<PAGE>

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-QSB/A
                                  AMENDMENT NO. 1


                                   (Mark One)

[X]      Quarterly report under Section 13 or 15(d) of the Securities Exchange
         Act of 1934 For the quarterly period ended September 30, 2004

[ ]      Transition report under Section 13 or 15(d) of the Securities Exchange
         Act of 1934 For the transition period from _________ to _________

                           Commission File No. 0-29015

                     AMERICAN ORIENTAL BIOENGINEERING, INC.
                 (Name of Small Business Issuer in Its Charter)

            NEVADA                                        84-0605867
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

           NO.308 XUEFU ROAD, NANGANG DISTRICT, HARBIN, CHINA, 150086
                    (Address of principal executive offices)
                                86-451-8666-6601
                (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 [ ]

The number of shares outstanding of each of the issuer's class of equity as of
the latest practicable date is stated below:

Title of each class of Common Stock          Outstanding as of November 11, 2004
--------------------------------------------------------------------------------
Preferred Stock, $0.001 par value                              1,000,000
Common Stock, $0.001 par value                                33,631,827

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

<PAGE>

                        --------------------------------
                                TABLE OF CONTENTS
                        --------------------------------

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

         o        Condensed Consolidated Balance Sheets                      F-1
         o        Condensed Consolidated Statements of Income                F-2
         o        Condensed Consolidated Statements of Cash Flows            F-3
         o        Notes to Condensed Consolidated Financial Statements       F-4

Item 2.  Management Discussions & Analysis of Financial Condition and
         Results of Operations.
Item 3.  Controls and Procedures.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3.  Defaults Upon Senior Securities.
Item 4.  Submission of Matters to a Vote of Security Holders.
Item 5.  Other Information.
Item 6.  Exhibits

<PAGE>
<TABLE>

                                        PART I - FINANCIAL INFORMATION

ITEM 1.         FINANCIAL STATEMENTS

                            AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES
                                     CONDENSED CONSOLIDATED BALANCE SHEETS

                                                    ASSETS
                                                    ------

                                                                    SEPTEMBER 30,    DECEMBER 31,
                                                                       2004              2003
                                                                    ------------     ------------
                                                                     UNAUDITED
<S>                                                                 <C>              <C>
CURRENT ASSETS
  Cash and cash equivalents                                         $ 2,214,039      $ 5,366,857
  Trade receivable, net                                               3,533,872        3,112,998
  Other receivable                                                      425,511          143,809
  Inventories                                                         4,495,426        2,546,810
  Prepayments for goods                                                 321,081          868,458
  Advances to employees                                                 123,283           55,116
  Deferred taxes                                                         78,439           78,439
  Deferred merger costs                                                   8,335           33,334
  Deferred consulting expenses                                        1,937,243        1,569,442

                                                                    ------------     ------------
  TOTAL CURRENT ASSETS                                               13,137,229       13,775,263
                                                                    ------------     ------------

PROPERTY, PLANT AND EQUIPMENT, NET                                    6,903,876        7,264,822

DEPOSIT FOR MACHINERY                                                   388,898               --

DEPOSIT FOR LEASEHOLD IMPROVEMENT                                       386,000               --

DEPOSIT FOR ACQUISITION                                               7,228,916               --

OTHER ASSETS, NET                                                       566,446          632,531

                                                                    ------------     ------------
TOTAL ASSET                                                         $28,611,365      $21,672,616
                                                                    ============     ============

CURRENT LIABILITIES
  Accounts payable and accrued expenses                             $ 1,497,581      $ 1,253,826
  Prepayments for materials                                             231,998           76,593
  Bank loans                                                          1,445,783        1,445,783
  Taxes payable                                                         444,365          310,480
  Obligation under finance leases within one year                         7,069            6,780
  Payable to related party                                               92,426           43,243

                                                                    ------------     ------------
  TOTAL CURRENT LIABILITIES                                           3,719,222        3,136,705
                                                                    ------------     ------------

LONG-TERM LIABILITIES
  Obligation under finance leases                                        21,638           25,449
                                                                    ------------     ------------

TOTAL LIABILITIES                                                     3,740,860        3,162,154
                                                                    ------------     ------------

SHAREHOLDERS' EQUITY
  Preferred stock, $0.001 par value; 2,000,000 shares
  authorized; 1,000,000 shares issued or outstanding
  at September 30, 2004 and December 31,2003 respectively                 1,000            1,000


  Common stock, $0.001 par value, 60,000,000 shares
  authorized: 33,631,827 and 32,725,827 shares and outstanding
  at September 30, 2004 and December 31, 2003, respectively              33,632           32,726


  Additional paid-in capital                                         11,399,038       10,048,734
  Retained earnings
    Restricted portion                                                  534,177          534,177
    Unrestricted portion                                             12,902,658        7,893,825

                                                                    ------------     ------------

TOTAL SHAREHOLDERS' EQUITY                                           24,870,505       18,510,462
                                                                    ------------     ------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                          $28,611,365      $21,672,616
                                                                    ============     ============

                    See accompanying notes to condensed consolidated financial statements

</TABLE>

                                                     F-1

<PAGE>
<TABLE>

                                 AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES
                                       CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                                       (UNAUDITED)

                                                      3 months ended Sept.30,               9 months ended Sept.30,
                                                      2004               2003               2004               2003
                                                      ----               ----               ----               ----
<S>                                                <C>                <C>                <C>                <C>
SALES                                              $  7,372,555       $  5,426,568       $ 19,283,134       $ 14,802,208

COST OF SALES                                         2,436,157          1,956,309          6,098,743          5,509,981

                                                   -------------      -------------      -------------      -------------
GROSS PROFIT                                          4,936,398          3,470,259         13,184,391          9,292,227

SELLING AND ADMINISTRATIVE EXPENSE                      508,477            440,322          1,537,631          1,144,636

ADVERTISING                                             728,802            420,987          2,336,006          1,593,682

GENERAL AND ADMINISTRATIVE EXPENSES                     892,701            882,504          2,757,745          1,655,667

MERGER COSTS                                              8,333              8,333             24,999             24,999

DEPRECIATION AND AMORTIZATION                           145,619            134,580            436,674            396,290

                                                   -------------      -------------      -------------      -------------
INCOME FROM OPERATIONS                                2,652,466          1,583,533          6,091,336          4,476,953

