Worldwide Energy & Manufacturing USA 10Q 2009 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2009

___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

WORLDWIDE ENERGY AND MANUFACTURING USA, INC.

(Exact name of registrant as specified in its charter)


Colorado	0-31761	84-1536519
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

408 N. Canal Street South San Francisco, CA 94080
(Address of principal executive offices)

Registrant’s telephone number, including area code: (650) 794-9888

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

Large Accelerated Filer [ ] Accelerated Filer [ ]

Non-Accelerated Filer [ ] Smaller reporting company X

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes__ NoX

Indicate the number of shares outstanding of each of the issuer's classes of stock, as of the latest practicable date.


Class of Securities	Shares Outstanding at May 14, 2009
Common Stock, no par value	3,617,512

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PART 1 - FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

(a)

The unaudited financial statements of registrant for the three months ended March 31, 2009, follow. The financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented.

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INDEX


	Page
ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS	4

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME	5

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	6

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	7

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	21

ITEM 3. CONTROLS AND PROCEDURES	28

PART II. OTHER INFORMATION	29

EXHIBITS	30

SIGNATURES	31

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WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


		March 31, 2009		December 31, 2008
		(Unaudited)

ASSETS
Current assets:
Cash and cash equivalents	$	3,520,399	$	5,092,476
Accounts receivables, net of allowances of $272,430 and $45,634, respectively		8,600,995		4,790,506
Notes receivables		149,937		269,507
Inventories		4,665,481		3,754,765
Tax receivable		240,001		-
Advances to suppliers		745,603		99,824
Related parties receivables		439,100		446,373
Prepaid and other current assets		405,069		451,770

Total current assets		18,766,585		14,905,221

Property, plant and equipment, net		2,029,878		1,353,539
Intangible assets		1,101,000		1,101,000
Goodwill		293,279		-
Deposits paid for investment		1,551,890		1,724,976
Investment		16,000		-
Other assets		-		7,559

Total assets	$	23,758,632	$	19,092,295

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	7,563,166	$	3,400,253
Accrued expenses		524,468		867,291
Bank loan		1,300,000		-
Tax payable		120,903		147,165
Due to related parties		1,242,248		1,243,024
Customer deposits		133,599		964,998

Total current liabilities		10,884.384		6,622,731

Non-current liabilities
Bank loan-long term portion		877,869		937,075
Loan payable to stockholders		-		60,024
Total non-current liabilities		877,869		997,099

Total liabilities		11,762,253		7,619,830


Worldwide’s Stockholders’ equity
Common stock (No Par Value : 100,000,000 shares authorized;
3,617,512 shares issued and outstanding)		6,296,899		6,108,379
Retained earnings		4,702,687		4,259,533
Deferred stock based compensation		(140,400)		-
Accumulated other comprehensive income		512,949		491,914

Total Worldwide’s stockholders’ equity		11,372,135		10,859,826

Non-controlling interest		624,244		612,639

Total equity		11,996,379		11,472,465

Total liabilities and stockholders’ equity	$	23,758,632	$	19,092,295

See accompanying notes to unaudited condensed consolidated financial statements.

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WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND

COMPREHENSIVE INCOME

(UNAUDITED)


		For The Three Months Ended
		March 31.
		2009		2008
Revenue
Sales, net of returns of $0 in 2009 and $0 in 2008	$	10,281,867	$	5,404,083

Cost of goods sold		8,382,275		4,239,033
Gross profit		1,899,592		1,165,050

Operating Expenses
Other selling, general and administrative expenses		1,205,781		701,085
Management and professional fees paid to shareholders (Note 10)		90,000		80,320
Stock based compensation		32,120		110,000
Depreciation		73,176		3,972

Total operating expenses		1,401,077		895,377

Operating income		498,515		269,673

Other Income (expenses)
Interest income		11,113		1,137
Interest expenses		(7,602)		(34,441)
Interest expense paid to shareholders (Note 10)		-		(17,446)
Other income		903		-
Exchange gain		3,928		-

Total other expenses		8,342		(50,750)

Net income before income taxes		506,857		218,923
Income taxes (expense)/benefit		(38,546)		11,404

Net income before non-controlling interest		468,311		230,327
Non-controlling interest		(25,157)		-

Net income attributable to the Company		443,154		230,327

Other comprehensive income
Foreign currency translation		21,035		98,423
Comprehensive income attributable to the non-controlling interest		(13,552)		-
Comprehensive income attributable to the Company	$	450,637	$	328,750

Earnings per share	$	0.13	$	0.11

Weighted average shares outstanding		3,527,956		2,069,863

See accompanying notes to unaudited condensed consolidated financial statements.

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WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


		For The Three Months Ended
		March 31,
		2009		2008
Cash flows from operating activities
Net income	$	443,154	$	230,327
Income attributable to non-controlling interest		11,605		-
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation		73,176		27,830
Allowance for bad debts		226,796		(20,000)
Stock issued for services		48,120		110,000

Changes in operating assets and liabilities:
Accounts receivable		(4,037,285)		(2,543,985)
Inventories		(910,716)		240,934
Income tax receivable		(240,001)		(10,974)
Loan receivable-affiliate		126,067		-
Notes receivable		(519,712)		(987,203)
Prepaid and other current assets		54,260		98,312
Accounts payable		4,162,913		1,826,234
Accrued expense		(342,823)		(12,028)
Income tax payable		(26,262)		(19,344)
Customer deposits		(831,399)		-

Net cash used in operating activities		(1,888,174)		(1,059,897)

Cash flows from investing activities

Loan to related parties		-		(25,987)
Purchase of property and equipment		(749,515)		(26,570)
Purchase of investment		(136,193)		(40,680)

Net cash used in investing activities		(885,708)		(93,237)

Cash flows from financing activities
Proceeds from shareholders loan		-		1,606,954
Repayment of shareholders loan		(60,024)		-
Principal payments on loan term debt		-		(884)
Proceeds from line of credit		1,300,000		-
Repayment of bank loans		(59,206)		(116,962)


Net cash flows provided by financing activities:		1,180,770		1,489,108

Effect of exchange rate changes in cash		21,035		55,331

Net (decrease)/ increase in cash		(1,572,077)		391,305

Cash- beginning of period		5,092,476		2,111,825

Cash- end of period	$	3,520,399	$	2,503,130

Supplemental disclosure of non cash investing and financing activities:
Interest paid in cash	$	-	$	51,887
Income taxed paid in cash	$	39,564	$	-

See accompanying notes to unaudited condensed consolidated financial statements.

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WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MANAGEMENT'S REPRESENTATION OF INTERIM FINANCIAL INFORMATION

The accompanying unaudited financial statements have been prepared by Worldwide Energy and Manufacturing USA, Inc. without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These financial statements should be read in conjunction with the audited financial statements at December 31, 2008 as filed in the Company Form 10-K filed with the Commission on April 14, 2009.

SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.

Description of Business

Worldwide Energy and Manufacturing USA, Inc. (“Worldwide” or “the Company”) is a manufacturing engineering firm and international contract manufacturer, using factories in China, primarily servicing customers in Europe, South Korea for our solar modules and United States-based companies that outsource their smaller scale production orders for offshore production in China. From our inception in 1993 until 2005, we were strictly an intermediary or “middle man,” working with our customers and our subcontractors to assure that our customers received high quality components on a timely basis that fulfilled their specific needs. While we still subcontract a significant portion of our business, since 2005, we have begun the transition to becoming a direct contract manufacturer, operating several of our own factories. Recently, we announced two additional factories allowing us to become a direct manufacturer for solar modules and for power supply units as described below:

In February of 2008, Worldwide established a solar division that focuses on photovoltaic module technology under the brand name of “AmeriSolar.” On February 25, 2008, the Company changed its name from Worldwide Manufacturing USA, Inc. to Worldwide Energy and Manufacturing USA, Inc. in order to reflect its expansion into the solar energy industry. The Company issued 300,000 restricted shares for the AmeriSolar brand name. Worldwide leased a 129,167 square foot facility in Ningbo, China. The lease term is from July 18, 2008 to July 17, 2013.This facility houses the production operations and R&D center for the Company’s solar division. This factory has the capability of producing 80MW which translates into approximately $224 million in revenues at full capacity based on current prices. By opening this factory we hope to increase gross margins and net margins in our solar division.

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WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

On October 14, 2008, Worldwide completed the acquisition of 55% of Shanghai De Hong Electric and Electronic Company Limited (“De Hong”) through acquiring 55% of the outstanding capital stock of De Hong, a China corporation, through Worldwide’s wholly owned subsidiary Intech Electro- Mechanical Products Co., Ltd., a Chinese corporation (“Intech”). The Company funded the acquisition with the sale of 1,055,103 shares of its common stock, or $4,747,970. The sale of stock took place on June 23, 2008. Shanghai De Hong Electric and Electronic Company is the holding company for the operating subsidiary Shanghai Intech -Detron Electronic Co. (“Detron”). Therefore, Worldwide received 55% control of the operating subsidiary Shanghai Intech-Detron Electric and Electronic Company Limited (“Detron”). Detron is a power supply factory in Shanghai, China with designing and R & D. The terms of Agreement dated February 3, 2008 was that Worldwide USA paid cash consideration of approximately 1 million dollars for 55% interest in DeHong. Intech paid the first installment of $714,286 on behalf of Worldwide in September, 2008. During the three months ended March 31, 2009, Worldwide paid back $714,286 to Intech and further paid $308,414 for the second installment and the total consideration of the investment is $1,022,700.

On August 15, 2008, the Company formed a new company called Nantong Ningbo Solar factory (“Ningbo Solar”), which is the solar energy research and development manufacturer. The Company established a factory to provide installation services to different solar project. The Company also acts as agent to import or export the products and services overseas.

On November 14, 2005, we established a die-casting and machining factory through leasing an existing facility from a former supplier, and initially investing approximately $500,000 to upgrade the equipment and manufacturing buildings. In these transactions we acquired assets, the expertise of the employees, the managers of the factories, and a portion of the existing customers of those factories. In the third quarter of 2005, we also established an electronics manufacturing factory. As a result, of these two continued factory operations and the recently announced new factories described above, as of December 31, 2008 we own and operate four factories that we now use for the manufacture of certain product lines that we historically had to subcontract, and we are using the services of approximately 40 subcontractors to manufacture those product lines for which we do not have our own manufacturing capabilities.

Principles of Consolidation

The accompanying financial statements include Worldwide Energy and Manufacturing USA, Inc., a Colorado corporation and a public company, its operating subsidiary, Worldwide USA, a California corporation, and six subsidiary companies, Shanghai Intech Electro-Mechanical Products Co., Ltd., Shanghai Intech Precision Mechanical Products Ltd., Shanghai Intech-Detron Electric and Electronic Company Limited, Ningbo Solar Factory, and Shanghai De Hong Electric and Electronic Company Limited, owned by Worldwide USA. Intercompany transactions have been eliminated in consolidation.

Property and equipment

Property and equipment are stated at historical cost and are depreciated over the useful lives of the assets. Depreciation is computed primarily using the straight-line method based on estimated useful lives, which range from 3 to 25 years.

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WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Impairment of Long-lived Assets

Long-lived tangible assets and definite-lived intangible assets are reviewed for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company uses an estimate of undiscounted future net cash flows of the assets over the remaining useful lives in determining whether the carrying value of the assets is recoverable. If the carrying values of the assets exceed the expected future cash flows of the assets, the Company recognizes an impairment loss equal to the difference between the carrying values of the assets and their estimated fair values. Impairment of long-lived assets is assessed at the lowest levels for which there are identifiable cash flows that are independent from other groups of assets. The evaluation of long-lived assets requires the Company to use estimates of future cash flows. However, actual cash flows may differ from the estimated future cash flows used in these impairment tests.

Inventories

Inventories consist of finished goods of manufactured products. Cost is stated at the lower of cost or market on a first-in, first-out (FIFO) basis. The Company has not recorded an allowance for slow-moving or obsolete inventory. Obsolete inventory at March 31, 2009 and December 31, 2008 was minimal.

Revenue Recognition

The Company recognizes revenues in accordance with the guidelines of the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104 “Revenue Recognition”. The Company recognizes revenue from product sales when the orders are completed and shipped, provided that collection of the resulting receivable is reasonably assured. Amounts billed to customers are recorded as sales while the shipping costs are included in cost of sales. Returns on defective custom parts may only be exchanged for replacement parts within 30 days of the invoice date. Returns on defective catalogue parts, which can be resold, may be exchanged for replacement parts or for a refund. Revenue from non-refundable customer tooling deposits is recognized when the materials are shipped or when the deposit is forfeited, whichever is earlier.

Repairs and Maintenance

Repairs and maintenance of a routine nature are charged as incurred to operations, while those that extend or improve the life of existing assets are capitalized.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.

Income Taxes

The Company uses the liability approach to financial accounting and reporting for income taxes. The differences between the financial statement and tax bases of assets and liabilities are determined annually. Deferred income tax assets and liabilities are computed for those differences that have future

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WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

tax consequences using the currently enacted tax laws and rates that apply to the period in which they are

expected to affect taxable income. Valuation allowances are established, if necessary, to reduce deferred tax asset accounts to the amounts that will more likely than not be realized. Income tax expense is the current tax payable or refundable for the period, plus or minus the net change in the deferred tax asset and liability accounts.

