form10-q.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 March 31, 2009

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 Filer o 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 March 31, 2009, 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 o No x

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

FORM 10-Q

March 31, 2009

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		18

	ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		22

	ITEM 4 (A) - CONTROLS AND PROCEDURES		22

	ITEM 4 (A)T – INTERNAL CONTROL OVER FINANCIAL REPORTING		22

PART II - OTHER INFORMATION

	ITEM 1 - LEGAL PROCEEDINGS		23

	ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		23

	ITEM 3 - DEFAULTS UPON SENIOR SECURITIES		23

	ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS		23

	ITEM 5 - OTHER INFORMATION		23

	ITEM 6 - EXHIBITS		23

		SIGNATURES	24

Table of Contents

Item 1. Financial Statements

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

March 31, 2009

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Contents	Page(s)

Consolidated Balance Sheets at March 31, 2009 (Unaudited) and December 31, 2008	4

Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2008 and 2008 (Unaudited)	5

Consolidated Statement of Comprehensive Loss (Unaudited)	6

Consolidated Statement of Changes in Equity (Deficit) (Unaudited)	7

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2009 and 2008 (Unaudited)	8

Notes to the Consolidated Financial Statements (Unaudited)	9 - 17

Table of Contents

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	March 31, 2009			December 31, 2008
	(Unaudited)
ASSETS
Current Assets:
Cash	$	105,213		$	190,039
Accounts receivable, net (Note 4)		26,195			26,238
Inventories (Note 5)		163,882			126,585

Prepayments and other current assets		86,568			62,061

Total Current Assets		381,858			404,923

Property, plant and Equipment, net		4,768,155			4,858,303

Licenses, net		-			-

Land use rights, net		775,942			781,815

Total Assets	$	5,925,955		$	6,045,041


LIABILITIES
Current liabilities:
Loan payable (Note 7)	$	702,409		$	703,554
Note payable- stockholder (Note 6)		161,144			198,051
Note payable - bank (Note 8)		1,463,351			1,465,738
Accounts payable		355,172			353,058
Due to related parties (Note 6)		2,184,262			2,140,537
Other current liabilities		2,047,222			1,935,279

Total Current Liabilities		6,913,560			6,796,217

Total Liabilities		6,913,560			6,796,217

DEFICIT
WWBP stockholders' deficit:
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		12,529,205			12,499,171
Accumulated deficit		(13,621,893	)		(13,427,533	)
Accumulated other comprehensive income (loss):
Foreign currency translation gain		97,758			123,270
Total WWBP stockholders' deficit		(941,014	)		(751,176	)

Noncontrolling interest		(46,591	)		-

Total Deficit		(987,605	)		(751,176	)

Total Liabilities and Deficit	$	5,925,955		$	6,045,041


See accompanying notes to the consolidated financial statements

Table of Contents

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

	For the Three Months Ended
	March 31, 2009			March 31, 2008

Revenues	$	18,265		$	14,898

Cost of Goods Sold		13,589			9,806

Gross Profit		4,676			5,092

Operating Expenses:
Selling expenses		1,518			16,750
Research and development		-			11,670
Professional fees		270			8,461
General and administrative		75,502			128,987

Total Operating Expenses		77,290			165,868

Loss from Operations		(72,614	)		(160,776	)

Other Expenses(Income):
Interest income		(305	)		(81	)
Interest expense		95,308			60,929
Other (income) expense		1,358			6,084
Depreciation and production cost of idle capacity		60,920			-

Total Other (Income) Expenses		157,281			66,932

Net Loss		(229,895	)		(227,708	)

Less: Net loss attributable to the noncontrolling interest		35,535			23,385

Net Loss Attributable to WWBP	$	(194,360	)	$	(204,323	)

Net Loss Per Common Share
Net loss per common share - Basic and diluted	$	(0.00	)	$	(0.00	)

Weighted average number of common shares outstanding
- Basic and diluted		53,915,653			53,915,653


See accompanying notes to the consolidated financial statements.

