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 endedJune 30, 2009





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





For the transition period from______ to _______





01-06914


Commission File Number







Worldwide Biotech & Pharmaceutical Company


(Name of small business issuer in its charter)







Delaware


(State or other jurisdiction of Incorporation)





59-0950777


(IRS Employer Identification Number)





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


Jie Zuo Mansion, Xi'an, Shaanxi 710075


P.R. China


(Address of principal executive offices)





86-29-88193339


(Issuer's telephone number)









Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes xNo o





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





Large Accelerated Filer o   Accelerated Filer o   Non-Accelerated 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 June 30, 2009, there were 53,915,653 shares of the common stock issued and outstanding.





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





Transitional Small Business Disclosure Format (check one): Yes xNo o















WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES





FORM 10-Q





June 30, 2009





TABLE OF CONTENTS





PagePART I - FINANCIAL INFORMATIONITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS
3ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
19ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUTMARKET RISK
24ITEM 4 - CONTROLS AND PROCEDURES
25ITEM 4T – INTERNAL CONTROL OVER FINANCIAL REPORTING
25PART II - OTHER INFORMATIONITEM 6 - EXHIBITS
25SIGNATURES
26




2
 Table of Contents




PART I – FINANCIAL INFORMATION




Item 1 – Consolidated Financial Statements





WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES





June 30, 2009





INDEX TO CONSOLIDATED FINANCIAL STATEMENTS








Contents
Page(s)Consolidated Balance Sheets at June 30, 2009 (Unaudited) and December 31, 2008
4Consolidated Statements of Operations for the Three Months and Six Months EndedJune 30, 2009 and 2008 (Unaudited)
5Consolidated Statement of Comprehensive Loss for the Three Months andSix Months Ended June 30, 2009 and 2008 (Unaudited)
6Consolidated Statement of Changes in Equity (Deficit) for the Six Months EndedJune 30, 2009 (Unaudited)
7Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2009and 2008 (Unaudited)
8Notes to the Consolidated Financial Statements (Unaudited)
9 - 18




3
 Table of Contents




WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETSJune 30, 2009


December 31, 2008(Unaudited)ASSETSCurrent Assets:Cash

$
110,704


$
190,039Accounts receivable, net (Note 4)


35,385



26,238Inventories (Note 5)


169,630



126,585Prepayments and other current assets


76,361



62,061Total Current Assets


392,080



404,923Property, plant and Equipment, net


4,498,011



4,858,303Land use rights, net


771,676



781,815Total Assets

$
5,661,767


$
6,045,041LIABILITIESCurrent liabilities:Loan payable (Note 7)

$
702,711


$
703,554Note payable- stockholder (Note 6)


161,214



198,051Current maturities of note payable - bank (Note 8)


1,463,981



1,465,738Accounts payable


370,145



353,058Due to related parties (Note 6)


2,149,411



2,140,537Other current liabilities


2,038,396



1,935,279Total Current Liabilities


6,885,858



6,796,217Total Liabilities


6,885,858



6,796,217EQUITY(DEFICIT)WWBP stockholders' equity(deficit):Common stock $.001 par value; 90,000,000 shares authorized;53,915,653 shares issued and outstanding,


53,916



53,916Additional paid-in capital


12,558,280



12,499,171Accumulated deficit


(13,866,694
)


(13,427,533
)Accumulated other comprehensive income (loss):Foreign currency translation gain


123,715



123,270Total WWBP stockholders' equity(deficit)


(1,130,783
)


(751,176
)Noncontrolling interest


(93,308
)


-Total Equity(Deficit)


(1,224,091
)


(751,176
)Total Liabilities and Equity(Deficit)

$
5,661,767


$
6,045,041




See accompanying notes to the consolidated financial statements.




