United States
                       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 quarterly period ended        March 31, 2006
                               -----------------------------

[_]   TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
      EXCHANGE ACT OF 1934

                         Commission File Number 0-20791

                           AMARILLO BIOSCIENCES, INC.
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

              TEXAS                                       75-1974352
--------------------------------------------------------------------------------
(State or other jurisdiction of              (IRS Employer  Identification No.)
 incorporation or organization)

 4134 Business Park Drive, Amarillo, Texas                  79110
--------------------------------------------------------------------------------
  (Address of principal executive offices)                (Zip Code)

                 806-376-1741                          FAX 806-376-9301
--------------------------------------------------------------------------------
(Issuer's telephone number, including area code)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act 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 [_]

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

As of March 31, 2006 there were  21,282,203  shares of the issuer's common stock
outstanding.

Transitional Small Business Disclosure Format (check one)  Yes [_] No [X]


                                       1
<PAGE>


                           AMARILLO BIOSCIENCES, INC.

                                      INDEX

                                                                            PAGE
                                                                            ----
PART I:     FINANCIAL INFORMATION

ITEM 1.     Financial Statements

            Consolidated Balance Sheet - March 31, 2006........................3

            Consolidated Statements of Operations - Three Months Ended
            March 31, 2006 and March 31, 2005..................................4

            Condensed Consolidated Statements of Cash Flows - Three
            Months Ended March 31, 2006 and 2005...............................5

            Notes to Consolidated Financial Statements.........................6

ITEM 2.     Management's Discussion and Analysis of Financial Condition
            and Results of Operations..........................................8

ITEM 3.     Controls and Procedures...........................................11

PART II:    OTHER INFORMATION

ITEM 2.     Unregistered Sales of Equity Securities and Use of Proceeds.......11

ITEM 6.     Exhibits..........................................................12

Signatures  ..................................................................13


                                       2
<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.       Financial Statements

                   Amarillo Biosciences, Inc. and Subsidiaries
                     Consolidated Balance Sheet - Unaudited
                                 March 31, 2006

Assets
Current assets:
   Cash                                                           $     379,233
   Other current assets                                                   1,799
                                                                  -------------
Total current assets                                                    381,032
Equipment, net                                                            2,118
Patents, net of accumulated amortization of $194,884                    115,812
                                                                  -------------
Total assets                                                      $     498,962
                                                                  =============

Liabilities and Stockholders' Deficit
Current liabilities:
   Accounts payable                                               $      40,233
   Accrued interest expense                                             532,832
   Notes payable                                                      2,025,000
                                                                  -------------
Total current liabilities                                             2,598,065
                                                                  -------------
Total liabilities                                                     2,598,065
                                                                  -------------
Commitments and contingencies
Stockholders' deficit
   Preferred stock, $.01 par value:
      Authorized shares - 10,000,000
      Issued shares - none
   Common stock, $.01par value:
      Authorized shares - 50,000,000
      Issued shares - 21,282,203                                        212,822
   Additional paid-in capital                                        21,635,300
   Accumulated deficit                                              (23,947,225)
                                                                  -------------
Total stockholders' deficit                                          (2,099,103)
                                                                  -------------
Total liabilities and stockholder's deficit                       $     498,962
                                                                  =============

See accompanying notes to financial statements.


                                       3
<PAGE>


                  Amarillo Biosciences, Inc. and Subsidiaries
                Consolidated Statements of Operations - Unaudited

                                                   Three months ended March 31,
                                                       2006            2005
                                                  -------------   -------------
Revenues:
  Dietary supplement sales                        $         853   $         876
  License fee                                            30,000              --
                                                  -------------   -------------
     Total Revenues                                      30,853             876
                                                  -------------   -------------
Expenses:
  Cost of sales                                              --               8
  Research and development expenses                      96,238          42,527
  Selling, general and administrative expenses          681,442         132,348
  Interest expense                                       24,181          23,791
                                                  -------------   -------------
     Total Expenses                                     801,861         198,674
                                                  -------------   -------------
Net income (loss)                                 $    (771,008)  $    (197,798)
                                                  -------------   -------------
Basic and diluted net income (loss) per share             (0.04)          (0.01)
                                                  =============   =============
Weighted average shares outstanding                  20,360,871      16,086,523
                                                  =============   =============

See accompanying notes to financial statements.