Table of Contents

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)

	For the Three Months Ended
	March 31, 2009			March 31, 2008

Net loss	$	(229,895	)	$	(227,708	)

Other comprehensive income(loss), net of tax:
Foreign currency translation gain(loss)		(36,568	)		28,589

Comprehensive loss		(266,463	)		(199,119	)
Comprehensive loss attributable to the noncontrolling interest		46,591			23,385

Comprehensive loss attributable to WWBP	$	(219,872	)	$	(175,734	)


See accompanying notes to the consolidated financial statements.

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED MARCH 31, 2009
(UNAUDITED)

							WWBP Shareholders

																Accumulated
							Common Stock, $.001 Par Value				Additional					Other
				Comprehnsive			Number of				Paid-in		Accumulated			Comprehensive			Noncontrolling
	Total			Income			Shares		Amount		Capital		Deficit			Income			Interest

Balance, December 31, 2008	$	(751,176	)	$	-			53,915,653	$	53,916	$	12,499,171	$	(13,427,533	)	$	123,270		$	-

Interest for due to related parties		30,034										30,034

Comprehensive loss:
Net loss		(229,895	)		(229,895	)								(194,360	)					(35,535	)
Other comprehensive loss, net of tax:
Foreign currency translation loss		(36,568	)		(36,568	)											(25,512	)		(11,056	)

Comprehensive loss		(266,463	)	$	(266,463	)

Balance, March 31, 2009	$	(987,605	)					53,915,653	$	53,916	$	12,529,205	$	(13,621,893	)	$	97,758		$	(46,591	)


See accompanying notes to the consolidated financial statements

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

	For The Three Months Ended
	March 31, 2009			March 31, 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(229,895	)	$	(227,708	)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization		108,310			60,896
Imputed interest for due to related parties		30,034			-
Changes in assets and liabilities:
Accounts receivable		43			11,643
Inventories		(37,297	)		64,961
Prepayments and other current assets		(24,507	)		(55,833	)
Accounts payable		2,114			(78,149	)
Accrued expenses and other current liabilities		111,943			(5,754	)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		(39,255	)		(229,944	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(21,510	)		(14,413	)

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		(21,510	)		(14,413	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of note payable - stockholder		(36,570	)		-
Proceeds from stockholders/officers		47,188			21,344

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		10,618			21,344

EFFECT OF EXCHANGE RATE CHANGES ON CASH		(34,679	)		28,056

NET CHANGE IN CASH		(84,826	)		(194,957	)

CASH at beginning of period		190,039			815,671

CASH at end of period	$	105,213		$	620,714

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	$	-		$	-


See accompanying notes to the consolidated financial statements.

Table of Contents

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2009

(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 RMB 1,351,200 (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.

Table of Contents

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2009

(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, 2008 and notes thereto contained in the Report on Form 10-K of the Company as filed with the United States Securities and Exchange Commission (the “SEC”) on March 31, 2009. 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 right 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.

Table of Contents

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2009

(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 three months ended March 31, 2009 or 2008.

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 March 31, 2009.

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 records 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.

Table of Contents

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2009

(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:

Table of Contents

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2009

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

March 31, 2009

Balance sheet RMB 6.8336 to US$1.00

Statement of operations and comprehensive income (loss) RMB 6.8363 to US$1.00

December 31, 2008

Balance sheet RMB 6.8225 to US$1.00

Statement of operations and comprehensive income (loss) RMB 6.9493 to US$1.00

March 31, 2008

Balance sheet RMB 7.0120 to US$1.00

Statement of operations and comprehensive income RMB 7.1590 to US$1.00

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 Comprehensive Loss. The foreign currency translation gain(loss) for the three months ended March 31, 2009 and 2008 were $(36,568) and $28,589 and effect of exchange rate changes on cash flows for the three months period then ended were $(34,679) and $28,056, respectively.

