    -------------

         Total liabilities                                                  17,532,989       15,742,724
                                                                         -------------    -------------

MINORITY INTEREST                                                            9,118,323        8,272,726
                                                                         -------------    -------------

SHAREHOLDERS' EQUITY:
    Common stock, $0.001 par value, 260,000,000 shares authorized,
      71,333,586 issued and outstanding, respectively                            6,851            6,851
    Paid-in-capital                                                          8,906,492        8,906,492
    Statutory reserves                                                       3,730,137        3,730,137
    Retained earnings                                                       44,889,182       20,453,290
    Stock receivable                                                              --             (6,650)
    Accumulated other comprehensive income (loss)                               (3,928)          (3,928)
                                                                         -------------    -------------
      Total shareholders' equity                                            57,528,734       33,086,192
                                                                         -------------    -------------
         Total liabilities and shareholders' equity                      $  84,180,046    $  57,101,642
                                                                         =============    =============
</TABLE>


         The accompanying notes are an integral part of this statment.

                                       2
<PAGE>
<TABLE>
<CAPTION>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

        CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

                                                    Three months ended         Nine months ended
                                                -------------------------   -------------------------
                                                       September 30,              September 30,
                                                -------------------------   -------------------------
                                                   2004          2003          2004          2003
                                                -----------   -----------   -----------   -----------
                                                (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
                                                -----------   -----------   -----------   -----------
<S>                                             <C>           <C>           <C>           <C>

REVENUE - RELATED PARTIES                       $18,058,888   $13,989,470   $46,074,775   $31,775,037

COST OF SALES                                     4,304,640     4,309,393    10,922,106    11,338,306
                                                -----------   -----------   -----------   -----------

GROSS PROFIT                                     13,754,248     9,680,077    35,152,669    20,436,731

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES      2,437,047       903,778     5,055,967     2,264,622
                                                -----------   -----------   -----------   -----------

INCOME FROM OPERATIONS                           11,317,201     8,776,299    30,096,702    18,172,109

OTHER INCOME                                        205,357        25,676       523,063        96,936
                                                -----------   -----------   -----------   -----------

INCOME BEFORE MINORITY INTEREST                  11,522,558     8,801,975    30,619,765    18,269,045

MINORITY INTEREST                                 2,327,913     1,760,396     6,183,873     3,653,810
                                                -----------   -----------   -----------   -----------

NET INCOME                                        9,194,645     7,041,579    24,435,892    14,615,235

OTHER COMPREHENSIVE INCOME                             --            --            --            --
                                                -----------   -----------   -----------   -----------

COMPREHENSIVE INCOME                            $ 9,194,645   $ 7,041,579   $24,435,892   $14,615,235
                                                ===========   ===========   ===========   ===========

Weighted average number of shares outstanding    71,872,975    32,503,302    71,957,327    33,072,996
                                                ===========   ===========   ===========   ===========

Earnings per share, basic and diluted           $      0.13   $      0.22   $      0.34   $      0.44
                                                ===========   ===========   ===========   ===========
</TABLE>






         The accompanying notes are an integral part of this statment.




                                       3
<PAGE>
<TABLE>
<CAPTION>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003


                                                          Number          Common        Paid-in        Statutory
                                                        of shares         stock         capital         Reserve
                                                      ------------    ------------    ------------    ------------
                                                       (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)
                                                      ------------    ------------    ------------    ------------
<S>                                                   <C>             <C>             <C>             <C>
BALANCE, January 1, 2003, audited                        5,000,508    $          1    $  8,906,492    $    399,173

   Tianshi stock issued to Tianshi shareholders               --             6,850            --              --
   6.5 for one shares forward split                     27,502,794
   Issuance of common stock to Tianshi
      shareholders due to reorganization                68,495,000            --              --              --
   Cancellation of common stock held by
      Rene Larrave                                     (29,000,000)           --              --              --
   Net Income                                                 --              --              --              --
                                                      ------------    ------------    ------------    ------------
BALANCE, September 30, 2003, unaudited                  71,998,302    $      6,851    $  8,906,492    $    399,173

   Additional stocks issued to Tianshi shareholders            284            --              --              --
   Net Income                                                 --              --              --              --
   Adjustment to statutory reserve                            --              --              --         3,330,964
                                                      ------------    ------------    ------------    ------------
BALANCE, December 31, 2003, audited                     71,998,586    $      6,851    $  8,906,492    $  3,730,137

   Calcellation of shares                                 (665,000)           --              --              --
   Net income                                                 --              --              --              --
   Receipt of stock receivable                                --              --              --              --
                                                      ------------    ------------    ------------    ------------
BALANCE, September 30, 2004, unaudited                  71,333,586    $      6,851    $  8,906,492    $  3,730,137
                                                      ============    ============    ============    ============


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

BALANCE, January 1, 2003, audited                     $  6,730,432    $       --      $     (3,928)   $ 16,032,170