INTEREST, NET                                           (23,694)            (3,554)           (71,485)           (50,261)

OTHER INCOME / (EXPENSES)                                56,634               (679)            83,376             79,473

                                                   -------------      -------------      -------------      -------------
INCOME BEFORE INCOME TAXES                            2,685,406          1,579,300          6,103,227          4,506,165

INCOME TAXES                                            444,361            335,645          1,094,394            803,242

                                                   -------------      -------------      -------------      -------------
NET INCOME                                         $  2,241,045       $  1,243,655       $  5,008,833       $  3,702,923
                                                   =============      =============      =============      =============

NET INCOME PER SHARE
    BASIC                                          $       0.07       $       0.04       $       0.15       $       0.13
    DILUTED                                        $       0.07       $       0.04       $       0.15       $       0.13

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
    BASIC                                            33,570,957         31,625,827         33,073,499         27,762,034
    DILUTED                                          33,594,477         33,237,240         33,097,224         28,777,621


                         See accompanying notes to condensed consolidated financial statements

</TABLE>
                                                          F-2

<PAGE>
<TABLE>

                               AMERICAN ORIENTAL BIOENGINEERING, INC.
                                          AND SUBSIDIARIES
                           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                             (UNAUDITED)

                                                                   9 months ended Sept.30,
                                                                   2004              2003
                                                                   ----              ----
<S>                                                            <C>               <C>
CASH FLOWS FROM OPERATING ACTIVIES:
          Net income                                           $ 5,008,833       $ 3,702,923
          Adjustments to reconcile net income to net cash
               provided by operating activities:
          Depreciation and amortization                            436,674           396,290
          Stock option compensation expenses                        64,000                --
          Deferred merger cost                                      24,999            24,999
          Buy back of warrants                                      25,000                --
          Common stock for services                              1,287,210                --

          Amortization of deferred consulting                      691,299           225,000
          Common stock issued for deferred consulting           (1,059,100)               --

          Stock warrants issued                                         --           555,000
          Changes in operating assets and liabilities:
               Inventories                                      (1,948,616)       (2,911,535)
               Trade receivables                                  (420,874)       (1,242,791)
               Other receivable                                   (281,702)          (26,042)
               Prepayments for goods                               547,377          (179,062)
               Due from related parties                                 --           265,961
               Advances to employee                                (68,167)               --
               Trade payables and accrued expenses                 218,755           476,682
               Prepayments for materials                           155,405            60,046
               Payable to related party                             49,183          (175,093)
               Income taxes payable                                133,885           344,334
                                                               ------------      ------------
Net cash provided by operating activities                        4,864,161         1,516,712
                                                               ------------      ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
          Purchase of fixed assets                                  (9,643)          (69,380)
          Deposit for machinery                                   (388,898)               --
          Deposit for leasehold improvement                       (386,000)               --
          Deposit for acquisition                               (7,228,916)               --
                                                               ------------      ------------
Net cash uesd in investing activities                           (8,013,457)          (69,380)
                                                               ------------      ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
          Repayment of finance leases                               (3,522)               --
          Proceeds from bank loan                                  481,928                --
          Repayment of bank loan                                  (481,928)               --
                                                               ------------      ------------
Net cash used in financing activities                               (3,522)               --
                                                               ------------      ------------

NET (DECREASE) INCREASE IN CASH                                 (3,152,818)        1,447,332
  AND CASH EQUIVALENTS
          Cash and cash equivalents, beginning of period         5,366,857         2,816,723
                                                               ------------      ------------

          Cash and cash equivalents, end of period             $ 2,214,039       $ 4,264,055
                                                               ============      ============

SUPPLEMENTARY CASH FLOWS DISCLOSURES
             1 Interest paid                                   $    71,485       $    50,261
                                                               ============      ============
             2 Taxes paid                                      $   313,172       $   344,334
                                                               ============      ============
             3 Issued 1,000,000 preferred shares and 20,284,810 common shares in
               February 2003 valued at $3,285,856 for the assets acquisition.
             4 Issued 200,600 common shares in April 2004 valued at $97,210 for
               services performed.
             5 Issued 700,000 common shares in July 2004 valued at $1,189,300
               for services performed.


                See accompanying notes to condensed consolidated financial statements

</TABLE>
                                                F-3

<PAGE>

             AMERICAN ORIENTAL BIOENGINEERING, INC AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                               SEPTEMBER 30, 2004
--------------------------------------------------------------------------------

NOTE 1 - BASIS OF PRESENTATION

The unaudited condensed consolidated financial statements of American Oriental
Bioengineering, Inc. have been prepared in accordance with generally accepted
accounting principles for interim financial information and pursuant to the
requirements for reporting on Form 10-QSB and Item 310(b) of Regulation S-B.
Accordingly, they do not include all the information and footnotes required by
accounting principles generally accepted in United States of America for
complete financial statements. However, such information reflects all
adjustments (consisting solely of normal recurring adjustments), which are, in
the opinion of management, necessary for a fair statement of results for the
interim periods. Results shown for interim periods are not necessarily
indicative of the results to be obtained for a full fiscal year. The condensed
consolidated balance sheet information as of December 31, 2003 was derived from
the audited consolidated financial statements included in the Company's Annual
Report Form 10-KSB. These interim financial statements should be read in
conjunction with that report.

Certain prior period amounts have been reclassified to conform to the current
period's presentation.

NOTE 2 - NATURE OF COMPANY

On December 18, 2001, the Company and Harbin Bioengineering entered into an
agreement whereby the Company acquired 100% of the equity interest of Harbin
Bioengineering. As a result, Harbin Bioengineering became a wholly owned
subsidiary of the Company (the "Acquisition"). The Company exchanged 8,538,943
shares of its common stock for that number of shares of Harbin Bioengineering
that constitutes 100% of the equity interest of Harbin Bioengineering. On
December 18, 2001, the directors and executive officers of the Company resigned
and Shujun Liu was appointed Chairman of the Board of Directors and President of
the Company. On June 26, 2002, the Acquisition became effective when the Company
filed Articles of Exchange with the Secretary of State of Nevada.