4
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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)For the Three Months Ended


For the Six Months EndedJune 30, 2009


June 30, 2008


June 30, 2009


June 30, 2008Net Revenues

$
19,555


$
69,347


$
37,820


$
84,245Cost of Goods Sold


36,300



58,201



49,889



68,007Gross Profit


(16,745
)


11,146



(12,069
)


16,238Operating Expenses:Selling expenses


2,043



13,393



3,561



30,143Research and development


14,204



980



16,422



12,650Professional fees


48,255



55,926



48,525



64,387Stock-based compensation


-



-



-



-General and administrative


99,275



115,245



172,559



244,232Total Operating Expenses


163,777



185,544



241,067



351,412Loss from Operations


(180,522
)


(174,398
)


(253,136
)


(335,174
)Other Expenses(Income):Interest income


(141
)


(45,124
)


(446
)


(45,205
)Interest expense


99,153



88,044



194,461



148,973Other (income) expense


(37,610
)


7,325



(36,252
)


7,325Depreciation and production cost of idle capacity


60,838



-



121,758



-Realized (gain) loss on sale of marketable securities


-



-



-



6,084Total Other (Income) Expenses


122,240



50,245



279,521



117,177Net Loss


(302,762
)


(224,643
)


(532,657
)


(452,351
)Less: Net loss attributable to the noncontrolling interest


57,961



1,305



93,496



24,690Net Loss Attributable to WWBP common stockholders

$
(244,801
)

$
(223,338
)

$
(439,161
)

$
(427,661
)Net Loss Per Common ShareNet loss per common share - Basic and diluted

$
(0.00
)

$
(0.00
)

$
(0.01
)

$
(0.01
)Weighted average number of common shares outstanding- Basic and diluted


53,915,653



53,915,653



53,915,653



53,915,653





See accompanying notes to the consolidated financial statements.




5
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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)For the Three Months Ended


For the Six Months EndedJune 30, 2009


June 30, 2008


June 30, 2009


June 30, 2008Net loss

$
(302,762
)

$
(224,643
)

$
(532,657
)

$
(452,351
)Other comprehensive income(loss), net of tax:Foreign currency translation gain(loss)


37,201



19,265



633



47,854Comprehensive loss


(265,561
)


(205,378
)


(532,024
)


(404,497
)Comprehensive loss attributable to the noncontrolling interest


46,717



1,305



93,308



24,690Comprehensive loss attributable to WWBP

$
(218,844
)

$
(204,073
)

$
(438,716
)

$
(379,807
)




See accompanying notes to the consolidated financial statements.




6
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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
FOR THE SIX MONTHS ENDED JUNE 30, 2009
(UNAUDITED)WWBP ShareholdersAccumulatedCommon Stock, $.001 Par Value


Additional





OtherComprehnsive


Number of





Paid-in


Accumulated


Comprehensive


NoncontrollingTotal


Income


Shares


Amount


Capital


Deficit


Income


InterestBalance, December 31, 2008

$
(751,176
)

$
-



53,915,653


$
53,916


$
12,499,171


$
(13,427,533
)

$
123,270


$
-Interest for due to related parties


59,109















59,109Comprehensive loss:Net loss


(532,657
)


(532,657
)














(439,161
)






(93,496
)Other comprehensive loss, net of tax:Foreign currency translation loss


633



633



















445



188Comprehensive loss


(532,024
)

$
(532,024
)Balance, June 30, 2009

$
(1,224,091
)






53,915,653


$
53,916


$
12,558,280


$
(13,866,694
)

$
123,715


$
(93,308
)





See accompanying notes to the consolidated financial statements.




7
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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)For The Six Months EndedJune 30, 2009


June 30, 2008CASH FLOWS FROM OPERATING ACTIVITIES:Net loss

$
(532,657
)

$
(452,351
)Adjustments to reconcile net loss to net cash provided by(used in) operating activities:Depreciation and amortization


216,509



187,212Imputed interest due to related parties


59,109



-Changes in assets and liabilities:Accounts receivable


(9,147
)


(13,290
)Inventories


(43,045
)


(133,149
)Prepayments and other current assets


(14,300
)


(164,812
)Accounts payable


17,087



41,592Accrued expenses and other current liabilities


103,117



122,921NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES


(203,327
)


(411,877
)CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment


(13,515
)


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


(13,515
)


(150,616
)CASH FLOWS FROM FINANCING ACTIVITIES:Repayment of note payable - stockholder


(36,570
)


-Repayment for due to related parties


-



(44,981
)Proceeds from stockholders/officers


171,978



-NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES


135,408



(44,981
)EFFECT OF EXCHANGE RATE CHANGES ON CASH


2,099



55,326NET CHANGE IN CASH


(79,335
)


(552,148
)CASH at beginning of period


190,039



815,671CASH at end of period

$
110,704


$
263,523SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Interest paid

$
-


$
-





See accompanying notes to the consolidated financial statements.




