qworldwidebio.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934:

For the quarterly period ended June 30, 2008

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934:

For the transition period from______ to _______

01-06914

Commission File Number

Worldwide Biotech & Pharmaceutical Company

(Name of small business issuer in its charter)

Delaware

(State or other jurisdiction of Incorporation)

59-0950777

(IRS Employer Identification Number)

4 Fenghui South Road, 15th Floor, A10-11501

Jie Zuo Mansion, Xi'an, Shaanxi 710075

P.R. China

(Address of principal executive offices)

86-29-88193339

(Issuer's telephone number)

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 o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filero Smaller Reporting Company x

The number of shares outstanding of each of the Issuer's classes of common equity, as of the latest practicable date: As of November 9, 2007, there were 53,915,653 shares of the common stock issued and outstanding.

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934) (check one): Yes o No x

Transitional Small Business Disclosure Format (check one): Yes x No o

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

FORM 10-Q

June 30, 2008

TABLE OF CONTENTS

			Page

PART I - FINANCIAL INFORMATION

	ITEM 1 - FINANCIAL STATEMENTS		3

	ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		15

	ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		19

	ITEM 4 (A) - CONTROLS AND PROCEDURES		19

	ITEM 4 (A)T – INTERNAL CONTROL OVER FINANCIAL REPORTING		19

PART II - OTHER INFORMATION

	ITEM 1 - LEGAL PROCEEDINGS		19

	ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		19

	ITEM 3 - DEFAULTS UPON SENIOR SECURITIES		19

	ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS		19

	ITEM 5 - OTHER INFORMATION		19

	ITEM 6 - EXHIBITS		20

		SIGNATURES	20

- 2 - -

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

June 30, 2008

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Contents		Page(s)

Consolidated Balance Sheets at June 30, 2008 (Unaudited) and December 31, 2007		4

Consolidated Statements of Operations and Comprehensive Income for the Three Months and Six Months Ended June 30, 2008 and 2007 (Unaudited)		5

Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2008 and 2007 (Unaudited)		6

Notes to the Consolidated Financial Statements (Unaudited)		7 - 14

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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	June 30, 2008			December 31, 2007
	(Unaudited)

ASSETS

CURRENT ASSETS:
Cash	$	263,523		$	815,671
Accounts receivable, net (Note 4)		85,019			71,729
Inventories (Note 5)		312,002			178,853
Prepayments and other current assets		286,232			121,420

Total Current Assets		946,776			1,187,673

PROPERTY, PLANT AND EQUIPMENT, net		4,934,474			4,770,394

LICENSES, net		5,821			13,597

LAND USE RIGHTS, net		787,139			748,449

Total Assets	$	6,674,210		$	6,720,113

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Loan payable	$	699,800		$	658,021
Note payable- stockholder (Note 6)		196,994			185,233
Current maturities of note payable - bank		1,457,917			1,370,877
Accounts payable		414,313			372,721
Due to related parties (Note 6)		2,159,015			2,073,826
Other current liabilities		1,441,454			1,318,533

Total Current Liabilities		6,369,493			5,979,211

MINORITY INTEREST		-			56,378

Total Liabilities		6,369,493			6,035,589

STOCKHOLDERS' EQUITY:
Common stock $.001 par value; 90,000,000 shares authorized; 53,915,653 shares issued and outstanding,		53,916			53,916
Additional paid-in capital		12,381,441			12,381,441
Accumulated deficit		(12,236,790	)		(11,809,129	)
Accumulated other comprehensive income (loss):
Foreign currency translation gain		106,150			58,296

Total Stockholders' Equity		304,717			684,524

Total Liabilities and Stockholders' Equity	$	6,674,210		$	6,720,113

See accompanying notes to the consolidated financial statements.

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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	For the Three Months Ended						For the Six Months Ended
	June 30, 2008			June 30, 2007			June 30, 2008			June 30, 2007

NET REVENUES	$	69,347		$	121,779		$	84,245		$	143,541

COST OF GOODS SOLD		58,201			104,326			68,007			123,146

GROSS PROFIT		11,146			17,453			16,238			20,395

OPERATING EXPENSES:
Selling expenses		13,393			7,978			30,143			14,665
Research and development		980			48,475			12,650			48,475
Professional fees		55,926			(10,907	)		64,387			4,093
Stock-based compensation		-			385,500			-			585,000
General and administrative		115,245			58,960			244,232			318,098

Total Operating Expenses		185,544			490,006			351,412			970,331

LOSS FROM OPERATIONS		(174,398	)		(472,553	)		(335,174	)		(949,936	)

OTHER (INCOME) EXPENSES:
Interest income		(45,124	)		-			(45,205	)		-
Interest expense		88,044			40,919			148,973			91,590
Other (income) expense		7,325			2,276			7,325			-
Realized (gain) loss on sale of marketable securities		-			(3,535	)		6,084			(23,044	)

Total Other (Income) Expenses		50,245			39,660			117,177			68,546

LOSS BEFORE MINORITY INTEREST		(224,643	)		(512,213	)		(452,351	)		(1,018,482	)

MINORITY INTEREST		(1,305	)		29,334			(24,690	)		(53,972	)

NET LOSS		(223,338	)		(541,547	)		(427,661	)		(964,510	)

OTHER COMPREHENSIVE INCOME
Change in unrealized gain on marketable securities		-			-			-			32,793
Foreign currency translation gain		19,265			(4,020	)		47,854			(21,361	)

COMPREHENSIVE LOSS	$	(204,073	)	$	(545,567	)	$	(379,807	)	$	(953,078	)

NET LOSS PER COMMON SHARE - BASIC AND DILUTED:	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.02	)
Net loss per common share - Basic and diluted
		53,915,653			53,915,653			53,915,653			48,850,833

See accompanying notes to the consolidated financial statements.