   Tianshi stock issued to Tianshi shareholders               --            (6,850)           --              --
   6.5 for one shares forward split
   Issuance of common stock to Tianshi
      shareholders due to reorganization                      --              --              --              --
   Cancellation of common stock held by
      Rene Larrave                                            --              --              --              --
   Net Income                                           14,615,235            --              --        14,615,235
                                                      ------------    ------------    ------------    ------------
BALANCE, September 30, 2003, unaudited                $ 21,345,667    $     (6,850)   $     (3,928)   $ 30,647,405

   Additional stocks issued to Tianshi shareholders           --               200            --               200
   Net Income                                            2,438,587            --              --         2,438,587
   Adjustment to statutory reserve                      (3,330,964)           --              --              --
                                                      ------------    ------------    ------------    ------------
BALANCE, December 31, 2003, audited                   $ 20,453,290    $     (6,650)   $     (3,928)   $ 33,086,192

   Calcellation 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
                                                      ============    ============    ============    ============
</TABLE>

         The accompanying notes are an integral part of this statment.


                                       4
<PAGE>
<TABLE>
<CAPTION>


                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

                                                                      2004            2003
                                                                  ------------    ------------
                                                                   Unaudited       Unaudited
                                                                  ------------    ------------
<S>                                                               <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                    $ 24,435,892    $ 14,615,235
    Adjustments to reconcile net income  to cash
      provided by operating activities:
       Minority interest                                               845,597       3,653,810
       Depreciation                                                  1,021,882         749,345
       Amortization                                                     35,823          46,408
       Loss on sale of assets                                           61,009           4,366
      (Increase) decrease in assets:
       Accounts receivable - related party                          (9,535,479)     (3,988,011)
       Other receivables                                              (243,888)        139,645
       Other receivables - related party                             8,767,860     (14,067,143)
       Inventories                                                    (993,589)      1,287,338
       Employee advances                                               749,199         171,859
       Decrease in deposits                                           (170,308)        300,497
      Increase (decrease) in liabilities:
       Accounts payable                                               (577,187)       (288,032)
       Accounts payable - related party                               (758,570)         39,755
       Advances from customers                                      (5,141,661)        (60,439)
       Wages and benefits payable                                         --          (140,291)
       Other taxes payable                                             117,755          17,455
       Accrued liabilities                                             (21,721)     (1,130,569)
       Other payables - related party                                 (309,566)      2,487,279
       Distribution payable to minority interest                     3,327,273            --
                                                                  ------------    ------------
         Net cash provided by operating activities                  21,610,321       3,838,507
                                                                  ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Payments on loan receivable - related party                           --           807,971
    Increase in loans receivable - related party                          --        (2,005,371)
    Proceeds from sales of equipment                                    65,129            --
    Purchase of equipment and automobiles                           (1,686,230)     (1,319,635)
    Net decrease in construction in progress                           177,988            --
                                                                  ------------    ------------
         Net cash used in investing activities                      (1,443,113)     (2,517,035)
                                                                  ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Payments on short term notes payable                            (5,324,000)       (291,713)
    Borrowings (Payments) on long term debt                         10,477,942        (482,189)
    Decrease in stock receivable                                         6,650            --
                                                                  ------------    ------------
         Net cash provided by (used in) in financing activities      5,160,592        (773,902)
                                                                  ------------    ------------

INCREASE IN CASH                                                    25,327,800         547,570

CASH, beginning of period                                           12,725,043         302,974
                                                                  ------------    ------------

CASH, end of period                                               $ 38,052,843    $    850,544
                                                                  ============    ============
</TABLE>


         The accompanying notes are an integral part of this statment.


                                       5
<PAGE>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1 - Summary of significant accounting policies


Background
----------

On February 17,  2004,  Tiens  Biotech  Group  (USA),  Inc.  (referred to as the
"Company" or "Tiens")  formally changed it name from  Strategika,  Inc. to Tiens
Biotech Group (USA), Inc.

On August 22, 2003, Strategika,  Inc., a corporation organized under the laws of
the State of Delaware ("Strategika"); Tianshi International Holdings Group Ltd.,
a corporation  organized under the laws of the British Virgin Islands  ("Tianshi
International");  Li Jin  Yuan,  Jiao  Wen  Jun  and Yan Yu  Peng,  all  Chinese
Nationals  who  are   stockholders  of  Tianshi   International   (the  "Tianshi
Stockholders")  entered  into  an  Agreement  and  Plan of  Reorganization  (the
"Agreement").  The Agreement was effective on 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,  par value  $0.001 per share,  to the  Tianshi  Stockholders,
representing  approximately  95% of the issued and  outstanding  common stock of
Strategika following the time of the issuance. As additional consideration,  the
29,000,000  shares of the common stock of Strategika  held by Rene Larrave,  the
sole  officer  and  director of  Strategika  prior to the  reorganization,  were
redeemed and cancelled by Strategika.  There are currently 71,333,586 issued and
outstanding shares of common stock of the reorganized Strategika.

