UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549








Form
10-Q





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





For the
quarterly period endedSeptember 30, 2008





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





For the
transition period from______ to _______








01-06914


Commission
File Number








Worldwide Biotech &
Pharmaceutical Company


(Name of
small business issuer in its charter)








Delaware


(State or
other jurisdiction of Incorporation)








59-0950777


(IRS
Employer Identification Number)








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


Jie
Zuo Mansion, Xi'an, Shaanxi 710075


P.R.
China


(Address
of principal executive offices)








86-29-88193339


(Issuer's
telephone number)








Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes x    No
o





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





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





The
number of shares outstanding of each of the Issuer's classes of common equity,
as of the latest practicable date: As of September 30, 2008, there were
53,915,653 shares of the common stock issued and outstanding.





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





Transitional
Small Business Disclosure Format (check one): Yes oNo x








WORLDWIDE
BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES





FORM
10-Q





September
30, 2008





TABLE
OF CONTENTS





PagePART
      I - FINANCIAL INFORMATIONITEM
      1 - FINANCIAL STATEMENTS
            3ITEM
      2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
      RESULTS OF OPERATIONS
            16ITEM
      3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK
            20ITEM
      4 (A) - CONTROLS AND PROCEDURES
            20ITEM
      4 (A)T – INTERNAL CONTROL OVER FINANCIAL REPORTING
            20PART
      II - OTHER INFORMATIONITEM
      1 - LEGAL PROCEEDINGS
            21ITEM
      2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS
            21ITEM
      3 - DEFAULTS UPON SENIOR SECURITIES
            21ITEM
      4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
            21ITEM
      5 - OTHER INFORMATION
            21ITEM
      6 - EXHIBITS
            21SIGNATURES
            22





- 2
-




PART
I - FINANCIAL INFORMATION




Item 1. Financial
Statements








WORLDWIDE
BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES





September
30, 2008





INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS








Contents
            
            Page(s)Consolidated
      Balance Sheets at September 30, 2008 (Unaudited) and December 31,
      2007
            
            4Consolidated
      Statements of Operations and Comprehensive Income for the
              Three
      Months and Nine Months Ended September 30, 2008 and 2007
      (Unaudited)
            
            5Consolidated
      Statements of Cash Flows for the
              Nine
      Months Ended September 30, 2008 and 2007 (Unaudited)
            
            6Notes
      to the Consolidated Financial Statements (Unaudited)
            
            7 -
      15









- 3
-


WORLDWIDE
BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEETS


September
      30, 2008
              
              
              December
      31, 2007(Unaudited)ASSETSCURRENT
      ASSETS:Cash
              
              $
              178,492
              
              
              $
              815,671Accounts
      receivable, net (Note 4)
              
              
              101,939
              
              
              
              71,729Inventories
      (Note 5)
              
              
              402,387
              
              
              
              178,853Prepayments
      and other current assets
              
              
              328,660
              
              
              
              121,420Total
      Current Assets
              
              
              1,011,478
              
              
              
              1,187,673PROPERTY,
      PLANT AND EQUIPMENT, net
              
              
              4,843,235
              
              
              
              4,770,394LICENSES,
      net
              
              
              1,517
              
              
              
              13,597LAND
      USE RIGHTS, net
              
              
              790,197
              
              
              
              748,449Total
      Assets
              
              $
              6,646,427
              
              
              $
              6,720,113LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIES:Loan
      payable (Note 7)
              
              $
              706,932
              
              
              $
              658,021Note
      payable- stockholder (Note 6)
              
              
              199,001
              
              
              
              185,233Current
      maturities of note payable - bank (Note 8)
              
              
              1,472,776
              
              
              
              1,370,877Accounts
      payable
              
              
              453,707
              
              
              
              372,721Due
      to related parties (Note 6)
              
              
              2,214,512
              
              
              
              2,073,826Other
      current liabilities
              
              
              1,507,557
              
              
              
              1,318,533Total
      Current Liabilities
              
              
              6,554,485
              
              
              
              5,979,211MINORITY
      INTEREST
              
              
              -
              
              
              
              56,378Total
      Liabilities
              
              
              6,554,485
              
              
              
              6,035,589STOCKHOLDERS'
      EQUITY:Common
      stock $.001 par value; 90,000,000 shares authorized;53,915,653
      shares issued and outstanding,
              
              
              53,916
              
              
              
              53,916Additional
      paid-in capital
              
              
              12,381,441
              
              
              
