The Board of Directors of American Oriental Bioengineering Inc. appointed Cosimo J. Patti, an independent director of the Board since 2004, as the Chairman of the audit committee of the Board. Mr. Patti has no family relationships with any of the executive officers or directors of the company. There have been no transactions in the past two years to which the company or any of its subsidiaries was, or is to be a party, in which Mr. Patti had or will have a direct or indirect material interest.