8
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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES


Notes to the Consolidated Financial Statements


June 30, 2009


(Unaudited)







NOTE 1 - ORGANIZATION AND OPERATIONS





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





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





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





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





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





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





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




9
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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
 Notes to the Consolidated Financial Statements
 June 30, 2009
 (Unaudited)
 
  NOTE 1 - ORGANIZATION AND OPERATIONS (CONTINUED)
 
 On December 18, 2006, Daiying, Mr. Aibin Chen and Mr. Zuobin Li, minority shareholders of Ze An and Hua Yang, entered into a Consolidation and Reorganization Agreement (“Consolidation”).  Pursuant to the Consolidation, Ze An merged into Hua Yang with Hua Yang assuming all assets and liabilities of Ze An and Hua Yang continuing as the surviving entity.
In addition, as part of the Consolidation, Daiying acquired an additional 15% equity interest in Ze An for a note payable to Mr. Zhongyu Lu, a former shareholder of Ze An, of RMB 1,351,200 (equivalent to $172,954 at December 31, 2006). The note included the principal of RMB1.2 million (equivalent to $153,600 at December 31, 2006) and accrued interest of RMB151,200 (equivalent to $19,354 at December 31, 2006) based on an interest rate of 6.3% per annum with both principal and interest due December 4, 2007; the
note is currently passed due. The Company owns a 67.3486% equity interest of Hua Yang subsequent to the consolidation.





NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Basis of presentation





The accompanying unaudited consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods have been included. These consolidated financial statements should be read in conjunction with the consolidated financial
statements of the Company for the year ended December 31, 2008 and notes thereto contained in the Report on Form 10-K of the Company as filed with the United States Securities and Exchange Commission (the “SEC”) on March 31, 2009. Interim results are not necessarily indicative of the results for the full year.





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





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.




10
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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
 Notes to the Consolidated Financial Statements
 June 30, 2009
 (Unaudited)




NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  Trade accounts receivable





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





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





Inventories





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





Property, plant and equipment





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





Land use rights





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





Licenses





The Company has adopted the guidelines as set out in 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.




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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
 Notes to the Consolidated Financial Statements
 June 30, 2009
 (Unaudited)
 
  NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  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 June 30, 2009.





Segment information





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





Revenue recognition





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




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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
 Notes to the Consolidated Financial Statements
 June 30, 2009
 (Unaudited)
 
  NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  Stock based compensation





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





Research and development





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





Shipping and handling costs





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





Income taxes





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




The Company adopted FASB Interpretation (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes,” which prescribes a comprehensive model for how a company should reorganize, measure, present and disclose in its financial statements uncertain tax positions that the Company has taken or expects to take on
a tax return (including a decision whether to file or not to file a return in a particular jurisdiction).


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.




13
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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
 Notes to the Consolidated Financial Statements
 June 30, 2009
 (Unaudited)
 
  NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


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





June 30, 2009





Balance sheet   RMB 6.8307 to US$1.00





Statement of operations and comprehensive income (loss) RMB 6.8331 to US$1.00





December 31, 2008





Balance sheet   RMB 6.8225 to US$1.00





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





June 30, 2008





Balance sheet   RMB 6.8591 to US$1.00





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





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





Net gains and losses resulting from foreign exchange transactions, if any, are included in the Consolidated Statements of Operations and Comprehensive loss. The foreign currency translation gain(loss) for the six months ended June 30, 2009 and 2008 were $633 and $47,854 and effect of exchange rate changes on cash flows for the three months
period then ended were $2,099 and $55,326, 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.