              12,381,441Accumulated
      deficit
              
              
              (12,462,402
              )
              
              
              (11,809,129
              )Accumulated
      other comprehensive income (loss):Foreign
      currency translation gain
              
              
              118,987
              
              
              
              58,296Total
      Stockholders' Equity
              
              
              91,942
              
              
              
              684,524Total
      Liabilities and Stockholders' Equity
              
              $
              6,646,427
              
              
              $
              6,720,113






- 4
-


WORLDWIDE
BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)


(UNAUDITED)




For
      the Three Months Ended
              
              
              For
      the Nine Months EndedSept
      30, 2008
              
              
              Sept
      30, 2007
              
              
              Sept
      30, 2008
              
              
              Sept
      30, 2007NET
      REVENUES
              
              $
              29,280
              
              
              $
              39,936
              
              
              $
              113,525
              
              
              $
              183,477COST
      OF GOODS SOLD
              
              
              21,808
              
              
              
              32,392
              
              
              
              89,815
              
              
              
              155,538GROSS
      PROFIT
              
              
              7,472
              
              
              
              7,544
              
              
              
              23,710
              
              
              
              27,939OPERATING
      EXPENSES:Selling
      expenses
              
              
              12,530
              
              
              
              3,359
              
              
              
              42,673
              
              
              
              18,024Research
      and development
              
              
              2,809
              
              
              
              10,467
              
              
              
              15,459
              
              
              
              58,942Professional
      fees
              
              
              3,260
              
              
              
              10,775
              
              
              
              67,647
              
              
              
              14,868Stock-based
      compensation
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              585,000General
      and administrative
              
              
              129,558
              
              
              
              117,604
              
              
              
              373,790
              
              
              
              435,702Total
      Operating Expenses
              
              
              148,157
              
              
              
              142,205
              
              
              
              499,569
              
              
              
              1,112,536INCOME(LOSS)
      FROM OPERATIONS
              
              
              (140,685
              )
              
              
              (134,661
              )
              
              
              (475,859
              )
              
              
              (1,084,597
              )OTHER
      (INCOME) EXPENSES:Interest
      income
              
              
              (100,124
              )
              
              
              (456
              )
              
              
              (145,329
              )
              
              
              (456
              )Interest
      expense
              
              
              181,451
              
              
              
              51,269
              
              
              
              330,424
              
              
              
              142,859Other
      (income) expense
              
              
              21,122
              
              
              
              17,611
              
              
              
              28,447
              
              
              
              17,611Government
      grants
              
              
              -
              
              
              
              (285,218
              )
              
              
              -
              
              
              
              (285,218
              )Realized
      (gain) loss on sale of marketable securities
              
              
              -
              
              
              
              (13
              )
              
              
              6,084
              
              
              
              (23,057
              )Total
      Other (Income) Expenses
              
              
              102,449
              
              
              
              (216,807
              )
              
              
              219,626
              
              
              
              (148,261
              )INCOME(LOSS)
      BEFORE MINORITY INTEREST
              
              
              (243,134
              )
              
              
              82,146
              
              
              
              (695,485
              )
              
              
              (936,336
              )MINORITY
      INTEREST
              
              
              (17,522
              )
              
              
              (64,953
              )
              
              
              (42,212
              )
              
              
              (118,925
              )NET
      INCOME(LOSS)
              
              
              (225,612
              )
              
              
              147,099
              
              
              
              (653,273
              )
              
              
              (817,411
              )OTHER
      COMPREHENSIVE INCOME(LOSS)Change
      in unrealized gain on marketable securities
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              32,793Foreign
      currency translation gain(loss)
              
              
              12,837
              
              
              
              9,194
              
              
              
              60,691
              
              
              
              (12,038
              )COMPREHENSIVE
      INCOME(LOSS)
              
              $
              (212,775
              )
              
              $
              156,293
              
              
              $
              (592,582
              )
              
              $
              (796,656
              )NET
      INCOME(LOSS) PER COMMON SHARENet
      income(loss) per common share - Basic and diluted
              
              $
              (0.00
              )
              
              $
              0.00
              
              
              $
              (0.01
              )
              
              $
              (0.02
              )Weighted
      average number of common shares outstanding-
      Basic and diluted
              
              
              53,915,653
              
              
              
              53,915,653
              
              
              
              53,915,653
              
              
              
              50,557,053







- 5
-


WORLDWIDE
BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(UNAUDITED)