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 March 31, 2009 or 2008.

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.

Table of Contents

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2009

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently adopted accounting principles

In December 2007, FASB issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS No. 141R”). SFAS No. 141R is a revision to SFAS No. 141 and includes substantial changes to the acquisition method used to account for business combinations (formerly the “purchase accounting” method), including broadening the definition of a business, as well as revisions to accounting methods for contingent consideration and other contingencies related to the acquired business, accounting for transaction costs, and accounting for adjustments to provisional amounts recorded in connection with acquisitions. SFAS No. 141R retains the fundamental requirement of SFAS No. 141 that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. SFAS No. 141R is applied prospectively to 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 adopted SFAS No. 141R effective January 1, 2009. The adoption of SFAS No. 141R did not have a material impact on our consolidated financial statements for the three months ended March 31, 2009 because we did not complete any business combinations in the first quarter of 2009.

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. We adopted SFAS No. 160 effective January 1, 2009. The adoption of SFAS No. 160 did not have a material impact on our consolidated financial statements for the three months ended March 31, 2009.

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. We adopted SFAS No. 160 effective January 1, 2009. The adoption of SFAS 161 had no impact on the 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. We adopted SFAS No. 142-3 effective January 1, 2009. The adoption of FSP FAS 142-3 had no impact on the Financial Statements.

In June 2008, the 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”). We adopted EITF 03-6-1 effective January 1, 2009. The adoption of FSP EITF 03-6-1 did not have a material impact on the Financial Statements.

Recent Accounting Pronouncements

In December 2008, the FASB issued FSP 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (FSP 132(R)-1). FSP 132(R)-1 requires additional disclosures for plan assets of defined benefit pension or other postretirement plans. The required disclosures include a description of our investment policies and strategies, the fair value of each major category of plan assets, the inputs and valuation techniques used to measure the fair value of plan assets, the effect of fair value measurements using significant unobservable inputs on changes in plan assets, and the significant concentrations of risk within plan assets. FSP 132 (R)-1 does not change the accounting treatment for postretirement benefits plans. FSP 132(R)-1 is effective for us for fiscal year 2009.

In April 2009, the FASB issued FSP FAS 157-4, “Determining Fair Value When Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (FSP 157-4). FSP 157-4 provides guidance on how to determine the fair value of assets and liabilities when the volume and level of activity for the asset/liability has significantly decreased. FSP 157-4 also provides guidance on identifying circumstances that indicate a transaction is not orderly. In addition, FSP 157-4 requires disclosure in interim and annual periods of the inputs and valuation techniques used to measure fair value and a discussion of changes in valuation techniques. FSP 157-4 is effective for us beginning in the second quarter of fiscal year 2009. The adoption of FSP 157-4 is not expected to have a significant impact on our consolidated financial statements.

In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairment” (FSP 115-2/124-2). FSP 115-2/124-2 amends the requirements for the recognition and measurement of other-than-temporary impairments for debt securities by modifying the pre-existing “intent and ability” indicator. Under FSP 115-2/124-2, another-than-temporary impairment is triggered when there is an intent to sell the security, it is more likely than not that the security will be required to be sold before recovery, or the security is not expected to recover the entire amortized cost basis of the security. Additionally, FSP 115-2/124-2 changes the presentation of an other-than-temporary impairment in the income statement for those impairments involving credit losses. The credit loss component will be recognized in earnings and the remainder of the impairment will be recorded in other comprehensive income. FSP 115-2/124-2 is effective for us beginning in the second quarter of fiscal year 2009. Upon implementation at the beginning of the second quarter of 2009, FSP 115-2/124-2 is not expected to have a significant impact on our consolidated financial statements.

