UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549  FORM 10-KSB  [X]    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2006  [  ]   Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to ______    WORLDWIDE MANUFACTURING USA, INC. (Exact name of small business issuer in its charter)  Colorado0-3176184-536519(State or other jurisdiction of incorporation or organization)(Commission file number)(I.R.S. Employer Identification No.)1142 Cherry StreetSan Bruno, California94066(Address of principal executive offices)(Zip Code)  Registrant's telephone number, including area code:  (650) 794-9888  Securities registered pursuant to Section 12(b) of the Act: None  Securities registered pursuant to Section 12(g) of the Act: Common Stock, no par value  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 [  ]  Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in part III of this Form 10-K or any amendment to this Form 10-K. [X]  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act Yes [  ] No [X]  State issuer's revenues for its most recent fiscal year: $11,409,300   - 1 -   The aggregate market value of the voting stock held by non-affiliates of the registrant as of April 06, 2007 is approximately $9,200,234.  The number of shares outstanding of the issuer's classes of Common Stock as of April 06, 2007:  Common Stock, no par value, 2,030,863 shares  Transitional Small Business Disclosure Format Yes [  ] No [X]   DOCUMENTS INCORPORATED BY REFERENCE: NONE          - 2 -   WORLDWIDE MANUFACTURING USA, INC. 2006 ANNUAL REPORT ON FORM 10-KSB INDEX    PART I 4 ITEM 1. DESCRIPTION OF BUSINESS 4 ITEM 2. DESCRIPTION OF PROPERTY 14 ITEM 3. LEGAL PROCEEDINGS 14 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 14 PART II 14 ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 14 ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS 15 ITEM 7. FINANCIAL STATEMENTS 21 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS 22 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 23 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 23 CONSOLIDATED BALANCE SHEETS 24 CONSOLIDATED STATEMENTS OF OPERATIONS 25 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY 26 CONSOLIDATED STATEMENTS OF CASH FLOWS 27 ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE44 ITEM 8A. CONTROLS AND PROCEDURES 45 ITEM 8B. OTHER INFORMATION 45 PART III 45 ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT45 ITEM 10. EXECUTIVE COMPENSATION 47 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 49 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 50 ITEM 13. EXHIBITS 50 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 51 SIGNATURES 52   - 3 -   PART I   ITEM 1. DESCRIPTION OF BUSINESS  When used in this Form 10-KSB, the words "expects," "anticipates," "estimates" and similar expressions are intended to identify forward-looking statements. Such statements are subject to risks and uncertainties, including those set forth below under "Risks and Uncertainties," that could cause actual results to differ materially from those projected. These forward-looking statements speak only as of the date hereof. Worldwide expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based. This discussion should be read together with the financial statements and other financial information included in this Form 10-KSB.  Risk Factors  THE SHARES OF WORLDWIDE ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK INCLUDING THE COMPREHENSIVE DISCUSSION OF MATERIAL RISK FACTORS DESCRIBED BELOW. EACH PROSPECTIVE INVESTOR SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS INHERENT IN AND AFFECTING THE BUSINESS OF THE COMPANY BEFORE MAKING AN INVESTMENT DECISION.  1. Resale of our securities may be difficult because there may not be sufficient market activity to provide liquidity of the Companys shares.  There is no assurance that the market for the Companys shares will be maintained or that it will be sufficiently active or liquid to allow shareholders to easily dispose of their shares.  2.  Because we work under short-term contracts, it is very difficult to forecast our operational and cash needs.  Contract manufacturing service providers must provide increasingly rapid product turnaround for their customers. We generally do not obtain firm long-term purchase commitments from our customers. Customers may cancel their orders, change production quantities, or delay production because of consumer demand or technological changes; however, we are often obligated to expend significant amounts for retooling or other start-up costs of manufacturing. Any costs due to cancellations, reductions, customer returns and/or delays by a significant customer or by a group of customers might not be recoverable. The loss could be greater than our projected profit on the contract, resulting in a net loss for the contract. The short-term nature of our customers' commitments and the possibility of rapid changes in demand for their products reduce our ability to estimate accurately future customer requirements. On occasion, customers may require rapid increases in production, which can stress our resources and reduce margins. Although we have several manufacturing facilities in China that we do business with, there can be no assurances we will have sufficient capacity at any given time to meet our customers demands. We could lose orders or fail to complete orders in a timely manner. In addition, because many of our costs and operating expenses are relatively fixed, any reduction in customer demand can adversely affect our  - 4 -   gross margins and operating income.  3.  A few customers and contract manufacturers account for a large percentage of our business. Therefore, the loss of any one customer or contract manufacturers could reduce our sales significantly or impede our ability to comply with our manufacturing contracts, respectively.  Historically, our six largest customers, Joslyn Sunbank, Joslyn Manufacturing, Radio Waves Corp and Teleflex Electrical, Crosman Corporation and Pacific Scientific-CA accounted for approximately 52% of consolidated net sales in 2005ompared to 46% of consolidated net sales in the year ending 2004. Our two largest contract manufacturers are now Shanghai Xinli Trading Company Ltd. and Shanghai ShangJi Tool Co. Ltd., and they accounted for $302,150 or 3.2% and $261,026 or 2.6% respectively of the total materials purchased by Worldwide for the period ending December 31, 2005. Likewise for the period ending December 31, 2004, Worldwide's largest suppliers were Shanghai Xinli Trading Company Ltd. and Shanghai ShangJi Tool Co. Ltd., and they accounted for $530,233 or 6.9% and $465,640 or 5.9% respectively of the total materials purchased by Worldwide. The loss of any one customer could significantly reduce our sales. The loss of one contract manufacturer could cause delays in our performance of contracts or reduce our gross margin if the substitute manufacturer could not deliver on time or at the same contract price.  4. Taxing authorities could modify our tax exemptions or challenge our tax allocations and require us to pay more taxes.  Our operations are predominantly located in China, where tax incentives have been extended to encourage foreign investment. Our effective tax rate could increase if these tax incentives are not renewed upon expiration or tax rates applicable to us are increased. Substantially all of the products manufactured by factories we employ in China are sold to customers based in the United States. Tax authorities in jurisdictions in the United States could challenge the manner in which profits are allocated between US and Chinese subsidiaries, and if we do not prevail in any such challenge we will be required to pay more taxes.  5.  Unforeseen changes in suppliers can result in losses of tooling deposits and other pre-production costs.  In most cases the tool, die, or mold from which a part is made is owned by the supplier, and is designed for the specific customer. We require our customers to provide a non-refundable down payment to cover tooling costs, including pre-production machine set-up costs. In the event that a supplier is unable to fulfill its production agreements with us, management believes that other suppliers can be found. However, a change in suppliers would cause a delay in the production process and could result in loss of tooling deposits and other supplier advances, causing Worldwide to not comply with the timely delivery requirements of our contract with our customer, and loss of tooling deposits will reduce our gross margin on the contract.  6.  Doing business in China is subject to legal risks and political and economic changes over which we have no control.  Under its current leadership, the Chinese government has been pursuing economic reform policies. Changes in these policies or political instability could affect our ability to operate, to repatriate funds  - 5 -   from China, or increase our costs of doing business or our tax rate. Even though the United States has granted a most favored nation status to China, this could be revoked or retaliatory tariffs could make the import of our products prohibitively expensive. The Chinese government could change its policies toward private enterprise or even nationalize or expropriate private enterprises, which could result in the total loss of our investment in that country.  We periodically enter into agreements governed by Chinese law. Unlike the United States, China has a civil law system based on written statutes in which judicial decisions have little precedential value. The Chinese government has enacted some laws and regulations dealing with matters such as corporate organization and governance, foreign investment, commerce, taxation and trade. However, the government's experience in implementing, interpreting and enforcing these recently enacted laws and regulations is limited, and our ability to enforce commercial claims or to resolve commercial disputes is uncertain. Furthermore, enforcement of the laws and regulations may be subject to the exercise of considerable discretion by agencies of the Chinese government, and forces unrelated to the legal merits of a particular matter or dispute may influence their determination. These uncertainties mean that we cannot rely on legal protections to ensure that suppliers honor their contracts with us. If we suffer a loss because of breach of contract by a Chinese supplier, we might not be able to recover the loss.  7.  Currency fluctuations can cause us significant losses.  Some of our costs such as payroll, material and equipment costs are denominated in Chinese Renminbi. Changes in the exchange rate between the Renminbi and the U.S. dollar will affect our costs of sales and operating margins. Presently, China's currency is not freely convertible and thus fluctuations in the value of this currency have not had a significant impact on operations. Some interests in the United States and other nations believe that a revaluation of the Renminbi is overdue, and any revaluation would increase our manufacturing costs relative to the rest of the world and reduce our sales.  Background  Worldwide was incorporated under the laws of the State of Colorado on March 17, 2000, under the name of Tabatha III, Inc. We changed our name to Worldwide Manufacturing USA, Inc. on November 3, 2003. We were formed as a "blind pool" or "blank check" company whose business plan was to seek to acquire a business opportunity through completion of a merger, exchange of stock, or other similar type of transaction. In furtherance of our business plan, we voluntarily elected to become subject to the periodic reporting obligations of the Securities Exchange Act of 1934 by filing a registration statement on Form 10SB.  Prior to our identification of Worldwide Manufacturing USA, Inc., a privately held California corporation, ("Worldwide USA") as an acquisition target, our only business activities were the organizational activities described above, including registration under the Securities Exchange Act of 1934, and efforts to locate a suitable business opportunity for acquisition.  On September 30, 2003, we acquired all of the issued and outstanding common stock of Worldwide USA in a share exchange transaction. We issued 27,900,000 shares of common stock in the share exchange transaction for 100% or 10,000 of the issued and outstanding shares of Worldwide USA's common stock. As a result of the share exchange transaction, Worldwide USA became our wholly  - 6 -   owned subsidiary.  The former stockholders of Worldwide USA acquired 93% of our issued and outstanding common stock as a result of completion of the share exchange transaction. Therefore, although Worldwide USA became our wholly owned subsidiary, the transaction was accounted for as a recapitalization of Worldwide USA, whereby Worldwide USA is deemed to be the accounting acquirer and is deemed to have adopted our capital structure. No finder's fee was paid to any person in connection with the transaction.  All operating activities are carried out through Worldwide USA as our wholly owned subsidiary, and Worldwide USA's wholly owned subsidiary, Shanghai Intech Electro-Mechanical Products Co., Ltd. ("Intech"). Intech was incorporated as a United States subsidiary doing business in China, registered in the city of Shanghai, China in 1997. Worldwide is an engineering firm specializing in manufacturing, and Worldwide contracts with factories in China to produce its varied goods. Intech employs (25) twenty-five engineers in Shanghai. As an engineering firm, Intech provides technical advisory, design, delivery material procurement and manufacturing quality control services to companies in the United States seeking to manufacture or purchase components from the manufacture or purchase components from manufacturers in China. Worldwide does not have operations throughout the world, but only in the state of California and the Peoples Republic of China.  On February 25, 2005, Worldwide USA completed an Agreement for Sale and Purchase of the Business Assets of Chengde Science & Technology (Chengde) located in Changchun Gaoxin District, PRC. The total price was $300,000 with the following payment schedule: The first payment of $120,000 will be paid by March 28, 2005.  The final payment will be issued in March, 2006 and bear a restrictive legend. Chengde is a factory that produces air conditioner units for automobiles primarily located in Asia.  On August 18, 2005, Worldwide established its own electronics manufacturing company located in Shanghai, PRC. The new company, Shanghai Intech Electronics Manufacturing Company will be a wholly-owned subsidiary of Worldwides quality control arm and wholly-owned subsidiary Shanghai Intech Electro Mechanical Products, Ltd. Worldwide purchased approximately $250,000 worth of electronics equipment from Opel Technology, a former Worldwide electronics vendor. In establishing the new electronics factory, Worldwide expects to compete more effectively in the PC board and cable assembly industry as well as gain complete control over its electronics components production.  The Company also established Shanghai Intech Precision Mechanical Products Manufacturing Ltd. (Precision) on November 1, 2005.  Precision will be a 51% owned by Intech and 49% owned by Worldwide. This factory performs die casting and machining services for the automotive, motorcycle, telecommunications and home supply industries. Precision is located in the suburbs of Shanghai, PRC and occupies an area of approximately 19,121 square feet. The factory contains three workshops: a die casting shop, a machining shop and a printing shop. It currently employs 107 employees.   - 7 -   General  Incorporated in California in 1996, Worldwide USA is headquartered in San Bruno, California and engages as a contract manufacturer, engineering firm and direct manufacturer through its wholly-owned subsidiaries. It has four wholly-owned subsidiaries located in China: Shanghai Intech Electro Mechanical Products Co (Intech), the quality control arm of the company, Chengde Science & Technology (Chengde), is a direct manufacturer of air conditioner units for automobiles, Shanghai Intech Electronics Manufacturing Company an electronics factory and Shanghai Intech Precision Mechanical Products Manufacturing Ltd. (Precision) a die casting and machining factory. Its products are manufactured in factories in the Peoples Republic of China (PRC). A contract manufacturer locates factories capable of producing customer parts according to desired specifications and quality standards imposed by the customer. The contract manufacturer hires subcontractors (factories) that provide the plant, equipment, manufacturing working capital and factory labor. Worldwide provides sales, management, production control and technical support. Worldwide's goal is to timely deliver high quality components at manufacturing costs that are at least fifty percent (50%) less than what Worldwide's customers would pay for similar parts in the United States. As a contract manufacturer, Worldwide manufactures car air condition units, die casting parts as well as electronic products and subcontracts to factories for the remaining customers' parts that it does not produce directly. Worldwide's role is to ensure that the parts meet specifications and quality standards imposed by our customers. Worldwide does not have operations throughout the world, but only in the state of California and the Peoples Republic of China. Worldwide's website address is www.wwmusa.com.  