For The Nine Months EndedSept 30, 2008
              
              
              Sept 30, 2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
              
              $
              (653,273
              )
              
              $
              (817,411
              )Adjustments
      to reconcile net loss to net cash provided by(used
      in) operating activities:Depreciation
      and amortization
              
              
              336,831
              
              
              
              214,466Stock-based
      compensation
              
              
              -
              
              
              
              585,000Gain
      on sale of marketable securities
              
              
              -
              
              
              
              (23,057
              )Minority
      interest
              
              
              (42,212
              )
              
              
              (118,925
              )Changes
      in assets and liabilities:Accounts
      receivable
              
              
              (30,210
              )
              
              
              27,281Inventories
              
              
              (223,534
              )
              
              
              (49,882
              )Prepayments
      and other current assets
              
              
              (207,240
              )
              
              
              50,764Accounts
      payable
              
              
              80,986
              
              
              
              7,163Accrued
      expenses and other current liabilities
              
              
              189,024
              
              
              
              (646,657
              )NET
      CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
              
              
              (549,628
              )
              
              
              (771,258
              )CASH
      FLOWS FROM INVESTING ACTIVITIES:Proceeds
      from sale of marketable securities
              
              
              -
              
              
              
              161,745Purchase
      of property and equipment
              
              
              (153,367
              )
              
              
              (75,143
              )NET
      CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
              
              
              (153,367
              )
              
              
              86,602CASH
      FLOWS FROM FINANCING ACTIVITIES:Payment
      on loan payable
              
              
              -
              
              
              
              (467,115
              )Proceeds
      from note payable - stockholder
              
              
              -
              
              
              
              523,436Payment
      on mortgages payable
              
              
              -
              
              
              
              (68,687
              )Repayment
      for due to related parties
              
              
              (44,981
              )
              
              
              -Proceeds
      from stockholders/officers
              
              
              32,108
              
              
              
              743,650NET
      CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
              
              
              (12,873
              )
              
              
              731,284EFFECT
      OF EXCHANGE RATE CHANGES ON CASH
              
              
              78,689
              
              
              
              (4,603
              )NET
      CHANGE IN CASH
              
              
              (637,179
              )
              
              
              42,025CASH
      at beginning of period
              
              
              815,671
              
              
              
              117,319CASH
      at end of period
              
              $
              178,492
              
              
              $
              159,344SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW  INFORMATION:Interest
      paid
              
              $
              -
              
              
              $
              200,801NON-CASH  INVESTING
      AND FINANCING ACTIVITIES:Issuance
      of common stock for debt conversion
              
              $
              -
              
              
              $
              1,000,000Transfer
      of certain property for debt reduction
              
              $
              -
              
              
              $
              334,959





See
accompanying notes to the consolidated financial statements.


- 6
-


WORLDWIDE
BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES


Notes
to the Consolidated Financial Statements


September
30, 2008


(Unaudited)








NOTE 1 - ORGANIZATION AND
OPERATIONS





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





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





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





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





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





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





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





On
December 18, 2006, Daiying, Mr. Aibin Chen and Mr. Zuobin Li, minority
shareholders of Ze An and Hua Yang, entered into a Consolidation and
Reorganization Agreement (“Consolidation”). Pursuant to the Consolidation, Ze An
merged into Hua Yang with Hua Yang assuming all assets and liabilities of Ze An
and Hua Yang continuing as the surviving entity. In addition, as part of the
Consolidation, Daiying acquired an additional 15% equity interest in Ze An for a
note payable to Mr. Zhongyu Lu, a former shareholder of Ze An, of RMB 1,351,200
(equivalent to $172,954 at December 31, 2006). The note included the principal
of RMB1.2 million (equivalent to $153,600 at December 31, 2006) and accrued
interest of RMB151,200 (equivalent to $19,354 at December 31, 2006) based on an
interest rate of 6.3% per annum with both principal and interest due December 4,
2007; the note is currently passed due. The Company owns a 67.3486% equity
interest of Hua Yang subsequent to the consolidation.






- 7
-


WORLDWIDE
BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
 Notes
to the Consolidated Financial Statements
 September
30, 2008
 (Unaudited)





NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Basis of
presentation





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





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





Reclassification





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





Use of
estimates





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reporting amounts of revenues and expenses
during the reported period. Significant estimates include the estimated useful
lives of property, plant and equipment, land use right and licenses. Actual
results could differ from those estimates.





