10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended September 30, 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 xNo 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 September 30, 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 xNo o

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

FORM 10-Q

September 30, 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		21
	ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		27
	ITEM 4 - CONTROLS AND PROCEDURES		27
	ITEM 4T – INTERNAL CONTROL OVER FINANCIAL REPORTING		28
PART II - OTHER INFORMATION
	ITEM 6 - EXHIBITS		28
		SIGNATURES	29

2

PART I

Item 1. Financial Information

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

September 30, 2009

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Contents	Page(s)
Consolidated Balance Sheets at September 30, 2009 (Unaudited) and December 31, 2008	4
Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 2009 and 2008 (Unaudited)	5
Consolidated Statement of Comprehensive Loss for the Three Months and Nine Months Ended September 30, 2009 and 2008 (Unaudited)	6
Consolidated Statement of Changes in Equity (Deficit) for the Nine Months Ended September 30, 2009 (Unaudited)	7
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2009 and 2008 (Unaudited)	8
Notes to the Consolidated Financial Statements (Unaudited)	9 - 20

3

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
	September 30, 2009			December 31, 2008
	(Unaudited)
ASSETS
Current Assets:
Cash	$	368,203		$	190,039
Accounts receivable, net (Note 4)		39,368			26,238
Inventories (Note 5)		157,885			126,585
Prepayments and other current assets		81,877			62,061
Total Current Assets		647,333			404,923
Property, plant and Equipment, net		4,421,551			4,858,303
Land use rights, net		768,796			781,815
Total Assets	$	5,837,680		$	6,045,041
LIABILITIES
Current liabilities:
Loan payable (Note 7)	$	703,160		$	703,554
Note payable- stockholder (Note 6)		161,317			198,051
Current maturities of note payable - bank (Note 8)		1,464,916			1,465,738
Accounts payable		354,900			353,058
Due to related parties (Note 6)		2,593,870			2,140,537
Other current liabilities		2,120,019			1,935,279
Total Current Liabilities		7,398,182			6,796,217
Total Liabilities		7,398,182			6,796,217
EQUITY(DEFICIT)
WWBP stockholders' equity(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		12,606,168			12,499,171
Accumulated deficit		(14,169,712	)		(13,427,533	)
Accumulated other comprehensive income (loss):
Foreign currency translation gain		123,062			123,270
Total WWBP stockholders' equity(deficit)		(1,386,566	)		(751,176	)
Noncontrolling interest		(173,936	)		-
Total Equity(Deficit)		(1,560,502	)		(751,176	)
Total Liabilities and Equity(Deficit)	$	5,837,680		$	6,045,041
See accompanying notes to the consolidated financial statements

4

 

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended						For the Nine Months Ended
	Sept. 30, 2009			Sept. 30, 2008			Sept. 30, 2009			Sept. 30, 2008
Net Revenues	$	10,515		$	29,280		$	48,335		$	113,525
Cost of Goods Sold		4,302			21,808			54,191			89,815
Gross Profit		6,213			7,472			(5,856	)		23,710
Operating Expenses:
Selling expenses		23,951			12,530			27,512			42,673
Research and development		29,108			2,809			45,530			15,459
Professional fees		9,817			3,260			58,342			67,647
Stock-based compensation		-			-			-			-
General and administrative		139,127			129,558			311,686			373,790
Total Operating Expenses		202,003			148,157			443,070			499,569
Loss from Operations		(195,790	)		(140,685	)		(448,926	)		(475,859	)
Other Expenses(Income):
Interest income		(264	)		(788	)		(710	)		(2,179	)
Interest expense		127,879			82,115			322,340			187,274
Other (income) expense		(793	)		21,122			(37,045	)		28,447
Depreciation and production cost of idle capacity		60,762			-			182,520			-
Realized (gain) loss on sale of marketable securities		-			-			-			6,084
Total Other (Income) Expenses		187,584			102,449			467,105			219,626
Net Loss		(383,374	)		(243,134	)		(916,031	)		(695,485	)
Less: Net loss attributable to the noncontrolling interest		80,356			17,522			173,852			42,212
Net Loss Attributable to WWBP common stockholders	$	(303,018	)	$	(225,612	)	$	(742,179	)	$	(653,273	)
Net Loss Per Common Share
Net loss per common share - Basic and diluted	$	(0.01	)	$	(0.00	)	$	(0.01	)	$	(0.01	)
Weighted average number of common shares outstanding
- Basic and diluted		53,915,653			53,915,653			53,915,653			53,915,653
See accompanying notes to the consolidated financial statements.