Strategika was incorporated on July 13, 1990 as Super Shops, Inc. under the laws
of the State of Michigan.  In October 2000, Super Shops, Inc.  reincorporated in
Delaware and changed its name to MIA Acquisition  Corp. On February 11, 2002, in
connection with a change in control  transaction,  MIA Acquisition  Corp changed
its name to  Strategika,  Inc.  Until the Effective  Date,  Strategika  had only
nominal assets and liabilities and was a development stage company attempting to
provide network security services to Fortune 1000 listed companies.  As a result
of the  reorganization,  Strategika  will  continue the business  operations  of
Tianshi International.

Prior to the reorganization,  on June 18, 2003, Tianshi  International  acquired
80%  of  Tianjin  Tianshi  Biological  Development  Co.,  Ltd.   ("Biological").
Biological is a foreign investment joint venture which is incorporated under the
laws of the People's Republic of China ("PRC") on March 27, 1998.

The  original  partners  in  Biological  were  Tianshi  Hong Kong  International
Development  Co., Ltd.  ("Tianshi Hong Kong")  incorporated in Hong Kong,  which
owned 80% of the joint venture and Tianjin Tianshi  Biological  Engineering Co.,
Ltd, ("Tianshi  Engineering") a Chinese company incorporated in PRC, which owned
the  remaining 20% of the joint  venture.  Tianshi Hong Kong is owned 100% by Li
Jin Yuan, the Company's president and major shareholder.  Tianshi Engineering is
49%  owned by Ms. Li Bao Lan,  the  daughter  of Li Jin Yuan and 51% by  Tianjin
Tianshi Group Co., Ltd. ("Tianshi Group"), which is owned 90% by Li Jin Yuan and
10% by Li Bao Lan. On June 18, 2003,  Tianshi  Engineering  transferred  its 20%
interest  in  the  joint  venture  for  no   consideration  to  Tianjin  Tianshi
Pharmaceuticals  Co., Ltd, ("Tianshi  Pharmaceuticals")  a Chinese company whose
majority  shareholder is Tianshi Group. On June 18, 2003, Tianshi  International
acquired 80% of  Biological  from Tianshi Hong Kong for no  consideration.  This
transfer was made for no  consideration  since Li Jin Yuan 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 - Summary of significant accounting policies (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  following  diagram is an  organization  and equity
ownership chart of the Company and its affiliates:




                                 OBJECT OMITTED



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:



                                                                            Percentage
                         Subsidiary                                        Of Ownership
-------------------------------------------------------------------------  -----------
<S>                                                <C>                     <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 Co.,  Ltd.
("Tiens Yihai").








                                       7
<PAGE>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 1 - Summary of significant accounting policies (continued)


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.

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.

In December  2003,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Interpretation  No.  46(R),  Consolidation  of Variable  Interest  Entities,  an
Interpretation  of ARB No. 51 (FIN No. 46(R)),  which requires the consolidation
of certain variable interest  entities,  as defined.  FIN No. 46(R) is effective
for  reporting  periods  after March 15, 2004 for all  enterprises  that are not
small business  issuers.  The Company is in the process of reviewing the effects
of this statement on its operations.

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

The Company through its subsidiaries is primarily  engaged in the  manufacturing
and marketing of herbal products, vitamin and mineral supplements, personal care
and other health  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 the United States,  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.






                                       8
<PAGE>


                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 1 - Summary of significant accounting policies (continued)

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 2004, Tianshi Engineering,  a related company, owned all of the related party
distributors  which  sell the  Company's  products  domestically  in China.  The
Company was  responsible  for paying all the related  company's  sales  expenses
incurred to sell their products to outside third parties.

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 $(3,928) as of September 30, 2004 and December 31, 2003,
respectively.

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.

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



                                       9
<PAGE>


                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Summary of significant accounting policies (continued)


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

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 10% 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
will expire for Biological and it will become subject to income tax at a reduced
rate of 10%.

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.

As of  September  30,  2004,  Tiens Yihai is in the  developmental  stage of its
organization and did not have any operating income.

Note 2 - Condensed financial statements and 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,  2003 and 2002 and notes  thereto  included  in Tiens' Form
10-KSB, dated April 29, 2004.

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, 2004 and the results of operations for the nine months ended
September 30, 2004 and 2003,  respectively.  Interim results are not necessarily
indicative  of full year  performance  because  of the  impact of  seasonal  and
short-term variations.



                                       10
<PAGE>


                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




Note 3 - 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,
                        2004            2003
                   -------------   -------------
                    (Unaudited)     (Audited)
                   -------------   -------------
Raw materials      $   2,055,039   $   1,673,405
Work-in-progress         286,946         342,252
Finished goods         2,655,820       1,988,559
                   -------------   -------------
                   $   4,997,805   $   4,004,216
                   =============   =============


Note 4 - Supplemental disclosure of cash flow information


No income taxes were paid for the nine months ended September 30, 2004 and 2003,
respectively.  Interest  paid  amounted to $169,936  and  $361,050  for the nine
months ended September 30, 2004 and 2003, respectively.