On October 15, 2002, the Company filed a Information Statement of Schedule 14C
reporting the issuance of 20,284,810 shares of common stock and 1,000,000 shares
of class A preferred stock in consideration for all of the ownership interest in
a soybean protein peptide biochemical engineering project (the "Project") as
described in the purchase agreement, dated as of August 17, 2002 by Shujun Liu
and the Company ("Purchase Agreement"). The value of the common stock issued was
approximately $3,205,000, which was equivalent to $0.158 per share of common
stock, the average of the closing price for the five-day period immediately
following the date of the Purchase Agreement, i.e, from August 19, 2002 to
August 23, 2002. By acquiring the Project, among other assets, the Company had
also acquired the ownership of the building housing the Project's manufacturing
plant, manufacturing equipment, and environmental control equipment the
historical cost of which was approximately $3,205,000. In addition, the Company
had also received the right to produce the products that resulted from the
Project as well as ownership rights on a pending patent in PRC for the process
of the extraction and production of soybean peptide. The shares were issued on
February 22, 2003.

                                      F-4




<PAGE>

On April 16, 2004, the Company formed a subsidiary registered in Hong Kong,
American Oriental Bioengineering (H.K.) Limited ("AOBOHK") to be wholly owned by
Bestkey International Limited, a 100% subsidiary of the Company. The new
subsidiary commenced operations in May 2004 and currently employs four
individuals. This new subsidiary performs business development, sales and
marketing and logistics services exclusively for the Company in Hong Kong and
Asia.

On May 26, 2004, the Company signed a legally binding letter of intent to
acquire Heilongjiang Songhuajiang Pharmaceutical Limited ("HSPL"), a Chinese
state-owned pharmaceutical company. The letter of intent provides that the
Company has the right to acquire all or part of the equity ownership in HSPL for
a period of 90 days following the date of the execution of the letter of intent,
subject to signing an acquisition agreement. The acquisition of HSPL can be
completed only when the definitive acquisition agreement are signed by both
parties and all the criteria are being met to the satisfaction of the board of
directors of the Company. According to information provided by HSPL, which the
Company has not verified, it has over 50 years of operations and is a well-known
Chinese state-owned pharmaceutical company located in Heilongjiang province. It
has approximately 500 employees and an in-house research and development team.
All of HSPL's manufacturing facilities have been certified by the Chinese
Government according to the GMP (Good Manufacturing Practices) standards. In
addition, HSPL has an extensive line of antiviral products with more than 70
types of medicines, with delivery methods covering intravenous injection,
tablet, capsule, powder, granule, and oral liquid. HSPL's flagship product,
Shuanghuangliang Lyophilize Powder Injection, which is a product aimed at
administering one of the traditional antiviral Chinese herbs to patients through
intravenous injection. This product had some effect in fighting the SARS virus
during the spring of 2003.


On September 8, 2004, the Company signed the Purchase Agreement relating to the
acquisition of HSPL. The Company paid a deposit to acquire 100% equity ownership
of HSPL of $7,229,000 and the Company will assume of HSPL's liabilities,
including without limitation its existing bank loan with the outstanding balance
of approximately $3,614,000. As a result of this transaction, AOBO will acquire
all manufacturing assets, facilities, equipment, land and land use rights, raw
material, inventories, intellectual properties and technical talents of HSPL.


The closing procedures are expected to be completed within forty five (45) days
after the signing of the Purchase Agreement.

                                      F-5
<PAGE>

NOTE 3 - USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenue and expenses during the reporting period. Actual
results when ultimately realized could differ from those estimates.

NOTE 4 - STOCK BASED COMPENSATION

The Company's stock option plan is subject to the provisions of Statement of
Financial Accounting Standards ("SFAS") No 123, Accounting for Stock-Based
Compensation. Under the provisions of this standard, employee stock-based
compensation expense is measured using either the intrinsic-value method as
prescribed by Accounting Principles Board ("APB") Opinion No. 25, Accounting for
Stock Issued to Employees and related Interpretations, or the fair value method
described in SFAS No. 123. The Company has elected to account for its employee

stock-based awards under the provisions of APB Opinion No. 25. Under APB Opinion
No. 25, compensation cost for stock options is measured as the excess, if any,
of the fair value of the underlying common stock on the date of grant over the
exercise price of the stock option.

Companies choosing the intrinsic-value method are required to disclose the pro
forma impact of the fair value method on net income.

In June 2004, employment agreements for certain executive employees of the
Company were amended to include a provision that if the Company's closing stock
price was less than $2.00 on the last day of the quarter, the employees would
not be entitled to their quarterly stock options. In quarters ending September
30 and June 30, 2004, the closing stock price on September 30, 2004 and June 30,
2004 was $1.35 and $1.75, respectively. According to the employment agreements
as amended, no options were granted to the employees for those two respective
quarters.

In the quarter ending March 31, 2004, the Company granted 23,704 stock options
(which an exercise price of $2.00 per share, expire March 31, 2009 and vest
immediately) to the directors covered by the stock option plan of the Company in
accordance with the executive employee employment agreements the Company
concluded with them. For the three months ended March 31, 2004, the Company
recognized $32,000 of compensation expense for the difference between the
closing market price of the Company's common stock on March 31, 2004 and the
exercise price of $2.00.

There were no stock options granted to employees in 2003. The pro forma effect
on net income and income per share relating to the 2004 stock option grants, net
of the previously recognized intrinsic value expense are as follows:

                                                         Nine months ended
                                                        September 30, 2004
                                                        -------------------

Net income as reported                                          $5,008,833
Pro forma net income                                            $4,981,337

Income per share as reported                                         $0.15
Pro forma income per share                                           $0.15

Additionally, in accordance with the executive employment agreements, the
Company was obligated to grant stock options to purchase 19,393 shares of the
Company's common stock in the last quarter of 2003. The options vested
immediately, are exercisable at $2.00 per share and expire December 31, 2008.
Since the options were not physically granted until the establishment of the
Company's stock option plan in March 2004, the Company had accrued for the
compensation expense associated with the options at December 31, 2003 amounting
to $32,000. In the first quarter 2004, the $32,000 was reclassified from accrued
expenses to additional paid-in capital.