Cash
equivalents





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





Trade
accounts receivable





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





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





Inventories





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




- 8
-


WORLDWIDE
BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
 Notes
to the Consolidated Financial Statements
 September
30, 2008
 (Unaudited)


NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONT.)





Property,
plant and equipment





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





Land use
rights





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





Licenses





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





Impairment
of long-lived assets





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





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





Fair
value of financial instruments





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





Segment
information





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




- 9
-


WORLDWIDE
BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
 Notes
to the Consolidated Financial Statements
 September
30, 2008
 (Unaudited)


NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONT.)




Revenue
recognition





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





Stock
based compensation





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





Research
and development





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





Shipping
and handling costs





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





Income
taxes





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






- 10
-


WORLDWIDE
BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
 Notes
to the Consolidated Financial Statements
 September
30, 2008
 (Unaudited)
 NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONT.)





Foreign
currency translation





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





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





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





September 30,
2008





Balance
sheet   RMB 6.7899 to US$1.00





Statement
of operations and comprehensive income RMB 6.9842 to US$1.00





December 31,
2007





Balance
sheet   RMB 7.2946 to US$1.00





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





September 30,
2007





Balance
sheet   RMB 7.4928 to US$1.00





Statement
of operations and comprehensive income RMB 7.7134 to US$1.00





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





Net gains
and losses resulting from foreign exchange transactions, if any, are included in
the Consolidated Statements of Operations and Comprehensive loss. The foreign
currency translation gain(loss) at September 30, 2008 and 2007 were $60,691 and
$(12,038) and effect of exchange rate changes on cash flows for the nine months
period then ended were $78,689 and $(4,603), respectively.





Related
parties





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




- 11
-


WORLDWIDE
BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
 Notes
to the Consolidated Financial Statements
 September
30, 2008
 (Unaudited)
 NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONT.)





Comprehensive
income (loss)





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





Net loss
per common share





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





Commitments
and contingencies





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





Recently
adopted accounting principles





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





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





Recently
issued accounting pronouncements





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





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




- 12
-


WORLDWIDE
BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
 Notes
to the Consolidated Financial Statements
 September
30, 2008
 (Unaudited)
 NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONT.)
  Recently
issued accounting pronouncements (cont.)




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





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





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





NOTE
3 - GOING CONCERN





The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As reflected in the accompanying
consolidated financial statements, the Company has an accumulated deficit of
$12,462,402 and a working capital deficiency of $5,543,007 at September 30,
2008, a net loss of $653,273 and net cash used in operations of $549,628 for the
nine months ended September 30, 2008, respectively.





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





NOTE
4 - ACCOUNTS RECEIVABLE





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




September
      30,
            
            
            December
      31,2008
            
            
            2007Accounts
      Receivable
            
            $
            416,814
            
            
            $
            424,924Less:
      Allowance for doubtful accounts
            
            
            (314,875
            )
            
            
            (353,195
            )$
            101,939
            
            
            $
            71,729


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


- 13
-
 WORLDWIDE
BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
 Notes
to the Consolidated Financial Statements
 September
30, 2008
 (Unaudited)





NOTE 5 -
INVENTORIES





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




September
      30,
              
              
              December
      31,2008
              
              
              2007Raw
      Material
              
              $
              119,894
              
              
              $
              82,770.00Work
      in process
              
              
              131,099
              
              
              
              -Finished
      goods
              
              
              603,510
              
              
              
              494,987854,503
              
              
              
              577,757Less:
      Inventory obsolescence
              
              
              (452,116
              )
              
              
              (398,904
              )$
              402,387
              
              
              $
              178,853
  NOTE 6 - RELATED PARTY
TRANSACTIONS





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





September
      30,
              
              
              December
      31,2008
              
              
              2007Due to related parties (a)Guo,
      Wenxia
              CEO;
      Stockholder; Stockholder of Daiying
              
              $
              231,821
              
              
              $
              246,081Xian
      Jin Hao Tech
              Stockholder;           Stockholder
      of Daiying
              
              
              569,083
              
              
              
              510,031Daiying
      Institute
              The
      company controlled by Guo,Wenxia
              
              
              1,286,079
              
              
              
              1,199,008Li,
      Zhuobin
              Stockholder;          Stockholder
      of Hua Yang
              
              
              2,788
              
              
              
              2,595Chen,
      Aibin
              Stockholder;          Stockholder
      of Hua Yang
              
              
              124,741
              
              
              
              116,111$
              2,214,512
              
              
              $
              2,073,826Note payable- stockholder
    (b)Chen
      Aibin
              Stockholder;          Stockholder
      of Hua Yang
              