Non - cash financing and investing activities
---------------------------------------------

During the nine months ending September 30, 2004, the Company sold equipment for
a total sales price of $670,101 and received cash of $65,129 and a  non-interest
bearing  receivable of $604,972 which is disclosed as related party  transaction
under other receivable in Note 7.

During the nine months  ending  September  30,  2003,  the Company  sold several
buildings  for the  amount of  $3,238,210  to a related  party in  exchange  for
cancellation of a payable due to the related party.  The sale resulted in a gain
of $1,791.


Note 5 - 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 nine months ended  September,  2004 and 2003.  The
weighted  average  number of shares used to calculate  EPS reflects the 6.5 to 1
share split  retroactively  to January 1, 2002.  The weighted  average number of
shares  used to  calculate  EPS for the nine  months  ended  September  30, 2004
(71,957,327) and 2003 (33,072,996) reflect only the shares outstanding for those
periods.

On  September  14,  2004,  the board of  directors  of the Company  accepted the
resignation  of Mr. Percy Kong Kei Chin as one of the members of the Board.  Mr.
Chin's  665,000  shares of common  stock of the  Company  were  returned  to the
Company and were cancelled.  The outstanding shares of common stock at September
30, 2004 amounted to 71,333,586.

Note 6 - Minority interest

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





                                       11
<PAGE>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 7 - Related party transactions


Sales
-----


The Company  sells all of its 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.  Related party sales amounted to $46,074,775  and  $31,775,037 for the
periods ended  September 30, 2004 and 2003 which  represent  100% of total sales
for the periods then ended.

Related party accounts  receivable related to these sales amounted to $9,544,012
and $8,533 as at September 30, 2004 and December 31, 2003, respectively,  net of
an allowance for doubtful accounts of $39,204 and $ - 0 - , respectively.


Other receivables and note receivable - related party
-----------------------------------------------------


The Company is owed  additional  amounts  classified as other  receivables  from
related  parties  totaling  $18,668,451 and $26,831,339 as of September 30, 2004
and December 31, 2003,  respectively.  These  receivables are generated from the
Company  making various cash advances and short term loans and the allocation of
various  expenses  to  related  parties.  The  following  is the detail of those
transactions.

On March 26, 2004,  Biological  entered into an  agreement  with Tianjin  Juchao
Commercial  and Trading  Co.,  Ltd.  ("Juchao")  to convert  various  receivable
amounts into a note receivable in the amount of RMB 200,000,000 or approximately
US $24,200,000. Li Jin Yuan is the major shareholder of Juchao. The note will be
paid  off in four  quarterly  installments  of RMB  50,000,000  (US  $6,050,000)
beginning March 31, 2004 and ending December 31, 2004.  Interest will be charged
beginning  January 1, 2004 at an annual interest rate of 6.048%.  Total interest
income for the nine months ended  September 30, 2004  amounted to  approximately
$823,284.

The  receivable is secured by the personal  guarantee of Li Jin Yuan,  President
and major  shareholder of Tiens and the pledge of 20% of his stock  ownership in
Tiens or 13,167,000  shares.  These shares are  restricted  stock (as defined in
Rule 144 of the  Securities  Act of 1933, as amended) and cannot be traded until
September  10, 2004.  As of September  30, 2004,  Biological  received its three
principal  payments  of  RMB  150,000,000  (US  $18,150,000).  Approximately  US
$1,210,000 of the total payments received during 2004 was distributed in turn to
the parent company, Tianshi International as a joint venture distribution.

During the three  months  ending  September  30, 2004,  Biological  advanced RMB
28,960,300  or  approximately  US  $3,504,196  to Tianshi  Group.  In  addition,
Biological  advanced RMB  37,998,488 or  approximately  US $4,597,817 to Tianshi
Engineering.  These  transactions  are  recurring in nature and will be paid off
during the year. The Company does not charge interest on these receivables.

During the nine months ending September 30, 2004, the Company  transferred fixed
assets to Tianshi  Pharmaceuticals  and received a receivable of $604,972  which
will be paid off during the year.  The Company  does not charge  interest on the
receivable.

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

Accounts  payable  due to related  parties  amounted  to $- 0 - and  $758,570 at
September  30, 2004 and  December  31, 2003,  respectively.  These  amounts were
generated  from the purchases of raw  materials,  rent expense and the Company's
transportation costs.




                                       12
<PAGE>

                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 7 - Related party transactions (continued)


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


The Company has amounts  classified  as other  payables  due to related  parties
which  amounted  to  $1,002,722  and  $1,312,288  as of  September  30, 2004 and
December 31, 2003,  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.