                                      F-6
<PAGE>

The fair value of options granted under the Company's stock option plans were
estimated on the date of grant using the Black-Scholes pricing model with the
following assumptions:

                Weighted average of expected risk-free interest rates      3.00%
                Expected years to exercise date                                5
                Expected stock volatility                                 81.49%
                Expected dividend yield                                       0%

NOTE 5 - EARNINGS PER SHARE

Basic earnings per share is computed by dividing income available to common
shareholders by the weighted-average number of common shares outstanding during
the period. Diluted earnings per share is computed similar to basic earnings per
share except that the denominator is increased to include the number of
additional common shares that would have been outstanding if the potential
common shares had been issued and if the additional common shares were dilutive.

Basic and diluted earnings per share are calculated as follows:
<TABLE>
                                                                 NINE MONTHS ENDED
                                                                   SEPTEMBER 30
                                                               2004             2003
                                                           -----------      -----------
<S>                                                        <C>              <C>
Earnings:
   Net income                                              $ 5,008,833      $ 3,702,923
   Dividend                                                         --               --
                                                           -----------      -----------
Income applicable to common shareholders                   $ 5,008,833      $ 3,702,923
                                                           ===========      ===========

Basic:
Income applicable to common shareholders                   $ 5,008,833      $ 3,702,923
Weighted average shares outstanding during the period       33,073,499       27,762,034
                                                           -----------      -----------
   Basic earnings per share                                $      0.15      $      0.13
                                                           ===========      ===========

Diluted:
Income applicable to common shareholders                   $ 5,008,833      $ 3,702,923
Weighted average shares outstanding during the period               --       27,762,034
Effect of dilutive securities:
   Stock options                                                    --               --
   Warrants                                                     23,725        1,015,587
                                                           -----------      -----------
Diluted weighted common shares outstanding                  33,097,224       28,777,621
                                                           ===========      ===========

   Diluted earning per share                               $      0.15      $      0.13
                                                           ===========      ===========
</TABLE>

                                      F-7
<PAGE>

NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUTMENTS

The carrying value of financial instruments including cash and cash equivalents,
receivables, accounts payable and accrued expenses and debt, approximates their
fair value at June 30, 2004 and December 31, 2003 due to the relatively
short-term nature of these instruments.

NOTE 7 - FOREIGN CURRENCY CONVERSION

The Company's financial information is presented in US dollars. People's
Republic of China currency (Reminbi dollars) has been converted into US dollars
at the exchange rate of 8.3 to 1.

NOTE 8 - NEW ACCOUNTING PRONOUNCEMENTS

In March 2004, the U.S. Securities and Exchange Commission's Office of the Chief
Accountant and the Division of Corporate Finance released Staff Accounting
bulletin ("SAB") No. 105, "Loan Commitments Accounted for as Derivative
Instruments". This bulletin contains specific guidance on the inputs to a
valuation-recognition model to measure loan commitments accounted for at fair
value, and requires that fair-value measurement include only differences between
the guaranteed interest rate in the loan commitment and market interest rate,
excluding any expected future cash flows related to the customer relationship or
loan servicing. In addition, SAB 105 requires the disclosure of the accounting
policy for loan commitments, including methods and assumptions used to estimate
the fair value of loan commitments, and any associated hedging strategies. SAB
105 is effective for derivative instruments entered into subsequent to March 31,
2004 and should also be applied to existing instruments as appropriate.

The Company has not yet completed its evaluation of SAB 105, but does not
anticipate a material effect on the consolidated financial statements.

NOTE 9 - NOTE RECEIVABLE

On March 1, 2004, the Company loaned to Heilongjiang Songhuajiang Pharmaceutical
Limited ("HSPL") (an unrelated third party to the Company as of March 1, 2004)
$2,409,639. The loan was initially due in August 2004 and bore interest at the
prevailing best lending rate of the Bank of China on the first bank day of each
month. HSPL pledged a patent as security for the loan. On September 1, 2004, at
the request of HSPL, the Company extended the terms of borrowing for another 6
months.


On September 8, 2004, the Company signed the Purchase Agreement relating to the
acquisition of HSPL. The loan to HSPL, upon the request of HSPL, was transferred
to become part of the payment for the purchase price of the acquisition. As a
result, the Company has ceased to accrue interest income on the note receivable
after September 8, 2004 and starting from September 9, 2004, there was no more
outstanding note receivable reflected in the accounting records of the Company.
Also see Note 2.


                                      F-8
<PAGE>

NOTE 10 - INCOME TAXES

Income taxes are provided on Harbin Three Happiness Bioengineering Limited in
accordance with taxation principles currently effective in the People's Republic
of China as it relates to the Company.

NOTE 11 - INVESTMENT AGREEMENTS AND WARRANTS

On July 22, 2003, the Company filed a Form 8-K current report pursuant to
section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, to
announce that BH Capital Investments, LP and Excalibur Limited Partnership
(together, the "Investors") and the Company entered into an investment agreement
(the "Investment Agreement"). On September 18, 2003, in conjunction with the
Investment Agreement, the Company filed with the Securities and Exchange
Commission (the "Commission") a Form SB-2 registration statement under the
Securities Act of 1933 ("Registration Statement") to register the common stock
and the warrants associated with the Investment Agreement and on April 14, 2004,
the Company filed with the Commission a request to withdraw the September 18,
2003 registration statement, for reasons specified in that request. On December
30, 2003 and December 31, 2003 the Company filed separate registration
statements also in connection with the Investment Agreement, as amended as of
December 5, 2003, which have not become effective as of the end of the period
covered by this quarterly report.