Worldwide provides its services to several companies in the United States, primarily in the aerospace, automotive, and electronics industries. Although Worldwide initially focused on manufacturing components for the high tech industry, Worldwide's CEO, Jimmy Wang, realizes that through Worldwide's business model, the company has the ability to arrange for the manufacture of products, parts, and components for a broad number of industries. Worldwide currently arranges for the manufacture of components and products for a wide variety of customers. Worldwide is a direct manufacturer of die casting, electronics products and air-condition units for automobiles.  Worldwide sells to its customers under purchase orders, which it receives from time to time. We do not have long-term contracts with any customers. As a result, it is difficult to forecast revenues, and planning for future operations is also difficult. Because many of our costs and operating expenses are fixed, any unforeseen reduction in purchase orders can affect our gross margin and operating income.  In order to ensure a consistently high-quality product, it is imperative for a company in the contract manufacturing business to have a local quality control team. The team's responsibility is to institute quality control procedures that ensure the quality of products from start to finish.  Through Worldwides wholly-owned subsidiary in Shanghai, Intech Electro-Mechanical Products Co., Ltd. (hereinafter, "Intech"), Worldwide employs thirty-three (33) staff engineers. As an engineering firm, Intech provides technical advice, design, delivery, material procurement, and manufacturing quality control services to companies in the United States seeking to manufacture or purchase components from manufacturers in PRC. The quality control procedures used by Intech and Worldwide are described below from start to finish:   - 8 -   After receiving a request for parts from a customer, one of Intech's material engineers will first study the material and then contact the customer's engineer to get an idea of the application of that part in order to decide if the material can be purchased from a Chinese material supplier as opposed to United States suppliers, which are more expensive. If permission is given, that engineer will provide the customer's engineer with all the chemical and physical data of the Chinese material, which is closest in features to that of the material called for by the drawing for approval. After the material issue is resolved, one of our electronics or mechanical or fiber optic engineers will study the drawing and contact the customer's engineers to get an idea of the application for that part in order to propose some kind of engineering changes for the purpose of low cost production. Our price proposal will not be made until all the technical questions are answered. In many cases, our first proposal includes two alternative prices and deliveries from which a customer may choose. These price schedules include an "A," and "B," with a "C" pricing as a variation of the "A" and "B" price schedule. Price A is 100% based on the request for proposal with no modifications. Usually the price is higher and delivery time is longer. American material costs, plus internal shipping costs are usually much higher than the cost of Chinese material and also take a longer time for the Chinese factory to receive it. Generally, price A does not offer enough incentives for a customer to produce these parts using offshore manufacturing.  Price B is based on the proposal with our suggested engineering and material changes. Price B is lower in price and the lead-time is shorter. Price B is the price using materials from suppliers in PRC which are cheaper than United States' suppliers for the same material, as well as Worldwide's engineers in the design process. Price C is the final price and it is a compromise by the customer regarding its quality of materials used, where the supplier is located (China or United States) and the engineering design, whether it is designed by our engineers where the cost is less, or by an outside engineering firm.  In most cases, the customer accepts our partial suggestions for engineering and material changes; therefore, we re-quote with a "C" price and delivery proposal, which falls between the "A" and "B" price structures.  If we are successful in obtaining that order, our engineer writes the production and inspection procedures with all the considerations based on the information from the initial contacts with the customer's engineers. Shanghai Intech Electro-Mechanical Products Co., Ltd., the subsidiary of Worldwide Manufacturing, will compel the manufacturer to follow the procedures through a three-stage on-site inspection process and two incentive programs, both of which are described below. The purposes of the following inspection procedures are to ensure that the customer receives quality parts. There is no extra charge to the customer for having these quality control procedures. Worldwide institutes these procedures on behalf of our customers and in order to better compete with other contract manufacturers. By providing high quality parts, it allows Worldwide to attract and retain contract-manufacturing orders from our customers. As a contract manufacturer, Worldwide does not manufacture customer parts, but subcontracts to factories that produce these parts. Worldwide's role is to ensure that the parts meet specifications and quality standards imposed by our customer.  Our customer agrees to pay a certain price per unit manufactured and delivered in accordance with the purchase order. Worldwides per-unit price from the subcontractor is lower, and the difference represents our gross margin. Since we do not separately charge the customer for our engineering advice, we only are paid in connection with orders placed by the customer.  - 9 -    Material Audit (Inspection One)  Inspection one usually occurs during the first week after an order is issued to a factory. Intech's material engineer goes to that factory and conducts an on-site inspection. Other than a visual inspection, he/she will check both chemical and physical data on the material certificate. If that material comes from a reliable supplier, such as Dupont, GE, Corning, etc., he/she just takes the certificate and accepts it as if it were our certificate. Otherwise, our material engineer will re-inspect the material to make sure the chemical, physical and tensile strength data are in conformity with the specifications. Only with the signature of our material engineer, may the material be released to the production line for manufacturing.  In-Process Inspection (Inspection Two)  The second inspection happens usually during the second or third week after an order is issued to a factory. Without notifying the factory, our process engineer walks directly into the production line to make sure the factory is following our procedures. He/she measures and inspects the parts to ensure that the procedures and quality instructions are being followed. If any problem is found, our engineer has the power to stop the production and assist the factory in solving the procedural or quality issue to a complete resolution. Only with the signature of our onsite process engineer may the factory operator continue with the production.  In-process inspection also serves the purpose of delivery control. If a process engineer finds a serious problem, which may delay the completion of an order on time, he/she will immediately notify Worldwide's California office for emergency actions. After contacting the customer, the California office usually gives one of the following instructions to our Shanghai office:  - the customer accepts the postponed date from the factory; - the customer allows a few dates in the production cycle to be delayed, but does not accept our proposed delivery date. In this case, our Shanghai office either requests the factory to work overtime to finish the order on time, or switches from ocean shipping to air shipping or from air shipping to UPS express at our cost. - the customer does not approve a delay. In this case, we will require the factory to run production at full capacity regardless of the cost and change the shipping method from ocean to air or from air to UPS to meet the schedule. If all the efforts are exhausted and we still cannot finish that order, we will ship a partial order on time and make up the difference in the shortest time frame possible.  Final Inspection (Inspection Three)  When the Shanghai office is informed by a factory that production and inspections are completed, our inspection engineer goes to that factory with quality inspection tools. If a factory does not have the required equipment for an inspection, our inspector will open the boxes in the factory to take a random sample and return to Shanghai with selected samples to our own facility for inspection. The following is a typical inspection method for lots from 3,000 to 10,000 pieces.  We take 200 samples from evenly scattered boxes, and if the inspector finds one piece defective, he will sample another 200 pieces. The lot will be rejected if a defective piece is found in the second sampling. The average rate of rejection due to defects for both a first and second sampling is five  - 10 -   percent. Worldwide's quality control experience has helped us establish the following incentive programs to motivate the factories to obtain our quality and time requirements.  Three Percent Incentive or Penalty Agreement with Manufacturers (Incentive Program One)  To encourage a factory to effectively control quality on their own, we signed an agreement with most of the factories producing our parts for either receiving 103% or 97% of the originally determined payment amount from Worldwide's Shanghai office. If a lot costs $100,000 for Worldwide to buy and that lot is rejected with proof by our inspector during the first inspection, the payment will be reduced by 3%. The factory is going to receive a payment of $97,000 from Worldwide even if that lot is finally accepted after it has been re-worked. Otherwise, if the first inspection is passed, the payment to the factory is $103,000 instead of $100,000. So the difference is 3% ($3,000), which is considered by Chinese factories as a large enough incentive to provide the necessary quality control.  Incentive Rewarding Program with Worldwide Inspectors (Incentive Program Two)  The base salaries of our inspectors are very low compared to the base salaries of inspectors in the United States. About 70% of our inspectors' income is derived from incentive programs. If Worldwides inspector rejects the lot during the first inspection, the inspecting engineer will get one-third of the $3,000, or $1,000. Even if the inspection he/she conducts is passed during the first inspection, he/she will get a half of a percent of the value of that shipment, as long as the customer eventually accepts the shipment.  Our practice has proven the above quality control procedures to be very effective. This has allowed our rejection rates for the last few years to be less than two percent.  Other than rigid quality controls and incentive programs, another important factor in attracting customers from the United States is the Kanban program. The Kanban program is an inventory system that stocks at least one month's supply of inventory needed to manufacture ordered parts. Thus, if Worldwide receives a contract with a scheduled six months or more of deliveries, we will stock at least one month's inventory in the California warehouse or a warehouse that is close to the customer's facility so a twenty-four hour delivery turn around may be accomplished. This process of stocking at least one month's worth of inventory is maintained until the entire contract is completed. We have won many new customers as a result of the Kanban inventory program. Using Kanban inventory controls at our California warehouse, and in some cases, at the warehouses located close to the customers' facilities, allows us to help customers meet challenges with working capital returns, and the need to have supply products necessary to complete manufacturing of those parts in a shorter period of time.  Worldwide manages the entire production of its customers' products or components. Worldwide's engineers maintain the highest levels of quality by supervising all aspects of the manufacturing process. Worldwide's engineers write the production and inspection procedures, obtain the materials, audit and perform all of the in-progress and final inspections.  To fulfill customers' orders, Worldwide engages subcontractors located around the Shanghai area of China. Worldwide receives a fifty percent (50%) down payment from its customers for tooling necessary to produce the desired parts. This money for tooling is paid to the factory in China  - 11 -   selected to produce the customer's order. Once the order for the customer is produced and accepted by the customer, the customer is billed for the rest of the tooling as well as for the parts. The customer has sixty (60) days to mail the full payment to Worldwide. All of Worldwide's active subcontractors have received the International Standard Organization-9000 certification. ISO-9000 certifications are certificates issued by the International Manufacturing Board that rates the quality of manufacturers on the basis of that factory producing consistent quality parts. These certifications are issued to each factory after its management receives the prerequisite training.  The unique business relationships between Worldwide and its subcontractors allow Worldwide to offer its customers' lower manufacturing costs, and at the same time maintain high standards of quality and meet delivery schedules.  Worldwide's success stems from the following factors:  Worldwide has a wide range of manufacturing capability as a result of - being able to handle almost everything in the hardware category of the hi-tech industry; - providing engineering services, and - the ability to coordinate and plan for complete turnkey assemblies.  Worldwide's quality control is highly effective as a result of:  - setting inspection criterion for manufacturers; - conducting material auditing, in process inspection, and the final inspection; - signing three percent incentive and penalty agreements with manufacturers, and - providing incentive-reward packages to Worldwide's quality control employees.  Worldwide's quick turn-around time compared with other offshore suppliers is ensured by:  - committing 60-75 days for completing difficult tooling and two-to-six weeks for easy tooling; - committing 30-60 days for first delivery, and seven days for the deliveries afterwards; - inspectors tracking production progress, and - signing three percent incentive and penalty agreements with manufacturers  Worldwide's pricing is competitive.  Worldwide offers:  - significant flexibility towards customers' needs; - it hires local people to inspect the quality of the parts; - it arranges Kanban inventory for 24-hour delivery; and - it responds quickly to customer questions and concerns.  Additionally, Worldwide has a customer reception office at its Shanghai subsidiary, which makes arrangements for its customers airline tickets, and hotels at a discounted rate, along with providing local transportation and language interpretation.  Worldwide is able to provide its customers with the considerable cost advantages while eliminating  - 12 -   the disadvantages of quality and delivery issues frequently experienced by companies, which have direct contracts with manufacturers in China.  Since Worldwide primarily employs engineers and engages a broad variety of subcontractors, Worldwide is able to manufacture parts for a broad range of industries. As demand for manufacturing slows for a particular product, industry or sector, Worldwide is able to remain flexible as a result of its being in a position to pursue opportunities to manufacture other products.  There are no special governmental regulations or governmental approvals with respect to our business.  Suppliers and Customers  Our two largest contract manufacturers are Shanghai Xinli Trading Company Ltd. and Shanghai ShangJi Tool Co. Ltd., they accounted for $587,860 or 7.6% and $417,690 or 5.4% respectively for year ending December 31, 2006 of materials purchased by Worldwide.  In 2005, Shanghai Xinli Trading Company Ltd accounted for $302,150 or 3.2% and Shanghai ShangJi Tool Co. Ltd. accounted for $261,026 or 2.6% of the material purchased by Worldwide ending December 31, 2005. The customers listed below represented approximately 46% of Worldwide's revenues in 2006 and 50% in the year ending December 31, 2005. Worldwide Manufacturing has no agreements with any of these suppliers.  Name of CustomerAmount of Sales 2006% of SalesAmount of Sales 2005% of SalesJoslyn Manufacturing Co, LLC (MacLean Power)$1,355,83912.3$1,259,99414.5Joslyn Sunbank, Inc.$1,181,34310.7$1,004,89611.5Radio Waves Corp.
