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                 June 30, 2005
                               -------------------------------------------------


[ ]  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 |_|.

As of June 30, 2005 there were 16,297,908 shares of the issuer's common stock
outstanding.

<PAGE>

                           AMARILLO BIOSCIENCES, INC.

                                      INDEX


                                                                            PAGE

PART I:     FINANCIAL INFORMATION

ITEM 1.     Financial Statements

            Consolidated Balance Sheet - June 30, 2005......................   3

            Consolidated Statements of Operations - Six Months Ended
            June 30, 2005 and June 30, 2004.................................   4

            Condensed Consolidated Statements of Cash Flows - Six
            Months Ended June 30, 2005 and 2004.............................   5

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

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

ITEM 3.     Controls and Procedures.........................................  10

PART II:    OTHER INFORMATION

ITEM 6.     Exhibits and Reports on Form 8-K................................  11

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

<PAGE>

                        PART I - FINANCIAL INFORMATION

Item 1.          Financial Statements

                   Amarillo Biosciences, Inc. and Subsidiaries
                           Consolidated Balance Sheet
                                  June 30, 2005


<TABLE>
<CAPTION>
Assets
<S>                                                                         <C>
Current assets:
   Cash                                                                     $         12,488
   Other current assets                                                                  419
                                                                            -----------------
Total current assets                                                                  12,907
Equipment, net                                                                           757
Patents, net of accumulated amortization of $185,599                                 125,097
                                                                            -----------------
Total assets                                                                $        138,761
                                                                            =================

Liabilities and Stockholders' Deficit
Current liabilities:
   Accounts payable                                                         $        109,470
   Deferred revenue                                                                   13,735
   Accrued interest expense                                                          490,538
   Accrued payroll                                                                   103,109
   Current maturities of notes payable                                             1,048,500
                                                                            -----------------
Total current liabilities                                                          1,765,352

   Notes payable, including notes payable to stockholder                           1,065,000
                                                                            -----------------
Total liabilities                                                                  2,830,352
                                                                            -----------------
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 - 16,297,908                                                     162,979
   Additional paid-in capital                                                     19,927,093
   Accumulated deficit                                                           (22,781,663)
                                                                            -----------------
Total stockholders' deficit                                                       (2,691,591)
                                                                            -----------------
Total liabilities and stockholder's deficit                                 $        138,761
                                                                            =================
</TABLE>


See accompanying notes to financial statements.


                                       3
<PAGE>

                   Amarillo Biosciences, Inc. and Subsidiaries
                     Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                           Three months ended                Six months ended
                                                                 June 30,                         June 30,
                                                      ---------------------------------------------------------------
                                                           2005             2004             2005            2004
                                                      ---------------------------------------------------------------
<S>                                                     <C>             <C>               <C>             <C>
Revenues:
  Dietary supplement sales                              $   39,898      $    20,266       $   40,774      $   23,826
  Interferon sales                                              --            6,490               --           6,490
  Royalty earned                                            42,134               --           42,134              --
  Federal research grants                                   13,614               --           13,614              --
  Gain on sale of building and equipment                        --               --               --           2,664
  Other                                                         --               --               --              36
                                                      ---------------------------------------------------------------
        Total Revenue                                       95,646           26,756           96,522          33,016
                                                      ---------------------------------------------------------------

Expenses:
  Cost of sales                                              7,808           12,738            7,816          14,548
  Research and development expenses                         42,142           38,313           83,764          85,293
  Selling, general and administrative expense               97,574          152,294          230,828         226,858
  Interest expense                                          24,780           24,326           48,571          48,218
                                                      ---------------------------------------------------------------
        Total Expenses                                     172,304          227,671          370,979         374,917
                                                      ---------------------------------------------------------------

Net loss                                               $   (76,658)     $  (200,915)      $ (274,457)     $ (341,901)
                                                      ===============================================================

Basic and diluted net loss per share                   $    (0.005)     $    (0.017)      $   (0.018)     $   (0.028)
                                                      ===============================================================

Weighted average shares outstanding                     16,162,290       12,013,347       15,605,881      12,013,997
                                                      ===============================================================
</TABLE>


See accompanying notes to financial statements.


                                       4
<PAGE>


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


<TABLE>
<CAPTION>
                                                                                     Six months ended June 30,
                                                                                     2005                   2004
                                                                                ------------           ------------
<S>                                                                             <C>                    <C>
Net cash used in operating activities                                           $  (188,294)           $  (101,211)
                                                                                ------------           ------------

Net cash used in investing activities                                                    --                 (2,940)
                                                                                ------------           ------------
Cash from financing activities:
   Proceeds from issuance of common stock                                           194,499                 95,930
   Proceeds from notes payable                                                           --                 10,000
                                                                                ------------           ------------
      Net cash provided by (used in) financing activities                           194,499                105,930
                                                                                ------------           ------------
Net increase in cash                                                                  6,205                  1,779
Cash at beginning of period                                                           6,283                 11,300
                                                                                ------------           ------------
Cash at end of period                                                           $    12,488            $    13,079
                                                                                ============           ============

Supplemental Disclosure of Cash Flow Information
   Cash paid for interest                                                       $     5,154            $     3,999
                                                                                ============           ============
Non Cash Disclosure
   Stock issued for debt                                                        $        --            $   (10,500)
                                                                                ------------           ------------
</TABLE>


See accompanying notes to financial statements.


                                       5
<PAGE>

                   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, 2004 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 six months ended June 30, 2005 are not
     necessarily indicative of the results that may be expected for the full
     year ending December 31, 2005.