Intangibles

Brand name has an indefinite useful life and it is carried at cost and is not being amortized. The Company reviews its intangible assets annually for impairment, or sooner, if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Research and Development

The Company expenses the cost of research and development as incurred. No research and development costs were charged to operations during 2009 or 2008.

Goodwill

Goodwill represents the excess of the purchase price over the net of the fair value of the identifiable tangible and intangible assets acquired and the fair value of liabilities assumed in business acquisitions. In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets, management of the Company evaluates the carrying value of goodwill annually or when a possible impairment is indicated. The Company performs its impairment annually during the fourth quarter of the fiscal year.

Non-Cash Equity Transactions

Shares of other equity instruments issued for non-cash consideration are recorded at the fair value of the consideration received, or at the value of the stock given, considered in reference to contemporaneous cash sale of stock.

Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts of assets and liabilities, as well as footnote disclosures included in the financial statements and accompanying notes. Actual results may differ from those estimates and such differences may be material to the financial statements. The more significant estimates include: useful lives and residual values of fixed assets, fair market values of inventory, goodwill and intangible impairment tests, reserves for warranty, returns, and product liability losses, and credits losses.

Accounting Method

The Company’s financial statements are prepared using the accrual method of accounting.

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WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Foreign Currency Transactions and Translation

Transaction gains and losses result from a change in exchange rates between the functional currencies in which a foreign currency transaction is denominated. They represent an increase or decrease in (a) the actual functional current cash flows realized upon settlement of foreign currency transactions and (b) the expected functional currency cash flows on unsettled foreign currency transactions. All transaction gains and losses are included in other income or expense. For all years presented, sales to customers were primarily denominated in U.S. dollars.

Assets and liabilities of Intech are translated into U.S. dollars at the prevailing exchange rate in effect at each period end. Revenue and expenses are translated into U.S. dollars at the average exchange rate during the reporting period. Contributed capital is translated into U.S. dollars at the historical exchange rate when capital was injected. Any difference resulting from using the current rate, historical rate, and average rate in determination of retained earnings is accounted for as a translation adjustment and reported as part of comprehensive income or loss in the equity section. Exchange differences are recognized in the income statement in the period in which they occur.

Fair Value of Financial Instruments

Unless otherwise indicated, the fair value of all reported assets and liabilities, which represent financial instruments (none of which are held for trading purposes), approximate the carrying values of such instruments. At March 31, 2009 and December 31, 2008, accounts receivable in the amounts of $8,600,995 and $4,790,506 respectively, were pledged as collateral in connection with bank loans.

Compensated Absences

Employees of the Company are entitled to be compensated for absences depending on job classification, length of service, and other factors. At March 31, 2009 and 2008, the minimal amounts unused by employees could not be estimated, and accordingly, no provision is recorded.

Concentrations, Risks, and Uncertainties

The Company did not have concentration of business with suppliers constituting greater than 10% of the Company’s gross sales during 2009 and 2008.

In the first quarter of 2009 and 2008, 62% and 0% of the company's business was in the renewable energy industry.

As part of the production process, the Company may be required by its suppliers to advance funds under short-term agreements for tooling and other pre-production costs. The loans are generally unsecured and may carry interest at the prevailing market rate for short-term instruments. Such tooling is in most cases owned by the suppliers, and is a value primarily for the specific needs of the Company’s customers. The Company in turn requires its customers to provide a non-refundable down payment to cover such startup costs. In the event that a supplier is unable to fulfill its production agreements with the Company, management believes that other suppliers can be found for the Company’s products. However, a change in suppliers would cause a delay in the production process, and could result in loss of tooling deposits and

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WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

other supplier advances, which could negatively affect the Company’s operating results. At March 31, 2009, the balance of advances owed to the Company is $745,603.

The Company sells its goods and services internationally, although the majority of its revenue is derived from customers in the United States and Europe. As such, the Company is susceptible to credit risk on accounts and notes receivable from customers in that region. Additionally, a significant portion of the Company’s U.S. customers consists of entities in the solar industry, which has proven to be sensitive to swings in the economic cycle. Generally, the Company does not obtain security from its customers in support of accounts receivable.

Stock Based Compensation

The Company will account for employee stock option plans under the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25,“Accounting for Stock Issued to Employees”, and has adopted the disclosure only provisions of Statement of Financial Accounting Standards No. 123,“Accounting for Stock-Based Compensation”(“SFAS 123”). The Company accounts for equity instruments issued to non-employees in accordance with the provisions of SFAS No. 123 and Emerging Issues Task Force No. 96-18, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services”.

Earnings Per Share

The Company adopted Statement of Financial Accounting Standard No. 128, “Earnings per Share” (“SFAS No. 128"), which is effective for annual periods ending after December 15, 1997. Earnings per share (EPS) are computed based on the weighted average number of shares actually outstanding.


For the Three months Ended	March 31, 2009	March 31, 2008
Weighted average number of common shares used	3,527,956	2,069,863

Recent Accounting Pronouncements

In March 2008, the FASB issued SFAS No. 161 “Disclosures about Derivative Instruments and Hedging Activities amendment of FASB Statement No. 133” (“SFAS 161”). This statement changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures stating how and why an entity uses derivative instruments; how derivatives and related hedged items are accounted for under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”) and its related interpretations; and how derivative instruments and related hedge items affect an entity’s financial position, financial performance and cash flows. SFAS 161 is effective in fiscal years beginning after November 15, 2008 and is required to be adopted by the Company in the first quarter of fiscal year 2009. The Company does not expect the adoption of SFAS 161 will have a material impact on the Company’s disclosures.

In May 2008, the FASB issued Statement of Financial Accounting Standards No. 162,The HierarchyofGenerally Accepted Accounting Principles(“FAS 162"). This Standard identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted

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WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

accounting principles. FAS 162 directs thehierarchy to the entity, rather than the independent auditors, as the entity is responsible for selecting accounting principles for financial statements that are presented in conformity with generally accepted accounting principles. The Standard is effective 60 days following SEC approval of the Public Company Accounting Oversight Board amendments to remove the hierarchy of generally accepted accounting principles from the auditing standards. FAS 162 is not expected to have an impact on the financial statements.

Recent Accounting Pronouncements (Continued)

In May 2008, the FASB issued SFAS No. 163, Accounting for Financial Guarantee Insurance Contracts, an interpretation of FASB Statement No. 60 (SFAS 163). This statement clarifies accounting for financial guarantee insurance contracts by insurance enterprises under FASB Statement No. 60, Accounting and Reporting by Insurance Enterprises. SFAS 163 is effective beginning this interim period ended March 31, 2009. Because the Company does not issue financial guarantee insurance contracts, the adoption of this standard did not have an effect on its financial position or results of operations.