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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
 Notes to the Consolidated Financial Statements
 June 30, 2009
 (Unaudited)
 
  NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  Comprehensive income (loss)





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





Net loss per common share





Net loss per common share is computed pursuant to Statement of Financial Accounting Standards No. 128 “Earnings Per Share” (“SFAS No. 128”). Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common
stock outstanding during each period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period.  There were no potentially dilutive shares outstanding as of June 30, 2009 or 2008.





Commitments and contingencies





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





Recent Accounting Pronouncements





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





In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairment” (FSP 115-2/124-2).  FSP 115-2/124-2 amends the requirements for the recognition and measurement of other-than-temporary impairments for debt securities by modifying the pre-existing “intent
and ability” indicator.  Under FSP 115-2/124-2, another-than-temporary impairment is triggered when there is intent to sell the security, it is more likely than not that the security will be required to be sold before recovery, or the security is not expected to recover the entire amortized cost basis of the security.  Additionally, FSP 115-2/124-2 changes the presentation of another-than-temporary impairment in the income statement for those impairments.





In May 2009, the FASB issued SFAS No. 165, “Subsequent Events”.  This standard incorporates into authoritative accounting literature certain guidance that already existed within generally accepted auditing standards, with the requirements concerning recognition and disclosure of subsequent events remaining
essentially unchanged.  This guidance addresses events which occur after the balance sheet date but before the issuance of financial statements.  Under SFAS No.165, as under previous practice, an entity must record the effects of subsequent events that provide evidence about conditions that existed at the balance sheet date and must disclose but not record the effects of subsequent events which provide evidence about conditions that did not exist at the balance sheet date.  This
standard added an additional required disclosure relative to the date through which subsequent events have been evaluated and whether that is the date on which the financial statements were issued.  For the Company, this standard was effective beginning April 1, 2009.




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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
 Notes to the Consolidated Financial Statements
 June 30, 2009
 (Unaudited)
 
  NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification TM and the Hierarchy of Generally Accepted Accounting Principles a replacement of FASB Statement No. 162” and approved the FASB Accounting Standards Codification TM (Codification) as the single source of authoritative nongovernmental
US GAAP.  The Codification does not change current US GAAP, but is intended to simplify user access to all authoritative US GAAP by providing all the authoritative literature related to a particular topic in one place.  All existing accounting standard documents will be superseded and all other accounting literature not included in the Codification will be considered non-authoritative.  For the Company, the Codification is effective July 1, 2009 and will require future references
to authoritative US GAAP to coincide with the appropriate section of the Codification.  Accordingly, this standard will not have an impact on the Company's consolidated results of operations or financial condition.





NOTE 3 - GOING CONCERN





The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As reflected in the accompanying consolidated financial statements, the Company has an accumulated deficit of $13,866,694 and a working capital deficiency of $6,493,778 at June 30, 2009, a net loss of $532,657
and net cash used in operations of $203,327 for the six months ended June 30, 2009, respectively.





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





NOTE 4 - ACCOUNTS RECEIVABLE





Accounts receivable at June 30, 2009 and December 31, 2008 consisted of the following:




June 30


December 312009


2008Accounts Receivable

$
521,175


$
512,611Less: Allowance for doubtful accounts


(485,790
)


(486,373
)$
35,385


$
26,238





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




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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
 Notes to the Consolidated Financial Statements
 June 30, 2009
 (Unaudited)




NOTE 5 - INVENTORIES





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




June 30


December 312009


2008Raw Material

$
122,183


$
114,208Work in process


273,999



210,317Finished goods


519,694



517,967915,876



842,492Less: Inventory obsolescence


(746,246
)


(715,907
)$
169,630


$
126,585





NOTE 6 - RELATED PARTY TRANSACTIONS





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




June 30


December 312009


2008Due to related parties (a)Guo, Wenxia
CEO; Stockholder; Stockholder of Daiying