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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For The Six Months Ended
	June 30, 2008			June 30, 2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(427,661	)	$	(964,510	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		187,212			135,455
Stock-based compensation		-			585,000
Gain on sale of marketable securities		-			(23,044	)
Minority interest		(24,690	)		(53,972	)
Changes in assets and liabilities:
Accounts receivable		(13,290	)		27,278
Inventories		(133,149	)		(731	)
Prepayments and other current assets		(164,812	)		69,363
Accounts payable		41,592			60,653
Accrued expenses and other current liabilities		122,921			(678,068	)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		(411,877	)		(842,576	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of marketable securities		-			160,017
Purchase of property and equipment		(150,616	)		-

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		(150,616	)		160,017

CASH FLOWS FROM FINANCING ACTIVITIES:
Payment on loan payable		-			(450,961	)
Proceeds from note payable - stockholder		-			505,334
Payment on mortgages payable		-			(32,829	)
Repayment for due to related parties		(44,981	)		-
Proceeds from stockholders/officers		-			636,099

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		(44,981	)		657,643

EFFECT OF EXCHANGE RATE CHANGES ON CASH		55,326			3,794

NET CHANGE IN CASH		(552,148	)		(21,122	)

CASH at beginning of period		815,671			117,320

CASH at end of period	$	263,523		$	96,198

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	$	-		$	200,801

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of common stock for debt conversion	$	-		$	1,000,000

See accompanying notes to the consolidated financial statements.

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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2008

(Unaudited)

NOTE 1 - ORGANIZATION AND OPERATIONS

Worldwide Biotech & Pharmaceutical Company, (“Worldwide” or the “Company”) was incorporated in Delaware in 1961. In the fourth quarter of 2005, the Company commenced revenue producing operations.

On April 20, 2004, as amended on August 3, 2004 and effective December 16, 2004, under an Agreement and Plan of Reorganization, the Company issued 33,600,000 shares of its common stock for the acquisition of all of the outstanding capital stock of Yangling Daiying Biological Engineering Co., Ltd. (“Daiying”) with the former shareholders of the Company retaining 1,057,102 or approximately 5% of the outstanding stock. As a result of the ownership interests of the former shareholders of Daiying, for financial accounting purposes, the exchange of stock has been treated as a recapitalization of Worldwide with Daiying deemed the accounting acquirer and Worldwide deemed the accounting acquiree under the purchase method of accounting in accordance with Statement of Financial Accounting Standards No. 141 “Business Combinations” (“SFAS No. 141”). Additionally, as part of the Merger, the Company, whose former name was Sun City Industries, Inc., amended its Articles of Incorporation, and changed its name to Worldwide Biotech & Pharmaceutical Company.

Daiying was incorporated on November 26, 2001 in Shaanxi Province, the People's Republic of China (the “PRC”). Its principal business activities are to develop and market viruses/viral vectors, external diagnostic reagents, prophylactic vaccines for humans, and oral solid dosage forms of traditional Chinese medicine products.

On March 7, 2005, Daiying formed Shaanxi Daiying Medicine Distribution Co., Ltd. (“Shaanxi”) with a stockholder of the Company, in which Daiying holds a 90% interest. The stockholder's contribution for its 10% interest was Renminbi (“RMB”) 500,000 (equivalent to $61,956 at December 31, 2005), which has been reduced by its proportional share of Shaanxi's loss from inception-to-date. Shaanxi's principal business activities are trading of medicine products.

On July 26, 2005, Glory Dragon Investments Ltd. (“Glory Dragon”), an international business company, was formed in the British Virgin Islands by the Company. Glory Dragon then established a wholly-owned foreign investment company in the People's Republic of China known as Shaanxi Allied Shine International Investment Management Consulting Ltd. (“Shaanxi Allied”) on December 27, 2005. Worldwide transferred all of its shares in Daiying to Shaanxi Allied on December 27, 2005.

On January 19, 2006, Worldwide by and through its wholly owned subsidiary, Daiying, entered into a Reorganization Agreement with Hunan Hua Yang Pharmaceutical Co. Ltd. (“Hua Yang”) and its shareholders. Pursuant to this agreement, the Company issued 482,800 shares of its common stock to the shareholders of Hua Yang to acquire 51%. Hua Yang, incorporated on June 22, 1999 in Hunan Province, China, engages in developing, manufacturing and marketing synthetic chemical medicine, antibiotics, immune vaccine and nutrient supplements.

Also on January 19, 2006, Daiying entered into a Reorganization Agreement with Hunan Ze An Pharmaceutical Co. Ltd. (“Ze An”) and its shareholders. Daiying paid RMB3,400,000 (equivalent to US$424,115 at March 31, 2006) and 217,600 shares of common stock of Worldwide for 65% of Ze An. Ze An was incorporated in February 2000 in Hunan Province, China, and engages in developing, manufacturing and marketing essential traditional Chinese medicine, organic herbal medicine, and neutraceutical products.

On December 18, 2006, Daiying, Mr. Aibin Chen and Mr. Zuobin Li, minority shareholders of Ze An and Hua Yang, entered into a Consolidation and Reorganization Agreement (“Consolidation”). Pursuant to the Consolidation, Ze An merged into Hua Yang with Hua Yang assuming all assets and liabilities of Ze An and Hua Yang continuing as the surviving entity. In addition, as part of the Consolidation, Daiying acquired an additional 15% equity interest in Ze An for a note payable to Mr. Zhongyu Lu, a former shareholder of Ze An, of RMB1,351,200 (equivalent to $172,954 at December 31, 2006). The note included the principal of RMB1.2 million (equivalent to $153,600 at December 31, 2006) and accrued interest of RMB151,200 (equivalent to $19,354 at December 31, 2006) based on an interest rate of 6.3% per annum with both principal and interest due December 4, 2007; the note is currently passed due. The Company owns a 67.3486% equity interest of Hua Yang subsequent to the consolidation.