On January 1, 2009, the Company adopted FASB Staff Position (FSP) FAS 142-3, Determination of the Useful Life of Intangible Assets, which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets. Application of this FSP is not expected to have a significant impact on the financial statements

On January 1, 2009, the Company adopted FSP EITF 03-6-1, Determining Whether Instruments Granted Share-Based Payment Transactions are Participating Securities. This FSP provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method.

All prior-period EPS data presented shall be adjusted retrospectively (including interim financial statements, summaries of earnings, and selected financial data) to conform with the provisions of this FSP. The adoption of EITP 03-6-1 did not have an impact on the Company as the Company does not currently have any share-based awards that would qualify as participating securities. Therefore, application of this FSP is not expected to have an effect on the Company's financial reporting.

In April 2008, the FASB issued EITF 07-05, Determining whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock, (EITF 07-05). EITF 07-05 provides guidance on determining what types of instruments or embedded features in an instrument held by a reporting entity can be considered indexed to its own stock for the purpose of evaluating the first criteria of the scope exception in paragraph 11(a) of FAS 133. The Company adopted EITF 07-05 on January 1, 2009, the adoption of EITF 070-05 is not expected to have an effect on the Company’s financial reporting.

COMMITMENTS AND CONTINGENCIES

The Company leases its office spaces and certain vehicles under non-cancelable operating leases. The Worldwide office lease requires increasing annual payments plus a share of operating costs. Minimum future rental payments under non-cancelable operating leases with remaining terms in excess of one year as of March 31, 2009, in the aggregate and for each of the five succeeding fiscal years are as follows:

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WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Year ended December 31
2009	$	201,096
2010		188,851
2011		152,512
2012		152,512
2013		150,120

Total minimum future rental payment	$	845,091

Total rent and lease expense was $103,874 and $42,274 for the three months ended March 31, 2009 and 2008, respectively.

ACCOUNTS RECEIVABLE

Accounts receivable by major categories are summarized as follows:


		March 31, 2009

Accounts Receivable – pledged to banks	$	3,424,576
Accounts Receivable – others		5,448,849
		8,873,425
Less: allowances for doubtful accounts		272,430
Total	$	8,600,995

Under the terms of a revolving line of credit agreement with Bank of the West indicated in note 11, the revolving line of credit is secured by 70% of accounts receivable and all business assets of the company and guaranteed by its officers.

Concentrations in Accounts Receivable - At March 31, 2009, three customers accounted for more than 10% of the company's accounts receivables with total amounts of $4,909,491 representing 45.5% of the total accounts receivables in aggregate. At March 31, 2008, one customer accounted for more than 10% of the Company’s accounts receivable, with a total amount of $2,497,855, representing 52% of total accounts receivable in the aggregate.

5. INVENTORIES

Inventories by major categories are summarized as follows:


		March 31, 2009

Raw materials	$	922,888
Work in progress		490,492
Finished goods		2,336,054
Finished goods – Pledge to the bank (refer to note 11)		916,047
		4,665,481
Less: allowances for slowing moving items		-
Total	$	4,665,481

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WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PROPERTY AND EQUIPMENT

Property and equipment, which is located in the USA and PRC, consisted of the following at March 31, 2009:


		March 31, 2009
Vehicles	$	381,404
Furniture & fixtures		196,152
Equipment		1,701,081
Software		37,252
Others		38,429
Leasehold improvements		229,126

Less: accumulated depreciation		(985,546)

Construction in progress		431,980

Total	$	2,029,878

INTANGIBLE ASSET

The 1,101,000 or $3.67 per share. The “AMERISOLAR” modules are backed by ISO 9001:2000 and ISO 14000 environmental quality

The intangible asset of $1,101,000 represents the brand name of “Amerisolar” and the Company acquired this brand name by the issuance of 300,000 restricted shares at $3.67 per share. The "AMERISOLAR" modules are backed by ISO 9001:2000 and ISO 14000 environmental quality certifications.

The brand name is carried at cost and is not being amortized. If an intangible asset has an indefinite useful life it is not amortized. The useful life of an intangible asset is the period over which the asset is expected to contribute directly or indirectly to the future cash flows of the Company. If no legal, regulatory, contractual, competitive, economic or other factors limit the useful life of the asset it shall be considered to be indefinite. In recording of the brand name is was determined that the expected useful life is indefinite and cash flows from the brand name are expected to contribute to the Company over an indefinite period of time.

DEPOSITS PAID FOR INVESTMENT

On June 24, 2008, the Company paid $51,876 for an investment in Tomii International. The $51,876 gave Worldwide a 21% interest in Tomii International, which is developing a pocket translation device for Chinese and English.

On February 1, 2009, the Company paid $1,500,000 as deposits for the incorporation of the subsidiaries of Nantong Ningbo Solar factory located in China for the purpose of registered capital and working capital. The money will be used to purchase the land and to build a new facility.

INVESTMENT

On March 20, 2009 the Company exchanged 8,000 shares at $2.00 for one investment unit in JK Advisors Fund, LLC (“JK”) which is a partnership with approximately $1,250,000 in assets. Management of the Company has reviewed the investment in JK for impairment and determined there is no indication that the carrying amount of JK may not be recoverable.

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WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

10.

GOODWILL

The Company recorded the difference between the net tangible assets of Detron $729,421 less the purchase price of $1,022,700 of $293,279 as goodwill.


Cash	$	411,316
Accounts Receivable		1,929,314
Note receivable		226,877
Inventories		774,295
Advances to suppliers		21,703
Prepaid and other current assets		231,967
Property, plant and equipment, net		158,520
Other assets		3,494
Goodwill		293,279
Trade payables		(962,839)
Accrued expenses		(422,943)
Income taxes payable		(29,717)
Related parties payable		(1,015,773)
45% Minority Interest		(596,793)

55% Net assets acquired	$	1,022,700

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WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11.

BANK LOANS

As of March 31, 2009, the Company has the following lines of credit:


Banker		Amount of the credit line	Loan period	Interest rate	Secured by		Balance as of March 31, 2009

Bank of the West	$	$1,300,000	5/20/2009- 5/20/2010	WallStreet Journal prime + 0.5%	70% Accounts receivable + 50% inventory	$	1,300,000
Bank of the West	$	$1,025,000	5/20/2008 -6/1/2011	WallStreet Journal prime + 0.5%	70% Accounts receivable + 50% inventory	$	877,869

Total loans						$	2,177,868
Less : long term portion							(877,869)
						$	1,300,000

For maturities of long-term loans are as follows as of March 31, 2009:


June 1, 2011		877,869
	$	877,869

On May 20, 2008 the Company paid off its line of credit with Well Fargo in the amount of $960,000 and established a new credit facility with Bank of the West. Under the terms of the revolving line of credit agreement with Bank of the West dated May 20, 2008, the Company could borrow up to $3,025,000 at a rate of 5%. This rate is subject to change based on the prime rate for both credit lines. The revolving line of credit is secured by the assets of the Company and guaranteed by its officers.