                                       4
<PAGE>


                   Amarillo Biosciences, Inc. and Subsidiaries
          Condensed Consolidated Statements of Cash Flows - Unaudited

<TABLE>
<CAPTION>
                                                            Three months ended March 31,
                                                                2006            2005
                                                           -------------   -------------
<S>                                                        <C>             <C>
Net cash used in operating activities                      $    (266,405)  $    (137,832)
                                                           -------------   -------------
Cash from investing activities:
   Purchases of equipment                                         (1,461)             --
                                                           -------------   -------------
Cash from financing activities:
   Proceeds from issuance of common stock                        522,284         140,480
   Repayments on notes payable                                   (68,500)             --
                                                           -------------   -------------
      Net cash provided by (used in) financing activities        453,784         140,480
                                                           -------------   -------------
Net increase (decrease) in cash                                  185,918           2,648
Cash at beginning of period                                      193,315           6,283
                                                           -------------   -------------
Cash at end of period                                      $     379,233   $       8,931
                                                           =============   =============
Supplemental Disclosure of Cash Flow Information
   Cash paid for interest                                  $       2,050   $       2,431
                                                           =============   =============
</TABLE>

See accompanying notes to financial statements.


                                       5
<PAGE>


                   Amarillo Biosciences, Inc. and Subsidiaries

             Notes To Consolidated Financial Statements - Unaudited

1.    Basis of presentation. The accompanying consolidated financial statements,
      which  should  be read in  conjunction  with  the  consolidated  financial
      statements  and footnotes  included in the  Company's  Form 10-KSB for the
      year  ended  December  31,  2005 filed with the  Securities  and  Exchange
      Commission,  are  unaudited,  but have been  prepared in  accordance  with
      accounting  principles generally accepted in the United States for interim
      financial  information.  Accordingly,  they  do  not  include  all  of the
      information  and  footnotes  required by accounting  principles  generally
      accepted in the United States for complete  financial  statements.  In the
      opinion  of  management,   all  adjustments  (consisting  only  of  normal
      recurring  adjustments)  considered necessary for a fair presentation have
      been included.

      Operating  results  for the three  months  ended  March  31,  2006 are not
      necessarily  indicative  of the results  that may be expected for the full
      year ending December 31, 2006.

2.    Stock based  compensation.  Effective January 1, 2006, the Company adopted
      SFAS No. 123 (revised),  "Share-Based Payment" (SFAS 123(R)) utilizing the
      modified  prospective  approach.  Prior to the  adoption of SFAS 123(R) we
      accounted  for stock option grant in  accordance  with APB Opinion No. 25,
      "Accounting  for Stock Issued to Employees," and  accordingly,  recognized
      compensation  expense for stock option  grants using the  intrinsic  value
      method.

      Under the modified prospective approach, SFAS 123(R) applies to new awards
      and  to  awards  that  were  outstanding  on  January  1,  2006  that  are
      subsequently  modified,  repurchased  or  cancelled.  Under  the  modified
      prospective approach, compensation cost recognized in the first quarter of
      fiscal  2006  includes  compensation  cost  for all  share-based  payments
      granted  prior to, but not yet vested as of January 1, 2006,  based on the
      grant-date fair value estimated in accordance with the original provisions
      of SFAS 123, and  compensation  cost for all share-based  payments granted
      subsequent to January 1, 2006 based on the grant-date fair value estimated
      in accordance  with the provisions of SFAS 123(R).  Prior periods were not
      restated to reflect the impact of adopting the new standard.

      The following  table  illustrates  the effect on net loss and net loss per
      share if Amarillo had applied the fair value  provisions of FASB Statement
      No. 123, Accounting for Stock-Based Compensation,  to stock-based employee
      compensation prior to January 1, 2006.