5

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
	For the Three Months Ended						For the Nine Months Ended
	Sept. 30, 2009			Sept. 30, 2008			Sept. 30, 2009			Sept. 30, 2008
Net loss	$	(383,374	)	$	(243,134	)	$	(916,031	)	$	(695,485	)
Other comprehensive income(loss), net of tax:
Foreign currency translation gain(loss)		(925	)		12,837			(292	)		60,691
Comprehensive loss		(384,299	)		(230,297	)		(916,323	)		(634,794	)
Comprehensive loss attributable to the noncontrolling interest		80,628			17,522			173,936			42,212
Comprehensive loss attributable to WWBP	$	(303,671	)	$	(212,775	)	$	(742,387	)	$	(592,582	)
See accompanying notes to the consolidated financial statements.

6

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 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		106,997										106,997
Comprehensive loss:
Net loss		(916,031	)		(916,031	)								(742,179	)					(173,852	)
Other comprehensive loss, net of tax:
Foreign currency translation loss		(292	)		(292	)											(208	)		(84	)
Comprehensive loss		(916,323	)	$	(916,323	)
Balance, September 30, 2009	$	(1,560,502	)					53,915,653	$	53,916	$	12,606,168	$	(14,169,712	)	$	123,062		$	(173,936	)
See accompanying notes to the consolidated financial statements

7

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
	For The Nine Months Ended
	Sept 30, 2009			Sept 30, 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(916,031	)	$	(695,485	)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization		323,426			336,831
Stock-based compensation		-			-
Gain on sale of marketable securities		-			-
Imputed interest for due to related parties		106,997			-
Changes in assets and liabilities:
Accounts receivable		(13,130	)		(30,210	)
Inventories		(31,300	)		(223,534	)
Prepayments and other current assets		(19,816	)		(207,240	)
Accounts payable		1,842			80,986
Accrued expenses and other current liabilities		184,740			189,024
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		(363,272	)		(549,628	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of marketable securities		-			-
Purchase of property and equipment		(31,313	)		(153,367	)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		(31,313	)		(153,367	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of note payable - stockholder		(36,591	)		-
Repayment for due to related parties		-			(44,981	)
Proceeds from stockholders/officers		608,230			32,108
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		571,639			(12,873	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		1,110			78,689
NET CHANGE IN CASH		178,164			(637,179	)
CASH at beginning of period		190,039			815,671
CASH at end of period	$	368,203		$	178,492
SUPPLEMENTAL DISCLOSURE OF CASH FLOW  INFORMATION:
Interest paid	$	-		$	-
See accompanying notes to the consolidated financial statements.

8

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 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. 

9

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 2009

(Unaudited)

NOTE 1 - ORGANIZATION AND OPERATIONS (CONTINUED)

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. 

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. 

The Company has evaluated subsequent events through the date that the financial statements were issued, which was November 16, 2009, the date of the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2009.

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. 

10

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 2009

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  (CONTINUED)

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. 

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 the standard “Goodwill and Other Intangible Assets,” codified with ASC 350 for the licenses. Under the requirements as set out in ASC 350, 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. 

11

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 2009

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  (CONTINUED)

Impairment of long-lived assets

The Company follows the standard “Accounting for the Impairment or Disposal of Long-Lived Assets,” codified with ASC 360 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 nine months ended September 30, 2009 and 2008. 

Segment information

The standard “Disclosures about Segments of an Enterprise and Related Information,” codified with ASC 280, 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 standard “Revenue Recognition,” codified  with ASC 650  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. 

Stock based compensation

Effective January 1, 2006, the Company adopted the fair value recognition provisions of the standard “Share-Based Payment,” codified with ASC 718, 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. 