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, “Interim Disclosure about Fair Value of Financial Instruments” (FSP 107-1/APB 28-1). FSP 107-1/APB 28-1 requires interim disclosures regarding the fair values of financial instruments that are within the scope of FAS 107, “Disclosures about the Fair Value of Financial Instruments.” Additionally, FSP 107-1/APB 28-1 requires disclosure of the methods and significant assumptions used to estimate the fair value of financial instruments on an interim basis as well as changes of the methods and significant assumptions from prior periods. FSP 107-1/APB 28-1 does not change the accounting treatment for these financial instruments and is effective for us beginning in the second quarter of fiscal year 2009.

Table of Contents

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2009

(Unaudited)

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 $13,621,893 and a working capital deficiency of $6,531,702 at March 31, 2009, a net loss of $229,895 and net cash used in operations of $39,255 for the three months ended March 31, 2009, 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.

NOTE 4 - ACCOUNTS RECEIVABLE

Accounts receivable at March 31, 2009 and December 31, 2008 consisted of the following:

	March 31			December 31
	2009			2008

Accounts Receivable	$	511,776		$	512,611
Less: Allowance for doubtful accounts		(485,581	)		(486,373	)

	$	26,195		$	26,238

For the three month period ended March 31, 2009 and 2008, the Company did not record any bad debt expense.

NOTE 5 - INVENTORIES

Inventories at March 31, 2009 and December 31, 2008consisted of the following:

	March 31			December 31
	2009			2008

Raw Material	$	121,077		$	114,208.00
Work in process		243,910			210,317
Finished goods		530,603			517,967
		895,590			842,492
Less: Inventory obsolescence		(731,708	)		(715,907	)

	$	163,882		$	126,585

Table of Contents

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2009

(Unaudited)

NOTE 6 - RELATED PARTY TRANSACTIONS

Due to and notes payable - related parties at March 31, 2009 and December 31, 2008 consisted of the following:

		March 31		December 31
		2009		2008
Due to related parties (a)

Guo, Wenxia	CEO; Stockholder; Stockholder of Daiying	$	208,551	$	251,330
Xian Jin Hao Tech	Stockholder; Stockholder of Daiying		584,952		486,731
Daiying Institute	The company controlled by Guo,Wenxia		1,264,046		1,275,557
Li, Zhuobin	Stockholder; Stockholder of Hua Yang		2,770		2,774
Chen, Aibin	Stockholder; Stockholder of Hua Yang		123,943		124,145

		$	2,184,262	$	2,140,537
Note payable- stockholder (b)
Lu, Zhongyu	Prior Stockholder of Ze An	$	161,144	$	198,051

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.

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.

On March 31, 2007, Xian Jin Hao Sci-Tech Investment Management Co., Ltd. (Xian Jin Hao), a stockholder of the Company converted RMB7.73 million (equivalent to $1 million at the date of conversion) to 10,000,000 shares of the Company’s common stock at $0.10 per share, the closing price of the Company’s common stock on the date of conversion

On September 30, 2007, the Company and Xian Jin Hao, a stockholder of the Company reached an agreement whereby the Company transferred certain property to Xian Jin Hao, with the original cost of RMB3,030,707 and Xian Jin Hao assumed the remaining mortgage of RMB1,087,250 and relieved debt of RMB1,943,457. Upon transfer of the property, the related cost of RMB3,030,707 (equivalent to $41,547 at December 31, 2007), accumulated depreciation of RMB447,032 ($61,283) remaining mortgage of RMB1,087,250 ($149,049) and the payable to Jin Hao of RMB1,943,457 ($266,424) were removed from the accounts with the excess value of the payable and assumed mortgage over the net book value of the transferred property being recorded as a contribution to capital.

NOTE 7 – LOAN PAYABLE

Loan payable is collateralized by all of Hua Yang’s equipment, building and land use right, payable to a financial institution, with interest at 6.696% per annum payable monthly, with principal due May 27, 2007. The loan is currently past due. The Company paid interest through May 20, 2007 and interest accrued through March 31, 2009 was included in accrued interest.