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. There were 520,000 options
     granted to purchase common stock in the three months ended March 31, 2005,
     with an exercise price of $0.40 per share with a 5 year term. No options
     were granted in the three month period ending June 30, 2005.

3.   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.

                                                   Six Months Ended June 30,
                                                     2005             2004
                                                 ------------     ------------
Net loss, as reported                             $  (274,457)     $  (341,901)
Less:  stock based compensation determined
   under fair value based method                  $  (181,105)     $       --
                                                 -------------    -------------
Pro forma net loss                                $  (455,562)     $  (341,901)
                                                 =============    =============
Basic and diluted net loss per share
   As reported                                    $     (0.02)     $     (0.03)
   Pro forma                                      $     (0.02)     $     (0.03)

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 134.0%, risk-free
interest rate of 1.5% and expected life of 60 months.


                                       6
<PAGE>


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

5.   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.

6.   Equity. During the six months ended June 30, 2005, the Board of Directors
     authorized the issuance of 12,612 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 $5,074 was
     recorded for the issuance of these shares during the first half of 2005.

     In the first six months of 2005, the Company completed private equity
     financing by selling 1,650,000 restricted shares of common stock at a
     discount to 21 investors. The net proceeds to the Company were
     approximately $192,000.

     During the quarter ending March 31, 2005 Amarillo issued 250,000 shares of
     stock to a consultant. The consultant paid $2,500 for these shares. The
     difference between the fair market value of the stock of $80,000 and the
     cash proceeds of $2,500 was recorded as compensation expense.

     In May 2005 the shareholders voted to change the number of authorized
     shares of common stock from 20,000,000 to 50,000,000.


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.


                                       7
<PAGE>

In the first six months of the fiscal year, the Company completed private equity
financing by selling restricted stock at a discount to 21 investors. The net
proceeds to the Company were approximately $192,000.

During the first six months of 2005, the Company worked in five areas to improve
its business. These are the areas 1) agroterrorism, 2) publishing, 3) partner
discussions, 4) sales, and 5) relocation.

Agroterrorism. Dr. Joseph Cummins continues to meet 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. Dr.
Cummins expressed his concerns that the livestock in the Texas Panhandle are
completely vulnerable to an attack with foot-and-mouth disease virus and
proposed an alternative control plan that was published in January 2005 (see
next paragraph).

Publishing. A manuscript entitled "Orally Administered Interferon Alpha has
Systemic Effects" was published in the January issue of the American Journal of
Veterinary Research. This information, the Company believes, will help it gain
recognition for its inexpensive, non-toxic technology. A second publication was
posted on the internet by the International Society for Interferon and Cytokine
Research, Jan 2005, Vol 12, No 1, pages 9-15. Entitled Foot-and-Mouth Disease: A
Third Control Alternative, this document is expected to increase awareness about
our plan to combat Foot-and-Mouth Disease.

Nutraceutical Product. Natrol has discontinued the sale of anhydrous crystalline
maltose (ACM) under their brand name Dry Mouth Relief (DMR). The Company 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 and animal health commercial development partners in various regions of
the world including the United States and South East Asia. The Company believes
that one or more of these agreements will be executed during 2005. 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 further reduce
staff and administrative expenses and may be forced to cease operations.

The Company has edited the protocols for myeloproliferative disease studies 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 in the second quarter of 2005 and clinical supplies
were ordered in the first quarter of 2005. The study is expected to enroll its
first patient in October 2005.


                                       8
<PAGE>

Documents were prepared to be submitted to the Turkish government seeking
permission to conduct a study on 90 patients with Behcet's disease. Nobel ILAC
and the Company have agreed to extend the study to 12 weeks of treatment with
interferon lozenges in order to collect more data about prevention of recurrence
of oral ulceration. The IND application was submitted to the FDA. Our goal is to
enroll the first patients to receive oral interferon before the end of 2005.

Relocation. The Company has continued to explore relocation incentives.
Negotiations have continued and a decision is expected in the third quarter of
2005.

Results of Operations:

Revenues. During the six-month period ended June 30, 2005 $40,774 from product
sales was generated compared to revenues from product sales for the six-month
period ended June 30, 2004, of $23,826, an increase of $16,948 or approximately
70%. There have been no sales of oral interferon products in the USA in 2005.
The increase in revenue can be contributed to international sales. There was a
royalty payment of $42,134 credited for animal health sales of oral interferon
products in Japan.

Selling, General and Administrative Expenses. Selling, General and
Administrative expenses of $230,828 were incurred for the six-month period ended
June 30, 2005, compared to 226,858 for the six-month period ended June 30, 2004.

Non-Cash Consulting Activities. During the six-month period ended June 30, 2005,
the Board of Directors authorized the issuance of shares of restricted common
stock to two consultants 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 $82,575 was recorded for the issuance of these shares during the
six-month period ended June 30, 2005.

Net Income (Loss). As a result of the above, in the six-month period ended June
30, 2005, the Company's Net Loss was ($274,457) compared to a Net Loss for the
six-month period ended June 30, 2004 of ($341,901). This decreased loss is
primarily due to higher revenues in 2005.

Liquidity Needs:

At June 30, 2005, the Company had available cash of approximately $12,488, and
had a working capital deficit of approximately ($1,752,445). 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 2005 Plan.


                                       9
<PAGE>

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 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 June 30, 2005. 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.


                                       10
<PAGE>

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 6.    Exhibits and Reports on Form 8-K.

           No reports on Form 8-K were filed during the quarter ended June 30,
           2005.



                                   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: August 9, 2005               By: /s/ Joseph M. Cummins
                                       -----------------------------------------
                                       Joseph M. Cummins
                                       President, Chief Executive Officer
                                       and Chief Financial Officer


                                       11