The Company can borrow up to $2,000,000 and $1,025,000 under the two credit lines. The maturity dates of these two credit lines are May 20, 2010 and June 1, 2011, respectively. The balance outstanding on the first line as of March 31, 2009 is $1,300,000 and $700,000 is still available for used on the line of credit. The second line of credit has a balance of $877,869 as of March 31, 2009 resulting in $147,131 available for use of equipment and facility purchases.

12.

STOCK TRANSACTIONS

On March 6, 2009, the Company issued 120,000 shares of its common stock to consultants, valued at $187,200, as part of their compensation for the consulting services. The Company amortized the consultancy fee of $187,200 over the 12-month term of the agreement from January 1, 2009 to December 31, 2009. The expense is $15,600 for each month and total stock-based compensation expense would have been $46,800 for the quarter ended March 31, 2009. However, on January 2, 2009, one of the consultants returned 4,000 shares to the Company for the work that he did not perform, valued at $14,680 or $3.67 per share, so the total for the quarter was $32,120.

On March 20, 2009, the Company issued 8,000 shares of its common stock in exchange for one unit investment of JK Advisors Fund LLC, of which 1,000 shares were paid to the broker arranging the sale and the remainder was distributed to the members of the fund.

The total number of shares of common stock outstanding as of March 31, 2009 was 3,617,512.

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WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

13.

PENSION PLAN AND STOCK OPTION PLAN

The Company established a SEP plan for the benefit of all full-time employees. Contributions to the plan are limited to a statutory amount per employee. No contributions were made for 2005 or 2006. The Company also established a stock option plan for its employees on April 1, 2004. The Company approved the plan to issue up to 300,000 shares of common stock. The stock option plan provides employees, consultants and directors the opportunity to purchase shares. The exercise price of an incentive stock option granted under this plan must be equal to or greater than the fair market value of the shares of the Company’s common stock on the date the option is granted. The exercise price of a non-qualified option granted under this plan must be equal to or greater than 85% of the fair market value of the shares of the common stock on the date the option is granted. An incentive stock option granted to an optionee owning more than 10% of the voting stock must have an exercise price equal to or greater than 110% of the fair market value of our common stock on the date the option is granted. On April 1, 2004, the Board granted options to purchase 109,213 shares at an exercise price of $6.00 per share.

14.

RELATED PARTY TRANSACTIONS

The Company paid wages in the amount of $90,000 and $80,320 to certain stockholders, who are also members of the Board of Directors, as of March 31, 2009 and 2008 respectively.

As of March 31, 2009 the Company has no outstanding loan balance or accrued interest between Jimmy and Mindy Wang, who are principal stockholders, executive officers and members of the Board of Directors of the Company. At March 31, 2008, the Company owed Jimmy and Mindy Wang $ 1,195,766 which consisted of funds provided for working capital for the Company. The advances are interest bearing at 8% per annum, with a default interest rate of 10%. The Company paid cash in the amount of $17,446 for interest expense to Mr. and Mrs. Wang for the three months ended March 31, 2008 and no cash to such persons in the quarter ending March 31, 2009.

15.

OPERATING RISK

Interest rate risk

The interest rates and terms of repayment to the bank are disclosed in Note 11. Other financial assets and liabilities do not have material interest rate risk.

Credit risk

The Company is exposed to credit risk from its cash in bank and bills and accounts receivable. The credit risk on cash in bank is limited because the counterparties are recognized financial institutions. Bills and accounts receivable are subjected to credit evaluations. An allowance has been made for estimated irrecoverable amounts which have been determined by reference to past default experience and the current economic environment.

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WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

15.

OPERATING RISK (CONTINUED)

Foreign currency risk

Most of the transactions of the Company were settled in Euros, Renminbi, and U.S. dollars. Thus, the company has significant foreign currency risk exposure.

Substantially all of the Company’s products are manufactured in China. The Company’s operations are subject to various political, economic, and other risks and uncertainties inherent in China. Among other risks, the Company’s operations are subject to the risks of restrictions on transfer of funds; export duties, quotas, and embargoes; domestic and international customs and tariffs; changing taxation policies; foreign exchange restrictions; and political conditions and governmental regulations

16.

SEGMENT INFORMATION

The Company’s operations are classified into seven principal reportable segments that provide different products or services. Worldwide USA purchases and sells manufactured goods from China procured by its subsidiary, Shanghai Intech Electro-Mechanical Products Co., Ltd. (“Intech Electro”). Intech Electro provides technical advisory, design, delivery, material procurement, and manufacturing quality control services. Separate management of each segment is required because each business unit is subject to different marketing, production, and technology strategies, and because of the geographic location of each entity.Shutai Precision sells die cast parts. Intech Detron is a power supply factory in Shanghai, China with designing and R & D capabilities. Worldwide's Ningbo (“WM Ningbo”) manufactures and sells solar modules.

Segmental Data – 2009

Reportable Segments

(Amounts in thousands)


	WWMUSA Manufacturing	WWMUSA Solar	Intech Electro	Intech Precision	Shutai Precision	Intech Detron	WM Ningbo	Total
External revenue	1,781	6,412	47	260	218	1,087	477	10,282
Intersegment revenue	-	-	1,215	-	170	-		1,385
Interest income	8	-	-	-	-	-	3	11
Interest expense	-	-	-	-	-	-	-	-
Depreciation	(2)	-	(21)	(8)	(1)	(13)	(28)	(73)
Net (loss) profit after tax	338	-	166	(35)	(33)	31	(24)	443	(1)

Expenditures for long-lived assets	-	-	12	2	1	11	733	760

(1) No inter-company profit was eliminated in consolidation.

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WORLDWIDE ENERGY AND MANUFACTURING USA, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Segmental Data – 2008

Reportable Segments

(Amounts in thousands)


	WWMUSA	Intech Electro	Intech Precision	Shutai Precision	Discontinued Operations	Total
External revenue	4,391	114	872	14	13	5,404
Intersegment revenue	-	1,152	-	-	-	1,152
Interest income	1	-	-	-	-	1
Interest expense	(30)	-	-	(5)	-	(35)
Depreciation	(4)	-	-	-	-	(4)
Net profit after tax	175	34	19	(7)	9	230	(1)

Expenditures for long-lived assets	6	12	-	9	-	27

(1) $(16,555) in inter-company profit was eliminated in consolidation.