(Smith Industry)$616,8465.6$1,063,37012.2Teleflex Electrical, Inc$642,7675.8$480,5395.5Ryko Manufacturing$752,0436.8$00Pacific Scientific-CA$529,6704.8$570,5396.5  Competition  Worldwide strives to ensure quality and provide low cost to customers so that it can remain competitive. The contract manufacturing service industry remains a strongly competitive industry. There are hundreds of companies, many larger than Worldwide, that have substantially greater manufacturing, financial, research and development, engineering and marketing resources. Worldwide Manufacturing is a small competitor in this multi-billion dollar industry. If overall demand for contract manufacturing services should decrease, this could result in substantial pricing pressure which would negatively affect revenue and net profit for Worldwide.  Employees  Worldwide currently employs two hundred and six employees, including 33 staff engineers and 13 administrative personnel at Worldwide's wholly owned subsidiary Intech in Shanghai, China and one hundred and nine employees who work at our factories in China. The remaining 13 employees work at the California office in San Bruno. Four of these employees are in sales with the remaining eight employees working in support and administrative roles. All employees are full time.   - 13 -   ITEM 2. DESCRIPTION OF PROPERTY  On May 1, 2003, Worldwide entered into a 60-month lease for 6,825 square feet of office/ warehouse space located at 1142 Cherry Avenue in San Bruno, California. The rent per month is $5,430 with rent increasing three percent each year. The rent for 2007 will be $5,593 and the lease expires July 2008.  On June 1, 2006 Shanghai Intech the company's quality control division entered into a one-year lease expiring June 1, 2007 for $3,998 per month. Additionally, the rent for our electronics factory is $1,496 per month for approximately 1,800 square feet and expires on March 14, 2007. Shanghai Intech Precision, our die cast factory's rent is $1,263 per month with the lease expiring March 14, 2007. In addition, Worldwide leases space for its wholly owned subsidiary Chengde Science & Technology Co., Ltd for $631 per year with the lease expiring April 15, 2010.   ITEM 3. LEGAL PROCEEDINGS  Not Applicable.   ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS  No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year ended December 31, 2006.   PART II   ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS  (a) Market Information  Our stock is quoted on the OTC Bulletin Board under the symbol "WWMU". Worldwide began trading on June 1, 2004. There are 2,030,863 shares outstanding. The below table provides the average low and high bid and ask prices for the preceding quarters of 2006.  Year ended December 31, 2006BIDASK1st QTR$ 2.50$8.252nd QTR$3.50$5.003rd QTR$3.85$4.404th QTR$2.75$5.60  (b) Holders  As of December 31, 2006, there were approximately 196 record holders of Company common stock.  - 14 -   (b) Stock Split  The Company had a Special Meeting on April 19, 2006 and approved a 1:15 reverse stock split. Prior to the reverse stock split there were approximately 30,437,500 shares outstanding. After the split there were 2,030,863 shares outstanding where fractions were rounded up.  In addition, after the split the Companys stock symbol changed from WMFG to WWMU. The stock split became effective April 21, 2006.  (c) Dividends  The Company has not paid any dividends on its common stock. The Company currently intends to retain any earnings for use in its business, and therefore does not anticipate paying cash dividends in the foreseeable future.   (d) Equity Compensation Plans  Worldwide has established a stock option plan for its employees on April 1, 2004 in order to attract and retain qualified employees on behalf of the Corporation as well as provide employees with an opportunity to participate in the growth of the Corporation.  Worldwide approved that up to 300,000 shares would be authorized. As of December 31, 2006, no shares have been exercised under this plan. The 2004 Stock Option Plan provides the opportunity for employees to purchase shares at $6.00.   ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS  Certain statements in this report, which are not statements of historical fact, are what are known as "forward-looking statements," which are basically statements about the future. For that reason, these statements involve risk and uncertainty since no one can accurately predict the future. Words such as "plans," "intends," "hopes," "seeks," "anticipates," "expects, "and the like, often identify such forward looking statements, but are not the only indication that a statement is a forward-looking statement. Such forward-looking statements include statements concerning our plans and objectives with respect to our present and future operations, and statements, which express or imply that such present and future operations will or may produce revenues, income or profits. In evaluating these forward-looking statements, you should consider various factors, including those described in this report under the heading "Risk Factors" in Part I, Item 1, Business. These and other factors may cause our actual results to differ materially from any forward- looking statement. We caution you not to place undue reliance on these forward-looking statements. Although we base these forward-looking statements on our expectations, assumptions, and projections about future events, actual events and results may differ materially, and our expectations, assumptions, and projections may prove to be inaccurate. The forward-looking statements speak only as of the date hereof, and we expressly disclaim any obligation to publicly release the results of any revisions to these forward-looking statements to reflect events or circumstances after the date of this filing.     - 15 -   Overview  We are an engineering, contract manufacturing and direct manufacturing company, primarily servicing United States-based companies that outsource their smaller scale production orders for offshore production in China. From our inception in 1993 until 2005, we were strictly an intermediary or middle man, working with our customers and our subcontractors to assure that our customers received high quality components on a timely basis that fulfilled their specific needs. While we still subcontract a significant portion of our business, since 2005, we have begun the transition to becoming a direct contract manufacturer, operating several of our own factories.  We feel that as a contract manufacturer, we are constrained in our growth for a number of reasons. Many Fortune 500 and other large companies either cannot, or choose not, to work with contract manufacturers preferring to go directly to the source that can manufacture the product and thereby avoid the additional expense of the middleman. This is particularly true for very large orders, where the added cost of the middleman can have a material impact on the customers bottom line. As a result, our revenues have for the most part been limited to smaller scale production orders primarily (but not entirely) placed by companies that are not among the largest companies in the United States or elsewhere. Additionally, as a middleman we must share any potential gross profit with the subcontracting factory. Therefore, our customers are generally smaller, the orders they place are generally smaller and the income and profit we can generate from those orders is of necessity limited because we are not directly manufacturing the products. On the other hand, when we subcontract the actual manufacturing of our customers products and components, we do not need to hire factory employees, purchase materials, purchase and maintain manufacturing equipment or incur the costs of the manufacturing facilities. To some extent, these costs are built into the price charged by our subcontractors, but if we do not place orders, we do not incur those costs.  Our management has carefully considered these factors and during 2004 made the strategic decision to move our company away from our historical complete reliance on subcontractors. At the beginning of 2005 we did not own any of our own factories and used as our suppliers of materials and labor approximately 100 factories in China, mostly in Shanghai or the surrounding area. During the first quarter of 2005, we acquired the assets of Chengde, a factory that manufactures automobile air conditioning units, and in the fourth quarter of 2005, we established a die-casting and machining factory through leasing an existing facility from a former vendor and initially investing approximately $500,000 to upgrade the equipment and manufacturing buildings. In these transactions we acquired assets, the expertise of the employees, the managers of the factories, and a portion of the existing customers of those factories. In the third quarter of 2005, we also established an electronics manufacturing factory. As a result, as of December 31, 2006, we own and operate three factories that we now use for the manufacture of certain product lines that we historically had to subcontract, and we are using the services of approximately 40 subcontractors to manufacture those product lines for which we do not have our own manufacturing capabilities. The establishment of these factories, including asset purchases and factory upgrades, was funded primarily by loans from Jimmy and Mindy Wang, our principal shareholders and executive officers as well as increased lines of credit. Our credit line increased to $2.25 million with Golden Gate Bank from a $650,000 line with Wells Fargo. In the future, we expect to continue to acquire or newly-establish factories that will give us the capability to manufacture those product lines our management believes are the most profitable.   - 16 -   In 2005, this transition did have an effect on our results of operations.  Because we did not begin operating Chengde until September 2005, Intech Electronics until August 2005, and Intech Precision until December 2005, the impact on our results of operations for the year was not what we would expect had the factories been in operation for an entire year. The impact of our operation of these factories is as follows:  (i) For December 31, 2006, Chengde provided revenues of $399,011 and net profit of $18,987 compared to revenues of $226,228 and net profit of $166 in the same period in December 2005. Revenue growth was $172,783 or 76% and profit grew by $18,821 or 11,338%.  (ii) The largest growth for the company came from Shanghai Intech Precision Machinery Co. Ltd., which generated revenues of $2,347,312 for December 31, 2006 compared to $71,087 in the same period in 2005. Additionally, gross profitability rose from $1,939 in 2005 to $464,937 or $462,998 representing a 23,900% increase in the same period in 2006. Our die cast operations are expected to continue to increase in 2007 as the company continues to attract customers requiring die cast parts.  With the continuing transition into direct manufacturing, we expect to continue to increase sales outside the United States, and in particular, increase the number of customers in PRC and other Asian markets. Our costs to establish and improve these factories will increase along with sales and profits.  Through the development of our product mix, which consists of foundry, machining and stamping, electronics and fiber optics products lines, our business has become more diverse. In the past, foundry and machining and stamping accounted for more than 90% of our business. This percentage has decreased by approximately 10% since forming our own factories now representing approximately 80% of our business. The electronics product lines now account for approximately 16% of our business as compared to approximately 6% in 2005.  Fiber optics remains steady at approximately 4% of our business.  Generally, our operating results have been, and will continue to be, affected by a number of factors, including the following:  our customers may cancel or delay orders or change production quantities;our operating results vary significantly from period to period due to the mix of the manufacturing services we are providing, the number and size of new manufacturing programs, the degree to which we utilize our manufacturing capacity, seasonal demand, shortages of components and other factors;integration of acquired businesses and facilities; andmanaging growth and changes in our operations. We also are subject to other risks, including risks associated with operating in foreign countries, changes in our tax rates, and fluctuations in currency exchange rates.   Managements Discussion for December 31, 2006  - 17 -   Financial Condition  As of December 31, 2006, the current assets of Worldwide were $6,599,094 compared to current assets as of December 31, 2005 of $4,916,119. This represents an increase of $1,682,975 or approximately 34%. The increase in current assets was the result of increases in cash of $645,409 due to an increase in profitability. Moreover, inventory increased by $1,208,083                  from $1,295,851 as of December 31, 2005 to $2,503,934 as of December 31, 2006 as the result of greater customer orders.  Current liabilities at December 31, 2006 totaled $4,084,924 compared with $3,483,895 at December 31, 2005. This represents an increase of $ 601,029 or 17%.  The increase in current liabilities was due to an increase in related parties payables of $561,561 due to the previous owner of our die cast factory. Additionally, the use of the company's line of credit increased by $466,852 from $150,000 at December 31, 2005 to $616,852 at December 31, 2006. The line of credit was used to support the growth of the company during the year ended December 31, 2006.  Total assets were $ 7,127,847 at December 31, 2006 compared to $5,427,736 at December 31, 2005. The increase of $ 1,700,111 or 31 % was the result of greater inventory due to the companys growth as well as an increase in cash as a result of profitability.  Results of Operations  Net sales for the year ending December 31, 2006 were $11,409,300 compared to $8,713,431 for the year ending December 31, 2005, an increase of $2,695,869 or approximately 31 %.  