American Oriental Bioengineering, Inc. Closes $60 Million Private Placement.

HONG KONG -- American Oriental Bioengineering, Inc. (AMEX:AOB), a leading Chinese manufacturer and distributor of pharmaceutical and nutraceutical products, announced today that it has closed its private offering to accredited investors of 12.5 million units at a price of $4.80 per unit, for gross proceeds of $60 million. Each unit consists of one share of common stock, par value $0.001 per share, and three tenths of a warrant to acquire one share of common stock at an exercise price of $6.50 per share. The co-placement agents were CRT Capital Group LLC and Westminster Securities Corp. The proceeds will be used for potential acquisitions and general corporate purposes.

Gross proceeds of approximately $26,527,680, reflecting subscriptions for 5,526,600 units, will continue to remain in escrow, pending (i) the expiration of the requisite waiting period under Rule 14c-2 of the Exchange Act of 1934 with respect to the company's Information Statement on Schedule 14C filed with the Securities and Exchange Commission on December 7, 2005, (ii) the filing of an amendment to the company's certificate of incorporation increasing the number of its authorized shares of common stock to 150 million and (iii) the approval of an additional listing application to be filed with the American Stock Exchange with respect to the common stock underlying the units to be issued upon release of the remaining escrowed proceeds.

Tony Liu, Chairman and CEO of American Oriental Bioengineering, commented, "The company plans to use the proceeds for general corporate purposes and seeks to identify accretive acquisition targets within our industry to diversify our product line, accelerate our growth and more effectively leverage our distribution channels."

The shares and warrants have not been registered under the Securities Act of 1933, as amended, (the "Securities Act"), or any state securities laws, and unless so registered, the securities may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. American Oriental Bioengineering has entered into a registration rights agreement obligating it to file a registration statement with the Securities and Exchange Commission registering the shares, including the shares exercisable upon exercise of the warrants, within 45 days from the closing, or January 22, 2006.

This announcement shall not constitute an offer to sell or a solicitation of an offer to buy any of these securities.

About American Oriental Bioengineering Inc.

American Oriental Bioengineering, Inc. uses proprietary processes for producing soybean protein peptide more efficiently than traditional extracting techniques. These techniques are used to manufacture and formulate supplemental and medicinal products. Soybean peptides are used widely in general food, health food products and medicines, among other applications. AOB also produces Cease-Enuresis Soft Gel, the only China State FDA-approved first-grade, plant-based prescription medicine that is specially formulated to help alleviate bed-wetting and incontinence. The company is a leading producer of products in both the nutraceuticals and pharmaceuticals areas in China. For more information, visit http://www.bioaobo.com.

About CRT Capital Group LLC

CRT Capital Group LLC ("CRT") is an institutional securities research and brokerage firm focused on high-yield and convertible debt, capital structure arbitrage, mergers and acquisitions, special situations and distressed securities. CRT trades senior and subordinated bonds, bank debt, trade claims, convertible bonds, equities, real estate loans, tax exempt securities and private placements. For more information, visit http://www.crtllc.com.

About Westminster Securities Corp.

Westminster Securities Corp. is a full-service brokerage firm operating in five principal areas: Investment Banking, Research, Account Management, Execution Services, and Clearing. Founded in 1971, Westminster is a member of the New York Stock Exchange, National Association of Securities Dealers and the Securities Investor Protection Corporation. Westminster is headquartered at 100 Wall Street, New York, with branch offices in Atlanta, Cyprus, Miami, New York, St. Louis and Toronto.

This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in statements filed from time to time with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.