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ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

DISCLAIMER REGARDING FORWARD LOOKING STATEMENTS

Certain statements in this Form 10-Q, which are not statements of historical fact, are what are known as "forward-looking statements," which are basically statements about the future. For that reason, these statements involve risk and uncertainty since no one can accurately predict the future. Words such as "plans," "intends," "hopes," "seeks," "anticipates," "expects," and the like, often identify such forward looking statements, but are not the only indication that a statement is a forward-looking statement. Such forward-looking statements include statements concerning our plans and objectives with respect to our present and future operations, and statements which express or imply that such present and future operations will or may produce revenues, income or profits. These and other factors may cause our actual results to differ materially from any forward-looking statement. We caution you not to place undue reliance on these forward-looking statements. Although we base these forward-looking statements on our expectations, assumptions, and projections about future events, actual events and results may differ materially, and our expectations, assumptions, and projections may prove to be inaccurate. The forward-looking statements speak only as of the date hereof, and we expressly disclaim any obligation to publicly release the results of any revisions to these forward-looking statements to reflect events or circumstances after the date of this filing.

Overview

Worldwide Energy and Manufacturing USA, Inc. (“Worldwide” or “the Company”) is a manufacturing engineering firm and international contract manufacturer, using factories in China, primarily supplying customers in Europe and South Korea with respect to our solar modules and United States-based companies that outsource their smaller scale production orders for offshore production in China. From our inception in 1993 until 2005, we were strictly an intermediary or “middle man,” working with our customers and our subcontractors to assure that our customers received high quality components on a timely basis that fulfilled their specific needs. While we still subcontract a significant portion of our business, since 2005, we have begun the transition to becoming a direct contract manufacturer, operating several of our own factories. Recently, we announced two additional factories allowing us to become a direct manufacturer for solar modules and for power supply units as described below:

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factory to provide installation services to different solar projects. The Company also acts as agent to import or export the products and services overseas.

On November 10, 2008 the Company announced the establishment of a new solar module production and R&D facility. We leased a 128,000-square-foot facility in Ningbo, China. This facility will house the Company’s research center and part of its photovoltaic (PV) manufacturing operations.

The city of Ningbo is about two hours and 15 minutes away from downtown Shanghai. The capacity of the factory is 60 to 80 megawatts per year. Based on current market prices for solar modules 60 to 80 megawatts equates to approximately US$225 million to $300 million in potential revenues per year.

Despite these additions and enlarging our capability as a direct manufacturer for several products lines we are still constrained in our growth for a number of reasons. Many Fortune 500 and other large companies either cannot, or choose not, to work with contract manufacturers preferring to go directly to the source that can manufacture the product and thereby avoid the additional expense of the middleman. This is particularly true for very large orders, where the added cost of the middleman can have a material impact on the customers’ bottom line. As a result, our revenues have for the most part, but not entirely, been limited to smaller scale production orders primarily (but not entirely) placed by companies that are not among the largest companies in the United States or elsewhere. Additionally, as a middleman we must share any potential gross profit with the subcontracting factory. Therefore, our customers are generally smaller, the orders they place are generally smaller and the income and profit we can generate from those orders is of necessity limited because we are not directly manufacturing the products. On the other hand, when we subcontract the actual manufacturing of our customers’ products and components, we do not need to hire factory employees, purchase materials, purchase and maintain manufacturing equipment or incur the costs of the manufacturing facilities. To some extent, these costs are built into the price charged by our subcontractors, but if we do not place orders, we do not incur those costs.

Our management has carefully considered these factors and during 2004 made the strategic decision to move our company away from our historical complete reliance on subcontractors. At the beginning of 2005 we did not own any of our own factories and used as our suppliers of materials and labor approximately 100 factories in China, mostly in Shanghai or the surrounding area. Since 2005 we have acquired an electronics factory, a die-casting and machining factory through leasing an existing facility from a former vendor and initially invested approximately $500,000 to upgrade the equipment and manufacturing buildings, a recently announced power supply company with designing and R & D capabilities and a solar module factory on November 10, 2008. In these transactions we acquired assets, the expertise of the employees, the managers of the factories, and a portion of the existing customers of those factories with the exception of the solar module factory which we established on our own. As a result, as of November 10, 2008, we own and operate four factories that we now use for the manufacture of certain product lines that we historically had to subcontract, and we are using the services of approximately 40 subcontractors to manufacture those product lines for which we do not have our own manufacturing capabilities.

The establishment of these factories, including asset purchases and factory upgrades, was funded by three separate sources. The earlier acquisitions of the die cast and electronic factory primarily was financed by loans from Jimmy and Mindy Wang, our principal stockholders and executive officers, as well as increased lines of credit. Our credit line increased to $3,025,000 with Bank of the West from a $2,250,000 line with Wells Fargo. The power supply company and the establishment of the new solar module factory were funded by two equity transactions dated June 23 and July 24, 2008 where the company raised approximately $5 million dollars and netted approximately $4,600,000 after fees and costs. In the future, we expect to continue to acquire or newly-establish factories that will give us the capability to manufacture those product lines our management believes are the most profitable.

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With the continuing transition into direct manufacturing and the renewable energy field, we expect to continue to increase sales outside the United States, and in particular, increase the number of customers in PRC, other Asian markets and Europe. Our costs to establish and improve these factories will increase along with sales and profits.

Through the development of our product mix, which consists of solar modules, foundry, machining and stamping, electronics and fiber optics products lines, our business has become more diverse. In the past, foundry and machining and stamping accounted for more than 90% of our business. This percentage has decreased since forming our own factories along with our new energy division which now represents approximately 62% of our business and we expect this percentage to continue to increase in the foreseeable future.

Generally, our operating results have been, and will continue to be, affected by a number of factors, including the following:


	•	our customers may cancel or delay orders or change production quantities;

	•	our operating results vary significantly from period to period due to the mix of the manufacturing services we are providing, the number and size of new manufacturing programs, the degree to which we utilize our manufacturing capacity, seasonal demand, shortages of components and other factors;

	•	integration of acquired businesses and facilities; and

	•	managing growth and changes in our operations.

We also are subject to other risks, including risks associated with operating in foreign countries, changes in our tax rates, and fluctuations in currency exchange rates.

Results of Operations

Net sales for the three months ending March 31, 2009 were $10,281,867 compared to net sales of $5,404,083 for the same period in 2008. This increase of $4,877,784 or approximately 90.3% was the result of an increase in orders in our energy division and the recent acquisition of Detron. Solar orders for quarter ending March 31, 2009 were $6,412,210 compared to $2,505,977 in the same period in 2008. This represents an increase of $3,906,233 or approximately 155.9%. Additionally, the recent acquisition of Detron resulted in an increase in revenues of approximately $1,087,000. The Company will continue to focus on the expansion of its energy division by the continued development of its newly established solar factory in Ningbo, China as well as the continued quality enhancements of its solar module brand, "Amerisolar".