              $
              199,001
              
              
              $
              185,233


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





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





NOTE
7 – LOAN PAYABLE





Loan
payable is collateralized by all of Hua Yang’s equipment, building and land use
right, payable to a financial institution, with interest at 6.696% per annum
payable monthly, with principal due May 27, 2007. The loan is currently past
due. The Company paid interest through May 20, 2007 and interest accrued through
September 30, 2008 was included in accrued interest





NOTE
8 – CURRENT MATURITIES OF NORE PAYABLE- BANK





Note
payable - bank is collateralized by all of Hua Yang’s equipment, building and
land use right, and is payable to a financial institution, with interest at
6.696% per annum payable monthly, with RMB5 million (equivalent $667,307) due
April 29, 2007 and RMB5 million ($667,308) due April 27, 2008. The note is
currently past due for the first principal payment due on April 29, 2007. The
Company paid interest through May 20, 2007 and interest accrued through
September 30, 2008 was included in accrued interest.




- 14
-


WORLDWIDE
BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
 Notes
to the Consolidated Financial Statements
 September
30, 2008
 (Unaudited)





NOTE 9 - CONCENTRATIONS AND CREDIT
RISK





Credit risk





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





NOTE
10 - FOREIGN OPERATIONS





(i) Operations





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





(ii) Dividends and
reserves





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





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





- 15
-




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





A.
            PRELIMINARY
      NOTE REGARDING FORWARD-LOOKING
STATEMENTS





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





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





B.
            OVERVIEW
      OF BUSINESS





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





Summary
of research and development





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





Corporate
Events and Accomplishments





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





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





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





- 16
-






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





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





RESULTS
OF OPERATIONS





The
following analysis shows the selected unaudited consolidated statements of
operations data of the Company for the three month period ended September 30,
2008 and September 30, 2007.





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





Revenues





For the
three months ended September 30, 2008, our revenues were $29,280 as compared to
$ 39,936 for the three months ended September 30, 2007, a decrease of $10,656.
We attribute this decrease in net revenues to the lower revenues generated from
Hua Yang, a majority owned subsidiary.





Cost
of Sales and Gross Profit





For the
three months ended September 30, 2008, cost of sales amounted to $21,808 as
compared to cost of sales of $32,392 for the three months ended September 30,
2007. We attribute this decrease in cost of sales to having reduced the
varieties of product. Gross profit for the three months ended September 30, 2008
was $7,472, as compared to $ 7,544 for the three months ended September 30,
2007.





Operating
Expenses





For the
three months ended September 30, 2008, total operating expenses were $148,157 as
compared to $142,205 for the three months ended September 30, 2007, an increase
of $5,952, or approximately 4%. Included in this increase for the three months
ended September 30, 2008 as compared to the same period in 2007
were:





·
            Selling expenses of $12,530 as
      compared to $3,359, respectively. We increased the selling expenses in the
      third quarter of 2008 to promote sales activities and build our sales
      network.






·
            Stock-based
      compensation expense was $0 for the three-month periods ended September
      30, 2008 and 2007.


·
            General
      and administrative expenses were $129,558 as compared to $117,604,
      respectively, an increase of $11,954, approximately
  10.0%.





For the
three months ended September 30, 2008, interest expense was $181,451 as compared
to $51,269 for the three months ended September 30, 2007. For the three months
ended September 30, 2008, other expenses were $21,122 as compared to $17,611 for
the same period in 2007.





As a
result of these factors, the Company reported a net loss of $225,612 or $0.00
loss per share for the three months ended September 30, 2008, as compared to a
net income of $147,099 or $0.00 income per share for the same period in
2007.





Nine
Months Ended September 30, 2008 Compared To Nine Months Ended September 30,
2007





Revenues





For the
nine months ended September 30, 2008, our revenues were $113,525 as compared to
$ 183,477 for the nine months ended September 30, 2007, a decrease of $69,952.
We attribute this decrease in net revenues to the lower revenues generated from
HuaYang, a majority owned subsidiary.





- 17
-






Cost
of Sales and Gross Profit





For the
nine months ended September 30, 2008, cost of sales amounted to $ 89,815 as
compared to cost of sales of $155,538 for the nine months ended September 30,
2007. Gross profit for the nine months ended September 30, 2008 was $23,710 as
compared to $ 27,939 for the nine months ended September 30, 2007.