12

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 2009

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  (CONTINUED)

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 standard “Accounting for Shipping and Handling Fees and Costs,” codified with ASC 605 . 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 the standard “Accounting for Income Taxes,” codified with ASC 740 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. 

Fair value of financial instruments

The Company adopted the standard “Fair Value Measurements,” codified with ASC 820 and effective January 1, 2008.  The provisions of ASC 820 are to be applied prospectively.

ASC 820 clarifies that fair value is an estimate of the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date).  Under ASC 820, fair value measurements are not adjusted for transaction cost.  ASC 820 provides for use of a fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities

Level 2: Input other than quoted market prices that are observable, either directly or indirectly, and reasonably available.  Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company.

Level 3: Unobservable inputs.  Unobservable inputs reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability.

An asset or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.  Availability of observable inputs can vary and is affected by a variety of factors.  The Company uses judgment in determining fair value of assets and liabilities and Level 3 assets and liabilities involve greater judgment than Level 1 and Level 2 assets or liabilities.

13

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 2009

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  (CONTINUED)

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 the standard “Foreign Currency Translation,” codified with ASC 830 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 currencytranslation 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: 

September 30, 2009

Balance sheet   RMB 6.8263 to US$1.00

Statement of operations and comprehensive income (loss) RMB 6.8324 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

September 30, 2008

Balance sheet   RMB 6.7899 to US$1.00

Statement of operations and comprehensive income RMB 6.9842 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 Operations and Comprehensive loss. The foreign currency translation gain(loss) for the nine months ended September 30, 2009 and 2008 were ($257) and $60,691 and effect of exchange rate changes on cash flows for the nine months period then ended were $1,107 and $78,689, respectively. 

14

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 2009

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  (CONTINUED)

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 the standard “Reporting Comprehensive Income,” codified with ASC 220. 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 the standard “Earnings Per Share,” codified with ASC 260. 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 September 30, 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. 

Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (FASB) issued a standard that established the FASB Accounting Standards Codification TM (ASC) and amended the hierarchy of generally accepted accounting principles (GAAP) such that the ASC became the single source of authoritative nongovernmental U.S. GAAP. The ASC did not change current U.S. GAAP, but was intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. All previously existing accounting standard documents were superseded and all other accounting literature not included in the ASC is considered non-authoritative. New accounting standards issued subsequent to June 30, 2009 are communicated by the FASB through Accounting Standards Updates (ASUs). For the Company, the ASC was effective July 1, 2009. This standard did not have an impact on the Company’s consolidated results of operations or financial condition. However, throughout the notes to the consolidated financial statements references that were previously made to various former authoritative U.S. GAAP pronouncements have been changed to coincide with the appropriate section of the ASC.

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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 2009

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  (CONTINUED)

In December 2008, the FASB issued an accounting standard regarding a company’s disclosures about postretirement benefit plan assets.  This standard requires additional disclosures about plan assets for sponsors of defined benefit pension and postretirement plans including expanded information regarding investment strategies, major categories of plan assets, and concentrations of risk within plan assets. Additionally, this standard requires disclosures similar to those required for fair value measurements and disclosures under ASC 820 with respect to the fair value of plan assets such as the inputs and valuation techniques used to measure fair value and information with respect to classification of plan assets in terms of the hierarchy of the source of information used to determine their value. The disclosures under this standard are required for annual periods ending after December 15, 2009. The Company is currently evaluating the requirements of these additional disclosures.