Gross profit increased by $734,542, or approximately 63.0% from $1,165,050 in the quarter ending March 31, 2008 to $1,899,592 for the three months ending March 31, 2009, primarily reflecting solar module sales in the energy division

Cost of goods sold for the three months ended March 31, 2009 was $8,382,275 compared to $4,239,033 for the same period in 2008. The increase of $4,143,242 or approximately 97.7% was the result of greater revenues in the energy division.

The gross margin was 18.5% for the three months ending March 31, 2009 compared to 21.6% in the same period in 2008. The declined of 3.1% in gross margin was the result of the Company utilizing more sub-contractors for production of our solar modules along with softness in the price of solar modules. It is expected that gross margins will improve as the Company continues its transition of becoming a direct

- 23 -

manufacturer for its solar module products as the newly established factory becomes operational. Further, the outlook for solar modules margins look to improve as raw material necessary for production of modules are expected to decline and margins to increase.

In the period ending March 31, 2009 there was stock based compensation of $32,120 compared to the non-cash deduction of $110,000 for stock based compensation in 2008. Further the Company had depreciation expense of $73,176 in the period ending March 31, 2009 compared to $3,972 in the same period of 2008, due to the greater amount of depreciable assets owned by the Company.

Net income before taxes for the three months ending March 31, 2009 was $506,857 compared to a net income before taxes of $218,923 in the same quarter of 2008. The increase of $287,934 or approximately 131.5% was largely the result of the increased sales of our solar modules. Net income after tax was $443,154 for the three months ending March 31, 2009 compared to a net income after tax of $230,327 in the same quarter of 2008. The increase of $212,827 or approximately 92.4% was also due to the increased sales of our solar modules.

General and administration expenses for the three months ended March 31, 2009, totaled $1,213,383 compared to $701,085 in the same quarter in 2008. The increase of $512,298 or approximately 73.1% was due to the establishment of our solar module factory and recent expenses associated with the acquisition of Detron.

LIQUIDITY

The following is a summary of Worldwide’s cash flows from operating, investing, and financing activities during the periods indicated:


	Three months ended March 31,
	2009	2008

Cash at Beginning of Period	$5,092,476	$2,111,825
Operating activities (used)	$(1,888,174)	(1,059,897)
Investing activities(Used)	$(885,708)	$(93,237)
Financing activities	$1,180,770	$1,489,108
Net effect on cash	$21,035	$55,331
Cash at End of Period	$3,520,399	$2,503,130

The Company funded its growth largely from its proceeds of $4,747,970 from the sale on June 23, 2008 of 1,055,103 shares of its common stock, and from additional sale of $252,027 or 56,007 shares of common stock later in 2008. This was used to help fund these new acquisitions and to provide additional working capital for the Company. The Company netted $4,608,036 from the sales of these securities.

In 2008 our credit line was increased by approximately $775,000 from a line of credit in the amount of $2.25 million with Golden Gate Bank to $3.025 million, as a result of securing two new credit lines with Bank of the West, one for $1,025,000 and the other for $2,000,000. The credit line with Golden Gate Bank was subsequently closed. These revolving lines of credit are secured by the assets of the Company and guaranteed by its officers. The maturity date of these two credit lines is May 20, 2010 and June 1, 2011, respectively. The balance outstanding as of March 31, 2009 is $1,300,000, and $700,000 is still available for use on the line of credit. Additionally, the second line of credit has a balance of $877,869 as of March 31, 2009, with $147,131 still available for use of equipment and facility purchases.

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In addition the increase in net profits of $212,827 or 92.4% over the quarter ending March 31, 2009 provided the Company with greater liquidity and financial resources. The Company feels that it has sufficient capital to continue to fund its operations.

For the quarter ending March 31, 2009, net cash used in operations was $1,888,174 compared to net cash used in March of 2008 of $1,059,897. The major factors for this increase in net cash used in operations were the increase in accounts receivables and inventory due to the Company's growth in sales. Net cash used in investing was $885,708 in the March 31, 2009 quarter, compared to net cash used of $93,237 in the same period of 2008. This increase was the result of our acquisition of Detron and the establishment of our new solar module factory. The Company anticipates further expansion in 2009 and will finance this growth through Company profitability as well as outside sources of funding if required. Net cash flows provided by financing activities in the March 31, 2009 quarter was $1,180,770 compared to $1,489,108 in 2008.

The Company raised approximately, $4,747,970 on June 23, 2008 and an additional $252,027 on July 24, 2008 for gross proceeds of approximately $5 million, or net proceeds of $4,586,916 after offering expenses. The Company issued 1,111,109 restricted common shares along with warrants to purchase an additional 1,111,109 shares with 722,221 warrants having an exercise price of $7.00 and 388,888 of those warrants having an excise price of $9.00. These funds were used to expand our energy division through the establishment of a new solar module factory announced on November 10, 2008 along the acquisition of a power supply company with designing and R&D capabilities. Additionally, these funds will be used to provide additional working capital for the solar module factory to purchase raw materials and to expand the solar module business segment.

PLAN OF OPERATION

We plan to continue our expansion efforts in the solar module industry through expansion of our solar module factory in Ningbo, China. We will attempt to increase our customer base in this industry by achieving greater product enhancements and sales efforts. Further, we feel that our recent acquisition of Detron will bring more revenues and profits as we continue to streamline our present electronic factory into the new acquisition as well as improve the operation of Detron and our other factories in China. Additionally, we intend to begin expansion of our marketing into the U.S. solar module market in the third quarter of 2009.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that are currently material or reasonably likely to be material to our financial position or results of operations.

Critical Accounting Policies, Estimates and Judgments

This discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. On an on-going basis, we evaluate our estimates, including those related to property, plant and equipment, inventories, revenue recognition, inventories, accounts receivable and foreign currency transactions and translation. We base our estimates on historical experience and on various other market-specific assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results, however, may differ significantly from these estimates.

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We believe the following critical accounting policies reflect the more significant judgments and estimates used in the preparation of our consolidated financial statements:

Property, plant and equipment

Property, plant and equipment are stated at historical cost and are depreciated over the useful lives of the assets. Leasehold improvements and capitalized leased equipment are amortized over the life of the lease. Repair and maintenance expenditures that do not significantly add to the value of the equipment or prolong its life are charged to expense as incurred. Gains and losses on dispositions of property, plant and equipment are included in the related period’s statement of operations. Depreciation is computed primarily using the straight-line method based on estimated useful lives, which range from 3 to 25 years.