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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2008

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying unaudited consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods have been included. These consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2007 and notes thereto contained in the Report on Form 10-KSB of the Company as filed with the United States Securities and Exchange Commission (the “SEC”) on April 15, 2008. Interim results are not necessarily indicative of the results for the full year.

The consolidated financial statements include all the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All significant inter-company balances and transactions have been eliminated. The results of operations for Hua Yang have been included in the Consolidated Statements of Operations and Comprehensive Loss since the date of acquisition.

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported losses.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 reporting amounts of revenues and expenses during the reported period. Significant estimates include the estimated useful lives of property, plant and equipment, land use rihgt and licenses. Actual results could differ from those estimates.

Cash equivalents

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

Trade accounts receivable

Trade accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing accounts receivable. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions. Bad debt expense is included in general and administrative expenses, if any.

Outstanding account balances are reviewed individually for collectibility. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure to its customers.

Inventories

The Company values inventories, consisting of finished goods, work in progress and raw materials, at the lower of cost or market. Cost is determined on the weighted average cost method.

Property, plant and equipment

Property, plant and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of property, plant and equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful lives ranging from five (5) years to 20 years. Upon sale or retirement of property, plant and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in operations. Leasehold improvements, if any, are amortized on a straight-line basis over the lease period or the estimated useful life, whichever is shorter. Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts. Construction in progress includes direct costs of construction of factory building. Interest incurred during the period of construction has not been capitalized as such amounts are considered to be immaterial at this time. Construction in progress is not depreciated until such time as the assets are completed and put into operational use.

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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2008

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Land use rights

Land use rights represent the cost to obtain the right to use land in the PRC. Land use rights are carried at cost and amortized on a straight-line basis over the lives of the right ranging from 40 to 50 years. Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts.

Licenses

The Company has adopted the guidelines as set out in Statement of Financial Accounting Standards No. 142 “Goodwill and Other Intangible Assets” (“SFAS No. 142”) for the licenses. Under the requirements as set out in SFAS No. 142, the Company amortizes the costs of acquired licenses over their remaining legal lives or the term of the contract, whichever is shorter. Licenses are stated at cost less accumulated amortization and accumulated impairment losses, if any. Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts.

Impairment of long-lived assets

The Company follows Statement of Financial Accounting Standards No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”) for its long-lived assets. The Company's long-lived assets, which include property, plant and equipment, land use rights and licenses are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset's expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company determined that there were no impairments of long-lived assets for the six months ended June 30, 2008 or 2007.

Fair value of financial instruments

The Company follows Statement of Financial Accounting Standards No. 107 “Disclosures about Fair Value of Financial Instruments” (“SFAS No. 107”) for its financial instruments. The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. The carrying amounts of financial assets and liabilities, such as cash, trade accounts receivable, prepayments and other current assets, accounts payable, accrued expenses and other current liabilities, approximate their fair values because of the short maturity of these instruments. The Company's loan approximates the fair value of such instruments based upon management's best estimate of interest rates that would be available to the Company for similar financial arrangements at June 30, 2008.

Segment information

SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information”, requires certain financial and supplementary information to be disclosed on an annual and interim basis for each reportable segment of an enterprise. The Company believes that it operates in one business segment (research, development, production, marketing and sales of auto electronic products) and in one geographical segment (China), as all of the Company’s current operations are carried out in China.

Revenue recognition

The Company follows the guidance of the United States Securities and Exchange Commission's Staff Accounting Bulletin (“SAB”) No. 101 “Revenue Recognition” (“SAB No. 101”), as amended by SAB No. 104 (“SAB No. 104”) for revenue recognition. The Company revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred and the title and risk of loss transfer to the buyer, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. Persuasive evidence of an arrangement is demonstrated via invoice to the customer; product delivery is evidenced by the warehouse shipping log as well as a signed bill of lading from the trucking company and no product return is allowed except for defective or damaged products; the sales price to the customer is fixed upon acceptance of the purchase order; and there are no separate sales rebates, discounts, or volume incentives. The Company manufactures and distributes traditional Chinese medicine, including drink tablets, synthetic medicine, antibiotics, biotech medicine and biotech reagents; wholesale Class II medical devices, Class III medical devices, including but not limited to, medical sewing materials and bond, medical high molecular materials and products, and disposable sterile medical devices. The majority of the Company's revenue derives from sales contracts with distributors. The Company sells certain products to certain customers on a consignment basis. The Company records revenue for consignment transactions when the consignee sells the product to the end users.

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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2008

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Stock based compensation

Effective January 1, 2006, the Company adopted the fair value recognition provisions of Statement of Financial Accounting Standards No. 123 (revised 2004) “Share-Based Payment” (“SFAS No. 123R”) using the modified prospective method. On January 12, 2007, the Company issued 1,400,000 shares of its common stock to three employees pursuant to the 2005 Non-Qualified Stock Compensation Plan (see Note 15(i)). The Company valued the shares at $0.15 per share, the closing price of the Company's common stock on the date of issuance and charged $210,000 to stock based compensation. The Company did not issue any stock options or warrants to any employees, directors, officers or third parties since January 1, 2006.

Research and development

Research and development costs are charged to expense as incurred. Research and development costs consist primarily of remuneration for research and development staff, depreciation and maintenance expenses of research and development equipment and material costs for research and development.