                                       6
<PAGE>


                                                             3 Months ended
                                                             March 31, 2005
                                                            ---------------
      Net loss, as reported                                 $      (197,799)
      Less:  stock based compensation determined
        under fair value based method                              (181,105)
                                                            ---------------
      Pro forma  net loss                                   $      (378,904)
                                                            ===============
      Basic and diluted net loss per share
         As reported                                        $         (0.01)
          Pro forma                                         $         (0.02)

      The fair value of each option  granted is  estimated  on the date of grant
      using the Black-Scholes  option-pricing  model with the following weighted
      average assumptions:  dividend yield 0.0%, expected volatility of 138.31%,
      risk-free interest rate of 1.5% and expected life of 60 months.

3.    Loss per share.  Loss per share is computed based on the weighted  average
      number of common shares outstanding.

4.    Financial Condition.  The Company's viability is dependent upon successful
      commercialization  of products  resulting  from its  research  and product
      development  activities.  The  Company  plans on working  with  commercial
      development  partners in the United States and in other parts of the world
      to provide the necessary sales, marketing and distribution  infrastructure
      to successfully  commercialize the interferon alpha product for both human
      and animal  applications.  The Company's products will require significant
      additional  development,  laboratory  and clinical  testing and investment
      prior to the Company obtaining  regulatory approval to commercially market
      its product(s).  Accordingly, for at least the next few years, the Company
      will  continue  to  incur  research  and   development   and  general  and
      administrative  expenses and may not  generate  sufficient  revenues  from
      product sales to support its operations.

5.    Line of Credit.  The  Company  has a line of credit  with Wells  Fargo for
      $10,000,  with interest at the prime rate plus 6.75 percent.  There was no
      outstanding balance at March 31, 2006.

6.    Equity.  During the quarter  ended March 31, 2006,  the Board of Directors
      authorized  the  issuance of 9,033  shares of  restricted  common stock to
      consultants in lieu of cash payments.  Based upon the common stock trading
      price at the time of issuance, a non-cash consulting expense of $5,200 was
      recorded  for the  issuance of these  shares  during the first  quarter of
      2006.  The Board of  Directors  also  authorized  the  issuance of 274,000
      options to  purchase  restricted  common  stock at a  discounted  price to
      consultants for service, in lieu of cash payments.  These options have not
      been  exercised,  but have been  recognized  as follows:  24,000  options,
      vesting  2,000  options per month,  were  valued at $8,951,  for the first
      quarter and 250,000 options,  vesting immediately valued at $224,448.  The
      accumulated  value of the above  mentioned stock and stock options for the
      first quarter is $238,599 for non-cash consulting compensation.


                                       7
<PAGE>


      During the three  months  ended March 31,  2006,  the  Company  recognized
      $216,000  (fair value) of expense in  connection  with the  February  2006
      grant of  300,000 shares  of  stock to an  employee  of the  Company.  The
      certificate is expected to be issued in the second quarter of 2006.

      In the first three months of 2006,  the Company  completed  private equity
      financing  by selling  1,471,300  restricted  shares of common  stock at a
      discount  to  8   investors.   The  net   proceeds  to  the  Company  were
      approximately $522,000.

7.    License Fee.  License fee revenue is  recognized  upon  completion  of all
      significant   initial   services   provided  to  the   licensee  and  upon
      satisfaction of all material  conditions of the license agreement.  In the
      first  quarter of 2006 ABI  entered  into a License  and Supply  Agreement
      whereby the Company received and earned $30,000 as an initial license fee.

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

The  following  discussion  should  be read in  conjunction  with our  financial
statements  and the notes  thereto  which appear  elsewhere in this report.  The
results  shown  herein  are not  necessarily  indicative  of the  results  to be
expected  in  any  future  periods.  This  discussion  contains  forward-looking
statements based on current expectations,  which involve  uncertainties.  Actual
results   and  the  timing  of  events   could   differ   materially   from  the
forward-looking  statements as a result of a number of factors.  Readers  should
also  carefully  review  factors set forth in other reports or documents that we
file from time to time with the Securities and Exchange Commission.