$
245,342


$
251,330Xian Jin Hao Tech
Stockholder;           Stockholder of Daiying


766,030



486,731Daiying Institute
The company controlled by Guo,Wenxia


1,011,272



1,275,557Li, Zhuobin
Stockholder;          Stockholder of Hua Yang


2,771



2,774Chen, Aibin
Stockholder;          Stockholder of Hua Yang


123,996



124,145$
2,149,411


$
2,140,537Note payable- stockholder (b)Lu, Zhongyu
Prior Stockholder of Ze An

$
161,214


$
198,051





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





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





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




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WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY AND SUBSIDIARIES
 Notes to the Consolidated Financial Statements
 June 30, 2009
 (Unaudited)




NOTE 6 - RELATED PARTY TRANSACTIONS(CONTINUED)


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





Due to related parties do not bear interest and have no definite terms of repayment. For the six months ended, June 30, 2009, the Company imputed interest of $59,109 based on a 5.5% interest rate which approximates the bank lending rate.





NOTE 7 – LOAN PAYABLE





Loan payable is collateralized by all of Hua Yang’s equipment, building and land use right, payable to a financial institution, with interest at 6.696% per annum payable monthly, with principal due May 27, 2007. The loan is currently past due. The Company paid interest through May 20, 2007 and interest accrued through June 30, 2009
was included in accrued interest





NOTE 8 – CURRENT MATURITIES OF NOTE PAYABLE- BANK





Note payable - bank is collateralized by all of Hua Yang’s equipment, building and land use right, and is payable to a financial institution, with interest at 6.696% per annum payable monthly, with RMB5 million (equivalent $667,307) due April 29, 2007 and RMB5 million ($667,308) due April 27, 2008. The note is currently past due for
the first principal payment due on April 29, 2007. The Company paid interest through May 20, 2007 and interest accrued through June 30, 2009 was included in accrued interest





The accrued interest for above Loan Payable and Current Maturities of Note Payable was $378,312 and $304,998 as of June 30, 2009 and December 31, 2008, respectively.





NOTE 9 - CONCENTRATIONS AND CREDIT RISK





Credit risk





Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents.  As of June 30, 2009, substantially all of the Company's cash and cash equivalents were held by major financial institutions located in the PRC, none of which are insured. However, the
Company has not experienced losses on these accounts and management believes that the Company is not exposed to significant risks on such accounts.





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 June 30, 2009, the Company had no Statutory Surplus Reserve and the Statutory Common Welfare Fund established and segregated in retained earnings.




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





A.
PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS





The following analysis of the Company's results of operations and financial condition should be read in conjunction with the financial statements of Worldwide Biotech & Pharmaceutical Company for the year ended December 31, 2008 and notes thereto contained in Report on Form 10-K of Worldwide Biotech & Pharmaceutical Company as filed
with the Securities and Exchange Commission.





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





B.
OVERVIEW OF BUSINESS





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





Summary of Research and Development





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




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Corporate Events and Accomplishments





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




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





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





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





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





RESULTS OF OPERATIONS





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





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





Revenues





For the three months ended June 30, 2009, our revenues were $19,555 as compared to $69,347 for the three months ended June 30, 2008, a decrease of $49,792. We attribute this decrease in net revenues to the reduced amounts of goods sold by our subsidiaries.




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Cost of Sales and Gross Profit





For the three months ended June 30, 2009, cost of sales amounted to $36,300 as compared to cost of sales of $58,201 for the three months ended June 30, 2008. We attribute the decrease in cost of sales to the reduction in the amounts of goods sold and the decline in the proceeds from sales.  Gross profit for the three months ended
June 30, 2009 was $(16,745), as compared to $11,146 for the three months ended June 30, 2008.





Operating Expenses





For the three months ended June 30, 2009, total operating expenses were $163,777 as compared to $185,544 for the three months ended June 30,2008, a decrease of $21,767, or approximately 11.7%.





Included in this decrease was:





·
Selling expenses of $2,043 for the three months ended June 30, 2009 as compared to $13,393 for the three months ended June 30, 2008, a decrease of $11,350, or approximately 84.7%.  We attribute this decrease to: (1) the reduction in consignment expenses and traveling costs of the sales staff, resulting from the decreased sales by our subsidiaries;
and (2) some economy measures adopted by the Company.


