Cybrdi (CYDI) 10-Q 2010 Q3 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 September 30, 2010

OR

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

Commission File No: 09081

CYBRDI, INC.

(Exact name of registrant as specified in its charter)

CALIFORNIA	95-2461404
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer ID No)

No 29 Chang'An South Road Xi'an Shaanxi P.R. China 710061

(Address of principal executive office)  (Zip Code)

Registrant's telephone number: (011) 86-29-8237-3068

N/A

Former name, former address and former fiscal year,

(if changed since last report)

        Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x     No ¨

        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 definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

 Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨  (Do not check if a smaller reporting company) 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 ¨   No x 

The number of shares of common stock, no par value per share, outstanding as of November 19, 2010 was 65,756,567

CYBRDI, INC.

FORM 10-Q

QUARTERLY PERIOD ENDED June 30, 2010

INDEX

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4T:	Controls and Procedures	20
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	21
Item 1A:	Risk Factors	21
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3:	Defaults Upon Senior Securities	21
Item 4:	Removed and Reserved	21
Item 5:	Other Information	21
Item 6:	Exhibits	21

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PART I. FINANCIAL INFORMATION

Item 1 Financial Statements

CYBRDI, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	September 30, 2010			December 31, 2009
	(Unaudited)			(Audited)
ASSETS
CURRENT ASSETS
Cash and equivalents	$	551,738		$	861,457
Accounts receivable		12,991			14,646
Inventories		1,089,452			1,334,463
Deferred tax assets		-			-
Due from related companies		224,175			219,716
Loan to unaffiliated company		89,670			171,758
Other receivables and prepaid expenses		151,365			161,891
TOTAL CURRENT ASSETS		2,119,391			2,763,931
PROPERTY, PLANT AND EQUIPMENT, NET		397,569			371,116
CONSTRUCTION IN PROGRESS		7,253,308			6,739,726
INTANGIBLE ASSETS, NET		247,126			312,519
OTHER ASSETS		-			38,630
DEFERRED TAX ASSETS		-			-
TOTAL ASSETS	$	10,017,394		$	10,225,922
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term loan	$	1,569,225		$	1,538,011
Accounts payable		3,316			49,938
Accrued expenses		466,536			400,249
Deferred revenue		60,337			28,871
Customers deposits		125,447			116,731
Due to related parties		1,958,733			1,786,113
Deferred tax liabilities		9,681			9,490
Other payables		28,794			132,912
TOTAL CURRENT LIABILITIES		4,222,069			4,062,315
CONSTRUCTION PAYABLE		803,213			865,446
TOTAL LIABILITIES		5,025,282			4,927,761
EQUITY
Preferred Stock, $1.00 per value, 500,000 shares authorized,
zero shares issued and outstanding		-			-
Common Stock, no par value, 150,000,000 shares authorized,
65,756,567 and 50,456,567 shares issued and outstanding		3,877,864			3,571,864
Reserve funds		336,885			336,885
Accumulated deficit		(1,745,969	)		(1,097,141	)
Accumulated other comprehensive income		1,176,954			1,075,711
TOTAL STOCKHOLDERS’ EQUITY		3,645,734			3,887,319
NONCONTROLLING INTEREST		1,346,378			1,410,842
TOTAL EQUITY		4,992,112			5,298,161
TOTAL LIABILITIES AND EQUITY	$	10,017,394		$	10,225,922

See notes to consolidated financial statements.