On June 3, 2004, the Company has signed Amendment No. 2 to the Investment
Agreement, in which the Company and the Investors agreed to the following:

1.    Extension of the terms of the Investment Agreement to January 31, 2005
2.    Removal of minimum drawdown requirement of $750,000
3.    The Investors agreed to waive all the registration rights (as previously
      provided for in the Registration Agreement associated with the Investment
      Agreement) relating to the warrants issued to the Investor in connection
      with execution of the Investment Agreement.

Furthermore, on June 30, 2004, the Company paid $25,000 to purchase back from
unrelated third parties, as transferees of the Investors and/or FirsTrust Group,
the warrants that were issued to the Investors and FirsTrust Group (the
placement agent) in connection with the execution of the Investment Agreement
and all subsequent Amendments to Investment Agreement.

<TABLE>
Name of recipient                        Number of warrant  Exercise price    Date of exercise       Expiry date
-----------------                        -----------------  --------------    ----------------       -----------
<S>                                          <C>                <C>             <C>                 <C>
BH Capital Investments, LP                   225,000            $ 0.3            Jul 18, 03          Jul 17, 08
Excalibur Limited Partnership                225,000            $ 0.3            Jul 18, 03          Jul 17, 08
FirsTrust Group, Inc.                        276,000            $ 0.3            Jul 18, 03          Jul 17, 08
BH Capital Investments, LP                    30,000            $ 2.5            Jan 1, 2004        Dec 31, 2008
BH Capital Investments, LP                    30,000            $ 2.5            Apr 1, 2004        Mar 31, 2009
BH Capital Investments, LP                    30,000            $ 2.5           July 1, 2004        June 30, 2009
Excalibur Limited Partnership                 30,000            $ 2.5            Jan 1, 2004        Dec 31, 2008
Excalibur Limited Partnership                 30,000            $ 2.5            Apr 1, 2004        Mar 31, 2009
Excalibur Limited Partnership                 30,000            $ 2.5           July 1, 2004        June 30, 2009
</TABLE>

                                      F-9
<PAGE>

The Company cancelled all the warrants purchased back and therefore, there were
no warrants outstanding at September 30, 2004. As of September 30, 2004, the
Company had not yet paid the $25,000 for the cancellation of warrants and such
amount is included in accrued expenses at September 30, 2004.

NOTE 12 - SHAREHOLDERS' EQUITY

On April 7, 2004, the Company issued 206,000 shares of its restricted common
stock to Focus Partners, LLP for them to provide investor relations services to
the Company during 2002. Their services were terminated in early 2003 because of
a dispute between the parties over the quality of the services. In early 2004,
the Company reached a settlement with Focus Partners, LLC and 206,000 shares of
restricted stock were issued in April 2004. The stock is restricted under the
Securities Act of 1933, and such shares bear a legend under rule 144 of the Act
and bear a restrictive legend or other restrictions on transfer or resale. The
service agreement provided that the shares of common stock were to be issued at
the end of each month during the service period. The 206,000 shares of
restricted stock issued to Focus Partners, LLC were therefore valued based on
the average of the closing share prices of the common stock at the end of each
month during the service period. The total value of the shares was $97,210.


On July 9, 2004, the Company filed a Form S-8 Registration Statement under the
Securities Act of 1933 to register a total of 700,000 shares of common stock of
the Company as compensation that related to the nine consulting agreements
entered between the Company and individuals effective July 1, 2004. All the
individuals are unrelated and non - affiliate third parties. The associated cost
of the stocks issued was valued at $1.70 per share, representing the closing
price of the Company's common stock on the agreement date, and is being
amortized over the terms of each respective consulting agreement. The value of a
total of 112,000 shares is being amortized over one year and the value of
588,000 shares is being amortized over 3 years. For the nine months ended
September 30, 2004, the Company recorded consulting expense of $130,900 and
deferred consulting expense of $1,059,100 at September 30, 2004.



NOTE 13 - SUBSEQUENT EVENTS

On September 8, 2004, the Company signed a Purchase Agreement relating to the
acquisition of HSPL, in connection with the legally binding letter of intent
signed between the Company and HSPL on May 26, 2004. The Company's total
consideration to acquire 100% equity ownership of HSPL consists of cash of
$7,229,000 and the assumption of HSPL's liabilities, including without
limitation its existing bank loan with the outstanding balance of approximately
$3,614,000. As a result of this transaction, AOBO will acquire all manufacturing
assets, facilities, equipment, land and land use rights, raw material,
inventories, intellectual properties and technical talents of HSPL. As of
September 30, 2004, the Company paid a deposit of $7,228,916 to HSPL for the
acquisition.

The closing procedures are expected to be completed within forty five (45) days
after the signing of the Purchase Agreement.

                                      F-10
<PAGE>

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

The following discussion should be read in conjunction with the information
contained in the condensed consolidated financial statements of the Company and
the notes thereto appearing elsewhere herein and in conjunction with the
Management's Discussion and Analysis set forth in the Company's Annual Report on
Form 10-KSB for the year ended December 31, 2003 and Quarterly Report on Form
10-QSB for the quarter ended September 30, 2003.

As used in this report, the "Company", "we", "our", "us" and "AOBO" refer to
American Oriental Bioengineering, Inc., a Nevada corporation.

PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
-----------------------------------------------------

This annual report contains forward-looking statements within the meaning of the
federal securities laws. These include statements about our expectations,
beliefs, intentions or strategies for the future, which we indicate by words or
phrases such as "anticipate," "expect," "intend," "plan," "will," "we believe,"
"AOBO believes," "management believes" and similar language. The forward-looking
statements are based on the current expectations of AOBO and are subject to
certain risks, uncertainties and assumptions, including those set forth in the
discussion under "Description of Business" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations," including the
discussion under "--Risk Factors" there under. The actual results may differ
materially from results anticipated in these forward-looking statements. We base
the forward-looking statements on information currently available to us, and we
assume no obligation to update them..

Investors are advised to consult any further disclosures by us on the subject in
our filings with the Securities and Exchange Commission, especially on Forms
10-KSB, 10-QSB and 8-K, in which we discuss in more detail various important
factors that could cause actual results to differ from expected or historic
results. It is not possible to foresee or identify all such factors. As such,
investors should not consider any list of such factors to be an exhaustive
statement of all risks and uncertainties or potentially inaccurate assumptions.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES
------------------------------------------

Our discussion and analysis of operations is based upon our consolidated
financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these
financial statements requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent assets and liabilities. On an on-going basis, we
evaluate our estimates. We base our estimates on historical experience and on
various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions.