Shipping and handling costs

The Company accounts for shipping and handling fees in accordance with the Financial Accounting Standards Board Emerging Issues Task Force Issue No. 00-10 “Accounting for Shipping and Handling Fees and Costs” (“EITF Issue No. 00-10”). While amounts charged to customers for shipping product are included in revenues, the related costs are classified in cost of goods sold as incurred.

Income taxes

The Company follows Statement of Financial Accounting Standards No. 109 “Accounting for Income Taxes” (“SFAS No. 109”), which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Operations and Comprehensive Income in the period that includes the enactment date.

Foreign currency translation

Transactions and balances originally denominated in U.S. dollars are presented at their original amounts. Transactions and balances in other currencies are converted into U.S. dollars in accordance with Statement of Financial Accounting Standards No. 52 “Foreign Currency Translation” (“SFAS No. 52”) and are included in determining net income or loss.

The financial records of the Company are maintained in their local currency, the Renminbi (“RMB”), which is the functional currency. Assets and liabilities are translated from the local currency into the reporting currency, U.S. dollars, at the exchange rate prevailing at the balance sheet date. Revenues and expenses are translated at weighted average exchange rates for the period to approximate translation at the exchange rates prevailing at the dates those elements are recognized in the combined and consolidated financial statements. Foreign currency translation gain (loss) resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining accumulated other comprehensive income in the consolidated statement of stockholders' equity.

RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People's Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rate adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC, which are determined largely by supply and demand. Translation of amounts from RMB into United States dollars (“US$”) has been made at the following exchange rates for the respective years:

June 30, 2008

Balance sheet RMB 6.8591 to US$1.00

Statement of operations and comprehensive income RMB 7.0591 to US$1.00

December 31, 2007

Balance sheet RMB 7.2946 to US$1.00

Statement of operations and comprehensive income RMB 7.6072 to US$1.00

June 30, 2007

Balance sheet RMB 7.6120 to US$1.00

Statement of operations and comprehensive income RMB 7.7177 to US$1.00

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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2008

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Foreign currency translarion (continued)

Commencing July 21, 2005, China adopted a managed floating exchange rate regime based on market demand and supply with reference to a basket of currencies. The exchange rate of the US dollar against the RMB was adjusted from approximately RMB 8.2765 per US dollar to approximately RMB 8.11 per US dollar on July 21, 2005. Since then, the PBOC administers and regulates the exchange rate of the US dollar against the RMB taking into account demand and supply of RMB, as well as domestic and foreign economic and financial conditions.

Net gains and losses resulting from foreign exchange transactions, if any, are included in the Consolidated Statements of Operations and Comprehensive loss. The foreign currency translation gain(loss) at June 30, 2008 and 2007 were $47,854 and $(21,361) and effect of exchange rate changes on cash flows for the six months period then ended were $55,326 and $3,794, respectively.

Related parties

A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.

Comprehensive income (loss)

The Company has adopted Statement of Financial Accounting Standards No. 130 “Reporting Comprehensive Income” (“SFAS No. 130”). This statement establishes rules for the reporting of comprehensive income (loss) and its components. Comprehensive income (loss), for the Company, consists of net loss and foreign currency translation adjustments and is presented in the Consolidated Statements of Operations and Comprehensive Income (loss) and Stockholders' Equity.

Net loss per common share

Net loss per common share is computed pursuant to Statement of Financial Accounting Standards No. 128 “Earnings Per Share” (“SFAS No. 128”). Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during each period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. There were no potentially dilutive shares outstanding as of June 30, 2008 or 2007.

Commitments and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Recently adopted accounting principles

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements". SFAS No. 157 defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. In February 2008, the FASB issued FASB Staff Position 157-1, "Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13" ("FSP 157-1") and FASB Staff Position 157-2, "Effective Date of FASB Statement No. 157" ("FSP 157-2"). FSP 157-1 amends SFAS No. 157 to remove certain leasing transactions from its scope. FSP 157-2 delays the effective date of SFAS No. 157 for all non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), until fiscal years beginning after November 15, 2008. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company adopted SFAS No. 157 effective January 1, 2008 for all financial assets and liabilities as required. The adoption of SFAS No. 157 was not material to the Company's financial statements or results of operations.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115”, which is effective for fiscal years beginning after November 15, 2007. SFAS No. 159 is an elective standard which permits an entity to choose to measure many financial instruments and certain other items at fair value at specified election dates. Subsequent unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings. The Company has not elected the fair value option for any assets or liabilities under SFAS No. 159.

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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2008

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently issued accounting pronouncements

On December 4, 2007, the FASB issued SFAS No. 160, “Noncontrolling interest in Consolidated Financial Statements”. SFAS No. 160 requires all entities to report noncontrolling (minority) interests in subsidiaries as equity in the consolidated financial statements. The statement establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation and expands disclosures in the consolidated financial statements. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. We have not yet determined the impact of the adoption of SFAS No. 160 on our consolidated financial statements and footnote disclosures.

On December 4, 2007, the FASB issued SFAS No.141R, “Business Combinations”. SFAS No. 141R requires the acquiring entity in a business combination to recognize all the assets acquired and liabilities assumed, establishes the acquisition date fair value as the measurement objective for all assets acquired and liabilities assumed, and requires the acquirer to expand disclosures about the nature and financial effect of the business combination. SFAS No. 141R is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. We have not yet determined the impact of the adoption of SFAS No. 141R on our consolidated financial statements and footnote disclosures.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities”. The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company is currently evaluating the impact of adopting SFAS No. 161 on its consolidated financial statements.