·
Professional fees of $48,255 as compared to $55,926 for the three months ended June 30, 2009 and 2008, respectively, a decrease of $7,671. We attribute this decrease to lower legal and professional fees.


·
General and administrative expenses were $99,275 for the three months ended June 30, 2009 as compared to $115,245 for the three months ended June 30, 2008, a decrease of $15,970, or approximately 13.9%.





For the three months ended June 30, 2009, interest expense was $99,153 as compared to $88,044 for the three months ended June 30, 2008. For the three months ended June 30, 2009, total other expenses were $122,240 as compared to $50,245 for the three months ended June 30, 2008.  The increase in other expenses for the three month
period ended June 30, 2009 was mainly due to depreciation and production cost of idle capacity.





As a result of these factors, the Company reported a net loss of ($302,762) or $0.00 per share for the three months ended June 30, 2009, as compared to a net loss of ($224,643) or $0.00 per share for the same period in 2008.





Six Months Ended June 30, 2009 Compared to the Six Months Ended June 30, 2008





Revenues




For the six months ended June 30, 2009, our revenues were $37,820 as compared to $84,245 for the six months ended June 30, 2008, a decrease of $46,425.  We attribute this decrease to the reduced amounts of goods sold by our subsidiaries.




Cost of Sales and Gross Profit





For the six months ended June 30, 2009, cost of sales amounted to $49,889 as compared to cost of sales of $68,007 for the six months ended June 30, 2008. Gross profit for the six months ended June 30, 2009 was $(12,069) as compared to $16,238 for the six months ended June 30, 2008.




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Operating Expenses





For the six months ended June 30, 2009, total operating expenses were $241,067 as compared to $351,412 for the six months ended June 30,2008, a decrease of $110,345 or approximately 31.4%.





Included in this decrease was:





·
Selling expenses of $3,561 for the six months ended June 30, 2009 as compared to $30,143 for the six months ended June 30, 2008. The decrease in selling expenses of $26,582 in the first six months of 2009 was attributable to: (1) the reduction in consignment expenses and traveling costs of the sales staff, resulting from the decreased sales by our
subsidiaries; and (2) some economy measures adopted by the Company.


·
Professional fees of $48,525 for the six months ended June 30, 2009 as compared to $64,387 for the six months ended June 30, 2008, a decrease of $15,862. The decrease is attributable to lower legal and professional fees for the six month period.


·
General and administrative expenses of $172,559 as compared to $244,232 for the six months ended June 30, 2009 and 2008, respectively, a decrease of $71,673, or approximately 29.3%. We attribute the decrease to: (1) the reduction in traveling costs and car expenses; and (2) the reduction in the payments to the board of directors.





For the six months ended June 30, 2009, interest expense was $194,461 as compared to $148,973 for the six months ended June 30, 2008. For the six months ended June 30, 2009, other expenses were $279,521 as compared to $117,177 for the six months ended June 30, 2008.  The increase in other expenses for the period was mainly due
to depreciation and production cost of idle capacity.





As a result of these factors, the Company reported a net loss of ($532,657) or( $0.01) per share for the six months ended June 30, 2009, as compared to a net loss of ($452,351) or ($0.01) per share for the same period in 2008.





LIQUIDITY AND CAPITAL RESOURCES





At June 30, 2009, we had cash and cash equivalents of $110,704.





Net cash used in operating activities for the six months ended June 30, 2009 was $203,327 as compared to net cash used in operating activities of $411,877 for the six months ended June 30, 2008. For the six months ended June 30, 2009, we used cash to fund our loss of $532,657, our inventories increased by $43,045, accounts payable increased
by $17,087, accounts receivable increased by $9,147, prepayments and other current assets increased by $14,300, accrued liabilities and other payable increased by $103,117, offset by non-cash items such as depreciation and amortization of $216,509. For the six months ended June 30, 2008, we used cash to fund our loss of $452,351 and to increase of accounts receivable of $13,290, funding of inventories increase of $133,149, accounts payable increase of $41,592, increasing accrued expenses and other
current liabilities by $122,921, offset by non-cash items such as depreciation and amortization of $187,212, and increases in prepayments and other current assets of $164,812.