Areas where significant estimation judgments are made and where actual results
could differ materially from these estimates are:

      A.   Inventory reserves
      B.   Reserve for uncollectible receivables
      C.   Impairment losses on long-lived assets
      D.   The assumptions used in calculating the fair value of our warrants
           using the Black-Scholes pricing model.

                                       11
<PAGE>

We believe the following are among the most critical accounting policies that
impact our consolidated financial statements. We suggest that our significant
accounting policies, as described in our consolidated financial statement
footnotes be read in conjunction with this Management's Discussion and Analysis
of Financial Condition and Results of Operations.

         A.       We account for our inventories at the lower of cost or market
                  on the first-in, first-out basis.
         B.       We evaluate impairment of our long-lived assets under the
                  provisions of Statement of Financial Accounting Standards No.
                  144, Accounting for Impairment or Disposal of Long-Lived
                  Assets.
         C.       We recognize revenue when merchandise is shipped and title
                  passes to the customer and collectibility is reasonably
                  assured.

RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 2004 AS COMPARED TO
----------------------------------------------------------------------------
THREE MONTHS ENDED SEPTEMBER 30, 2003
-------------------------------------

For the quarter ended September 30, 2004 revenues increased by $1,945,987 or 36%
to $7,372,555 from $5,426,568 as compared to the corresponding period of the
prior year. This increase is attributed primarily to the increase in sales
volume of all of our existing product lines including soybean protein peptide,
health food products and medical products.

Cost of sales increased by $479,848 or 25% to $2,436,157 from $1,956,309 for the
three months ended September 30, 2004, as compared to the corresponding period
of the prior year. This increase resulted from the increased product costs
incurred as associated with increase in sales of all existing product lines
including soybean protein peptide, health food products and medical products.

The gross profit margin has improved from 64% to 67%. This was mainly due to a
decrease in the raw material usage rate as a result of more effective
application of raw materials compared to the same period in 2003. The waste of
raw material was lower in 2004 for protein peptide products as the workers
better utilized the raw material.

Selling and administrative expenses increased by $68,155 or 15% to $508,477 as
compared to the corresponding period of the prior year. This increase is
attributed primarily to increased selling and marketing in order to sustain the
increase of 36% in sales revenues for the quarter ending September 30, 2004 as
compared to the same quarter of last year.

Advertising expenses increased by $307,815 or 73% to $728,802 as compared to the
corresponding period of the prior year. This increase is attributed to increased
advertising efforts in order to support the increase in sales and marketing
activities for all product lines that enabled the increase in revenue in the
current quarter ended September 30, 2004 as compared to September 30, 2003.

General and administrative expenses increased by $10,197 or 1% to $892,701 as
compared to the corresponding period of the prior year. This increase is
attributed to: (1) decrease in expenses of $130,986; and (2) increase in
consultancy expenses of $141,183 as compared to the same period of the prior
year.

Depreciation and amortization increased by $11,039 or 8% as compared to the
corresponding period to the prior year. This is the result of purchases of new
assets.

                                       12
<PAGE>


The income tax was provided at 15% of income before tax at the level of the
operating entity in China. However, since there were other operating expenses
incurred at the holding company level as well as AOBOHK and these expenses could
not enjoy tax benefits in China, the income tax rate provided for the Company
was higher than 15% and reached 17%. %. Compared to the last year of the same
quarter, the income tax provided has decreased from 21% to 17%, reason being for
the quarter ending September 30, 2003, there was a one time provision of
expenses for warrants granted out for the quarter and thus increased the
effective income tax provision to 21%.


Our net income increased by $997,386 to a net income of $2,241,041 from a net
income of $1,243,655.

RESULTS OF OPERATION - NINE MONTHS ENDED SEPTEMBER 30, 2004 AS COMPARED TO NINE
-------------------------------------------------------------------------------
MONTHS ENDED SEPTEMBER 30, 2003
-------------------------------

For the nine months ended September 30, 2004 revenues increased by $4,480,926 or
30% to $19,283,134 from $14,802,208 as compared to the corresponding period of
the prior year. This increase is attributed primarily to the increase in sales
volume of all of our existing product lines including soybean protein peptide,
health food products and medical products.

Cost of sales increased by $588,762 or 11% to $6,098,743 from $5,509,981 for the
nine months ended September 30, 2004, as compared to the corresponding period of
the prior year. This increase resulted from the increased product costs incurred
as associated with increase in sales of all existing product lines including
soybean protein peptide, health food products and medical products.

The gross profit margin has improved from 63% to 68%. This was mainly due to a
decrease in the raw material usage rate as a result of more effective
application of raw materials compared to the same period in 2003. The waste of
raw material was lower in 2004 for protein peptide products as the workers
better utilized the raw material.

Selling and administrative expenses increased by $392,995 or 34% to $1,537,631
as compared to the corresponding period of the prior year. This increase is
attributed primarily to increased selling and marketing as compared to the same
period of the prior year.

Advertising expenses increased by $742,324 or 47% to $2,336,006 as compared to
the corresponding period of the prior year. This increase is attributed to
increase in advertising efforts in order to support the increase in sales and
marketing activities for all product lines that enabled the increase in revenue.

General and administrative expenses increased by $1,102,078 or 67% to $2,757,745
as compared to the corresponding period of the prior year. This is mainly due to
(1) increase in activity level as a result of sales expansion of existing
products of $463,029; (2) expenses of $215,500 associated with the Company's
entering into new employment agreements with its directors and executive
officers, as well as adopting a stock option plan; and (3) increase in
consultancy expenses of $ 423,549 as compared to the same period of the prior
year.

Depreciation and amortization increased by $40,384 or 10% as compared to the
corresponding period to the prior year. This is mainly due to the increase in
assets as compared to the same period of the prior year.