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

On September 10, 2004, Tianshi  International entered into a loan agreement with
Tianyuan Capital  Development Corp. Ltd.  ("Tianyuan  Capital") to borrow $10.63
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 US  $1,063,000  on the  last  day of  each  June  and  December
commencing  June 30, 2006, and ending June 30, 2011. The first interest  payment
will  be  paid on  December  31,  2004 at an  annual  interest  rate of 5%.  The
principal payment requirements for the next five years are as follows:

       Period
       Ending
   September 30,                Amount
   -------------            -------------
        2005                $        --
        2006                    1,063,000
        2007                    2,126,000
        2008                    2,126,000
        2009                    2,126,000
     Thereafter                 3,189,000


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


As of January 1, 2003, the Company had a verbal agreement with Tianshi Group, to
lease a portion of its office building and manufacturing facilities. 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 $460,748 and $317,750 for the nine months ended  September 30, 2004 and 2003,
respectively.





                                       13
<PAGE>


                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 8 - Minority interest distributions


The Board of Directors of Biological has authorized the following  distributions
to their shareholders in direct proportion to their ownership percentages.


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

March 22, 2004   RMB   82,430,670   RMB   20,607,668   RMB  103,038,338

June 30, 2004         100,000,000         25,000,000        125,000,000
                     ------------       ------------       ------------

Totals           RMB  182,430,670   RMB   45,607,668   RMB  228,038,338
                     ============       ============       ============

Totals           USD $ 22,074,111   USD $  5,518,528   USD $ 27,592,639
                     ============       ============       ============



The amounts paid to Tianshi  International have been used to invest in their new
Shanghai investment  described in note 9. As of September 30, 2004, the minority
shareholder of Biological has been paid $2,191,255 and the remaining  amount has
been reflected as a distribution payable on the accompanying balance sheet.


Note 9 - Investment in Tiens Yihai Co. Ltd.

On April 20, 2004, Tianshi  International  entered into a joint venture contract
(the "Joint  Venture  Project") with Tianshi  Pharmaceuticals.  The parties have
agreed to establish  Tiens Yihai.  On September 15, 2004, the Board of Directors
of Tianshi  International  approved 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 our  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 their
English name as Tiens Yihai Co., Ltd.

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

A total of fifteen  percent or  approximately  US  $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.  As
of  September  30, 2004,  Tianshi  International  has made its required  capital
contribution in the amount of US $29,861,853.




                                       14
<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.  Tiens  Biotech  Group (USA),  Inc. is referred to herein as "we" or
"our." 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 we are able to manage our planned growth efficiently and
operate profitable operations,  including whether our 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 we are able to generate  sufficient
revenues or obtain financing to sustain and grow our operations; and (d) whether
we are able to successfully  fulfill our primary 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-QSB  with the  Securities  and
Exchange Commission and should not be relied upon as of any subsequent date.

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

OVERVIEW

On  September  9,  2003,  pursuant  to the  terms  of an  Agreement  and Plan of
Reorganization,  dated August 22, 2003,  Tianshi  International  Holdings  Group
Limited,  a corporation  organized  under the laws of the British Virgin Islands
("Tianshi  International"),  became a wholly owned subsidiary of Strategika Inc.
("Strategika"), a Delaware Corporation. On February 17, 2004, Strategika changed
its name to Tiens Biotech Group (USA), Inc. ("Tiens" or the "Company").

Tianshi International was incorporated on 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. Limited ("Biological"),  which is the
Company's main operating  subsidiary.  Biological is a foreign  investment joint
venture  incorporated  in the  People's  Republic of China  ("PRC") on March 27,
1998,  which is 80% owned by  Tianshi  International  and 20%  owned by  Tianjin
Tianshi Pharmaceuticals Co., Ltd. ("Tianshi Pharmaceuticals").

Biological is primarily engaged in the research, development,  manufacturing and
marketing of healthcare products including herbal products,  vitamin and mineral
supplements and personal care products. Since its establishment,  Biological has
developed 7 major product  series and produced 45 types of healthcare  products.
Twenty-three  of them are health  food  products,  all of which have been issued
"Health  Food  Certificates"  issued by the PRC Ministry of Health to be sold in
the PRC. The 7 major  product  series are:  High-Calcium  Series,  Immune System
Adjustment Series,  Nutrient Supplements Series,  Cholesterol Adjustment Series,
High-Fiber Series,  Heart and Brain Improvement Series and Personal Care Series.
Under the High-Calcium  series,  Biological has conducted extensive research and
developed  Tianshi  Hyperglycemia  High  Calcium  Nutrient  Powder  and  Tianshi
Children  High Calcium  Nutrient  Powder,  which have been awarded  patents from
State Intellectual  Properties Office in China with respective patent numbers of
ZL97115067.2 and ZL97115068.0.



                                       15
<PAGE>
<TABLE>
<CAPTION>

Biological has its own research and product development center in Tianjin,  PRC.
It employs  professionals in research,  product  development and innovation.  On
November 3, 2002,  Biological  was awarded the Quality  System  Certificate  for
compliance  with  the  standard  "ISO9001:  2000"  in the  area  of  Design  and
Development, Production and Service of Food and Healthcare Food in China.