In April 2009, the FASB issued an accounting standard which modifies the requirements for recognizing other-than-temporarily impaired debt securities and changes the existing impairment model for such securities. The standard also requires additional disclosures for both annual and interim periods with respect to both debt and equity securities. Under the standard, impairment of debt securities will be considered other-than-temporary if an entity (1) intends to sell the security, (2) more likely than not will be required to sell the security before recovering its cost, or (3) does not expect to recover the security’s entire amortized cost basis (even if the entity does not intend to sell). The standard further indicates that, depending on which of the above factor(s) causes the impairment to be considered other-than-temporary, (1) the entire shortfall of the security’s fair value versus its amortized cost basis or (2) only the credit loss portion would be recognized in earnings while the remaining shortfall (if any) would be recorded in other comprehensive income. The standard requires entities to initially apply its provisions to previously other-than-temporarily impaired debt securities existing as of the date of initial adoption by making a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The cumulative-effect adjustment potentially reclassifies the noncredit portion of a previously other-than-temporarily impaired debt security held as of the date of initial adoption from retained earnings to accumulated other comprehensive income. For the Company, this standard was effective beginning April 1, 2009. The adoption of this standard did not have a material impact on the Company’s consolidated results of operations or financial condition.

In May 2009, the FASB issued a new accounting standard regarding subsequent events. This standard incorporates into authoritative accounting literature certain guidance that already existed within generally accepted auditing standards, with the requirements concerning recognition and disclosure of subsequent events remaining essentially unchanged. This guidance addresses events which occur after the balance sheet date but before the issuance of financial statements. Under the new standard, as under previous practice, an entity must record the effects of subsequent events that provide evidence about conditions that existed at the balance sheet date and must disclose but not record the effects of subsequent events which provide evidence about conditions that did not exist at the balance sheet date. This standard added an additional required disclosure relative to the date through which subsequent events have been evaluated and whether that is the date on which the financial statements were issued. For the Company, this standard was effective beginning April 1, 2009. The additional disclosures required by this standard are included in Note 1.

In June 2009, the FASB issued a new standard regarding the accounting for transfers of financial assets amending the existing guidance on transfers of financial assets to, among other things, eliminate the qualifying special-purpose entity concept, include a new unit of account definition that must be met for transfers of portions of financial assets to be eligible for sale accounting, clarify and change the derecognition criteria for a transfer to be accounted for as a sale, and require significant additional disclosure. For the Company, this standard is effective for new transfers of financial assets beginning January 1, 2010. Because the Company historically does not have significant transfers of financial assets, the adoption of this standard is not expected to have a material impact on the Company’s consolidated results of operations or financial condition.

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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 2009

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  (CONTINUED)

In August 2009, the FASB issued ASU No. 2009-05, Measuring Liabilities at Fair Value , which provides additional guidance on how companies should measure liabilities at fair value under ASC 820. The ASU clarifies that the quoted price for an identical liability should be used. However, if such information is not available, a entity may use, the quoted price of an identical liability when traded as an asset, quoted prices for similar liabilities or similar liabilities traded as assets, or another valuation technique (such as the market or income approach). The ASU also indicates that the fair value of a liability is not adjusted to reflect the impact of contractual restrictions that prevent its transfer and indicates circumstances in which quoted prices for an identical liability or quoted price for an identical liability traded as an asset may be considered level 1 fair value measurements. For the Company, this ASU is effective October 1, 2009. The Company is currently evaluating the impact of this standard, but would not expect it to have a material impact on the Company’s consolidated results of operations or financial condition.

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 $14,169,712 and a working capital deficiency of $6,750,849 at September 30, 2009, a net loss of $916,031 and net cash used in operations of $363,272 for the nine months ended September 30, 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 September 30, 2009 and December 31, 2008 consisted of the following:

	September 30			December 31
	2009			2008
Accounts Receivable	$	525,469		$	512,611
Less: Allowance for doubtful accounts		(486,101	)		(486,373	)
	$	39,368		$	26,238

For the nine month period ended September 30, 2009 and 2008, the Company did not record any bad debt expense. 