In April 2008, the FASB issued Staff Position FAS 142-3, Determination of the Useful Life of Intangible Assets (“FSP FAS 142-3”) which amends the factors an entity should consider in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FAS No. 142, Goodwill and Other Intangible Assets (“FAS No. 142”). FSP FAS 142-3 applies to intangible assets that are acquired individually or with a group of assets and intangible assets acquired in both business combinations and asset acquisitions. It removes a provision under FAS No. 142, requiring an entity to consider whether a contractual renewal or extension clause can be accomplished without substantial cost or material modifications of the existing terms and conditions associated with the asset. Instead, FSP FAS 142-3 requires that an entity consider its own experience in renewing similar arrangements. An entity would consider market participant assumptions regarding renewal if no such relevant experience exists. FSP FAS 142-3 is effective for year ends beginning after December 15, 2008 with early adoption prohibited. We have not yet determined the effect, if any, of the adoption of this statement on our financial condition or results of operations.

In June 2008, the Financial Accounting Standards Board (“FASB”) issued FSP No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (“FSP EITF 03-6-1”). FSP EITF 03-6-1 concludes that unvested share-based payment awards that contain rights to receive non-forfeitable dividends or dividend equivalents are participating securities, and thus, should be included in the two-class method of computing earnings per share (“EPS”). FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008, and interim periods within those years. Early application of EITF 03-6-1 is prohibited. It also requires that all prior-period EPS data be adjusted retrospectively. We have not yet determined the effect, if any, of the adoption of this statement on our financial condition or results of operations.

NOTE 3 - GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As reflected in the accompanying consolidated financial statements, the Company has an accumulated deficit of $12,236,790 and a working capital deficiency of $5,422,717 at June 30, 2008, a net loss of $421,667 and net cash used in operations of $411,877 for the six months ended June 30, 2008, respectively.

While the Company is attempting to produce sufficient revenues, the Company's cash position may not be enough to support the Company's daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate sufficient revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate sufficient revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2008

(Unaudited)

NOTE 4 - ACCOUNTS RECEIVABLE

Accounts receivable at June 30, 2008 and December 31, 2007 consisted of the following:

	June 30			December 31
	2008			2007

Accounts Receivable	$	396,718		$	424,924
Less: Allowance for doubtful accounts		(311,699	)		353,195

	$	85,019		$	778,119

For the six month period ended June 30, 2008 and 2007, the Company did not record any bad debt expense.

NOTE 5 - INVENTORIES

Inventories at June 30, 2008 and December 31, 2007 consisted of the following:

	June 30			December 31
	2008			2007

Raw Material	$	127,756		$	82,770.00
Work in process		106,404			-
Finished goods		525,397			494,987
		759,557			577,757
Less: Inventory obsolescence		(447,555	)		(398,904	)

	$	312,002		$	178,853

NOTE 6 - RELATED PARTY TRANSACTIONS

Due to and notes payable - related parties at June 30, 2008 and December 31, 2007 consisted of the following:

		June 30		December 31
		2008		2007
Due to related parties (a)
Guo, Wenxia	CEO; Stockholder; Stockholder of Daiying	$	236,710	$	246,081
Xian Jin Hao Tech	Stockholder; Stockholder of Daiying		520,020		510,031
Daiying Institute	The company controlled by Guo,Wenxia		1,276,042		1,199,008
Li, Zhuobin	Stockholder; Stockholder of Hua Yang		2,760		2,595
Chen, Aibin	Stockholder; Stockholder of Hua Yang		123,483		116,111

		$	2,159,015	$	2,073,826
Note payable- stockholder (b)
Chen Aibin	Stockholder; Stockholder of Hua Yang	$	196,994	$	185,233

(a) The chief executive officer and a stockholder advanced funds to the Company for its working capital. These advances are unsecured, due on demand and non-interest bearing.

(b) Note payable to a stockholder is unsecured, payable to a stockholder with interest at 6.3% per annum and due December 4, 2007. The note is currently past due.

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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2008

(Unaudited)

NOTE 7 - CONCENTRATIONS AND CREDIT RISK

Credit risk

Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents. As of June 30, 2008, substantially all of the Company's cash and cash equivalents were held by major financial institutions located in the PRC, none of which are insured. However, the Company has not experienced losses on these accounts and management believes that the Company is not exposed to significant risks on such accounts.

NOTE 8 - FOREIGN OPERATIONS

(i) Operations

Substantially all of the Company's operations are carried out and all of its assets are located in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC. The Company's business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency fluctuation and remittances and methods of taxation, among other things.

(ii) Dividends and reserves

Under the Corporation Law of the PRC, net income after taxation can only be distributed as dividends after appropriation has been made for the following: (i) cumulative prior years' losses, if any; (ii) allocations to the “Statutory Surplus Reserve” of at least 10% of net income after tax, as determined under PRC accounting rules and regulations, until the fund amounts to 50% of the Company's registered capital; (iii) allocations of 5-10% of income after tax, as determined under PRC accounting rules and regulations, to the Company's “Statutory Common Welfare Fund”, which is established for the purpose of providing employee facilities and other collective benefits to employees in PRC; and (iv) allocations to any discretionary surplus reserve, if approved by stockholders.

As of June 30, 2008, the Company had no Statutory Surplus Reserve and the Statutory Common Welfare Fund established and segregated in retained earnings.

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

A.	PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

The following analysis of the Company's results of operations and financial condition should be read in conjunction with the financial statements of Worldwide Biotech & Pharmaceutical Company for the year ended December 31, 2007 and notes thereto contained in Report on Form 10-KSB of Worldwide Biotech & Pharmaceutical Company as filed with the Securities and Exchange Commission.