3

CYBRDI, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
	September 30, 2010			September 30, 2009			September 30, 2010			September 30, 2009
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue
Housing	$	118,076		$	-		$	254,525			-
Tissue array products		150,399			115,463			353,336		$	340,305
Total revenue		268,475			115,463			607,861			340,305
Cost of Sales
Housing		116,809			-			250,601			-
Tissue array products		95,818			77,579			261,770			226,234
Total cost of sales		212,627			77,579			512,371			226,234
Gross Profit		55,849			37,884			95,490			114,071
Operating Expenses:
Selling and distribution expenses		10,956			27,631			28,922			65,621
General and administrative expenses		194,157			113,407			797,097			402,101
Research and development expenses		29			-			10,186			-
Total Operating Expenses		205,142			141,038			836,205			467,722
Loss from Operations		(149,293	)		(103,154	)		(740,715	)		(353,651	)
Other Income/(Expense)
Interest income		(396	)		501			878			2,215
Other (expense) income, net		(973	)		(20,861	)		26,545			(17,057	)
Loss on disposal of fix assets		-			(6,017	)		-			(6,206	)
Total Other Income (Expense), Net		(1,369	)		(26,377	)		27,423			(21,048	)
Loss before Income Taxes		(150,662	)		(129,531	)		(713,292	)		(374,700	)
Income Taxes		-			-			-			-
Net loss		(150,662	)		(129,531	)		(713,292	)		(374,700	)
Net loss attributable to the noncontrolling interest		(27,324	)		(34,301	)		(64,464	)	$	(75,342	)
Net loss attributable to CYBRDI, INC. AND SUBSIDIARIES	$	(123,338	)	$	(95,230	)	$	(648,828	)	$	(299,358	)
Net Loss Per Common Share
Basic and Diluted	$	(0.00	)		(0.00	)	$	(0.01	)	$	(0.01	)
Weighted Average Number of Shares Outstanding
Basic and Diluted		65,756,567			50,456,567			64,963,234			50,456,567

See notes to consolidated financial statements.

4

CYBRDI INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	For The Nine Months Ended			For The Nine Months Ended
	September 30, 2010			September 30, 2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(648,828	)	$	(299,358	)
Adjustments to Reconcile Net Loss to Net Cash
Provided by Operating Activities:
Issuance of common shares for compensation		306,000			-
Depreciation and amortization		132,716			149,163
Bad debt expense		84,123			-
Gain on sale of other assets		(28,248	)		-
Minority interest		(64,464	)		(75,342	)
Loss on disposal of fixed assets		1,050			6,206
Changes in Operating Assets and Liabilities:
Accounts receivable		1,919			(14,725	)
Inventories		267,482			37,245
Other receivable and prepaid expenses		13,578			(86,193	)
Accounts payable and other current liabilities		(90,430	)		7,272
Deferred revenue		34,544			29,936
Customer deposits		6,239			655,719
Net Cash Provided by Operating Activities		15,681			409,923
CASH FLOWS FROM INVESTING ACTIVITIES
Net proceeds from disposal of other assets		67,361			10,040
Advance for loan to affiliated companies		(3,921	)		(93,090	)
Purchase of property, plant, and equipment		(81,964	)		(16,637	)
Payments for construction in progress		(448,516	)		(710,284	)
Repayment proceeds from loan to unaffiliated companies		-			907,447
Net Cash (Used in) Provided by Investing Activities		(467,040	)		97,476
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loans from related companies		145,366			-
Proceeds from short-term loan		-			1,536,807
Proceeds from shareholders/officers		-			74,640
Repayments of loan from related companies		-			(427,378	)
(Repayments) Proceeds from long-term debt		-			(1,390,443	)
Repayment to shareholders/officers		-			(31,057	)
Net Cash Provided by (Used in) Financing Activities		145,366			(237,431	)
NET (DECREASE) INCREASE IN CASH & CASH EQUIVALENTS		(305,993	)		269,968
EFFECT OF EXCHANGE RATE CHANGE ON CASH & CASH EQUIVALENTS		(3,726	)		17,324
CASH & CASH EQUIVALENTS, BEGINNING BALANCE		861,457			381,357
CASH & CASH EQUIVALENTS, ENDING BALANCE	$	551,738		$	668,649

See notes to consolidated financial statements.