Table of Contents

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2009

(Unaudited)

NOTE 8 – NOTE PAYABLE- BANK

Note payable - bank is collateralized by all of Hua Yang’s equipment, building and land use right, and is payable to a financial institution, with interest at 6.696% per annum payable monthly, with RMB5 million (equivalent $667,307) due April 29, 2007 and RMB5 million ($667,308) due April 27, 2008. The note is currently past due for the first principal payment due on April 29, 2007. The Company paid interest through May 20, 2007 and interest accrued through March 31, 2009 was included in accrued interest

The accrued interest for above Loan Payable and Current Maturities of Note Payable was $341,325 and $304,998 as of March 31, 2009 and December 31, 2008, respectively. Interest expense for the three months ended March 31, 2009 and 2008 was $36,809 and $35,150, respectively.

NOTE 9 - 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 March 31, 2009, 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 10 - 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 March 31, 2009, the Company had no Statutory Surplus Reserve and the Statutory Common Welfare Fund established and segregated in retained earnings.

Table of Contents

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, 2008 and notes thereto contained in Report on Form 10-K 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.

Table of Contents

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 2009, the above research projects will be delayed and production might not meet the market demand for the Company's new product.

The following analysis shows the selected unaudited consolidated statement of operations data of the Company for the three month period ended March 31, 2009 and March 31, 2008.

Results of Operations for the three months ended March 31, 2009 compared to the three months ended March 31, 2008

Revenues

For the three months ended March 31, 2009, our revenues were $18,265 as compared to $14,898 for the three months ended March 31, 2008, an increase of $3,367. We attribute this increase in net revenues to the higher revenues generated from Shaanxi Daiying Medicine Distribution Co., Ltd., a majority owned subsidiary.

Cost of Sales and Gross Profit

For the three months ended March 31, 2009, cost of sales amounted to $13,589 as compared to cost of sales of $9,806 for the three months ended March 31, 2008. We attribute this increase in cost of sales to more input of manufacturing overheads. Gross profit for the three months ended March 31, 2009 was $4,676, as compared to $5,092 for the three months ended March 31, 2008.

Operating Expenses

For the three months ended March 31, 2009, total operating expenses were $77,290 as compared to $165,868 for the three months ended March 31, 2008, a decrease of $88,578, or approximately 53.4%.

Included in this decrease was:

·	Research and development costs of $0 as compared to $11,670, respectively, a decrease of $11,670. With the progress of new projects completed, we have not invested any funds in additional projects.

·	Professional fees of $270 as compared to $8,461, respectively, a decrease of $8,191. We attribute this decrease to lower legal and professional fees.

·	Stock-based compensation expense was $0 for the three-month periods ended March 31, 2009 and 2008.

·	General and administrative expenses were $75,502 as compared to $128,987, respectively, a decrease of $53,485, or approximately 41.5%.

For the three months ended March 31, 2009, interest expense was $95,308 as compared to $60,929 for the three months ended March 31, 2008. For the three months ended March 31, 2009, other expenses were $157,281 as compared to $66,932 for the three months ended March 31, 2008. The increase in other expenses for the period was mainly due to depreciation and production cost of idle capacity.

As a result of these factors, the Company reported a net loss of $(229,895) or $0.00 per share for the three months ended March 31, 2009, as compared to a net loss of $(227,708) or $0.00 per share for the same period in 2008.

Table of Contents

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2009, we had cash and cash equivalents of $105,213.

Net cash used in operating activities for the three months ended March 31, 2009 was $39,255 as compared to $229,944 for the three months ended March 31, 2008. For the three months ended March 31, 2009, we used cash to fund our loss of $229,895; our inventories increased by $37,297; accounts payable increased by $2,114, and received net cash on accounts receivable of $43, prepayments and other current assets increased by $24,507, accrued liabilities and other payable increased by $111,943, offset by non-cash items such as depreciation and amortization of $108,310 and imputed interest due to related parties. For the three months ended March 31, 2008, we used cash to fund our loss of $227,708 and to reductions of accounts receivable of $11,643, our inventories decreased by $64,961, increases in prepayments and other current assets of $55,833, accounts payable decreased by $78,149, decreasing accrued expenses and other current liabilities by $5,754, offset by non-cash items such as depreciation and amortization of $60,896.