Biological  has marketed and sold its products  through its  affiliate  company,
Tianjin Tianshi  Biological  Engineering  Co., Ltd.  ("Tianshi  Engineering") in
China.  Tianshi  Engineering is a limited  liability  company duly  incorporated
under the laws of PRC, and affiliated with Biological  through common  ownership
of Mr. LI Jinyuan.  Tianshi Engineering markets and sells Biological's  products
domestically  through its 22 branches,  representative  offices and chain stores
and 12 domestic  affiliate  companies.  The Company also markets its products to
approximately 90 countries worldwide  including the United States,  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.

RESULTS OF OPERATIONS

General Results of Operations for the three and nine months ending September 30,
2004 and September 30, 2003

The third  quarter and the first nine months of 2004,  the Company  persisted in
strong  performance and consistent growth. As of September 30, 2004, the Company
had retained  earnings of  $44,889,182,  cash of $38,052,843  and reported total
shareholders' equity of $57,528,734.  For the third quarter of 2004, the Company
had revenue of $18,058,888 and selling,  general and administrative  expenses of
$2,437,047.  For the first nine months of 2004, the Company had total revenue of
$46,074,775  and  total  selling,   general  and   administrative   expenses  of
$5,055,967.


Three months ended September 30,                  2004            2003           Change
--------------------------------              ------------    ------------    ------------
<S>                                           <C>             <C>             <C>
Revenue                                       $ 18,058,888    $ 13,989,470           29.09%

Cost of goods sold                            $  4,304,640    $  4,309,393    $     (4,753)

Cost of goods sold as a percentage of sales          23.84%          30.80%

Gross Profit                                  $ 13,754,248    $  9,680,077    $  4,074,171

Gross Profit margin                                  76.16%          69.20%

Selling and administrative expenses           $  2,437,047    $    903,778    $  1,533,269

Selling and administrative expenses as
a percentage of sales                                13.50%           6.46%

Net income                                    $  9,194,645    $  7,041,579    $      30.58%



                                       16
<PAGE>

Nine months ended September 30,                   2004            2003           Change
-------------------------------               ------------    ------------    ------------
Revenue                                       $ 46,074,775    $ 31,775,037           45.00%

Cost of goods sold                            $ 10,922,106    $ 11,338,306    $   (416,200)

Cost of goods sold as a percentage of sales          23.71%          35.68%

Gross Profit                                  $ 35,152,669    $ 20,436,731    $ 14,715,938

Gross Profit margin                                  76.29%          64.32%

Selling and administrative expenses           $  5,055,967    $  2,264,622    $  2,791,345

Selling and administrative expenses as
a percentage of sales                                10.97%           7.13%

Net income                                    $ 24,435,892    $ 14,615,235    $      67.19%
</TABLE>


(1) SALES. Compared to the three and nine months ended September 30, 2003, sales
for the three and nine months ended  September 30, 2004  increased by $4,069,418
and  $14,299,738,  respectively.  The growth in reported sales was primarily due
to: (1)  continued  marketing of our products  internationally  since the end of
2002; (2) increased  networking  sales forces in China during 2003 and 2004; and
(3) continued growth in worldwide demand for our products.

(2) COST OF GOODS SOLD.  Compared to the third  quarter and first nine months of
2003,  consolidated  cost of goods  sold for the third  quarter  and first  nine
months of 2004  decreased by $4,753 and  $416,200,  respectively.  Cost of goods
sold as a percentage of sales decreased to 23.84% for the third quarter of 2004,
from 30.80% for the third quarter of 2003.  For the nine months ended  September
30, 2004, cost of goods sold as a percentage of sales decreased to 23.71%,  from
35.68%  for the same  period of 2003.  The  decrease  in cost of goods sold as a
percentage of sales was a result of continuing  stronger management control over
(1)  cost  of raw  material  purchases;  (2)  utilization  of raw  material  and
production  cost  efficiency;  (3) product quality  control;  (4) improvement of
manufacturing technology; and (5) economy of scale.

(3)  GROSS  PROFIT.  Consolidated  gross  profit  increased  by  $4,074,171  and
$14,715,938   for  the  three  and  nine  months  ended   September   30,  2004,
respectively.  The gross profit  margin was 76.16% in the third  quarter of 2004
versus  69.20% in the third quarter of 2003.  The  company's  total gross profit
margin was 76.29% for the first nine months of 2004 versus  64.32% for the first
nine months of 2003.  The increase in gross profit  margin was  primarily due to
sales growth both in the domestic and overseas  markets and  successful  control
over production cost.

(4) SELLING AND ADMINISTRATIVE  EXPENSES.  Selling and  administrative  expenses
increased  by  $1,533,269  and  $2,791,345  for the three and nine months  ended
September  30, 2004,  respectively,  compared to the same  periods of 2003.  The
selling and administrative expenses as a percentage of sales increased to 13.50%
and 10.97% for the three and nine months ended September 30, 2004, respectively.
The  increase  was  principally  due to the  continued  sales  growth and market
expansion.