The income tax was provided at 15% of income before tax at the level of the
operating entity in China. However, since there were other operating expenses
incurred at the holding company level as well as AOBOHK and these expenses could
not enjoy tax benefits in China, the income tax rate provided for the Company
was higher than 15% and reached 18%.

Our net income increased by $1,305,906 to a net income of $5,008,829 from a net
income of $3,702,923.

                                       13
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

We have funded capital requirements through cash flow from operations. As of
September 30, 2004 we had a cash balance of $2,214,039 and a working capital
surplus of $9,418,007. This compares with a cash balance of $5,366,857 and a
working capital surplus of $10,638,558 at December 31, 2003.

We believe that cash flow generated from our existing operations will be
sufficient to fund our working capital needs of the Company for the next twelve
months. We have cash inflow streams attributable to our profit from operations
and we do not anticipate any material liquidity issues in the near future.

NEW ACCOUNTING PRONOUNCEMENT
----------------------------

In March 2004, the U.S. Securities and Exchange Commission's Office of the Chief
Accountant and the Division of Corporate Finance released Staff Accounting
bulletin ("SAB") No. 105, "Loan Commitments Accounted for as Derivative
Instruments". This bulletin contains specific guidance on the inputs to a
valuation-recognition model to measure loan commitments accounted for at fair
value, and requires that fair-value measurement include only differences between
the guaranteed interest rate in the loan commitment and market interest rate,
excluding any expected future cash flows related to the customer relationship or
loan servicing. In addition, SAB 105 requires the disclosure of the accounting
policy for loan commitments, including methods and assumptions used to estimate
the fair value of loan commitments, and any associated hedging strategies. SAB
105 is effective for derivative instruments entered into subsequent to March 31,
2004 and should also be applied to existing instruments as appropriate.

The Company has not yet completed its evaluation of SAB 105, but does not
anticipate a material impact on the consolidated financial statements.

ITEM 3.  CONTROL AND PROCEDURES.

We maintain disclosure controls and procedures that are designed to ensure that
information that is required to be disclosed in our Securities Exchange Act of
1934 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 to allow timely decisions
regarding required disclosure.

At of the end of the period covered by this report, we carried out an
evaluation, under the supervision and with the participation of our management,
including our Chief Executive Officer and President, our Executive Vice
President and Secretary and our Acting Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as
amended. Based upon this evaluation, our Chief Executive Officer and our Acting
Chief Financial Officer concluded that, as of the end of the period covered by
this report, our disclosure controls and procedures were effective under Rule
13a-15.

                                       14
<PAGE>

There were no significant changes in our internal controls or in other factors
that could significantly affect these controls subsequent to the end of the
period covered by this report, including any significant deficiencies or
material weaknesses of internal controls that would require corrective action.

                                       15
<PAGE>

PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

The Company may from time to time be involved in various claims, lawsuits, and
disputes with third parties, actions involving allegations of discrimination, or
breach of contract actions incidental to the operation of its business. The
Company is not currently involved in any such litigation that it believes could
have a materially adverse effect on its financial condition or results of
operations.

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On April 7, 2004, the Company issued 206,000 shares of restricted stocks to
Focus Partners, LLP. The issuance of shares was related to the Company's service
contract with Focus Partners, LLC to appoint them to provide investor relations
services to the Company during 2002. In the contract, the Company agrees to
issue them restricted stocks as part of the compensation of their services.
Their service was terminated in early 2003 however, there was a dispute on the
quality of services. The Company did not pay and Focus Partners had no requested
the Company to pay the stock and therefore the Company considered the chance of
issuing the stock remote in 2003 and therefore did not accrue any expense at
December 31, 2003.

In early 2004, the Company reached a settlement with Focus Partners, LLC and
206,000 shares of restricted stock were issued in April 2004. These stocks which
are restricted under the Securities Act of 1933, and such shares bear a legend
under rule 144 of the Act and bear a restrictive legend or other restrictions on
transfer or resale.

The service agreement provided that the shares of common stock were to be issued
at the end of each month during the service period. The 206,000 shares of
restricted stock issued to Focus Partners, LLC were therefore valued based on
the average of the closing share prices of the common stock of the end of each
month during the service period. The total value of the shares was $97,210.

On July 9, 2004, the Company filed a Form S-8 Registration Statement under the
Securities Act of 1933 to register a total of 700,000 shares of common stock of
the Company as compensation that related to the nine consulting agreements
entered between the Company and several individuals effective July 1, 2004. A
summary of the agreements is as follows:

Agreement 1:
------------


The individual will engage in evaluating the technical aspects of the Company's
Hong Kong regional office and other subsidiaries of the Company. The Company
issued 120,000 shares of common stock to the individual for such services and
valued them based on the closing market price of the Company's common stock
($1.70 per share) for a total value of $204,000. The Company amortizes the
expense over the term of the consulting agreement of 3 years.


                                       16
<PAGE>

Agreement 2:
------------


The individual will engage in evaluating the marketing and sales channeling of
the Hong Kong regional office and other subsidiaries of the Company. The Company
issued 153,000 shares of common stock to the individual for such services and
valued them based on the closing market price of the Company's common stock
($1.70 per share) for a total value of $260,100. The Company amortizes the
expense over the term of the consulting agreement of 3 years.


Agreement 3:
------------


The individual will engage in assisting the Company in negotiating with the
government regulators, and working with the management to facilitate the
development of the Hong Kong regional office and other subsidiaries of the
Company. The Company issued 120,000 shares of common stock to the individual for
such services and valued them based on the closing market price of the Company's
common stock ($1.70 per share) for a total value of $204,000. The Company
amortizes the expense over the term of the consulting agreement of 3 years.

Agreement 4:
------------

The individual will engage in reviewing and improving the internal control
system of the Hong Kong regional office and other subsidiaries of the Company.
The Company issued 85,000 shares of common stock to the individual for such
services and valued them based on the closing market price of the Company's
common stock ($1.70 per share) for a total value of $144,500. The Company
amortizes the expense over the term of the consulting agreement of 1 year.