Net cash used in investing activities for the six months ended June 30, 2009 was $13,515 as compared to net cash provided in investing activities for the six months ended June 30, 2008 of $150,616.  For the six months ended June 30, 2009, we used cash of $13,515 for purchase of property and equipment. For the six months ended
June 30, 2008, we used cash for purchase of property and equipment of $150,616.





Net cash provided by financing activities for the six months ended June 30, 2009 was $135,408 as compared to net cash used in financing activities for the six months ended June 30, 2008 of $44,981. For the six months ended June 30, 2009, received net proceeds of $171,978 from stockholders/officers. For the six months ended June 30, 2008,
the Company repaid $44,981 to stockholders/officers.




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





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





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





Currently, the People's 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 People's Republic of China.





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





Efforts to improve the Company’s financial results





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





(a)
Strengthen internal controls





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





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





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





(c)
Further our cooperation with Yangling Daiying Biotech Institute





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




23
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Off Balance Sheet Arrangements





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




Recently Issued Accounting Pronouncements





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





In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairment” (FSP 115-2/124-2).  FSP 115-2/124-2 amends the requirements for the recognition and measurement of other-than-temporary impairments for debt securities by modifying the pre-existing “intent
and ability” indicator.  Under FSP 115-2/124-2, another-than-temporary impairment is triggered when there is intent to sell the security, it is more likely than not that the security will be required to be sold before recovery, or the security is not expected to recover the entire amortized cost basis of the security.  Additionally, FSP 115-2/124-2 changes the presentation of another-than-temporary impairment in the income statement for those impairments.





In May 2009, the FASB issued SFAS No. 165, “Subsequent Events”.  This standard incorporates into authoritative accounting literature certain guidance that already existed within generally accepted auditing standards, with the requirements concerning recognition and disclosure of subsequent events remaining
essentially unchanged.  This guidance addresses events which occur after the balance sheet date but before the issuance of financial statements.  Under SFAS No.165, as under previous practice, an entity must record the effects of subsequent events that provide evidence about conditions that existed at the balance sheet date and must disclose but not record the effects of subsequent events which provide evidence about conditions that did not exist at the balance sheet date.  This
standard added an additional required disclosure relative to the date through which subsequent events have been evaluated and whether that is the date on which the financial statements were issued.  For the Company, this standard was effective beginning April 1, 2009.




In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification TM and the Hierarchy of Generally Accepted Accounting Principles a replacement of FASB Statement No. 162” and approved the FASB Accounting Standards Codification TM (Codification) as the single source of authoritative nongovernmental
US GAAP.  The Codification does not change current US GAAP, but is intended to simplify user access to all authoritative US GAAP by providing all the authoritative literature related to a particular topic in one place.  All existing accounting standard documents will be superseded and all other accounting literature not included in the Codification will be considered non-authoritative.  For the Company, the Codification is effective July 1, 2009 and will require future references
to authoritative US GAAP to coincide with the appropriate section of the Codification.  Accordingly, this standard will not have an impact on the Company's consolidated results of operations or financial condition.





Item 3. Quantitative and Qualitative Disclosures about MarketRisk





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





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




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Item 4. Controls and Procedures





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





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





Item 4T. Internal Control over Financial Reporting





The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based
on the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of June 30, 2009.





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





PART II





Item 6. Exhibits




Exhibit No.
Description of 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




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SIGNATURES





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





WORLDWIDE BIOTECH & PHARMACEUTICAL COMPANY(Registrant)August 14, 2009
By:
/s/ Wenxia GuoWenxia GuoChief Executive Officer and Director(Principal Executive Officer)August 14, 2009
By:
/s/ Peiyi TianPeiyi TianChief Financial Officer, VP, Treasurer and Director(Principal Financial and Accounting Officer)August 14, 2009
By:
/s/ Huimin ZhangHumin ZhangDirector





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