17

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 2009

(Unaudited)

NOTE 5 - INVENTORIES

Inventories at September 30, 2009 and December 31, 2008 consisted of the following: 

	September 30			December 31
	2009			2008
Raw Material	$	118,832		$	114,208
Work in process		282,411			210,317
Finished goods		507,483			517,967
		908,726			842,492
Less: Inventory obsolescence		(750,841	)		(715,907	)
	$	157,885		$	126,585

NOTE 6 - RELATED PARTY TRANSACTIONS

Due to and notes payable - related parties at September 30, 2009 and December 31, 2008 consisted of the following: 

		September 30		December 31
		2009		2008
Due to related parties (a)
Guo, Wenxia	CEO; Stockholder; Stockholder of Daiying	$	232,128	$	251,330
Xian Jin Hao Tech	Stockholder;           Stockholder of Daiying		1,265,003		486,731
Daiying Institute	The company controlled by Guo,Wenxia		969,890		1,275,557
Li, Zhuobin	Stockholder;          Stockholder of Hua Yang		2,773		2,774
Chen, Aibin	Stockholder;          Stockholder of Hua Yang		124,076		124,145
		$	2,593,870	$	2,140,537
Note payable- stockholder (b)
Lu, Zhongyu	Prior Stockholder of Ze An	$	161,317	$	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. 

18

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 2009

(Unaudited)

NOTE 6 - RELATED PARTY TRANSACTIONS (CONTINUED)

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.

Due to related parties do not bear interest and have no definite terms of repayment. For the nine months ended, September 30, 2009, the Company imputed interest of $106,997 based on a 5.5% interest rate which approximates the bank lending rate.

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 September 30, 2009 was included in accrued interest

NOTE 8 – CURRENT MATURITIES OF 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 September 30, 2009 was included in accrued interest

The accrued interest for above Loan Payable and Current Maturities of Note Payable was $415,417 and $304,998 as of September 30, 2009 and December 31, 2008, 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 September 30, 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.

19

WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 2009

(Unaudited)

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 September 30, 2009, 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, 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.

21

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.

RESULTS OF OPERATIONS

The following analysis shows the selected unaudited consolidated statement of operations data of the Company for the three month and nine month periods ended September 30, 2009 and September 30, 2008.

Three Months Ended September 30, 2009 Compared to the Three Months Ended September 30, 2008

Revenues

For the three months ended September 30, 2009, our revenues were $10,515 as compared to $29,280 for the three months ended September 30, 2008, a decrease of $18,765. We attribute this decrease in net revenues to the reduced amounts of goods sold by our subsidiaries.

Cost of Sales and Gross Profit

For the three months ended September 30, 2009, cost of sales amounted to $4,302 as compared to cost of sales of $21,808 for the three months ended September 30, 2008. We attribute the decrease in cost of sales to the reduction in the amounts of goods sold and the decline in the proceeds from sales.  Gross profit for the three months ended September 30, 2009 was $6,213, as compared to $7,472 for the three months ended September 30, 2008. 

22

Operating Expenses

For the three months ended September 30, 2009, total operating expenses were $202,003 as compared to $148,157 for the three months ended September 30,2008, an increase of $53,846, or approximately 36.3%. 

Included in this increase was:

·   Selling expenses of $23,951 for the three months ended September 30, 2009 as compared to $12,530 for the three months ended September 30, 2008, an increase of $11,421, or approximately 91.1%.  We attribute this increase to multiplied efforts to expand our market in order to boost sales.

·   Research and development costs of $29,108 as compared to $2,809 for the three months ended September 30, 2009 and 2008, respectively, an increase of $26,299. This increase was attributable to further technological cooperation with Yangling Daiying Biotech Institute.

·   General and administrative expenses were $139,127 for the three months ended September 30, 2009 as compared to $129,558 for the three months ended September 30, 2008, an increase of $9,569, or approximately 7.4%.

For the three months ended September 30, 2009, interest expense was $127,879 as compared to $82,115 for the three months ended September 30, 2008. For the three months ended September 30, 2009, total other expenses were $187,584 as compared to $102,449 for the three months ended September 30, 2008.  The increase in other expenses for the three month period ended September 30, 2009 was mainly due to higher interest expense from loan payable and due to related parties as well as higher depreciation and production cost of idle capacity.

As a result of these factors, the Company reported a net loss of $(383,374) or $0.01 per share for the three months ended September 30, 2009, as compared to a net loss of $(243,134) or $0.00 per share for the same period in 2008. 