The primary result of this increase was the increased sales in Intech Precision, the company's die cast factory where revenues increased to $2,347,312 for the year ending December 31, 2006 compared to $71,087 for the year ending December 31, 2005. Gross profit increased by $584,412 to $3,386,426 (30% of sales) in 2006 compared to $2,802,014 (32% of sales) in 2005. The profit margin decreased 2% reflecting an increase in direct costs.  Cost of goods sold for year ending December 31, 2006 was $8,022,875 compared to $5,911,417 for the year ending December 31, 2005. This increase of $2,111,458 or 36% was primarily the result of increase demand for the company's products and services along with a 3% increase in direct labor at our factories.  Net profit for year ending December 31, 2006 was $969,429 compared to $581,166 for year ending December 31, 2005. The increase of $388,263 or 67% was the result of greater sales. Net operating income before income taxes was $930,492 or approximately 8% of sales compared to $579,466 or approximately 7% of sales in 2005.The profit margin increased 1% reflecting stronger demand for the company's product and services. The general and administrative expenses for year ending December 31, 2006 were $2,002,696 (18% of sales) compared to $1,717,149 (20% of sales) for year ending December 31, 2005. The increase of $285,547 or 17 % was the result of greater costs associated with increases in business.    - 18 -   LIQUIDITY  The following is a summary of Worldwides cash flows from operating, investing, and financing activities during the periods indicated:  Year ended December 31,20062005Operating Activities$340,073$36,929Investing activities$(102,245)$(179,783)Financing activities$276,658$738,815Net effect on cash$645,409$624,654 Historically, we have funded our operations and supported our growth with cash provided by our net income, loans from Jimmy and Mindy Wang, our principal shareholders and the revolving line of credit with Golden Gate Bank and previously Wells Fargo Bank.  On March 16, 2007 the Company paid off its line of credit with Wells Fargo in the amount of $602,947 and established a new credit facility with Golden Gate Bank, a division of Greater Bay Bank NA. Under the terms of a revolving line of credit agreement with Golden Gate Bank dated February 14, 2007, the Company could borrow up to $2,250,000 at 0.5% above the reported World Street Journal Prime through February 14, 2008.  Funds from these borrowings may be used for any purpose.  The revolving line of credit is secured by the assets of the company and guaranteed by its officers. On April 1, 2007 the amount used on the line of credit was $902,947.  At December 31, 2006 and 2005, the balance on the line of credit was $616,852 and $150,000 respectively.  At April 1, 2007 there is $1,347,053 still available at an interest rate of 8.75%. In addition, net profits of the Company will be used to provide capital for the expansion of inventory held for the convenience of customers, and for acquiring additional equipment, if needed. The Company has never needed to sell debt or equity securities to fund our operations.  For 2006 net cash provided by operations was $340,073 an increase of  $303,144 over the net cash provided in operating activities in 2005 of $36,929. Net cash used in investing was $102,245 in 2006 compared to net cash used of $179,783 in 2005. In 2005, $197,595 was used to expand operations through acquiring or establishing additional factories. The company anticipates further expansion in 2007 and will finance this growth through company profitability as well as outside sources of funding if required. Net cash flows provided by financing activities in 2006 was $276,658, which was provided by the Wells Fargo line of credit. In 2005, the primary source was a shareholder loan of $709,960. The balance of this shareholder loan is $522,024 as of December 31, 2006.  PLAN OF OPERATION  Acquisitions and Establishment of New Factories in 2005  In February 2005, we completed the purchase of assets of Chengde, a factory that produces air conditioner units for automobiles, for which we paid $300,000 in installments, all of which was paid by May 2006. We began operating this factory in September 2005.   - 19 -   In August 2005, we established Intech Electronics, our electronics factory, which operates as a division of Shanghai Intech. In connection with the establishment of this factory, we purchased approximately $250,000 worth of electronics equipment from Opel Technology, one of our former electronics vendors. The total cost to set up this factory was $290,000, including the equipment purchase.  In October 2005, we established Intech Precision, our die-casting and machining factory. We purchased certain assets owned by the former majority owner of the factory for $500,000, which amount is payable in March 2008 and hired that owner as the general manager of our factory. We began operating this factory in December 2005.  Off-Balance Sheet Arrangements  We do not have any off-balance sheet arrangements that are currently material or reasonably likely to be material to our financial position or results of operations.  Critical Accounting Policies, Estimates and Judgments  This discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. On an on-going basis, we evaluate our estimates, including those related to property, plant and equipment, inventories, revenue recognition, inventories, accounts receivable and foreign currency transactions and translation. We base our estimates on historical experience and on various other market-specific assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results, however, may differ significantly from these estimates.  We believe the following critical accounting policies reflect the more significant judgments and estimates used in the preparation of our consolidated financial statements:  Property, plant and equipment  Property, plant and equipment are stated at historical cost and are depreciated over the useful lives of the assets. Leasehold improvements and capitalized leased equipment are amortized over the life of the lease. Repair and maintenance expenditures that do not significantly add to the value of the equipment or prolong its life are charged to expense as incurred. Gains and losses on dispositions of property, plant and equipment are included in the related periods statement of operations. Depreciation is computed primarily using the straight-line method based on estimated useful lives, which range from 3 to 25 years.  Inventories  Inventories consist of finished goods of manufactured products. Our inventory is based on customer orders and the duration of those orders. Cost is stated at the lower of cost or market on a first-in, first-out (FIFO) basis. We have not recorded an allowance for slow-moving or obsolete  - 20 -   inventory. Obsolete inventory at December 31, 2006 and 2005 was minimal.  Revenue Recognition  We recognize revenues in accordance with the guidelines of the Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) No. 104 Revenue Recognition. We recognize revenue from product sales when the orders are completed and shipped, provided that collection of the resulting receivable is reasonably assured. Amounts billed to customers are recorded as sales while the shipping costs are included in cost of sales. Returns on defective custom parts may only be exchanged for replacement parts within 30 days of the invoice date. Returns on defective parts, which can be resold, may be exchanged for replacement parts or for a refund.  Revenue from non-refundable customer tooling deposits is recognized when the materials are shipped or when the deposit is forfeited, whichever is earlier.  Foreign Currency Transactions and Translation  Transaction gains and losses result from a change in exchange rates between the functional currencies in which a foreign currency transaction is denominated and the reporting currency. They represent an increase or decrease in (i) the actual functional current cash flows realized upon settlement of foreign currency transactions and (ii) the expected functional currency cash flows on unsettled foreign currency transactions. All transaction gains and losses are included in other income or expense. For all periods presented, sales to customers were primarily denominated in U.S. dollars.  Assets and liabilities of Intech are translated into U.S. dollars at the prevailing exchange rate in effect at each period end. Revenue and expenses are translated into U.S. dollars at the average exchange rate during the reporting period. Contributed capital is translated into U.S. dollars at the historical exchange rate when capital was injected. Any difference resulting from using the current rate, historical rate and average rate in determination of retained earnings is accounted for as a translation adjustment and reported as part of comprehensive income or loss in the equity section. Exchange differences are recognized in the income statement in the period in which they occur.  Management has discussed the development and selection of these critical accounting policies with the Board of Directors and the Board has reviewed the disclosures presented above relating to them.     ITEM 7. FINANCIAL STATEMENTS  See the following pages.  - 21 -     WORLDWIDE MANUFACTURING USA, INC. AND SUBSIDIARIES  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS CONTENTS PageReport of Independent Registered Public Accounting Firm23Consolidated Balance Sheets24Consolidated Statements of Operations25Consolidated Statements of Shareholders Equity26Consolidated Statements of Cash Flows27Notes to Consolidated Financial Statements29      - 22 -   REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   To The Board of Directors Worldwide Manufacturing USA, Inc. San Francisco, CA USA  We have audited the accompanying consolidated balance sheets of Worldwide Manufacturing USA, Inc. and subsidiaries as of December 31, 2006 and 2005, and the related consolidated statements of operations, stockholders equity, and cash flows for the years ended December 31, 2006 and 2005. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.  We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal controls over financial reporting. Our audits included consideration of internal control over financial reporting, as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting.  Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.  In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Worldwide Manufacturing USA, Inc. and subsidiaries as of December 31, 2006 and 2005 and the results of their operations and their cash flows for the years ended December 31, 2006 and 2005, in conformity with accounting principles generally accepted in the United States of America.   Child, Van Wagoner & Bradshaw, PLLC Salt Lake City, Utah April 10, 2007  - 23 -   WORLDWIDE MANUFACTURING USA, INC. AND SUBSIDIARIES    CONSOLIDATED BALANCE SHEETS December 31,December 31,2 0 0 62 0 0 5AssetsCurrent assetsCash and cash equivalents$    1,439,801$    794,392Accounts receivable  net of allowance for doubtful Accounts of $44,289 and $130,528, respectively)2,295,7732,252,778Inventories2,503,9341,295,851Income taxes receivable74,0278,256Loan receivable15,88837,174Loan receivable - affiliate-103,210Advances to suppliers223,775248,685Prepaid and other current assets45,896175,773Total current assets6,599,0944,916,119Property, plant and equipment, net492,608511,617Other assets36,145-Total assets$  7,127,847$  5,427,736Liabilities and Stockholders EquityCurrent liabilitiesAccounts Payable$2,308,537$2,508,671Related Parties Payable542,374-Lines of credit616,852150,000Accrued expenses59,69698,420Current portion of long-term debt (note 4)2,0353,025Taxes payable33,40513,819Total current liabilities3,562,8992,773,935Commitments and contingencies (Note 2)Non-current liabilitiesLoan payable to Shareholders522,024709,960Notes payable-less current portion (Note 5)-1,268Total non-current liabilities522,024711,228Total Liabilities4,084,9233,485,163Stockholders' equityCommon stock (No Par Value: 100,000,000 shares authorized; 2,030,863 shares issued and outstanding208,871208,871Accumulated other comprehensive income159,61528,693Retained Earnings2,674,4381,705,009Total stockholders equity3,042,9241,942,573Total liabilities and stockholders' equity$  7,127,847$   5,427,736  The accompanying notes are an integral part of the consolidated financial statements.   - 24 -   WORLDWIDE MANUFACTURING USA, INC. AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF OPERATIONS   For the Year Ended December 31,2 0 0 62 0 0 5RevenuesRegular sales, net of returns of $0 in 2006
and $0 in 2005$      11,409,300$      8,713,431Cost of goods sold(8,022,875)(5,911,417)Gross profit3,386,4252,802,014Operating expensesOther selling, general and administrative1,997,5301,652,362Advertising5,24591,659Management and professional fees paid to
Shareholders (Note 7)126,000256,000Allowance for bad debts(43,265)152,013Stock based compensation expenses-39,000Depreciation97,54694,051Total operating expenses2,183,0562,285,085Net operating income1,203,369516,929Other income (expense)Interest income5,91524,944Interest expense(31,365)(27,532)Interest expense paid to Shareholders (Note 7)(65,996)(30,302)Other income-134,194Gain on disposal-4,936Exchange (Loss)(181,431)(43,703)Government grant--Total other income (expense)(272,877)62,537Net income before income taxes930,492579,466Income tax benefit/(expense)38,9371,700Net income$       969,429$       581,166Other comprehensive income(loss)
Foreign currency translation adjustment130,92228,6931,100,351609,859Earnings per share$             0.48$             0.29Weighted average shares outstanding2,030,8632,024,002   The accompanying notes are an integral part of the consolidated financial statements  - 25 -


WORLDWIDE MANUFACTURING USA, INC. AND SUBSIDIARIES   CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY   Common Stock