Agreement 5:
------------

The individual will engage in reviewing, redesigning and implementing the
websites (including back end back ups) of various entities, as may be specified
by the Company. The Company issued 30,000 shares of common stock to the
individual for such services and valued them based on the closing market price
of the Company's common stock ($1.70 per share) for a total value of $51,000.
The Company amortizes the expense over the term of the consulting agreement
of 3 year.

Agreement 6:
------------

The individual will engage in completing the Company's growth strategy in China
by reviewing, redesigning and implement the product mix and product line
strategies of the Company and marketing of those products in new geographic
areas inside China. The Company issued 115,000 shares of common stock to the
individual for such services and valued them based on the closing market price
of the Company's common stock ($1.70 per share) for a total value of $195,500.
The Company amortizes the expense over the term of the consulting agreement
of 3 year.

Agreement 7:
------------

The individual will engage in providing administrative support and documentation
in relation to the Hong Kong regional office and other subsidiaries of the
Company. The Company issued 5,000 shares of common stock to the individual for
such services and valued them based on the closing market price of the Company's
common stock ($1.70 per share) for a total value of $8,500. The Company
amortizes the expense over the term of the consulting agreement of 1 year.


                                       17
<PAGE>

Agreement 8:
------------


The individual will engage in completing the Company's growth strategy in the
U.S. by providing general corporate advice on the strategies and directions of
potential growth of the Company. The Company issued 50,000 shares of common
stock to the individual for such services and valued them based on the closing
market price of the Company's common stock ($1.70 per share) for a total value
of $85,000. The Company amortizes the expense over the term of the consulting
agreement of 3 year.

Agreement 9:
------------

The individual will engage in completing work on the finance and reporting
issues of the Company's Hong Kong regional office and other subsidiaries. The
Company issued 22,000 shares of common stock to the individual for such services
and valued them based on the closing market price of the Company's common stock
($1.70 per share) for a total value of $37,400. The Company amortizes the
expense over the term of the consulting agreement of 1 year.


ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

There have been no material defaults.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to the security holders for a vote during the period
covered by this report.

ITEM 5 - OTHER INFORMATION

Employment agreements
---------------------

In March 2004 we entered into employment agreements with our top executive
officers and directors to secure their commitment to continued service to AOBO.
All employment agreements have the effective date of October 1, 2003. The
compensation and warrants issued to respective officers and directors during the
period beginning on October 1, 2003 through the end of the period covered by
this quarterly report were as follows:

Employment contract with Chief Executive Officer, Shujun Liu
------------------------------------------------------------

The Company shall pay Shujun Liu $150,000 in cash per annum plus $12,500 value
of stock option per quarter. The stock options issued are exercisable within 5
years from date of grant and with an exercise price of $2.00. In the last
quarter of 2003 and first quarter of 2004, the Company has issued 7,576 and
9,259 shares of stock options, respectively, to Shujun Liu. However, in the
second quarter of 2004, no cash compensation has been paid and no stock option
has been issued.

For the current quarter of 2004, no stock option has been issued.

                                       18
<PAGE>

Employment contract with Acting Chief Financial Officer, Yanchun Li
-------------------------------------------------------------------

The Company shall pay Yanchun Li $90,000 in cash per annum plus $7,500 value of
stock option per quarter. The stock options issued are exercisable within 5
years from date of grant and with an exercise price of $2.00. In the last
quarter of 2003 and first quarter of 2004, the Company has issued 4,545 and
5,556 shares of stock options, respectively, to Yanchun Li. However, in the
second quarter of 2004, no cash compensation has been paid and no stock option
has been issued.

For the current quarter of 2004, no stock option has been issued.

Employment contract with Director, Jun Min
------------------------------------------

The Company shall pay Jun Min $70,000 in cash per annum plus $7,500 value of
stock option per quarter. The stock options issued are exercisable within 5
years from date of grant and with an exercise price of $2.00. In the last
quarter of 2003 and first quarter of 2004, the Company has issued 4,545 and
5,556 shares of stock options, respectively, to Jun Min. However, in the second
quarter of 2004, no cash compensation has been paid and no stock option has been
issued.

For the current quarter of 2004, no stock option has been issued.

Employment contract with Director, Binsheng Li
----------------------------------------------

The Company shall pay Binsheng Li $57,000 in cash per annum plus $4,500 value of
stock option per quarter. The stock options issued are exercisable within 5
years from date of grant and with an exercise price of $2.00. In the last
quarter of 2003 and first quarter of 2004, the Company has issued 2,727 and
3,333 shares of stock options, respectively, to Binsheng Li. However, in the
second quarter of 2004, no cash compensation has been paid and no stock option
has been issued.

For the current quarter of 2004, no stock option has been issued.

                                       19
<PAGE>

ITEM 6 - EXHIBITS

The following exhibits are filed as part of this quarterly report on Form
10-QSB:

Exhibit No.                         Description
-----------                         -----------

3.1.1       Certificate of Amendment to Articles of Incorporation of American
            Oriental Bioengineering, Inc. (incorporated by reference to the
            Report on Form 10-KSB of American Oriental Bioengineering, Inc.
            (Commission File No. 0-29015), filed with the Commission on April
            15, 2004).

3.1.2       Certificate of Correction to Amended Articles of Incorporation,
            dated October 19, 2004.

3.1.3       Certificate of Correction to Amended Articles of Incorporation,
            dated November 12, 2004.

3.1.4       Certificate of Correction to Amended Articles of Incorporation,
            dated November 12, 2004.

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

31.2        Certification of Acting Chief Financial Officer pursuant to Section
            302 of the Sarbanes-Oxley Act of 2002

32.1        Certification of Chief Executive Officer pursuant to Section 906 of
            the Sarbanes-Oxley Act of 2002

32.2        Certification of Acting Chief Financial Officer pursuant to Section
            906 of the Sarbanes-Oxley Act of 2002

                                       20
<PAGE>

                                   SIGNATURES

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

AMERICAN ORIENTAL BIOENGINEERING, INC.

/s/ Shujun Liu
---------------------------------------
SHUJUN LIU
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
DATED: November 15, 2004

---------------------------------------
YANCHUN LI
ACTING CHIEF FINANCIAL OFFICER
DATED: November ___, 2004

                                       21