Nine Months Ended September 30, 2009 Compared to the Nine Months Ended September 30, 2008

Revenues

For the nine months ended September 30, 2009, our revenues were $48,335 as compared to $113,525 for the nine months ended September 30, 2008, a decrease of $65,190.  We attribute this decrease to the reduced amounts of goods sold by our subsidiaries.

Cost of Sales and Gross Profit

For the nine months ended September 30, 2009, cost of sales amounted to $54,191 as compared to cost of sales of $89,815 for the nine months ended September 30, 2008. Gross profit for the nine months ended September 30, 2009 was $(5,856) as compared to $23,710 for the nine months ended September 30, 2008.

23

Operating Expenses

For the nine months ended September 30, 2009, total operating expenses were $443,070 as compared to $499,569 for the nine months ended September 30,2008, a decrease of $56,499 or approximately 11.3%. 

Included in this decrease was:

·   Selling expenses of $27,512 for the nine months ended September 30, 2009 as compared to $42,673 for the nine months ended September 30, 2008. The decrease in selling expenses of $15,161 in the first nine months of 2009 was attributable to strengthened control over selling activities, which brought down selling expenses.

·   Professional fees of $58,342 for the nine months ended September 30, 2009 as compared to $67,647 for the nine months ended September 30, 2008, a decrease of $9,305. The decrease is attributable to lower legal and professional fees for the nine month period.

·   General and administrative expenses of $311,686 as compared to $373,790 for the nine months ended September 30, 2009 and 2008, respectively, a decrease of $62,104, or approximately 16.6%. We attribute the decrease to greater control over administrative costs, which helped lower expenses.

For the nine months ended September 30, 2009, interest expense was $322,340 as compared to $187,274 for the nine months ended September 30, 2008. For the nine months ended September 30, 2009, total other expenses were $467,105 as compared to $219,626 for the nine months ended September 30, 2008.  The increase in other expenses for the period was mainly due to higher interest expense from loan payable and due to related parties as well as higher depreciation and production cost of idle capacity.

As a result of these factors, the Company reported a net loss of $(916,031) or ($0.01) per share for the nine months ended September 30, 2009, as compared to a net loss of $(695,485) or $(0.01) per share for the same period in 2008. 

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2009, we had cash and cash equivalents of $368,203.

Net cash used in operating activities for the nine months ended September 30, 2009 was $363,272 as compared to net cash used in operating activities of $549,628 for the nine months ended September 30, 2008. For the nine months ended September 30, 2009, we used cash to fund our loss of $916,031, our inventories increased by $31,300, accounts payable increased by $1,842, accounts receivable increased by $13,130, prepayments and other current assets increased by $19,816, accrued liabilities and other payable increased by $184,740, offset by non-cash items such as depreciation and amortization of $323,426. For the nine months ended September 30, 2008, we used cash to fund our loss of $695,485 and to reductions of accounts receivable of $30,210, funding of inventories of $223,534, accounts payable increase of $80,986, decreasing accrued expenses and other current liabilities by $189,024, offset by non-cash items such as depreciation and amortization of $336,831, and increases in prepayments and other current assets of $207,240. 

Net cash used in investing activities for the nine months ended September 30, 2009 was $31,313 as compared to net cash used in investing activities for the nine months ended September 30, 2008 of $153,367.  For the nine months ended September 30, 2009, we used cash of $31,313 for purchase of property and equipment. For the nine months ended September 30, 2008, we used cash for purchase of property and equipment of $153,367 and received net proceeds of $0 from sale of marketable securities.  

Net cash provided by financing activities for the nine months ended September 30, 2009 was $571,639 as compared to net cash used in financing activities for the nine months ended September 30, 2008 of $12,873. For the nine months ended September 30, 2009, we received net proceeds of $608,230 from stockholders/officers. For the nine months ended September 30, 2008, the Company repaid $44,981 to stockholders/officers. 

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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.

Although China has been affected by the global recession, the government initiated a package of incentive programs to stimulate the economy and encourage business development, which has proven successful, especially in terms of GDP.  According to China’s National Bureau of Statistics, China’s Gross Domestic Product (GDP) amounted to RMB 21,781.7 billion for the nine months ended September 30, 2009, an increase of 7.7% as compared to the nine months ended September 30, 2008. 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 on 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 is making great efforts to improve the Company’s results of operations and cash flows. The actions include:

(a)   Strengthen internal controls

We will take steps to strengthen internal controls, aimed at bringing down production costs and various expenses.