Inventories

Inventories consist of finished goods of manufactured products. Our inventory is based on customer orders and the duration of those orders. Cost is stated at the lower of cost or market on a first-in, first-out (FIFO) basis. We have not recorded an allowance for slow-moving or obsolete inventory. Obsolete inventory at March 31, 2009 was minimal.

Revenue Recognition

We recognize revenues in accordance with the guidelines of the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104 “Revenue Recognition”. We recognize revenue from product sales when the orders are completed and shipped, provided that collection of the resulting receivable is reasonably assured. Amounts billed to customers are recorded as sales while the shipping costs are included in cost of sales. Returns on defective custom parts may only be exchanged for replacement parts within 30 days of the invoice date. Returns on defective parts, which can be resold, may be exchanged for replacement parts or for a refund. Revenue from non-refundable customer tooling deposits is recognized when the materials are shipped or when the deposit is forfeited, whichever is earlier.

Foreign Currency Transactions and Translation

Transaction gains and losses result from a change in exchange rates between the functional currencies in which a foreign currency transaction is denominated and the reporting currency. They represent an increase or decrease in (i) the actual functional current cash flows realized upon settlement of foreign currency transactions and (ii) the expected functional currency cash flows on unsettled foreign currency transactions. All transaction gains and losses are included in other income or expense. For all periods presented, sales to customers were primarily denominated in U.S. dollars.

Assets and liabilities of Intech are translated into U.S. dollars at the prevailing exchange rate in effect at each period end. Revenue and expenses are translated into U.S. dollars at the average exchange rate during the reporting period. Contributed capital is translated into U.S. dollars at the historical exchange rate when capital was injected. Any difference resulting from using the current rate, historical rate and average rate in determination of retained earnings is accounted for as a translation adjustment and reported as part of comprehensive income or loss in the equity section. Exchange differences are recognized in the income statement in the period in which they occur.

Management has discussed the development and selection of these critical accounting policies with the Board of Directors and the Board has reviewed the disclosures presented above relating to them.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk

The interest rates and terms of repayment of bank and other borrowings from stockholders are disclosed in Note 5 and Note 8. Other financial assets and liabilities do not have material interest rate risk.

Credit risk

Foreign currency risk

We transact business in foreign currencies and may be exposed to risk resulting from fluctuations in foreign currency exchange rates, particularly the Renminbi, ("RMB"), and the Euro ("EUR"), which may result in gains or losses reported in our earnings. The volatilities in RMB and EUR are monitored by us throughout the year. We face two risks related to foreign currency exchange rates: translation risk and transaction risk. Amounts invested in our foreign operations are translated into U.S. Dollars using period-end exchange rates. The resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in stockholders' equity. Revenues and expenses in foreign currencies translate into higher or lower revenues and expenses in U.S. Dollars as the U.S. Dollar weakens or strengthens against other currencies. Substantially all of the revenues of our foreign subsidiaries are received, and substantially all expenses are incurred, in currencies other than the U.S. Dollar, which increases or decreases the related U.S. Dollar reported revenues and expenses depending on the trend in currencies. Therefore, changes in foreign currency exchange rates may negatively affect our consolidated revenues and expenses. Net foreign currency transaction gains or losses arising from transactions in our foreign operations denominated in currencies other than the local functional currency are included in other income (expense), net in the consolidated statements of operations. While we have not engaged in foreign currency hedging to date, we may in the future use hedging programs, including currency forward contracts, currency options and/or other derivative financial instruments commonly utilized if it is determined that such hedging activities are appropriate to reduce risk. In addition substantially all of the Company’s products are manufactured in China. The Company’s operations are subject to various political, economic, and other risks and uncertainties inherent in China. Among other risks, the Company’s operations are subject to the risks of restrictions on transfer of funds; export duties, quotas, and embargoes; domestic and international customs and tariffs; changing taxation policies; foreign exchange restrictions; and political conditions and governmental regulations.

Inflation

Inflationary factors such as increases in the cost of our product and overhead costs may adversely affect our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and selling, general and administrative expenses as a percentage of net revenues if the selling prices of our products do not increase with these increased costs

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ITEM 4.

CONTROLS AND PROCEDURES

The Securities and Exchange Commission defines the term disclosure controls and procedures to mean a company’s controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms.

Based on an evaluation performed, the Company's certifying officers have concluded that the disclosure controls and procedures were effective as of March 31, 2009, to provide reasonable assurance of the achievement of these objectives.

There was no change in the Company's internal control over financial reporting during the period ended March 31, 2009, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting

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PART II. OTHER INFORMATION

Item 1A.

Risk Factors (herein incorporated by reference from Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 14, 2009).

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults upon Senior Securities

None

Item 4.

Submission of Matters to a Vote of Security Holders

None

Item 5.

Other Information

None

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Item 6.

Exhibits

The following exhibits are filed herewith:

3.1

Articles of Incorporation (incorporated by reference from Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on October 11, 2000).

3.2

Bylaws (incorporated by reference from Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on October 11, 2000).

3.3

Amendment to the Articles of Incorporation to change the name of the Company from Tabatha III, Inc. to Worldwide Manufacturing USA, Inc., filed with the Colorado Secretary of State on November 4, 2003 (herein incorporated by reference from Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 14, 2009).

3.4

Amendment to the Articles of Incorporation to change the name of the Company from Worldwide Manufacturing USA, Inc. to Worldwide Energy and Manufacturing USA, Inc., filed with the Colorado Secretary of State on February 4, 2008 (herein incorporated by reference from Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 14, 2009).

4.1

Specimen Common Stock Certificate (incorporated by reference from Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on October 11, 2000).

4.2

Specimen Class A Convertible Preferred Stock Certificate (incorporated by reference from Registration Statement on Form 10-SB/A filed with the Securities and Exchange Commission on October 11, 2000).

10.1

Common Stock Purchase Warrant (incorporated by reference from Form 10-KSB filed with the Securities and Exchange Commission on September 27, 2001).

14.1

Code of Ethics (incorporated by reference from Form 10-KSB filed with the Securities and Exchange Commission on March 31, 2005).

21.1

Subsidiaries of Worldwide Energy and Manufacturing USA, Inc. (herein incorporated by reference from Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 14, 2009).

31.1

Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended.

31.2

Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended.

32.1

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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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 singed on its behalf by the undersigned thereunto duly authorized.

WORLDWIDE ENERGY AND MANUFACTURING USA, INC.

By: /S/ JIMMY WANG

Jimmy Wang, CEO and Director (duly authorized officer)

Date: May 14, 2009

By: /S/ JOHN BALLARD

John Ballard, Chief Financial Officer (principal financial and accounting officer)

Date: May 14, 2009

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Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	8th grade Avg

Worldwide Energy & Manufacturing USA Inactive 10-Q2009 Q1 Quarterly report

Content analysis