No Par ValueRetained EarningsAccumulated Other Comprehensive IncomeTotal Stockholders EquityNumber of SharesAmount$$$$Balance, December 31, 20042,022,500169,8711,123,843-1,293,714Shares Issued at $5.85 per share for services6,66739,000--39,000Net Income for the year ended December 31, 2005--581,166-581,166Stock split rounding adjustment1696----Comprehensive income  unrealized loss on foreign currency translation---28,69328,693Balance, December 31, 20052,030,863208,8711,705,00928,6931,942,573Net income for the year ended December 31, 2006--969,429-969,429Comprehensive income  unrealized loss on foreign currency translation---130,922130,922Balance, December 31, 20062,030,863$208,871$2,674,438$159,615$3,042,924    The accompanying notes are an integral part of the consolidated financial statements


- 26 -   WORLDWIDE MANUFACTURING USA, INC. AND SUBSIDIARIES   CONSOLIDATED STATEMENTS OF CASH FLOWS  For the Year Ended December 31,2 0 0 62 0 0 5Cash flows from operating activitiesNet income$969,429$581,166Adjustments to reconcile net income to net cash provided by operating activities:Depreciation97,54694,051Allowance for bad debt(107,724)116,528Common stock issued for services-39,000Gain on disposal on fixed assets-(4,936)Changes in operating assets and liabilities:Accounts receivables64,728(1,034,162)Due from related parties542,374-Inventories(1,208,083)(714,000)Income taxes receivable(65,770)53,639Other receivable37,174(37,174)Advances to suppliers24,910(248,685)Prepaid and other current assets117,439(124,424)Accounts payable(200,134)1,338,153Accrued expenses(38,724)66,331Income taxes payable19,58613,819Net Cash Provided In Operating Activities252,751139,306Cash flows from investing activitiesCapital expenditure(78,537)(197,595)Proceeds from sales of assets-18,645Loan receivable  affiliate63,615(103,210)Net Cash Used In Investing Activities(14,922)(282,160)Cash flows from financing activitiesLoan (payable)/advance from shareholders(187,936)709,960Principal payments on loan term debt(2,258)(20,064)Proceeds from lines of credit466,85248,919Net cash flows provided by financing activities:276,658738,815Effect of exchange rate changes in cash130,92228,693     - 27 -   WORLDWIDE MANUFACTURING USA, INC. AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF CASH FLOWS  CONT. Years EndedDecember 3120062005Net Increase in Cash645,409624,654Cash- beginning of year794,392169,738Cash- end of year$1,439,801$794,392Supplemental disclosure of non cash investing and financing activities:Interest paid in cash$97,475$57,834Income taxed paid in cash$69,143$-   The accompanying notes are an integral part of the consolidated financial statements            - 28 -   Worldwide Manufacturing USA, Inc. and Subsidiaries Notes to Consolidated Financial Statements Years Ended December 31, 2006 and 2005  1.  SIGNIFICANT ACCOUNTING POLICIES  This summary of significant accounting policies of the Company is presented to assist in understanding the Companys financial statements.  The financial statements and notes are representations of the Companys management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.  Description of Business  Worldwide Manufacturing USA, Inc. (Worldwide, the Company) is a direct manufacturer of die casting, electronics components, and air-condition units for automobiles an, engineering firm and international contract manufacturer, using factories in China.  Worldwide provides services to several companies in the United States, primarily the aerospace, automotive, and electronics industries.  Worldwide employs thirty-three (33) staff engineers through its wholly owned subsidiary, Shanghai Intech Electro-Mechanical Products Co., Ltd. (Intech).  Intech provides technical advisory, design, delivery, material procurement, and manufacturing quality control services.  Worldwide uses its engineers to write the production and inspection procedures, manages the production process, and conducts quality control audits as well as in-progress and final inspections of the customers products.  On September 30, 2003, the Company, formerly known as Tabatha III, Inc., acquired all of the issued and outstanding common stock of Worldwide Manufacturing USA, Inc. (Worldwide USA), a privately held operating company, in a share exchange transaction.  The Company issued 27,900,000 shares of common stock  in the share exchange transaction for 100%, or 10,000 shares, of the issued and outstanding shares of Worldwide USAs common stock.  Immediately prior to the acquisition, 10,762,000 shares of stock had been outstanding, and as part of the acquisition arrangement, certain shareholders of Tabatha III, Inc. agreed to surrender for cancellation a total of 8,662,000 common shares held by them.  Total shares outstanding after the Worldwide USA acquisition was 30,000,000.  As a result of the share exchange transaction, Worldwide USA became a wholly-owned subsidiary of the Company.  The parent company, Tabatha III, Inc., changed its name to Worldwide Manufacturing USA, Inc. in November 2003.  The former stockholders of Worldwide USA acquired a majority of the issued and outstanding common stock as a result of the share exchange transaction.  The transaction has been accounted for as a recapitalization of Worldwide USA, whereby Worldwide USA is the accounting acquirer.  The accompanying financial statements reflect the financial position and operating results of the Company for all periods presented.  On May 18, 2005, the Company formed a new company called Changchun Chengde Automobile Air-Conditioner Co., Limited, which is the manufacturer of automobile air-conditioners. On October 03, 2005, the Company formed another company called Shanghai Intech Precision Machinery Co., Ltd. which is engaged in the manufacturing and trading of equipments. Both companies are 51% owned by Intech and 49% owned by Worldwide Manufacturing USA, Inc.      - 29 -   Worldwide Manufacturing USA, Inc. and Subsidiaries   Notes to Consolidated Financial Statements Years Ended December 31, 2006 and 2005  1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)  Principles of Consolidation  The accompanying financial statements include Worldwide Manufacturing USA, Inc., a Colorado corporation (formerly Tabatha III, Inc.) and a public company, its operating subsidiary, Worldwide, a California corporation, a wholly owned subsidiary Intech and three subsidiary companies 51% owned by Intech and 49% owned by Worldwide.  Intercompany transactions have been eliminated in consolidation.  Property and equipment  Property and equipment are stated at historical cost and are depreciated over the useful lives of the assets. Depreciation is computed primarily using the straight-line method based on estimated useful lives, which range from 3 to 25 years.  Impairment of Long-lived Assets  Long-lived tangible assets and definite-lived intangible assets are reviewed for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company uses an estimate of undiscounted future net cash flows of the assets over the remaining useful lives in determining whether the carrying value of the assets is recoverable. If the carrying values of the assets exceed the expected future cash flows of the assets, the Company recognizes an impairment loss equal to the difference between the carrying values of the assets and their estimated fair values. Impairment of long-lived assets is assessed at the lowest levels for which there are identifiable cash flows that are independent from other groups of assets. The evaluation of long-lived assets requires the Company to use estimates of future cash flows. However, actual cash flows may differ from the estimated future cash flows used in these impairment tests.  Inventories  Inventories consist of finished goods of manufactured products.  Cost is stated at the lower of cost or market on a first-in, first-out (FIFO) basis.  The Company has not recorded an allowance for slow-moving or obsolete inventory.  Obsolete inventory at December 31, 2006 and 2005 was minimal.  Revenue Recognition  The Company recognizes revenues in accordance with the guidelines of the Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) No. 104 Revenue Recognition.  The Company recognizes revenue from product sales when the orders are completed and shipped, provided that collection of the resulting receivable is reasonably assured.  Amounts billed to customers are recorded as sales while the shipping costs are included in cost of sales. Returns on defective custom parts may only be exchanged for replacement parts within 30 days of the invoice date.  Returns on defective parts, which can be resold, may be exchanged for replacement parts or for a refund.  Revenue from non-refundable customer tooling deposits is recognized when the materials are shipped or when the deposit is forfeited, whichever is earlier.   - 30 -   Worldwide Manufacturing USA, Inc. and Subsidiaries   Notes to Consolidated Financial Statements Years Ended December 31, 2006 and 2005  1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)  Advertising Costs  The Company generally expenses advertising costs as incurred.  Advertising expenses charged to operations were $5,245 and $91,659 in 2006 and 2005, respectively.  Repairs and Maintenance  Repairs and maintenance of a routine nature are charged as incurred to operations, while those that extend or improve the life of existing assets are capitalized.  Income Taxes  The Company uses the liability approach to financial accounting and reporting for income taxes.  The differences between the financial statement and tax bases of assets and liabilities are determined annually.  Deferred income tax assets and liabilities are computed for those differences that have future tax consequences using the currently enacted tax laws and rates that apply to the period in which they are expected to affect taxable income.  Valuation allowances are established, if necessary, to reduce deferred tax asset accounts to the amounts that will more likely than not be realized.  Income tax expense is the current tax payable or refundable for the period, plus or minus the net change in the deferred tax asset and liability accounts.  Intangibles  Patent costs and other identifiable intangibles are capitalized and generally amortized over useful lives of 15 years or less.  Effective in 2001, goodwill has been assessed for impairment annually and is not amortized.  Research and Development  The Company expenses the cost of research and development as incurred.  No research and development costs were charged to operations during 2006 or 2005.  Cash and Cash Equivalents  For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.  Non-Cash Equity Transactions  Shares of other equity instruments issued for non-cash consideration are recorded at the fair value of the consideration received, or at the value of the stock given, considered in reference to contemporaneous cash sale of stock.    - 31 -   Worldwide Manufacturing USA, Inc. and Subsidiaries   Notes to Consolidated Financial Statements Years Ended December 31, 2006 and 2005  1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)  Estimates  The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts of assets and liabilities, as well as footnote disclosures included in the financial statements and accompanying notes.  Actual results may differ from those estimates and such differences may be material to the financial statements.  The more significant estimates include:  useful lives and residual values of fixed assets, fair market values of inventory, goodwill and intangible impairment tests, reserves for warranty, returns, and product liability losses, and credits losses.  Accounting Method  The Companys financial statements are prepared using the accrual method of accounting.  Foreign Currency Transactions and Translation  Transaction gains and losses result from a change in exchange rates between the functional currencies in which a foreign currency transaction is denominated.  They represent an increase or decrease in (a) the actual functional current cash flows realized upon settlement of foreign currency transactions and (b) the expected functional currency cash flows on unsettled foreign currency transactions.  All transaction gains and losses are included in other income or expense.  For all years presented, sales to customers were primarily denominated in U.S. dollars.  Assets and liabilities of Intech are translated into U.S. dollars at the prevailing exchange rate in effect at each period end.  Revenue and expenses are translated into U.S. dollars at the average exchange rate during the reporting period.  Contributed capital is translated into U.S. dollars at the historical exchange rate when capital was injected.  Any difference resulting from using the current rate, historical rate, and average rate in determination of retained earnings is accounted for as a translation adjustment and reported as part of comprehensive income or loss in the equity section.  Exchange differences are recognized in the income statement in the period in which they occur.  Fair Value of Financial Instruments  Unless otherwise indicated, the fair value of all reported assets and liabilities, which represent financial instruments (none of which are held for trading purposes), approximate the carrying values of such instruments.  At December 31, 2006 and 2005, both short and long-term receivables in the amounts of  $1,576,944 and $1,589,133, respectively, were pledged as collateral in connection with bank loans.  Compensated Absences  Employees of the Company are entitled to be compensated for absences depending on job classification, length of service, and other factors.  At December 31, 2006 and 2005, the minimal amounts unused by employees could not be estimated, and accordingly, no provision is recorded.    - 32 -   Worldwide Manufacturing USA, Inc. and Subsidiaries   Notes to Consolidated Financial Statements Years Ended December 31, 2006 and 2005  1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)   Concentrations, Risks, and Uncertainties  The Company has the following concentrations of business with customers and suppliers constituting greater than 10% of the Companys gross sales and purchasing volume:  20062005Customer A12%14%Customer B11%14%Customer C6%12%  In 2006, the Companys two largest suppliers comprised 13% of its manufacturing cost, versus 6% during 2005.  