(b)   Expand the market for our products and double our efforts at marketing

We began to manufacture some drugs that we did not make before and plan to increase marketing activities, which should boost our sales. We have also instituted some polices to motivate our salesmen to increase sales.

(c)   Further our cooperation with Yangling Daiying Biotech Institute

We will further our cooperation with Yangling Daiying Biotech Institute on the manufacturing and consignment sales of its newly-developed product of Emergency Haemostatic Patch, as well as the increase in other incomes.

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Off Balance Sheet Arrangements

The Company has no off balance sheet arrangements at September 30, 2009.

Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (FASB) issued a standard that established the FASB Accounting Standards Codification TM (ASC) and amended the hierarchy of generally accepted accounting principles (GAAP) such that the ASC became the single source of authoritative nongovernmental U.S. GAAP. The ASC did not change current U.S. GAAP, but was intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. All previously existing accounting standard documents were superseded and all other accounting literature not included in the ASC is considered non-authoritative. New accounting standards issued subsequent to June 30, 2009 are communicated by the FASB through Accounting Standards Updates (ASUs). For the Company, the ASC was effective July 1, 2009. This standard did not have an impact on the Company’s consolidated results of operations or financial condition. However, throughout the notes to the consolidated financial statements references that were previously made to various former authoritative U.S. GAAP pronouncements have been changed to coincide with the appropriate section of the ASC.

In December 2008, the FASB issued an accounting standard regarding a company’s disclosures about postretirement benefit plan assets.  This standard requires additional disclosures about plan assets for sponsors of defined benefit pension and postretirement plans including expanded information regarding investment strategies, major categories of plan assets, and concentrations of risk within plan assets. Additionally, this standard requires disclosures similar to those required for fair value measurements and disclosures under ASC 820 with respect to the fair value of plan assets such as the inputs and valuation techniques used to measure fair value and information with respect to classification of plan assets in terms of the hierarchy of the source of information used to determine their value. The disclosures under this standard are required for annual periods ending after December 15, 2009. The Company is currently evaluating the requirements of these additional disclosures.

In April 2009, the FASB issued an accounting standard which modifies the requirements for recognizing other-than-temporarily impaired debt securities and changes the existing impairment model for such securities. The standard also requires additional disclosures for both annual and interim periods with respect to both debt and equity securities. Under the standard, impairment of debt securities will be considered other-than-temporary if an entity (1) intends to sell the security, (2) more likely than not will be required to sell the security before recovering its cost, or (3) does not expect to recover the security’s entire amortized cost basis (even if the entity does not intend to sell). The standard further indicates that, depending on which of the above factor(s) causes the impairment to be considered other-than-temporary, (1) the entire shortfall of the security’s fair value versus its amortized cost basis or (2) only the credit loss portion would be recognized in earnings while the remaining shortfall (if any) would be recorded in other comprehensive income. The standard requires entities to initially apply its provisions to previously other-than-temporarily impaired debt securities existing as of the date of initial adoption by making a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The cumulative-effect adjustment potentially reclassifies the noncredit portion of a previously other-than-temporarily impaired debt security held as of the date of initial adoption from retained earnings to accumulated other comprehensive income. For the Company, this standard was effective beginning April 1, 2009. The adoption of this standard did not have a material impact on the Company’s consolidated results of operations or financial condition.

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In May 2009, the FASB issued a new accounting standard regarding subsequent events. This standard incorporates into authoritative accounting literature certain guidance that already existed within generally accepted auditing standards, with the requirements concerning recognition and disclosure of subsequent events remaining essentially unchanged. This guidance addresses events which occur after the balance sheet date but before the issuance of financial statements. Under the new standard, as under previous practice, an entity must record the effects of subsequent events that provide evidence about conditions that existed at the balance sheet date and must disclose but not record the effects of subsequent events which provide evidence about conditions that did not exist at the balance sheet date. This standard added an additional required disclosure relative to the date through which subsequent events have been evaluated and whether that is the date on which the financial statements were issued. For the Company, this standard was effective beginning April 1, 2009. The additional disclosures required by this standard are included in Note 1.