In the first quarter,  the Company completed private equity financing by selling
restricted  stock at a discount to 8 investors.  The net proceeds to the Company
were approximately $522,000.

During the first  quarter  of 2006,  ABI  worked in three  areas to improve  the
Company.  These are the areas 1) agroterrorism,  2) partner discussions,  and 3)
sales.

Agroterrorism.  Teel Bivins was retained as a  consultant  in April 2006 to help
advance our position.

Nutraceutical  Product.  ABI  sells  ACM as  Maxisal(R)  to  individuals  and to
pharmacies in the USA and to licensed distributors overseas.

Partner/License  Discussions.  The Company is presently  negotiating  with human
health commercial development partners in various regions of the world including
South America,  the United States and South East Asia.  These  agreements  could
generally  include  provisions for the  commercial  partner to pay the Company a
technology  access fee,  could  include  payments  for a portion of the clinical
trial  expenses,  could  include  payment  obligations  to the Company  upon the
accomplishment  of certain  defined  tasks  and/or  could  provide for  payments
relating to the future sales of commercial product. These agreements could be an
important  source of funds for the Company.  However,  there can be no assurance
that the Company will be successful in obtaining  additional funding from either
human  health and  animal  health  commercial  development  partners  or private
investors. If the Company is not successful in raising additional funds, it will
need to significantly  curtail  clinical trial  expenditures and to reduce staff
and administrative expenses and may be forced to cease operations.


                                       8
<PAGE>


The Company has launched a  myeloproliferative  diseases study at a major cancer
center in Texas. The myeloproliferative  diseases to be studied are polycythemia
vera  and  essential   thrombocythemia.   An  investigational   new  drug  (IND)
application  was  filed  with the US Food and Drug  Administration  (FDA) in the
second quarter of 2005 and the patients are being enrolled and evaluated now.

The Turkish  government  has granted  permission  to conduct a study there on 90
patients  with  Behcet's  disease.  Nobel ILAC and the  Company  have  agreed to
collaborate on a 12-week study of treatment with interferon lozenges in order to
evaluate  prevention of recurrence of oral  ulceration.  The IND application was
submitted to the FDA and  approved by the Turkish  Ministry of Health on October
18, 2005. The first patient was enrolled in April of 2006.

Subsequent  Event. Gary W. Coy, PhD, MBA joined the Company on April 15, 2006 as
Chief Financial  Officer.  Dr. Coy's business and scientific  background  brings
additional depth to the management team.

Results of Operations:

Revenues.  During the three-month period ended March 31, 2006, $853 from product
sales was generated  compared to revenues from product sales for the three-month
period ended March 31, 2005, of $876, a decrease of $23 or  approximately  2.6%.
There have been no sales of  interferon  products in 2006.  ABI  entered  into a
License and Supply Agreement  whereby the Company received and earned $30,000 as
an initial license fee.

Selling,   General   and   Administrative   Expenses.   Selling,   General   and
Administrative  expenses of $681,442  were incurred for the  three-month  period
ended March 31,  2006,  compared to $132,348  for the  three-month  period ended
March 31, 2005,  an increase of  $549,094.  This  included  $238,599 in non-cash
expenses in recognition of restricted stock issued to cover services provided by
consultants in lieu of cash, and options to purchase restricted stock in lieu of
cash.  Also  included in this amount is  $216,000  for a stock bonus  awarded on
February 20, 2006.

Non-Cash  Consulting  Activities.  During the three-month period ended March 31,
2006,  the Board of Directors  authorized  the issuance of shares of  restricted
common stock to a  consultant  in lieu of cash  payments.  Based upon the common
stock  trading  price at the  times of  issuance,  and FASB  rules,  a  non-cash
consulting  expense of $5,200 was  recorded  for the  issuance  of these  shares
during the  three-month  period  ended March 31, 2006.  Additionally,  the Board
authorized the issuance of 274,000 options to purchase  restricted  common stock
at a discounted price to consultants for service, in lieu of cash payments.