(5) NET  INCOME.  Net income in the third  quarter and first nine months of 2004
increased by 30.58% and 67.19%,  respectively,  when compared to the  comparable
periods of 2003 due  primarily to steady  growth in worldwide  sales.  Continued
decrease in production cost also contributed to the Company's net income growth.



                                       17
<PAGE>

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  Company  markets  most  of  its  products   through  various  domestic  and
international  business  entities that are related to Biological  through common
ownership.  Related  party  sales  amounted to 100% of total  sales.  Due to the
common ownership,  there are no formal sales or administrative agreement between
Biological  and those  related  parties.  The  business  operations  among these
related  entities are regulated  through internal  ordinances.  For the domestic
market,  Biological sells all of its products to Tianshi  Engineering,  which in
turn sells them through its 22 representative  offices,  and 12 other affiliated
companies in China. All of these  affiliated  companies are owned in whole or in
part by Li Jinyuan, our President and majority shareholder.

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

The Company  through its Chinese joint venture,  Biological,  is owed additional
amounts   classified  as  other   receivables   from  related  parties  totaling
$18,668,451  and  $26,831,339  as of  September  30, 2004 and December 31, 2003,
respectively.  These  receivables  are generated from the Company making various
cash advances and  short-term  loans and the  allocation of various  expenses to
related parties. The following is the detail of those transactions.

On March 26, 2004,  Biological  entered into an  agreement  with Tianjin  Juchao
Commercial  and Trading  Co.,  Ltd.  ("Juchao")  to convert  various  receivable
amounts into a note receivable in the amount of  RMB200,000,000 or approximately
USD$24,200,000.  The note  will be paid off in four  quarterly  installments  of
RMB50,000,000  beginning March 31, 2004 and ending  December 31, 2004.  Interest
will be charged  beginning January 1, 2004 at an annual interest rate of 6.048%.
Total interest  income for the nine months ended September  30,2004  amounted to
approximately  $823,284.  This note is secured by the  personal  guarantee of Li
Jinyuan,  President and major shareholder of the Company,  and the pledge of 20%
of his  stock  ownership  in  Tiens  or  13,167,000  shares.  These  shares  are
restricted  stock (as  defined  in Rule 144 of the  Securities  Act of 1933,  as
amended) and cannot be traded until September 10, 2004. As of September 30,2004,
Biological   received   its  three   principal   payments  of  RMB   150,000,000
(US$18,150,000).  Approximately  US$1,210,000  of the  total  payments  received
during 2004 was distributed in turn to the parent company, Tianshi International
as a joint venture distribution.

During the three  months  ending  September  30, 2004,  Biological  advanced RMB
28,960,300  or  approximately  US$3,504,196  to Tianjin  Tianshi Group Co., Ltd.
("Tianshi  Group").   In  addition,   Biological   advanced  RMB  37,998,488  or
approximately  US$4,597,817  to  Tianshi  Engineering.  These  transactions  are
recurring  in nature and will be paid off during the year.  The Company does not
charge interest on these receivables.

During the nine months ending September 30, 2004, the Company  transferred fixed
assets to Tianshi  Pharmaceuticals  and received a receivable of $604,972  which
will be paid off during the year.  The company  does not charge  interest on the
receivable.

Accounts payable.
-----------------

Accounts payable due to related parties amounted to $0 and $758,570 at September
30, 2004 and December 31, 2003, respectively.  These amounts were generated from
the purchases of raw  materials,  rent expense and the Company's  transportation
costs.

Other payables.
---------------

The  Company  also has  amounts  classified  as other  payables  due to  related
parties,  which  amounted to $1,002,722  and $1,312,288 as of September 30, 2004
and December 31, 2003, respectively. These amounts arose from cash advances from
related  parties  such as  management  service  fees due to related  parties and
various non-operational transactions incurred with related parties.


                                       18
<PAGE>

Note Payable.
-------------

On September 10, 2004, in order to fund their capital  contribution due to Tiens
Yihai Co.,  Ltd.  ("Tiens  Yihai"),  Tianshi  International  entered into a loan
agreement with Tianyuan Capital Development  Corp.Ltd.  ("Tianyuan  Capital") to
borrow $10.63 million.  Mr. Li Jinyuan,  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 US  $1,603,000  on the  last  day of  each  June  and  December
commencing  June 30,2006 and ending June 30, 2011. The interest  payment will be
paid on the  outstanding  and unpaid  principal  amount of the loan at an annual
interest  rate  of 5% on  the  last  business  day of  each  June  and  December
commencing on December 31, 2004.

Rent expense.
-------------

As of January 1, 2003, the Company had a verbal agreement with Tianshi Group, to
lease a portion of its office building and manufacturing facilities. 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 $460,748  and
$317,750 for the nine months ended September 30, 2004 and 2003, respectively.

LIQUIDITY AND CAPITAL RESOURCES

For the nine  months  ended  September  2004,  net cash  provided  by  operating
activities  was  $21,610,321,   net  cash  used  in  investing   activities  was
$1,443,113, and net cash provided by financing activities was $5,160,592.