In June 2009, the FASB issued a new standard regarding the accounting for transfers of financial assets amending the existing guidance on transfers of financial assets to, among other things, eliminate the qualifying special-purpose entity concept, include a new unit of account definition that must be met for transfers of portions of financial assets to be eligible for sale accounting, clarify and change the derecognition criteria for a transfer to be accounted for as a sale, and require significant additional disclosure. For the Company, this standard is effective for new transfers of financial assets beginning January 1, 2010. Because the Company historically does not have significant transfers of financial assets, the adoption of this standard is not expected to have a material impact on the Company’s consolidated results of operations or financial condition.

In August 2009, the FASB issued ASU No. 2009-05, Measuring Liabilities at Fair Value , which provides additional guidance on how companies should measure liabilities at fair value under ASC 820. The ASU clarifies that the quoted price for an identical liability should be used. However, if such information is not available, a entity may use, the quoted price of an identical liability when traded as an asset, quoted prices for similar liabilities or similar liabilities traded as assets, or another valuation technique (such as the market or income approach). The ASU also indicates that the fair value of a liability is not adjusted to reflect the impact of contractual restrictions that prevent its transfer and indicates circumstances in which quoted prices for an identical liability or quoted price for an identical liability traded as an asset may be considered level 1 fair value measurements. For the Company, this ASU is effective October 1, 2009. The Company is currently evaluating the impact of this standard, but would not expect it to have a material impact on the Company’s consolidated results of operations or financial condition.

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 decides 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. Controls and Procedures

The Chief Executive Officer and Chief Financial Officer (the principal executive officer and principal financial officer, respectively) of the Company have concluded, based on their evaluation as of September 30, 2009, that the design and operation of the Company's "disclosure controls and procedures" (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended ("Exchange Act")) are effective to ensure that information required to be disclosed in the reports filed or submitted by the Company under the Exchange Act is accumulated, recorded, processed, summarized and reported to the management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding whether or not disclosure is required.

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During the quarter ended September 30, 2009, there were no changes in the internal controls of the Company over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the internal controls of the Company over financial reporting.

Item 4T. Internal Control over Financial Reporting

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 September 30, 2009.

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 6. Exhibits

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

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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)
November 16, 2009	By:	/s/ Wenxia Guo
		Wenxia Guo
		Chief Executive Officer and Director
		(Principal Executive Officer)
November 16, 2009	By:	/s/ Peiyi Tian
		Peiyi Tian
		Chief Financial Officer, VP, Treasurer and Director
		(Principal Financial and Accounting Officer)
November 16, 2009	By:	/s/ Huimin Zhang
		Humin Zhang
		Director

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EX-31.1

Exhibit 31.1

Rule 13a - 14(a)/15d-14(a) Certification of the Chief Executive Officer

I, Wenxia Guo, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Worldwide Biotech & Pharmaceutical Company (the “registrant);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 16, 2009

/s/ Wenxia Guo

Wenxia Guo

Chief Executive Officer

EX-31.2

Exhibit 31.2

Rule 13a - 14(a)/15d-14(a) Certification of the Chief Financial Officer

I, Peiyi Tian, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Worldwide Biotech & Pharmaceutical Company (the “registrant);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a.   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 16, 2009

/s/ Peiyi Tian

Peiyi Tian

Principal Accounting Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the report of Worldwide Biotech & Pharmaceutical Company (the “Company”) on Form 10-Q for the quarter ending September 30, 2009, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Wenxia Guo, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Wenxia Guo

Wenxia Guo

Chief Executive Officer

November 16, 2009

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the report of Worldwide Biotech & Pharmaceutical Company (the “Company”) on Form 10-Q for the quarter ending September 30, 2009, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Peiyi Tian, Principal Accounting Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Peiyi Tian

Peiyi Tian

Chief Financial Officer

November 16, 2009