Operating
Expenses





For the
nine months ended September 30, 2008, total operating expenses were $499,569 as
compared to $1,112,536 for the nine months ended September 30,2007, a decrease
of $612,967 or approximately 55.0%.  Included in this decrease for the
nine-months ended September 30, 2008 as compared to the same period in 2007
were:





·
            Research and development costs of
      $15,459 compared to $58,942,
  respectively.


·
            Stock-based
      compensation expense was $0 for the nine months ended September 30, 2008
      as compared to $585,000 for same period in
2007.


·
            For
      the nine months ended September 30, 2008, general and administrative
      expenses were $ 373,790 as compared to $435,702 for the nine months ended
      September 30, 2007, a decrease of $61,912, approximately
    14%.





As a
result of these factors, the Company reported a net loss of $653,273 or $0.01
loss per share for the nine months ended September 30, 2008, as compared to a
net loss of $817,411 or $0.02 loss per share for the same period in
2007.





LIQUIDITY
AND CAPITAL RESOURCES





At
September 30, 2008, we had cash and cash equivalents of $178,492.





Net cash
used in operating activities for the nine months ended September 30, 2008 was
$549,628 as compared to net cash used by operating activities of $771,258 for
the nine months ended September 30, 2007. For the nine months ended September
30, 2008, we used cash to fund our loss of $653,273, our inventories increased
$223,534, accounts payable increased  $80,986, and accounts receivable
increased $30,210, prepayments and other current assets increased $207,240,
accrued expenses and other current liabilities increased $189,024, offset by
$42,212 minority interest and non-cash items such as depreciation and
amortization of $336,831. For the nine months ended September 30, 2007, we used
cash to fund our loss of $817,411, had reductions of accounts receivable of
$27,281, funding of inventories of $49,882, prepayments and other current assets
decreased $50,764, accounts payable increased $7,163, accrued expenses and other
current liabilities decreased $646,657, offset by $118,925 minority interest and
non-cash items such as depreciation and amortization of $214,466, and
stock-based compensation of $585,000.





Net cash
used in investing activities for the nine months ended September 30, 2008 was
$153,367 as compared to net cash provided in investing activities for the nine
months ended September 30, 2007 of $86,602 For the nine months ended September
30, 2008, we used cash of $153,367 for the purchase of plant and equipment. For
the nine months ended September 30, 2007, we used cash for the purchase of plant
and equipment of $75,143 and received net proceeds of $161,745 from sale of
marketable securities.





Net cash
used by financing activities for the nine months ended September 30, 2008 was
$12,873 as compared to net cash provided in financing activities for the nine
months ended September 30, 2007 of $731,284. For the nine months ended September
30, 2008, the Company repaid $32,108 to stockholders/officers. For the nine
months ended September 30, 2007, the Company received net proceeds of $743,650
from stockholders/officers, which were offset by the repayment of mortgages
payable of $68,687.





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





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





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





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





- 18
-






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





Efforts
to improve the Company’s financial results





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





(a)
            Improve
      the capital conditions





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





(b)
            Increase
      in marketing activities and sales





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





Off
Balance Sheet Arrangements





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





Recently
Adopted Accounting Principles





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





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





Recently
Issued Accounting Pronouncements





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





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





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





- 19
-






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





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





Item
3. Quantitative and Qualitative Disclosures about Market Risk





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





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





Item
4(A). Controls and Procedures





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





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





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





- 20
-






PART
II - OTHER INFORMATION





Item
1. Legal Proceedings





None.





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





None.





Item
3. Defaults upon Senior Securities





Not
Applicable.





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





None.





Item
5. Other Information





None.





Item
6. Exhibits





Exhibit No.
            
            Description of Exhibit31.1
            
            Rule
      13a - 14(a)/15d-14(a) Certification of the Chief Executive
      Officer31.2
            
            Rule
      13a - 14(a)/15d-14(a) Certification of the Chief Financial
      Officer32.1
            
            Section
      1350 certification32.2
            
            Section
      1350 certification





- 21
-






SIGNATURES








Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.








Worldwide
Biotech & Pharmaceutical Company








Date: November 14,
2008








/s/
Wenxia Guo


Wenxia
Guo


Chief
Executive Officer, Director


(Principal
Executive Officer)








Date:
November 14, 2008





/s/
Peiyi Tian


Peiyi
Tian


VP,
Treasurer, CFO, Director


(Principal
Financial and Accounting Officer)








Date: November 14,
2008





/s/
Huimin Zhang


Huimin
Zhang


Director






- 22
-