This document contains certain forward-looking statements including, among others, anticipated trends in our financial condition and results of operations and our business strategy. These forward-looking statements are based largely on our current expectations and are subject to a number of risks and uncertainties. Actual results could differ materially from these forward-looking statements. Important factors to consider in evaluating such forward-looking statements include (i) changes in external factors or in our internal budgeting process which might impact trends in our results of operations; (ii) unanticipated working capital or other cash requirements; (iii) changes in our business strategy or an inability to execute our strategy due to unanticipated changes in the industries in which we operate; and (iv) various competitive market factors that may prevent us from competing successfully in the marketplace.

B.	OVERVIEW OF BUSINESS

The Company was incorporated in Delaware in 1961. On Dec. 16, 2004, through a Reorganization Agreement, the Company reorganized with Yangling Daiying Biotech & Pharmaceutical Group Co., Ltd. (“Daiying”), located at Yangling High-tech Agricultural Demonstration Zone, P.R. China. The Company operates its business mainly through its wholly-owned subsidiary, Daiying and its subsidiaries in P.R. China. The Company focuses on research and development, manufacture and distribution of in vitro diagnostics, human vaccine, biomedicines, traditional Chinese medicines, synthetic medicines and medical devices with frontier technologies and great potentials.

Summary of Research and Development

As a biotech-focused company, we have made significant progress on our HCV research pipelines. We were able to successfully set up the in vitro intact HCV virus culturing system which could continuously replicate the HCV virus in vitro and we are the first entity in the world to break this bottleneck in the HCV research field. Secondly, we have developed a new generation of HCV diagnostic reagents which has been fully approved for production and free sales by SFDA in China in 2006. We have also fully established a high-throughput anti-HCV medicine screening system and started screening anti - HCV medicines. We expect to get one or two new anti-HCV leads in the next two years if we can raise enough capital funding for our research. We are actively developing HCV human vaccine and by the end of year 2006, we have successfully created two replication-deficient HCV strains which could induce high immune responses in rabbit test subjects. We are now optimizing large-quantity purification methods for replication-deficient HCV virus and setting up ideal animal models for efficacy and safety studies of HCV human vaccine. Meanwhile, we will actively seek new collaboration opportunities and promising research projects. The progress on our research projects depend on our ability to raise enough funding in the following year.

Corporate Events and Accomplishments

Our growth and development as a business enterprise has been marked by a number of significant corporate events. Daiying acquired Hunan Hua Yang Pharmaceutical Co., Ltd. (Hua Yang) and Hunan Ze An Pharmaceutical Co., Ltd. (Ze An) on January 19, 2006. On December 18, 2006, Daiying, Mr. Aibin Chen and Mr. Zuobin Li, minority shareholders of Ze An and Hua Yang, entered into a Consolidation and Reorganization Agreement (“Consolidation”). Pursuant to the Consolidation Ze An merged into Hua Yang with Hua Yang as a surviving entity. In addition, as part of the Consolidation, Daiying acquired a 15% equity interest in Ze An for a note payable to Mr. Zhongyu Lu, a former shareholder of Ze An, of RMB1,351,200 (equivalent to $172,954 at December 31, 2006). The note included the principal of RMB1.2 million (equivalent to $153,600 at December 31, 2006) and accrued interest of RMB151,200 (equivalent to $19,354 at December 31, 2006) based on an interest rate of 6.3% per annum with both principal and interest due December 4, 2007. The purpose of the Consolidation was to optimize capital resources and to minimize operating expenses.

With the completion of these reorganization transactions, the Company now owns two manufacturing facilities: the research and development and manufacturing headquarters of the Company, Daiying, is located at Yangling Hi-tech Demonstration Zone, Shaanxi Province, PRC. Daiying purchased the right to use 35,940 square meters of land and constructed a 5,359 square meter fully equipped manufacturing facility. Daiying owns six (6) traditional Chinese medicines and HCV in vitro diagnostics which have National Drug Production Licenses from the China State Food and Drug Administration (“SFDA”). Hua Yang purchased the right to use 51,640 square meters of land with a GMP-compliant manufacturing facility of 13,093 square meters. Hua Yang owns 29 medicines with National Drug Production Licenses and six (6) functional foods with National Food Production Licenses from the SFDA.

In addition, the Company entered into a sole distribution agreement with TARAMEDIC.CORPORATION.BHD (TARAMEDIC), a Malaysian company, to distribute its Tara KLamp® Disposable Circumcision Device (“Tara KLamp”). TARAMEDIC owns patents for Tara KLamp in both Malaysia and China. Tara KLamp has been registered with the SFDA and sales began in 2006.

On March 28, 2007, Daiying, and Shaanxi Yangling Daiying Biotech Research Institute, a research institute (“Institute”), entered into an Entrusting Agreement (the “Entrusting Agreement”) with respect to the commercialization of an Emergency Haemostatic Patch developed and patented in PRC by the Institute. Pursuant to the Entrusting Agreement, Daiying agreed to register the Emergency Haemostatic Patch (“Patch”) with the State Food and Drug Administration. All expenses associated with the registration process incurred by Daiying would be paid by the Institute. In addition, Daiying has been granted the right to purchase no less than 20% of the equity of a new company that will be set up to market and distribute the Patch on or before September 30, 2007, or purchase the equity interest of the new company proportionally thereafter.

To continue its research and development on HCV product development and facilitate the transition from focusing on research and development to engaging in both research and commercialization of new medical products the Company may have to rely on its ability to raise additional capital during the next twelve months. In the case that the Company does not meet its fundraising goal in the year 2007, the above research projects will be delayed and production might not meet the market demand for the Company's new product.