For the nine months ended  September  30, 2003,  net cash  provided by operating
activities was $3,838,507, net cash used in investing activities was $2,517,035,
and net cash used in financing activities was $773,902.

Net  cash  provided  by  operating   activities   increased  by  $17,771,814  to
$21,610,321  for the nine months  ended  September  30,  2004,  representing  an
increase of  approximately  462.99%  compared to $3,838,507 net cash provided by
operating activities for the same period of 2003. The increase in cash flow from
operating  activities  primarily  reflects an increase in revenues  for the nine
months ended September 30, 2004. This increase was also due to better management
of the collection of other  receivables  from our related party during the first
nine months of 2004.

Net cash used in investing  activities decreased by $1,073,922 to $1,443,113 for
the nine months ended  September  30,  2004,  representing  an 42.67%  decrease,
compared to $2,517,035 net cash used by investing activities for the same period
of 2003.  The  decrease in net cash used in  investing  activities  was due to a
decrease in lending to related parties.

Net cash provided by financing  activities  was  $5,160,592  for the nine months
ended  September  30,  2004.  For the  same  period  in 2003,  net cash  used in
financing  activities  was $773,902.  The increase in cash provided by financing
activities  was primarily due to an increase in borrowing on long-term  debt for
funding Tiens Yihai.

Going forward,  our primary  requirements for cash consist of: (1) the continued
production  of existing  products  and general  overhead and  personnel  related
expenses to support  these  activities;  (2)  continued  promotion of networking
sales activities pertaining to our attempt to increase related revenues; and (3)
the development costs of new products.  We anticipate that our current operating
activities will enable us to meet the anticipated cash requirements for the 2004
fiscal year.


                                       19
<PAGE>

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.


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

Our  operating  subsidiaries  are located in China.  This  Company  buys all raw
materials in China and sells 50% of our products in China using Chinese Renminbi
as the functional currency.  Based on China government  regulation,  all foreign
currencies  under the  category  of current  accounts  are  allowed to be freely
exchanged with hard  currencies.  During the past two years of operation,  there
were no significant changes in exchange rates; however,  unforeseen developments
may cause a significant change in exchange rates.

















                                       20
<PAGE>

ITEM 3.  CONTROLS AND PROCEDURES

         We  maintain  "disclosure  controls  and  procedures,"  as such term is
defined  under  Exchange  Act Rule  13a-15(e),  that are designed to ensure that
information  required to be  disclosed  in our Exchange Act reports is recorded,
processed,  summarized,  and reported  within the time periods  specified in the
SEC's rules and forms, and that such information is accumulated and communicated
to our  management,  including our Chief  Executive  Officer and Chief Financial
Officer,   as  appropriate,   to  allow  timely  decisions   regarding  required
disclosures. In designing and evaluating the disclosure controls and procedures,
our management  recognized that any controls and procedures,  no matter how well
designed and operated,  can provide only  reasonable  assurance of achieving the
desired control  objectives and in reaching a reasonable  level of assurance our
management  necessarily  was  required to apply its judgment in  evaluating  the
cost-benefit  relationship of possible controls and procedures.  We have carried
out an  evaluation  under  the  supervision  and with the  participation  of our
management,  including our Chief Executive Officer and Chief Financial  Officer,
of the effectiveness of the design and operation of our disclosure  controls and
procedures as of September 30, 2004.  Based upon their evaluation and subject to
the foregoing, the Chief Executive Officer and Chief Financial Officer concluded
that as of  September  30, 2004 our  disclosure  controls  and  procedures  were
effective  at  the  reasonable   assurance   level  in  ensuring  that  material
information  relating  to us, is made known to the Chief  Executive  Officer and
Chief Financial  Officer by others within our company during the period in which
this report was being prepared.

         There were no  changes in our  internal  controls  or in other  factors
during the most recent  quarter that has materially  affected,  or is reasonably
likely to materially affect, our internal controls over financial reporting.













                                       21
<PAGE>



                          PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         None.

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.

ITEM 5.  OTHER INFORMATION

         None.

ITEM 6.       EXHIBITS

(a) Exhibits

The following exhibits are filed as part of this report:


EXHIBIT
NUMBER             DESCRIPTION
-----------        -------------------------------------------------------------

31.1              Certification  of Chief Executive  Officer Pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

31.2              Certification  of Chief Financial  Officer Pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

32                Certification  of Chief Executive  Officer and Chief Financial
                  Officer Pursuant to Section 906 of the  Sarbanes-Oxley  Act of
                  2002.






                                       22
<PAGE>

                                   SIGNATURES

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

                                                 TIENS BIOTECH GROUP (USA), INC.


Date: November 15, 2004                           /s/ Li Jin Yuan
                                                 -------------------------------
                                                 Li Jin Yuan
                                                 Chief Executive Officer
                                                 (Principal Executive Officer)


Date: November 15, 2004                           /s/ Jiao Wenjun
                                                 -------------------------------
                                                 Jiao Wenjun
                                                 Chief Financial Officer
                                                 (Principal Financial Officer)













                                       23