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                                  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, 2004
                               ------------------------------------------------


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

                         Commission File Number 0-20791


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

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

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

     806-376-1741                                       FAX 806-376-9301
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(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 .

As of March 31, 2004 there were 11,527,834 shares of the issuer's common stock
outstanding.

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                    AMARILLO BIOSCIENCES, INC.

                               INDEX
<TABLE>
<CAPTION>

                                                                                  PAGE NO.
<S>                                                                                  <C>
PART I:       FINANCIAL INFORMATION
ITEM 1.       Financial Statements
              Consolidated Balance Sheet - March 31, 2004.......................        3
              Consolidated Statements of Operations - Three Months Ended
              March 31, 2004 and March 31, 2003.................................        4
              Condensed Consolidated Statements of Cash Flows - Three
              Months Ended March 31, 2004 and 2003..............................        5
              Notes to Consolidated Financial Statements........................        6

              Management's Discussion and Analysis of Financial Condition and
ITEM 2.       Results of Operations.............................................        7

ITEM 3.       Controls and Procedures...........................................        7

PART II:      OTHER INFORMATION

ITEM 6.       Exhibits and Reports on Form 8-K..................................       10

Signatures    ..................................................................       11

</TABLE>

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                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                   Amarillo Biosciences, Inc. and Subsidiaries
                           Consolidated Balance Sheet
                                 March 31, 2004


Assets
Current assets:
  Cash                                                      $      4,973
  Other current assets                                            11,924
Total current assets                                              16,897

Equipment, net                                                     1,777
Patents, net of accumulated amortization of $156,516             153,099
                                                            ------------
Total assets                                                $    171,773
                                                            ============

Liabilities and Stockholders' Deficit
Current liabilities:
  Accounts payable                                          $    169,936
  Accrued interest expense                                       378,727
  Accrued payroll                                                 98,993
  Other accrued expenses                                           5,452
  Notes payable, including notes payable to stockholder        2,103,500
                                                            ------------
Total current liabilities                                      2,756,608
                                                            ------------
Total liabilities                                              2,756,608

Commitments and contingencies

Stockholders' deficit
  Preferred stock, $.01 par value:
  Authorized shares - 10,000,000
  Issued shares - none
  Common stock, $.01 par value:                                         -
     Authorized shares - 20,000,000
     Issued shares - 11,527,834                                  115,278
  Additional paid-in capital                                  19,352,876
  Accumulated deficit                                        (22,052,989)
                                                            ------------
Total stockholders' deficit                                   (2,584,835)
                                                            ------------
Total liabilities and stockholders' deficit                 $    171,773
                                                            ============

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                   Amarillo Biosciences, Inc. and Subsidiaries
                      Consolidated Statements of Operations


                                        Three Months ended March 31,
                                             2004            2003
                                        ----------------------------
Revenues:
  Dietary supplement sales              $      3,560    $      4,806
  Interferon sales                                --          10,000
  Federal research grants                         --           6,586
  Gain on sale of building, equipment          2,663          34,790
  Other                                           36           4,505
                                        ------------    ------------
                                               6,259          60,687
                                        ------------    ------------
Expenses:
  Cost of sales                                1,810              --
  Research and development expenses           46,981          40,292
  Selling, general and administrative
     expenses                                 74,563          37,187
  Interest expense                            23,892          22,554
                                        ------------    ------------
                                             147,246         100,033
                                        ------------    ------------

Net loss                                $   (140,987    $    (39,346)
                                        ============    ============

Basic and diluted net loss per share    $     (0.012)   $     (0.004)
                                        ============    ============

Weighted average shares outstanding       11,465,203       8,994,072
                                        ============    ============

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

<TABLE>
<CAPTION>

                                                              Three months ended
                                                                  March 31,
                                                           ----------------------
                                                              2004        2003
                                                           ---------    ---------
<S>                                                        <C>          <C>
Net cash used in operating activities                      $ (57,217)   $ (69,362)

Cash provided by (used in) investing activities               (2,405)     119,836
                                                           ---------    ---------

Cash from financing activities:
  Proceeds from issuance of common stock                      40,890           --
  Proceeds from notes payable                                 10,000       45,000
  Repayments of notes payable                                     --      (80,990)
                                                           ---------    ---------
     Net cash provided by (used in) financing activities      50,890      (35,990)
                                                           ---------    ---------
Net increase (decrease) in cash                               (6,327)      14,484
                                                           ---------    ---------
Cash at beginning of period                                   11,300          100
                                                           ---------    ---------
Cash at end of period                                      $   4,973    $  14,584
                                                           =========    =========
Supplemental Disclosure of Cash Flow Information
  Cash paid for interest                                   $   2,051    $   1,768
                                                           =========    =========
Non Cash Disclosure
  Stock issued for debt                                    $ (10,500)   $      --
                                                           ---------    ---------
</TABLE>
                                        5

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                   Amarillo Biosciences, Inc. and Subsidiaries

                   Notes To Consolidated Financial Statements

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, 2003 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, 2004 are not
     necessarily indicative of the results that may be expected for the full
     year ending December 31, 2004.

2.   Stock based compensation. The Company accounts for its employee stock-based
     compensation plans under Accounting Principles Board ("APB") Opinion No.
     25, Accounting for Stock Issued to Employees. No options were granted to
     purchase common stock in the three months ended March 31, 2004, and 12,000
     options were granted in the three months ending March 31, 2003 with an
     exercise price of $0.44 per share with a 5 year term.