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RESULTS OF OPERATIONS

The following analysis shows the selected unaudited consolidated statement of operations data of the Company for the three month and six month periods ended June 30, 2008 and June 30, 2007.

Three Months Ended June 30, 2008 Compared To The Three Months Ended June 30, 2007

Revenues

For the three months ended June 30, 2008, our revenues were $69,347 as compared to $ 121,779 for the three months ended June 30, 2007, a decrease of $52,432. We attribute this decrease in net revenues to the lower revenues generated from Hua Yang, a majority owned subsidiary.

Cost of Sales and Gross Profit

For the three months ended June 30, 2008, cost of sales amounted to $ 58,201 as compared to cost of sales of $104,326 for the three months ended June 30, 2007. Gross profit for the three months ended June 30, 2008 was $11,146, as compared to $ 17,453 for the three months ended June 30, 2007.

Operating Expenses

For the three months ended June 30, 2008, total operating expenses were $185,544 as compared to $490,006 for the three months ended June 30,2007, a decrease of $304,462, or approximately 63.0%.

Included in this decrease was:

·	For the three months ended June 30, 2008, we incurred selling expenses of $13,393 as compared to $7,978 for the three months ended June 30, 2007. We increased the selling expenses in the second three months of 2008 to promote sale activities and build our sales network.

·	For the three months ended June 30, 2008, we incurred research and development cost of $980 as compared to $48,475 for the three months ended June 30, 2007.

·	For the three months ended June 30, 2008, we incurred professional fees of $55,926 as compared to $(10,907) for the three months ended June 30, 2007.

·	Stock-based compensation expense was $0 for the three months ended June 30, 2008 from $385,500 for the three months ended June 30, 2007.

·	For the three months ended June 30, 2008, general and administrative expenses were $ 115,245 as compared to $58,960 for the three months ended June 30, 2007, an increase of $56,285, approximately (49.0%).

For the three months ended June 30, 2008, interest expense was $88,044 as compared to $40,919 for the three months ended June 30, 2007. For the three months ended June 30, 2008, other expenses were $7,325 as compared to $2,276 for the three months ended June 30, 2007.

As a result of these factors, the Company reported a net loss of ($223,338) or $0.00 per share for the three months ended June 30, 2008, as compared to a net loss of ($541,547) or ($0.01) per share for the same period in 2007.

Six Months Ended June 30, 2008 Compared To The Six Months Ended June 30, 2007

Revenues

For the six months ended June 30, 2008, our revenues were $84,245 as compared to $ 143,541 for the six months ended June 30, 2007, a decrease of $59,296. We attribute this decrease in net revenues to the lower revenues generated from Hua Yang, a majority owned subsidiary.Cost of Sales and Gross Profit.

Cost of Sales and Gross Profit

For the six months ended June 30, 2008, cost of sales amounted to $ 68,007 as compared to cost of sales of $123,146 for the six months ended June 30, 2007. Gross profit for the six months ended June 30, 2008 was $16,238 as compared to $ 20,395 for the six months ended June 30, 2007.

Operating Expenses

For the six months ended June 30, 2008, total operating expenses were $351,412 as compared to $970,331 for the six months ended June 30,2007, a decrease of $618,919 or approximately 64.0%.

Included in this decrease was:

·	For the six months ended June 30, 2008, we incurred selling expense of $30,143 as compared to $14,665 for the six months ended June 30, 2007. We increased the selling expense in the first six months of 2008 to promote sale activities and build our sales network.

·	For the six months ended June 30, 2008, we incurred research and development cost of $12,650 compared to $48,475 for the six months ended June 30, 2007.

·	For the six months ended June 30, 2008, we incurred professional fees of $64,387 as compared to $4,093 for the six months ended June 30, 2007, an increase of $60,294.

·	Stock-based compensation expense was $0 for the six months ended June 30, 2008 from $585,000 for the six months ended June 30, 2007.

For the six months ended June 30, 2008, general and administrative expenses were $ 244,232 as compared to $318,098 for the six months ended June 30, 2007, a decrease of $73,866, approximately (24.0%). The decrease was attributable to the lower amortization for every month. The amortization of intangible assets for the six months period from January 1, to June 30, 2007 and 2008 are $109,647and $10,624. The difference is $99,023. The amortization is less than last year.

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For the six months ended June 30, 2008, interest expense was $148,973 as compared to $91,590 for the six months ended June 30, 2007. For the six months ended June 30, 2008, other expenses were $7,325 as compared to $0 for the six months ended June 30, 2007.

As a result of these factors, the Company reported a net loss of ($427,661) or( $0.01) per share for the six months ended June 30, 2008, as compared to a net loss of ($964,510) or ($0.02) per share for the same period in 2007.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2008, we had cash and cash equivalents of $263,523.

Net cash used in operating activities for the six months ended June 30, 2008 was $411,877 as compared to net cash used by operating activities of $842,576 for the six months ended June 30, 2007. For the six months ended June 30, 2008, we used cash to fund our loss of $427,661; our inventories increased by $133,149; accounts payable increased by $41,592, and accounts receivable increased by $13,290, prepayments and other current assets increased by $164,812, accrued liabilities and other payable increased by $122,921, and by an increase in the minority interest portion of non-majority owned subsidiaries' losses, offset by non-cash items such as depreciation and amortization of $187,212. For the six months ended June 30, 2007, we used cash to fund our loss of $964,510 and to reductions of accounts receivable of $27,278 funding of inventories of $731, accounts payable increase of $60,653, decreasing accrued expenses and other current liabilities by $678,068, a decrease by minority interests portion of non-majority owned subsidiaries losses, offset by non-cash items such as depreciation and amortization of $135,455, stock-based compensation of $585,000 and increases in prepayments and other current assets of $95449.