The Companys customers in the aerospace, telecommunications, automotive, and electronics industries comprised the majority of its sales in 2006 and 2005.  These four industries counted for 60% and 59%  of the Companys sales in 2006 and 2005, respectively.  As part of the production process, the Company may be required by its suppliers to advance funds under short-term agreements for tooling and other pre-production costs.  The loans are generally unsecured and may carry interest at the prevailing market rate for short-term instruments.  Such tooling is in most cases owned by the suppliers, and is a value primarily for the specific needs of the Companys customers.  The Company in turn requires its customers to provide a non-refundable down payment to cover such startup costs.  In the event that a supplier is unable to fulfill its production agreements with the Company, management believes that other suppliers can be found for the Companys products.  However, a change in suppliers would cause a delay in the production process, and could result in loss of tooling deposits and other supplier advances, which could negatively affect the Companys operating results.  At December 31, 2006 and 2005, the balance of advances owed to the Company is $223,775 and $248,685 , respectively.  The Company sells its goods and services internationally, although the majority of its revenue is derived from customers in the United States.  As such, the Company is susceptible to credit risk on accounts and notes receivable from customers in that region.  Additionally, a significant portion of the Companys U.S. customers consists of entities in the aerospace industry, which has proven to be sensitive to swings in the economic cycle.  Generally, the Company does not obtain security from its customers in support of accounts receivable.        - 33 -   Worldwide Manufacturing USA, Inc. and Subsidiaries   Notes to Consolidated Financial Statements Years Ended December 31, 2006 and 2005  1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)  Stock-Based Compensation  The Company accounts for employee stock option plans under the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and has adopted the disclosure only provisions of Statement of Financial Accounting Standards No. 123®, Accounting for Stock-Based Compensation(SFAS 123(R)).  The Company accounts for equity instruments issued to non-employees in accordance with the provisions of SFAS No. 123(R) and Emerging Issues Task Force No. 96-18, Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services.  Earnings Per Share  The Company adopted Statement of Financial Accounting Standard No. 128, Earnings per Share (SFAS No. 128"), which is effective for annual periods ending after December 15, 1997.  Earnings per share (EPS) are computed based on the weighted average number of shares actually outstanding.  December 31, 2006December 31, 2005Weighted average number of common shares used2,030,8632,024,002  Recent Accounting Pronouncements  In December 2004, the FASB issued SFAS No. 123(R), Share-Based Payment. SFAS 123(R) is a revision of SFAS No., 123, Accounting for Stock Based Compensation, and supersedes Accounting Principles Board Opinion No. 25 (APB 25), Accounting for Stock Issued to Employees. Among other items SFAS 123(R) eliminates the use of APB 25 and the intrinsic value method of accounting, and requires companies to recognize the cost of employee services received in exchange for awards of equity instruments, based on the grant date fair value of those awards, in the financial statements. The Company began recognizing compensation expense for the fair value of stock-based compensation in its financial statements in accordance with SFAS 123 in 2003. The effective date of SFAS 123 (R) is the first annual reporting period beginning after June 15, 2005. The adoption of SFAS 123 (R) did not have a material impact on the Companys financial position, results of operations or cash flows.  In March 2005, the SEC staff issued additional guidance on SFAS 123 (R) in the form of Staff Accounting Bulletin (SAB) No. 107. SAB 107 was issued to assist preparers by simplifying some of the implementation challenges of SFAS 123 (R) while enhancing the information that investors receive. SAB 107 creates a framework that is premised on two themes: (a) considerable judgment will be required by preparers to successfully implement FAS 123 (R), specifically when valuing employee stock options; and (b) reasonable individuals, acting in good faith, may conclude differently on the fair value of employee share options. Key topics covered by SAB 107 include: (a) valuation models  SAB 107 reinforces the flexibility allowed by FAS 123 (R) to choose an option-pricing model that meets the standards fair value    - 34 -   Worldwide Manufacturing USA, Inc. and Subsidiaries   Notes to Consolidated Financial Statements Years Ended December 31, 2006 and 2005  1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)  Recent Accounting Pronouncements (Continued)  measurement objective; (b) expected volatility  the SAB provides guidance on when it would be appropriate to rely exclusively on either historical or implied volatility in estimating expected volatility; and (c) expected term  the new guidance includes examples and some simplified approaches to determining the expected term under certain circumstances. The Company will apply the principles of SAB 107 in conjunction with its adoption of SFAS 123 (R) but did not have a material impact on the Companys financial statements or results of operations.  Exchange of non-monetary assets:  In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29. SFAS No. 153 addresses the measurement of exchanges of nonmonetary assets and redefines the scope of transactions that should be measured based on the fair value of the assets exchanged. SFAS No. 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005.  The adoption of SFAS No. 153 did not have a material impact on the Company's financial statements or results of operations.  Consolidation of Variable Interest Entities:  In January 2003, the FASB issued FASB Interpretation No. 46, ("FIN 46"), Consolidation of Variable Interest Entities ("VIE"). Until this interpretation, the Company generally included entities in its consolidated financial statements only if it controlled the entity through voting interests. FIN No. 46 requires a variable interest entity, as defined, to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns. FIN No. 46 is effective for reporting periods ending after December 15, 2003. The adoption of FIN No. 46 did not have a material impact on the Company's Consolidated Financial Statements as of December 31, 2005.  Conditional Asset Retirement Obligation:  In March 2005, FASB issued FASB Interpretation (FIN) No. 47, Accounting for Conditional Asset Retirement Obligations. FIN 47 clarifies that the term Conditional Asset Retirement Obligation as used in FASB Statement No. 143, Accounting for Asset Retirement Obligation, refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. Accordingly, an entity is required to recognize a liability for the fair value of a Conditional Asset Retirement Obligation if the fair value of the liability can be reasonably estimated. FIN 47 is effective no later than the end of fiscal years ending after December 15, 2005. The adoption of FIN 47 did not have a material affect on the Companys financial position, results of operations or cash flows.        - 35 -   Worldwide Manufacturing USA, Inc. and Subsidiaries   Notes to Consolidated Financial Statements Years Ended December 31, 2006 and 2005  1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)  Accounting Changes and Error Corrections:  In May 2005, the Financial Accounting Standards Board (FASB) issued SFAS No. 154, Accounting Changes and Error Corrections (SFAS No. 154), which replaced Accounting Principles Board Opinion No. 20, Accounting Changes and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements. SFAS No. 154 changes the requirements for the accounting for and reporting of a change in accounting principles. It requires retrospective application to prior periods financial statements of changes in accounting principles, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.  The impact on the Companys operations will depend on future accounting pronouncements or changes in accounting principles.  Accounting for Uncertainty in Income Taxes: In July 2006, the FASB issued FIN 48, Accounting for Uncertainty in Income Taxesan Interpretation of FASB Statement No. 109, which clarifies the accounting for uncertainty in tax positions. This Interpretation requires that the Company recognize in its consolidated financial statements the impact of a tax position if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The provisions of FIN 48 are effective for the Company on January 1, 2007, with the cumulative effect of the change in accounting principle, if any, recorded as an adjustment to opening retained earnings. The Company is currently evaluating the impact of adopting FIN 48 on its consolidated financial statements. Fair Value Measurements: In September 2006, the FASB issued SFAS 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements, where fair value is the relevant measurement attribute. The standard does not require any new fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company is currently evaluating the impact of adopting SFAS 157 on its consolidated financial statements.  Staff Accounting Bulletin: In September 2006, the SEC issued SAB No. 108, which provides guidance on the process of quantifying financial statement misstatements. In SAB No. 108, the SEC staff establishes an approach that requires quantification of financial statement errors, under both the iron-curtain and the roll-over methods, based on the effects of the error on each of the Companys financial statements and the related financial statement disclosures. SAB No.108 is generally effective for annual financial statements in the first fiscal year ending after November 15, 2006. The transition provisions of SAB No. 108 permit existing public companies to   - 36 -   Worldwide Manufacturing USA, Inc. and Subsidiaries Notes to Consolidated Financial Statements Years Ended December 31, 2006 and 2005  1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) record the cumulative effect in the first year ending after November 15, 2006 by recording correcting adjustments to the carrying values of assets and liabilities as of the beginning of that year with the offsetting adjustment recorded to the opening balance of retained earnings. Management does not expect that the adoption of SAB No.108 would have a material effect on the Companys consolidated financial statements.  Accounting for certain hybrid financial instruments:  In February 2006 the FASB issued SFAS No. 155, Accounting for certain Hybrid Financial Instruments, an amendment of FASB No. 133 and 140, (SFAS 155), SFAS 155 permits fair value remeasurement for any hybrid financial instruments that contains an embedded derivative that otherwise would require bifuration in accordance with the provisions of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. Presently the company does not have any hybrid financial instruments.  Inventory costs:  SFAS No. 151, Inventory Costs, an amendment of ARB No. 43, Chapter 4 (SFAS 151), SFAS 151 requires that abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage) be recognized as current period charges, and that fixed production overheads be allocated to inventory based on normal capacity of production facilities. SFAS 151 had no impact on the companys consolidated financial statements.  Reclassifications  Certain 2005 balances have been reclassified to conform with 2006 presentation.  2. COMMITMENTS AND CONTINGENCIES  The Company leases its office spaces and certain vehicles under non-cancelable operating leases.  The Worldwide USA office lease requires increasing annual payments plus a share of operating costs.  Minimum future rental payments under non-cancelable operating leases with remaining terms in excess of one year as of December 31, 2006, in the aggregate and for each of the five succeeding fiscal years are as follows:  Year ended December 312007$   192,1362008130,437200982,089201024,382Total minimum future rental payment$429,044  Total rent and lease expense was $132,150 and $123,407 as of December 31, 2006 and 2005, respectively.    - 37 -   Worldwide Manufacturing USA, Inc. and Subsidiaries Notes to Consolidated Financial Statements Years Ended December 31, 2006 and 2005   3.  INVENTORIES  Inventories by major categories are summarized as follows:  20062005Raw materials$ 228,470$383,000Work in progress46,080-Finished goods2,229,384912,851$ 2,503,934$1,295,851Less: allowances for slowing moving items--Total$ 2,503,934$1,295,851   4.  PROPERTY AND EQUIPMENT Property and equipment, which is located in the USA and PRC, consisted of the following at December 31, 2006: 20062005Vehicles$   150,826$    134,057Furniture & fixtures4,4964,496Equipment620,309593,056Software35,46127,946Leasehold improvements9,1709,170820,262768,725Less: accumulated depreciation344,975257,108Total$   475,287$   511,617   5.  NOTES PAYABLE AND LINES OF CREDIT Notes payable consists of the following at December 31, 2006 and 2005:  An installment loan payable to a finance company is secured by equipment, having a carrying value of $2,035, and bears interest at 5.0% per annum.  Principal and interest payments are due monthly in the amount of $264.  The loan is due July, 2007.     - 38 -   Worldwide Manufacturing USA, Inc. and Subsidiaries Notes to Consolidated Financial Statements Years Ended December 31, 2006 and 2005  5.  