     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.


                                              Three Months Ended
                                                    March 31,
                                                 2004        2003
                                            -----------    --------
Net loss, as reported                       $  (135,545)   $(39,346)
Less: stock based compensation determined
  under fair value based method                      --      (4,969)
                                            -----------    --------
Pro forma net loss                          $  (135,545)   $(44,315)

Basic and diluted net loss per share
  As reported                               $     (0.01)      (0.01)
                                            ===========    ========
  Pro forma                                 $     (0.01)      (0.01)
                                            ===========    ========

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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.

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 first quarter, the Company completed private equity financing by selling
restricted stock at a discount to 10 investors. The net proceeds to the Company
were approximately $46,981.

During the first quarter of 2004, ABI worked in five areas to improve the
Company. These are the areas 1) funding, 2) agroterrorism, 3) publishing, 4)
partner discussions and 5) sales.

Agroterrorism. Dr. Joseph Cummins met with scientists, livestock producers and
elected officials to argue for alternatives to the government's plans to
slaughter livestock if diseases are introduced by terrorists. On February 12,
2004, Dr. Joseph Cummins participated in an agroterrorism seminar held at the
Texas A&M Research and Extension Center in Amarillo, Texas. Working with Dr.
Albert Paszek of Cargill, a manuscript entitled "Interferon Alpha in the Feed to
Control Foot-and-Mouth Disease" was prepared for submission to the 57th
Reciprocal Meat Conference in Lexington, KY in June. Dr. Cummins met with
members of the staff of US Senator Cornyn to discuss agroterrorism. Members of
the Emergency Management team in Amarillo and the Randall County Judge met with
Dr. Cummins to hear his concerns that the livestock in the Texas Panhandle are
completely vulnerable to an attack with foot-and-mouth disease virus.

                                        7

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Publishing. A manuscript entitled "Orally Administered Interferon Alpha has
Systemic Effects" was submitted and accepted by the American Journal of
Veterinary Research. Publishing this information, ABI believes, will help the
Company gain recognition for our technology.

Partner/License Discussions. Because approval for oral interferon in animal
health is expected in a "first world country," and because this approval will
result in a Certificate of Free Sale (CFS), discussions have begun with
multi-national animal health companies who have an interest in the CFS.

Nutraceutical Product. Natrol has discontinued the sale of anhydrous crystalline
maltose (ACM) under their brand name Dry Mouth Relief (DMR). ABI has been in
contact with the former distributors of DMR and expects our own sales to replace
those of DMR.

The Company is presently negotiating with human health and animal health
commercial development partners in various regions of the world including the
United States, Canada, Europe and the Middle East. The Company believes that one
or more of these agreements will be executed during 2004. These agreements could
generally include provisions for the commercial partner to pay ABI a technology
access fee, could include payments for a portion of the clinical trial expenses,
could include payment obligations to ABI 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
ABI. 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 further reduce staff and administrative
expenses and may be forced to cease operations.

Results of Operations:

Revenues. During the three-month period ended March 31, 2004 $3,560 from product
sales was generated compared to revenues from product sales for the three-month
period ended March 31, 2003, of $14,806, a decrease of $11,246 or approximately
76%. There have been no sales of interferon products in 2004, this accounts for
the decrease in product sales.

Selling, General and Administrative Expenses. Selling, General and
Administrative expenses of $74,563 were incurred for the three-month period
ended March 31, 2004, compared to $37,187 for the three-month period ended March
31, 2003, an increase of $3,376. There was $4,656 in non-cash expenses in
recognition of restricted stock issued to cover services provided by consultants
in lieu of cash.

Non-Cash Consulting Activities. During the three-month period ended March 31,
2004, 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 $4,656 was recorded for the issuance of these shares
during the three-month period ended March 31, 2004.

                                       8
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Net Income (Loss). As a result of the above, in the three-month period ended
March 31, 2004, the Company's Net Loss was ($140,987) compared to a Net Loss for
the three- month period ended March 31, 2003 of ($39,346). This increased loss
is primarily due to lower revenues in 2004.

Liquidity Needs:

At March 31, 2004, the Company had available cash of approximately $5,000, and
had a working capital deficit of approximately ($2,739,711). 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 2004 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.

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

                                       9
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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

Based on the evaluation conducted by Dr. Joseph M. Cummins, both the Chief
Executive Officer ("CEO") and Chief Financial Officer ("CFO"), as of a date
within 90 days of the filing date of this quarterly report ("Evaluation Date"),
of the effectiveness of the Company's disclosure controls and procedures, Dr.
Joseph M. Cummins concluded that, as of the Evaluation Date, (1) there were no
significant deficiencies or material weaknesses in the Company's disclosure
controls and procedures, (2) there were no significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the Evaluation Date and (3) no corrective actions were required to
be taken.



                           PART II - OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K.

          No reports on Form 8-K were filed during the quarter ended March 31,
          2004.

                                       10
<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 24, 2004                  By:      /s/ Joseph M. Cummins
                                       ---------------------------------------
                                       Joseph M. Cummins
                                       President, Chief Executive Officer
                                       and Chief Financial Officer


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