Net cash used in investing activities for the six months ended June 30, 2008 was $150,616 as compared to net cash provided in investing activities for the six months ended June 30, 2007 of $160,017 For the six months ended June 30, 2008, we used cash of $150,616 for purchase of plant and equipment. For the six months ended June 30, 2007, we used cash for purchase of plant and equipment of $0 and received net proceeds of $160,017 from sale of marketable securities.

Net cash used by financing activities for the six months ended June 30, 2008 was $44,981 as compared to net cash provided in financing activities for the six months ended June 30, 2007 of $657,643. For the six months ended June 30, 2008, the Company repaid $44,981 to stockholders/officers. For the six months ended June 30, 2007, the Company received net proceeds of $636,099 from stockholders/officers; these were offset by the repayment of mortgages payable of $32,829.

The Company has not generated sufficient cash flows from operations. If the Company does not generate enough revenues from the sales of its products to meet the cash needs, the Company will need other financing to continue to operate. As the Company tries to increases sales from its products and services, the Company expects to increase cash flows from operations.

We are not aware of any known trends, events or uncertainties that have, or are reasonably likely to have, material impact on the Company’s short-term or long-term liquidity. We have no source of liquidity from operations at the present time. However, we might pursue increasing liquidity through the registration of various shares of stock in a registration statement to be filed with the Securities & Exchange Commission. We are in need of additional funds to meet various anticipated capital expenditures which include research and development for a drug-screening system for anti-HCV drugs and HCV vaccines, production of products for release into the market, mergers of companies that would align the Company’s business plans, and various funds to market our technology and products to create interest in the market place.

There are a number of trends, ventures, and uncertainties that are reasonably expected to have a material impact on the net revenues or income from operations. We will be unable to pursue continued research, development, production, and marketing of our product line in the event the Company is unable to raise sufficient funds to meet these expenses. There is no assurance that we will be able to raise sufficient funds to meet these goals.

Currently, the Peoples Republic of China (“PRC”) is in a period of growth and is constantly promoting business development in order to bring more business into China. Additionally, a Chinese corporation can be owned by a United States corporation, however, the laws and regulations of China are subject to change and in the event said change occurs, it may affect the ability of Company to operate in the Peoples Republic of China.

The Company’s future success depends on the continued services of its executive management currently in place. The loss of any of their services could be detrimental to the Company and could have an adverse affect on business development. Future success is also dependent upon the ability to identify, hire, train, or retain other qualified employees. Competition for these individuals is intense and increasing.

Efforts to improve the Company’s financial results

The Company has incurred losses since inception. Management has taken great efforts to improve the Company’s results of operations and cash flows. The actions included:

(a)	Improve the capital conditions

We will take several steps to improve the capital conditions including increase bank loan and attracting new investment.

(b)	Increase in marketing activities and sales

We begin to manufacture some drugs which we didn’t make before which will increase our sale in marketing. And we also take some policy to stimulate the salesmen to increase the sale.

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Off Balance Sheet Arrangements

The Company has no off balance sheet arrangements at June 30, 2008.

Recently Adopted Accounting Principles

Recently Issued Accounting Pronouncements

- 18 - -

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As our major products are medicines and clinical tests kits. So we are currently subject to market risk primarily through the two points. The first one is the quality of the medicine. The quality of medicine we make decide the income, reputation and profit of our company. The second one is the policy risk, especially the SFDA policy on drug manufacture and selling. We do not believe that the effect of other changes, such as foreign exchange rates and equity prices currently pose significant market risk for us.

We have not engaged in any hedging activities since our inception. We do not currently expect to engage in any hedging activities.

Item 4(A). Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer (collectively, the "Certifying Officers") are responsible for establishing and maintaining disclosure controls and procedures for the Company. Based upon such officers' evaluation of these controls and procedures as of a date as of the end of the period covered by this Quarterly Report, and subject to the limitations noted hereinafter, the Certifying Officers have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in this Quarterly Report is accumulated and communicated to management, including our principal executive officers as appropriate, to allow timely decisions regarding required disclosure. The Certifying Officers have also indicated that there were no significant changes in our internal controls or other factors that could significantly affect such controls subsequent to the date of their evaluation, and there were no corrective actions required with regard to significant deficiencies and material weaknesses. Our management, including each of the Certifying Officers, does not expect that our disclosure controls or our internal controls will prevent all potential errors and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the control. The design of any systems of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of these inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

ITEM 4(A)T – INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in the Company's internal controls over financial reporting, known to the chief executive officer or the chief financial officer that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II

Item 1. Legal Proceedings

None

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults upon Senior Securities

Not Applicable

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

None.

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Item 6. Exhibits and Reports on Form 8-K

(a) The exhibits included in this report are indicated below.

Exhibit No.		Description of Exhibit
31.1		Rule 13a - 14(a)/15d-14(a) Certification of the Chief Executive Officer
31.2		Rule 13a - 14(a)/15d-14(a) Certification of the Chief Financial Officer
32.1		Section 1350 certification
32.2		Section 1350 certification

(b) Reports on Form 8-K

8-K

Change in Certifying Accountant filed on June 27, 2008

SIGNATURES

Pursuant to 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 hereunto duly authorized.

Worldwide Biotech & Pharmaceutical Company

Date: August 19, 2008

/s/ Wenxia Guo

Wenxia Guo

Chief Executive Officer, Director

(Principal Executive Officer)

Date: August 19, 2008

/s/ Peiyi Tian

Peiyi Tian

VP, Treasurer, CFO, Director

(Principal Financial and Accounting Officer)

Date: August 19, 2008

/s/ Huimin Zhang

Huimin Zhang

Director

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