NOTES PAYABLE AND LINES OF CREDIT (CONTINUED)   20062005$   2,035$  4,293Less: current portion(2,035)(3,025)Long-term debt, less current portion$       -$  1,268  Future maturities of long-term debt for the five years succeeding December 31, 2006 are as follows:  2007$    2,0352008-Total future maturities2,035  Future maturities of long-term debt for the five years succeeding December 31, 2005 are as follows:  2006$     3,02520071,268Total future maturities$4,293  On March 16, 2007 the Company paid off its line of credit with Well Fargo in the amount of $602,947 and established a new credit facility with Golden State Bank, a division of Greater Bay Bank NA. Under the terms of a revolving line of credit agreement with Golden Gate Bank dated February 14, 2007, the Company could borrow up to $2,250,000 at 0.5% above the reported World Street Journal Prime through February 14, 2008.  Funds from these borrowings may be used for any purpose.  The revolving line of credit is secured by the assets of the company and guaranteed by its officers. On April 1, 2007 the amount used on the line of credit was $902,947.  At December 31, 2006 and 2005, the balance on the line of credit was $616,852 and $150,000 respectively.         - 39 -   Worldwide Manufacturing USA, Inc. and Subsidiaries Notes to Consolidated Financial Statements Years Ended December 31, 2006 and 2005   6. PENSION PLAN AND STOCK OPTION PLAN  The Company established a SEP plan for the benefit of all full-time employees. Contributions to the plan are limited to a statutory amount per employee.  No contributions were made for 2004 or 2005.  The Company also established a stock option plan for its employees on April 1, 2004.  The Company approved the plan to issue up to 300,000 shares of common stock.  The stock option plan provides employees, consultants and directors the opportunity to purchase shares.  The exercise price of an incentive stock option granted under this plan must be equal to or greater than the fair market value of the shares of the Companys common stock on the date the option is granted.  The exercise price of a non-qualified option granted under this plan must be equal to or greater than 85% of the fair market value of the shares of the common stock on the date the option is granted.  An incentive stock option granted to an optionee owning more than 10% of the voting stock must have an exercise price equal to or greater than 110% of the fair market value of our common stock on the date the option is granted. On April 1, 2004, the Board granted options to purchase 109,213 shares at an exercise price of $6.00 per share.  7. RELATED PARTY TRANSACTIONS  The Company paid wages in the amount of $126,000 to certain shareholders, who are also members of the Board of Directors, as of December 31, 2006.  Jimmy and Mindy Wang, who are principal shareholders, executive officers and members of the Board of Directors of the Company, have advanced funds to the Company for working capital purposes.  At December 31, 2006, the Company owed Jimmy and Mindy Wang $522,024. The advances are interest bearing at 8% per annum, with a default interest rate of 10%. All unpaid amounts on this note are due in full on January 1, 2010.  The Company paid cash in the amount of $65,996 for interest expense to Mr. and Mrs. Wang for the Nine months ended December 31, 2006.  The Company paid cash in the amount of $256,000 and gave 100,000 shares of common stock valued at $39,000 for management services, $40,000 for legal services and $30,302 for interest expenses to certain shareholders, who are also members of the Board of Directors, as of December 31, 2005.  8. INCOME TAXES  The Company and its subsidiaries are included in a consolidated United States federal and state income tax return. The Company computes its provision for deferred federal income taxes using the liability method in which deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities for the Company and each of its subsidiaries, and are measured using the enacted tax rates.   - 40 -    Worldwide Manufacturing USA, Inc. and Subsidiaries Notes to Consolidated Financial Statements Years Ended December 31, 2006 and 2005  Income tax expense for the years ended December 31, 2006 and 2005 consists of the following:  8. INCOME TAXES - (CONTINUED)  2005CurrentDeferredTotalFederal$      197,596$            0$     197,596State7470747Foreign(196,463)0(196,363)$    1,700$            0$    1,7002006CurrentDeferredTotalFederal(1,700)$            0(1,700)State000Foreign000$                0$            0$          0  There were minimal NOLs and differences of tax and book basis between assets and liabilities, therefore there is no deferred tax asset recorded.  9.  Operating Risk  Interest rate risk  The interest rates and terms of repayment of bank and other borrowings from shareholders are disclosed in Note 5 and Note 8. Other financial assets and liabilities do not have material interest rate risk.  Credit risk  The Company is exposed to credit risk from its cash in bank and bills and accounts receivable.  The credit risk on cash in bank is limited because the counterparties are recognized financial institutions.  Bills and accounts receivable are subjected to credit evaluations.  An allowance has been made for estimated irrecoverable amounts which have been determined by reference to past default experience and the current economic environment.  Foreign currency risk  Most of the transactions of the Company were settled in Renminbi and U.S. dollars.  In the opinion of the directors, the Company would not have significant foreign currency risk exposure.  Companys operations are substantially in foreign countries  - 41 -   Worldwide Manufacturing USA, Inc. and Subsidiaries Notes to Consolidated Financial Statements Years Ended December 31, 2006 and 2005  9. OPERATING RISK - (CONTINUED)  Substantially all of the Companys products are manufactured in China. The Companys operations are subject to various political, economic, and other risks and uncertainties inherent in China. Among other risks, the Companys operations are subject to the risks of restrictions on transfer of funds; export duties, quotas, and embargoes; domestic and international customs and tariffs; changing taxation policies; foreign exchange restrictions; and political conditions and governmental regulations  10.  SEGMENT INFORMATION  The Companys operations are classified into four principal reportable segments that provide different products or services.  Worldwide USA purchases and sells manufactured goods from China procured by its subsidiary, Intech. Intech provides technical advisory, design, delivery, material procurement, and manufacturing quality control services.  Separate management of each segment is required because each business unit is subject to different marketing, production, and technology strategies, and because of the geographic location of Changchun Chengde Automobile Air-Conditioner Co., Limited (Changchun Chengde) which is located in Changchun City. The other entities are all located in Shanghai each entity. Changchun Chengde sells automobile air-conditioners while Shanghai Intech Precision Machinery Co., Ltd. performs die casting of various parts.  Segmental Data  2006  Reportable Segments (amounts in thousands) WWMUSAIntech
ElectroChangchun
ChengdeIntech
PrecisionTotalExternal revenue8,2933703992,34711,409Intersegment revenue-5,697--5,697Interest income12-25Interest expense(31)---(31)Depreciation under administrative expenses16582581Net profit after tax(69)80027427977(1)AssetsExpenditures for long-lived assets710-3956  (1) $ 55,363 in inter-company profit was eliminated in consolidation.    - 42 -   Worldwide Manufacturing USA, Inc. and Subsidiaries Notes to Consolidated Financial Statements Years Ended December 31, 2006 and 2005  10.  SEGMENT INFORMATION- (CONTINUED) Segmental Data  2005 Reportable Segments (amounts in thousands) WWMUSAIntech
ElectroChangchun
ChengdeIntech
PrecisionTotalExternal revenue7,618798226718,713Intersegment revenue-4,781--4,781Interest income-25--25Interest expense(58)---(58)Depreciation under administrative expenses1514--29Net profit after tax1207141(12)823(1)AssetsExpenditures for long-lived assets46012212198  (1) $41,865 in inter-company profit was eliminated in consolidation.  11. Management and Professional Fees  The Company paid wages in the amount of $126,000 to certain shareholders, who are also members of the Board of Directors, as of December 31, 2006.  Jimmy and Mindy Wang, who are principal shareholders, executive officers and members of the Board of Directors of the Company, have advanced funds to the Company for working capital purposes.  At December 31, 2006, the Company owed Jimmy and Mindy Wang $522,024. The advances are interest bearing at 8% per annum, with a default interest rate of 10%. All unpaid amounts on this note are due in full on January 1, 2010.  The Company paid cash in the amount of $65,996 for interest expense to Mr. and Mrs. Wang for the Nine months ended December 31, 2006.  The Company paid cash in the amount of $256,000 and gave 100,000 shares of common stock valued at $39,000 for management services, $40,000 for legal services and $30,302 for interest expenses to certain shareholders who are also members of the Board of Directors, as of December 31, 2005.  12.  STOCK TRANSACTION On April 19, 2006, a Special Meeting was held to approve a 1:15 reverse stock split which was approved by the majority of the shareholders of Worldwide. Prior to the reverse stock split, there were approximately 30,437,500 shares outstanding.  After the split there are approximately 2,030,863 shares outstanding after stock split rounding adjustments. In addition, as a result of the split, the Companys stock symbol changed from WMFG to WWMU.  The stock split became effective on April 21, 2006.  All stock information in these financial statements has been restated to show the effects of the split.    - 43 -   ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE  On or about January 1, 2006, Child, Sullivan & Company, the principal accountant for Worldwide Manufacturing USA, Inc. (the "Company") changed its accounting practice from a corporation to a professional limited liability company named Child, Van Wagoner & Bradshaw, PLLC.  As this is viewed as a separate legal entity, the Company terminated its accounting arrangement with Child, Sullivan & Company as principal accountant and engaged Child, Van Wagoner & Bradshaw, PLLC, as the Company's principal accountants for the Company's fiscal year ending December 31, 2005 and the interim periods for 2005 and 2006.  The decision to change principal accountants was approved by the Audit Committee of the Company's Board of Directors and subsequently approved by the Board of Directors.  None of the reports of Child, Sullivan & Company, on the Company's financial statements for either of the past two years or subsequent interim period contained an adverse opinion or disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope or accounting principles.  There were no disagreements between the Company and Child, Sullivan & Company, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of Child, Sullivan & Company, would have caused them to make reference to the subject matter of the disagreement in connection with its report. Further, Child, Sullivan & Company has not advised the Registrant that:  1) information has come to the attention of Child, Sullivan & Company which made it unwilling to rely upon management's representations, or made it unwilling to be associated with the financial statements prepared by management; or  2) the scope of the audit should be expanded significantly, or information has come to the attention of Child, Sullivan & Company that they have concluded will, or if further investigated might, materially impact the fairness or reliability of a previously issued audit report or the   underlying financial statements, or the financial statements issued or to be issued covering the fiscal year ending December 31, 2006.  On or about January 2, 2006 the Registrant engaged Child, Van Wagoner & Bradshaw, PLLC as its principal accountant to audit the Registrant's financial statements as successor to Child, Sullivan & Company.  During the Registrant's two most recent fiscal years or subsequent interim period, the Registrant has not consulted with the entity of Child, Van Wagoner & Bradshaw, PLLC regarding the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Registrant's financial statements, nor did the entity of Child, Van Wagoner & Bradshaw, PLLC provide advice to the Registrant, either written or oral, that was an important factor considered by the Registrant in reaching a decision as to the accounting, auditing or financial reporting    - 44 -   ITEM 8A. CONTROLS AND PROCEDURES  The Securities and Exchange Commission defines the term disclosure controls and procedures to mean a companys controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commissions rules and forms.   The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms.  Based on an evaluation performed, the Company's certifying officers have concluded that the disclosure controls and procedures were effective as of December 31, 2006, to provide reasonable assurance of the achievement of these objectives.  There was no change in the Company's internal control over financial reporting during the fiscal year ended December 31, 2006, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.   ITEM 8B. OTHER INFORMATION None   PART III   ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT  The following are the directors and executive officers of Worldwide.  NameAgePositionJimmy Wang51CEO, President, and ChairmanMindy Wang49Secretary, Treasurer, and a DirectorJohn Ballard48Chief Financial Officer/Director The directors named above serve for one-year terms until their successors are elected or they are re-elected at the annual stockholders' meeting. Officers hold their positions at the pleasure of the board of directors, absent any employment agreement, of which none currently exists or is contemplated. There is no arrangement or understanding between any of the directors or officers of the Company and any other person pursuant to which any director or officer was or is to be selected as a director or officer, and there is no arrangement, plan or understanding as to whether non-management shareholders will exercise their voting rights to continue to elect the current directors to the Company's board. There are also no arrangements, agreements or understandings between non-management shareholders and management under which non-management  - 45 -   shareholders may directly or indirectly participate in or influence the management of the Company's affairs.  