                                       9
<PAGE>


Net Income (Loss).  As a result of the above,  in the  three-month  period ended
March 31, 2006, the Company's Net Loss was ($771,008) compared to a Net Loss for
the three-month  period ended March 31, 2005 of ($197,798).  This increased loss
is primarily due to an increase in funding,  research  activity and stock option
recognition.

Liquidity Needs:

At March 31, 2006, the Company had available cash of approximately $379,233, and
had a working capital deficit of approximately  ($1,192,033).  Assuming there is
no decrease in current  accounts  payable,  and accounting for various  one-time
expenses,  the Company's negative cash flow is approximately  $39,000 per month.
The Company's  continued losses and lack of liquidity  indicate that the Company
may not be able to continue as a going concern for a reasonable  period of time.
The Company's  ability to continue as a going concern is dependent  upon several
factors  including,  but not  limited  to, the  Company's  ability  to  generate
sufficient  cash  flows  to meet  its  obligations  on a  timely  basis,  obtain
additional  financing  and continue to obtain  supplies  and  services  from its
vendors.  The  Company  will  need to raise  additional  funds in order to fully
execute its 2006 Plan.

Forward-Looking  Statements:  Certain statements made in this Plan of Operations
and elsewhere in this report are "forward-looking statements" within the meaning
of  the  Private   Securities   Litigation  Reform  Act  of  1995  (the  "Act").
Forward-looking  statements include, without limitation,  any statement that may
predict, forecast, indicate or imply future results, performance,  achievements,
costs  or  expenses  and may  contain  words  such as  "believe,"  "anticipate,"
"expect,"  "estimate,"  "project,"  "budget,"  or words or  phrases  of  similar
meaning.  Forward-looking  statements involve risks and uncertainties  which may
cause  actual  results  to  differ   materially  from  those  projected  in  the
forward-looking  statements. Such risks and uncertainties are detailed from time
to time in  reports  filed by the  Company  with  the  Securities  and  Exchange
Commission,  including Forms 8-K, 10-QSB and 10-KSB and include among others the
following:  promulgation and  implementation of regulations by the U.S. Food and
Drug Administration  ("FDA");  promulgation and implementation of regulations by
foreign  governmental  instrumentalities  with functions similar to those of the
FDA; costs of research and development and clinical  trials,  including  without
limitation,   costs  of  clinical  supplies,   packaging  and  inserts,  patient
recruitment,  trial monitoring,  trial evaluation and publication;  and possible
difficulties in enrolling a sufficient number of qualified  patients for certain
clinical  trials.  The Company is also  dependent  upon a broad range of general
economic  and  financial  risks,  such as  possible  increases  in the  costs of
employing  and/or  retaining  qualified  personnel and  consultants and possible
inflation  which might affect the Company's  ability to remain within its budget
forecasts. The principal uncertainties to which the Company is presently subject
are its inability to ensure that the results of trials  performed by the Company
will be  sufficiently  favorable  to ensure  eventual  regulatory  approval  for
commercial  sales, its inability to accurately  budget at this time the possible
costs   associated   with  hiring  and   retaining  of   additional   personnel,
uncertainties  regarding the terms and timing of one or more commercial  partner
agreements and its ability to continue as a going concern.


                                       10
<PAGE>


The risks  cited here are not  exhaustive.  Other  sections  of this  report may
include  additional  factors which could adversely impact the Company's business
and future prospects. Moreover, the Company is engaged in a very competitive and
rapidly changing  industry.  New risk factors emerge from time to time and it is
not possible for management to predict all such risk factors,  nor can it assess
the impact of all such risk factors on the Company's business,  or the extent to
which any factor or  combination  of factors may cause actual  results to differ
materially from those projected in any forward-looking  statements.  Given these
risks  and   uncertainties,   investors  should  not  place  undue  reliance  on
forward-looking statements as a prediction of actual future events.