Net cash used in investing activities for the three months ended March 31, 2009 was $21,510 as compared to net cash used in investing activities for the three months ended March 31, 2008 of $14,413. For the three months ended March 31, 2009, we used cash of $21,510 for purchase of property and equipment. For the three months ended March 31, 2008, we used cash for purchase of property and equipment of $14,413.

Net cash provided by financing activities for the three months ended March 31, 2009 was $10,618 as compared to net cash provided by financing activities for the three months ended March 31, 2008 of $21,344. For the three months ended March 31, 2009, the Company received $47,188 from stockholders/officers. These were offset by the repayment of note payable to a stockholder of $36,570. For the three months ended March 31, 2008, the Company received net proceeds of $21,344 from stockholders/officers.

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.

The Company currently has no material commitments for capital expenditures.

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.

Table of Contents

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 increasing our bank loan and attracting new investment.

(b)	Increase in marketing activities and sales

We will begin to manufacture some drugs that we did not make before, which should increase our sales and marketing activities. We will also initiate some policies to stimulate our sales staff to increase their sales.

Off Balance Sheet Arrangements

The Company has no off balance sheet arrangements at March 31, 2009.

Recently Issued Accounting Pronouncements

Recently adopted accounting principles

Table of Contents

Recent Accounting Pronouncements

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, “Interim Disclosure about Fair Value of Financial Instruments” (FSP 107-1/APB 28-1). FSP 107-1/APB 28-1 requires interim disclosures regarding the fair values of financial instruments that are within the scope of FAS 107, “Disclosures about the Fair Value of Financial Instruments.” Additionally,FSP 107-1/APB 28-1 requires disclosure of the methods and significant assumptions used to estimate the fair value of financial instruments on an interim basis as well as changes of the methods and significant assumptions from prior periods. FSP 107-1/APB 28-1 does not change the accounting treatment for these financial instruments and is effective for us beginning in the second quarter of fiscal year 2009.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Credit risk

Operations

Item 4(A). Controls and Procedures

The Company maintains disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 (“Exchange Act”) is recorded, processed, summarized and reported within the specified time periods. The Company’s Chief Executive Officer and its Chief Financial Officer (collectively, the “Certifying Officers”) are responsible for maintaining disclosure controls and procedures for the Company. The controls and procedures established by the Company are designed to provide reasonable assurance that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.

As of the end of the period covered by this report, the Certifying Officers evaluated the effectiveness of the Company’s disclosure controls and procedures. Based on the evaluation, the Certifying Officers concluded that the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including the Certifying Officers, as appropriate to allow timely decisions regarding required disclosure.

Item 4(A)T. Internal Control Over Financial Reporting

(a) The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of March 31, 2009.

(b) This quarterly report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management’s report in this annual report.

(c) 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.

Table of Contents

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

None

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

None

Item 5. Other Information

None.

Item 6. Exhibits

31.1	Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934

31.2	Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934

32.1	Certification of the Company's Chief Executive Officer Pursuant to 18 U.S.C. SS. 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. SS. 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Table of Contents

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
	(Registrant)

May 15, 2009	By:	/s/ Wenxia Guo
		Wenxia Guo
		Chief Executive Officer and Director
		(Principal Executive Officer)


May 15, 2009	By:	/s/ Peiyi Tian
		Peiyi Tian
		Chief Financial Officer, VP, Treasurer and Director
		(Principal Financial and Accounting Officer)


May 15, 2009	By:	/s/ Huimin Zhang
		Humin Zhang
		Director