Biographical Information  Jimmy Wang, President and Chief Executive Officer  Jimmy Wang has over twelve years experience in a wide range of component manufacturing. From 1996 to the present, Mr. Wang has been President, CEO and director of Worldwide Manufacturing USA, Inc. (California). He became President, CEO and Chairman of the Colorado holding company of the same name on September 30, 2003. From 1990 to 1995, Mr. Wang was the Sales Manager for MP World Manufacturing, Inc. From September 1993 to May 1996 Mr. Wang and Mindy Wang operated a sole proprietorship under the name Worldwide Manufacturing USA. In 1996, Mr. Wang incorporated Worldwide Manufacturing USA, Inc. In 1990, Mr. Wang earned a Masters Degree in Applied Economics from the University of Minnesota, and in 1982 received a Bachelors of Science Degree in Economics from the Shanghai Institute of Foreign Trade. Mr. Wang is the husband of Mindy Wang.  Mindy Wang, Secretary and Treasurer  Mindy Wang has over twelve years of accounting and financial management experience with Technology Power and Worldwide Manufacturing. From 1996 to the present, Ms. Wang has been controller and Director of Worldwide Manufacturing USA, Inc. In September 1996, Ms. Wang founded, with her husband, Worldwide Manufacturing USA, Inc. She became Controller and Director of the Colorado holding company of the same name on September 30, 2003. From 1991 to 1993 she was an accountant with Technology Power. The business of Technology Power was assembling personal computers for retail and business customers. From September 1993 to May 1996 Mr. Wang and Mindy Wang operated a sole proprietorship under the name Worldwide Manufacturing USA. Ms. Wang earned the equivalent of a Bachelors Degree in International Business from the University of California at the Los Angeles Institute of Economics and Management in Beijing and attended the Master's program of the Business Education of the University of Minnesota. Ms. Wang is the wife of Jimmy Wang.  John Ballard, Chief Financial Officer  John Ballard became Chief Financial Officer of Worldwide and its California operating subsidiary in September 30, 2003. John Ballard has more than fifteen years of business management, project management, and accounting experience. From January 2002 to the present, Mr. Ballard has been a financial consultant and director of Reveal Systems, Inc., a software development company and internet provider based in Longmont, Colorado. Mr. Ballard recently helped to complete the acquisition of Reveal Systems by Stewart Title in January of 2007. Mr. Ballard was the Chief Financial Officer of Call Solutions Inc., a publicly traded company, from October 1999 to November 2002. Call Solutions was in the business of opening call centers. From 1997-1999, Mr. Ballard owned and operated various food operations, Cookies 'N' Kreme and Lincoln Street Cafe in the Denver Metropolitan Area. In 1993, Mr. Ballard retired and he traveled until 1997. From 1988 to 1993, Mr. Ballard was Chief Financial Officer for Apple Sundries, Inc., a Denver retail chain. Since 1999, Mr. Ballard has been a major shareholder, owning 10% or more, and a consultant in five  - 46 -   blank check companies, Tabatha I, Inc., Tabatha II, Inc., Tabatha III, Inc. (Worldwide's predecessor), Tabatha IV, Inc., and Tabatha V, Inc. Mr. Ballard holds a Bachelor of Science Degree in Management and Marketing from the University of Colorado where he graduated Magna Cum Laude. Mr. Ballard also holds a Masters of Business in Administration from Regis University.  Meetings and Committees of the Board of Directors  The Board of Directors of the Company held one formal meeting during the fiscal year ended December 31, 2006. All incumbent directors attended 100% of the Board meetings held during their respective tenures, either in person, or telephonically. The Board of Directors does not have nominating or compensation committees, or committees performing similar functions.  We do not have an audit committee. The entire Board of Directors serves as the audit committee. Because of the small size of the Company and the risk attendant to a small public company, we are currently unable to attract an audit committee financial expert to our Board of Directors.  Code of Ethics  On August 27, 2004, the Company adopted a Code of Ethics.  Audit Committee Financial Expert  Worldwide does not have an audit committee. The entire board of directors functions as the audit committee. Worldwide does not have a financial expert on its audit committee, because of the difficulty encountered by all small public companies in obtaining outside board members. We cannot predict when, if ever, we will be able to attract a person to the board of directors who is a financial expert.   ITEM 10. EXECUTIVE COMPENSATION  Worldwide USA pays annual salaries of $206,000 to Jimmy Wang, President, $50,000 to Mindy Wang, Controller, and $24,000 to John Ballard, Chief Financial Officer. Board members received no compensation in 2006 in 2005 they received 20,000 in restrictive common shares for acting as directors.  There are no employment agreements between the Worldwide and its officers and directors.  There are no retirement plans in place.     - 47 -   Summary Compensation Table  NamePrincipal PositionYearSalaryBonusAnnual Other CompensationStock AwardsSecurities Underlying OptionsLTIP PayoutsOther Comp.Jimmy WangPres., CEO2003$60,0000$ 124,346 (1)000$0 (2)Jimmy WangPres., CEO2004$76,0000$0 (1)2,000 (3)00$0 (2)Jimmy WangPres., CEO2005$206,0000$0 (1)1,334 (4)00$0 (2)Jimmy WangPres., CEO2006$206,0000$0 (1)000$0 (2)Mindy WangSec./Treas./ Controller2003$36,0000$124,346 (1)000$0(2)Mindy WangSec./Treas./ Controller2004$50,0000$0 (1)2,000(3)00$0(2)Mindy WangSec./Treas./ Controller2005$50,0000$0 (1)1,334(4)00$0(2)Mindy WangSec./Treas./ Controller2006$50,0000$0 (1)000$0(2)John BallardChief Financial Officer2003$10,0000$0 (1)000$0(2)John BallardChief Financial Officer2004$24,0000$0 (1)2,000(3)00$0(2) John BallardChief Financial Officer2005$24,0000$0 (1)1,334(4)00$0(2)John BallardChief Financial Officer2006$24,0000$0 (1)000$0(2)Philip ZhangGeneral Manager2005$60,0000$0 (1)68,000(5)00$0(2)Philip ZhangGeneral Manager2006$60,0000$0 (1)000$0(2) (1) Distributions of S-Corporation income and interest on deferred compensation arrangement. (2) Deferred compensation accrued for the year, payable in 2005. In the periods from fiscal year 2000 to 2002 it was a Worldwide USA policy to provide $25,000 to each member of the Board of Directors of Worldwide for the additional responsibilities and duties as board members. As of September 30, 2003 with the transition from a Subchapter S Corporation to a C Corporation it was decided by management of Worldwide USA that $25,000 per year in compensation will no longer be given to board members. (3) S-8 shares of stock were issued in the amount of 5,000 shares on June 16, 2004. (4) Restricted Shares issue on October 3, 2005 for board compensation (5)Mr. Zhang received 66,667 option shares of the Issuer pursuant to an Option Agreement dated April 20, 2004. The Agreement between Mr. Zhang and Worldwide Manufacturing USA, Inc. provides for 66,667 options exercisable at the price of $6.00. The options are compensation for Mr. Zhang's management services to the Company. The options were exercisable as of the date of the Agreement, and expire on April 20, 2014. In addition, Mr. Zhang received 1,334 restricted shares for his services as a Director  There are no non-competition agreements with any of Worldwide's employees.  All share amounts reflect the 1:15 reverse stock split on April 21, 2006.      - 48 -   ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT  The following table sets forth information relating to the beneficial ownership of Company common stock as of March 15, 2006 (i) each person known by Worldwide to be the beneficial owner of more than 5% of the outstanding shares of common stock and (ii) each of Worldwide's directors and executive officers. Unless otherwise noted below, Worldwide believes that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. For purposes hereof, a person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days from the date hereof upon the exercise of warrants or options or the conversion of convertible securities. Each beneficial owner's percentage ownership is determined by assuming that any warrants, options or convertible securities that are held by such person (but not those held by any other person) and which are exercisable within 60 days from the date hereof, have been exercised. Title of ClassName and Address of Beneficial OwnerNumber of Shares HeldPercent of ClassCommon StockJimmy Wang (1) (2)
Worldwide Manufacturing USA, Inc.
1142 Cherry Street
San Bruno, California 940661,620,952 (3)79.82%Common StockMindy Wang(1) (2)
Worldwide Manufacturing USA, Inc.
1142 Cherry Street
San Bruno, California 940661,620,952 (3)79.82%Common StockJohn Ballard  (1) (2)
Worldwide Manufacturing USA, Inc.
1142 Cherry Street
San Bruno, California 9406682,7954.08%Common StockPhilip Zhang  (1) (2)
Worldwide Manufacturing USA, Inc.
1142 Cherry Street
San Bruno, California 9406668,001 (4)3.35%All officers and directors as a group (3 in number)1,771,74887.25%  (1) The person listed is a director of the Company. (2) The person listed is an officer of the Company. (3) Jimmy and Mindy Wang are husband and wife. Each holds directly 810,476 shares, but is deemed to beneficially own the shares owned by the other. (4)Mr. Zhang received 66,667 option shares of the Issuer pursuant to an Option Agreement dated April 20, 2004. The Agreement between Mr. Zhang and Worldwide Manufacturing USA, Inc. provides for 66,667 options exercisable at the price of $6.00. The options are compensation for Mr. Zhang's management services  - 49 -   to the Company. The options were exercisable as of the date of the Agreement, and expire on April 20, 2014. In addition, Mr. Zhang received 1,334 restricted shares for his services as a Director.    ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS  From time to time, Jimmy Wang and Mindy Wang may loan money to Worldwide. As of December 31, 2006, the Wangs have loaned $522,024 to the Company for operating capital and to establish new manufacturing facilities. This note bears interest of 8% with flexible terms and the note is due January 1, 2010.  This note was from Jimmy and Mindy Wang, President and Secretary, respectively. Jimmy and Mindy Wang are husband and wife.    ITEM 13. EXHIBITS  (a) The Exhibits listed below are filed as part of this Annual Report.  3.1 Articles of Incorporation (incorporated by reference from Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on October 11, 2000).  3.2 Bylaws (incorporated by reference from Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on October 11, 2000).  4.1 Specimen Common Stock Certificate (incorporated by reference from Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on October 11, 2000).  4.2 Specimen Class A Convertible Preferred Stock Certificate (incorporated by reference from Registration Statement on Form 10-SB/A filed with the Securities and Exchange Commission on October 11, 2000).  10.1 Common Stock Purchase Warrant (incorporated by reference from Form 10-KSB filed with the Securities and Exchange Commission on September 27, 2001).  14 Code of Ethics (incorporated by reference from Form 10-KSB filed with the Securities and Exchange Commission on March 31, 2005.).  31.1 Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended.  31.2 Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended.  32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  - 50 -      ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES  Audit-Related Fees  The aggregate fees billed by Child, Sullivan & Company for the audit of the Companys annual financial statements were $25,400 with $4,000 being paid for the review of the Companys statements included in its quarterly reports on Form 10-QSB during year ending December 31, 2006. The total fees paid in 2005 were $38,400.  Child, Sullivan & Company did not bill the Company any amounts for assurance and related services that were related to its audit or review of the Companys financial statements during the fiscal years ending December 31, 2006 or December 31, 2005.  Tax Fees  The aggregate fees billed by Child, Van Wagoner & Bradshaw, PLLC for tax compliance, tax advice and tax planning were $0 for fiscal year ended 2006 and $0 for the fiscal year ended 2005.  The aggregate fees billed by Child, Sullivan & Company for tax compliance, tax advice and tax planning were $0 for fiscal year ended 2005 and $0 for the fiscal year ended 2004.  All Other Fees  Child, Van Wagoner & Bradshaw, PLLC did not bill the Company for any products and services other than the foregoing during the fiscal years ended 2006 and 2005.  Audit Committees pre-approval policies and procedures.  We do not have an audit committee. The Board of Directors approved our engagement of Child, Van Wagoner & Bradshaw, PLLC. No services described in Item 9(e) (2) through 9(e)(4) of Schedule 14A were performed by our auditors.    - 51 -   SIGNATURES  Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned; thereunto duly authorized on April 13, 2007.   WORLDWIDE MANUFACTURING USA, INC.  By: /S/ JIMMY WANG Jimmy Wang, CEO, President and Director  Date: April 13, 2007  Pursuant to the requirements of the Securities Exchange Act of 1934, the following persons on behalf of the Registrant and in the capacities have signed this report below on April 13, 2007.  By: /S/ JIMMY WANG Jimmy Wang, CEO, President and Director  Date: April 13, 2007   By: /S/ MINDY WANG Mindy Wang, Secretary, Treasurer and a director  Date: April 13, 2007   By: /S/ JOHN BALLARD John Ballard, Chief Financial Officer / Principal Accounting Officer  Date: April 13, 2007    - 52 -