Item 3.           Controls and Procedures

As required  by Rule  13a-15  under the  Exchange  Act,  we have  carried out an
evaluation  of the  effectiveness  of the design and  operation of our company's
disclosure  controls and  procedures as of the end of the period covered by this
quarterly  report,  being March 31, 2006.  This evaluation was carried out under
the  supervision  and  with  the  participation  of  our  company's  management,
including our company's  president and chief executive officer.  Based upon that
evaluation,  our company's  president and chief executive officer concluded that
our company's  disclosure controls and procedures are effective as at the end of
the period covered by this report. There have been no significant changes in our
company's  internal  controls or in other  factors,  which  could  significantly
affect internal controls subsequent to the date we carried out our evaluation.

Disclosure  controls and procedures are controls and other  procedures  that are
designed to ensure that  information  required to be disclosed in our  company's
reports  filed or  submitted  under the  Exchange  Act is  recorded,  processed,
summarized and reported, within the time periods specified in the Securities and
Exchange  Commission's  rules and  forms.  Disclosure  controls  and  procedures
include,  without  limitation,  controls and procedures  designed to ensure that
information  required to be disclosed in our  company's  reports filed under the
Exchange Act is  accumulated  and  communicated  to  management,  including  our
company's president and chief executive officer as appropriate,  to allow timely
decisions regarding required disclosure.



                           PART II - OTHER INFORMATION

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

     During the quarter ended March 31, 2006, the Board of Directors  authorized
the issuance of 9,033 shares of restricted  common stock to  consultants in lieu
of cash  payments.  Based upon the  common  stock  trading  price at the time of
issuance,  a non-cash consulting expense of $5,200 was recorded for the issuance
of these shares during the first quarter of 2006. Both issuances were to Biotech
Financial  and were  exempt from  registration  under Rule 504 of  Regulation  D
promulgated  pursuant to the Securities Act of 1933.  Biotech Financial provided
financial consulting services as consideration for the shares.

     The first  issuance  occurred on January 10,  2006,  in the amount of 4,385
shares, and was valued at $1,900.00 at a per share price of $.433,  representing
a discount of $.037 per share,  as shares of the Company  closed at $.47 on that
date.


                                       11
<PAGE>


      The second  issuance  occurred on February 8, 2006, in the amount of 4,648
shares, and was valued at $3,300.00 at a per share price of $.71, representing a
discount  of $.02 per  share,  as shares of the  Company  closed at $.73 on that
date.

      In the quarter ended March 31, 2006, the Company  completed private equity
financing by selling  1,471,300  restricted shares of common stock at a discount
to 8 investors.  The shares are restricted and are transferable pursuant to Rule
144  promulgated  under the  Securities  Act of 1933.  The net  proceeds  to the
Company  were  approximately   $522,260.   All  shares  sold  were  exempt  from
registration  pursuant to Rule 506 of Regulation D, promulgated  pursuant to the
Securities Act of 1933. No underwriters were involved in any of the unregistered
share sales and no commissions were paid.

<TABLE>
<CAPTION>
          Date (2006)                 Shares                      Purchaser                    Discount*
                           Issue Price        Number                                    Per Share        Total
     <C>                                          <C>           <C>
  1        January 19           .2
  1        January 19           .2            200000             Sean Brooks               .32           64000
  2        January 19           .2            250000             Thomas Ulie               .32           80000
  3        January 24           .2            50000             Martin Lechner             .7            35000
  4        January 26           .2            21300              Thomas Ulie               .67           14271
  5       February 16           .2            150000            Nicolas Martin             .51           76500
  6         March 8            .38            200000             Thomas Ulie               .43           86000
  7         March 28           .52            100000            Thomas Huebner             .9            90000
  8         March 28           .52            300000         Calder Capital, Inc.          .9           270000
  9         March 29           .52            100000           Bernhard Tewaag            1.06          106000
  10        March 30           .52            100000          Hauck & Aufhaeuser          1.19          119000
*Discounts were calculated based on the last transaction on each date.
</TABLE>

Item 6.  Exhibits.

         None.


                                       12
<PAGE>


                                   SIGNATURES

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

                             AMARILLO BIOSCIENCES, INC.


Date: May 11, 2006          By:      /s/ Joseph M. Cummins
                               ----------------------------------------
                                     Joseph M. Cummins
                                     President, Chief Executive Officer
                                     and Chief Financial Officer

                                       13