American Oriental Bioengineering
American Oriental Bioengineering, Inc. (AOB) engages in the development, production, and sale of bioengineered products and traditional Chinese medicinal products, primarily in China. The company has three product segments; Health Food, Chinese Medical, and Soybean Protein Peptide products. The company is organized into three divisions; Harbin Bioengineering, HSPL, and AOBO. AOB offers its products through distributors, sales outlets, and hospital and clinics. The company is headquartered in Harbin, China and its stock is traded on the American Stock Exchange.
AOB has acquired two companies, both as subsidiaries, since its conception in 1999. The first was Harbin Three Happiness Bioengineering Company in 2001. During the 4th quarter of 2004, AOB formed a second subsidiary by acquiring HSPL, a traditional Chinese pharmaceutical company to obtain a distribution network in mainland China. In their most recent filing, Form 10QSB, dated November 14, 2005, covering their 3rd quarter, ending September 30, 2005, for the first time in their history, management has deemed it necessary to provide provisions for impairments to inventory and accounts receivable mainly due to their most recent acquisition.
Under the section titled "Critical Accounting Policies and Estimates", AOB states that management makes certain estimates and assumptions for the required financial statements and these estimates and assertions can differ from the actual results. In previous filings, management has made a point of stating there were no reserves for accounts receivable or inventory. In their latest filing, they have set aside reserve amounts for these items, $307,106 against accounts receivables and a total of $606,927 against inve ...