5

CYBRDI, INC. AND SUBSIDIDARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE A - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Interim Financial Statements

The unaudited consolidated financial statements of Cybrdi Inc. and subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and pursuant to the requirements for reporting on Form 10-Q. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. However, the information included in these interim financial statements reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for the fair presentation of the consolidated financial position and the consolidated results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full year. The consolidated balance sheet information as of December 31, 2009 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K. These interim financial statements should be read in conjunction with that report.  Certain comparative amounts have been reclassified to conform to the current period's presentation.

The consolidated financial statements include the accounts of Cybrdi, Inc. and its wholly-owned subsidiaries and joint ventures. All material intercompany balances and transactions have been eliminated.

2. Description of Business

Cybrdi, Inc. (f/k/a Certron Corporation) (the “Company” or “Cybrdi”) was incorporated on August 1, 1966, under the laws of the State of California. Until around June 2004, the Company’s business consisted of the distribution of magnetic media products, primarily blank audio and video cassettes. Due to continuing intense price competition and technological changes in the marketplace for its products, the Company lost its remaining significant customers and disposed of or wrote off its remaining inventory. As a result of these occurrences, the Company concluded that its audio and videotape businesses were no longer viable and some of its product lines were obsolete.

On February 10, 2005, the Company, through a wholly-owned subsidiary, acquired all the ownership interest in Cybrdi, Inc., a privately held company incorporated in the State of Maryland ("Cybrdi Maryland"). As a result of the ownership interests of the former shareholders of Cybrdi Maryland, for financial statement reporting purposes, the transaction was treated as a reverse acquisition, with Cybrdi Maryland deemed the accounting acquirer and Certron Corporation deemed the accounting acquiree. Historical information of the surviving company is that of Cybrdi Maryland.

Cybrdi Maryland was established in 2001 to acquire an interest in biogenetic products commercialization and related services entities in Asia. On March 5, 2003, Cybrdi Maryland acquired an 80% interest in Shaanxi Chao Ying Biotechnology Co., Ltd. (“Chaoying Biotech”), a sino-foreign equity joint venture established in July 2000 in the People's Republic of China (“PRC”), through the exchange of 99% of the Company’s shares to the existing shareholders of Chaoying Biotech. For financial statement reporting purposes, the merger was treated as a reverse acquisition, with Chaoying Biotech deemed the accounting acquirer and Cybrdi Maryland deemed the accounting acquiree.

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Chaoying Biotech is a sino-foreign equity joint venture between Shaanxi Chaoying Beauty & Cosmetics Group Co., Ltd. (the “Chinese Partner”, a PRC corporation) and Immuno-Onco Genomics Inc. (the “Foreign Partner”, a USA corporation).  The joint venture agreement has a 15 year operating period starting from its formation in July 2000 and it may be extendedupon mutual consent. The principal activities of Chaoying Biotech are research, manufacture and sale of various high-quality tissue arrays and the related services in the PRC.

Most of the Company’s activities are conducted through Chaoying Biotech. Chaoying Biotech, with its principal operations located in China, aims to take advantage of China's abundant scientific talent, low wage rates, less stringent biogenetic regulation, and the huge genetic population as it introduces its growing list of tissue micro array products.

On February 10, 2005, the Company completed the merger with Cybrdi Maryland and changed its name to Cybrdi, Inc.

On July 26 , 2007, Chaoying Biotech entered into an acquisition agreement with  its Chinese partner, which is a principal shareholder of the company, Mr. Bai, the Company’s chief executive officer and  a director is also a principal of its Chinese partner On July 28,2007, Chaoying Biotech invested RMB15 millions (equivalent to US$1,983,078) to acquire an 83.33% equity ownership of Shandong Chaoying Culture and Entertainment Co., Ltd. (“SD Chaoying”) from its Chinese partner, SD Chaoying is a corporation organized in Shandong Province P.R.China. On September 5, 2007, Shandong Commercial government had approved this acquisition and the ownership title of SD Chaoying had been transferred to Chaoying Biotech from its Chinese partner. The future business of SD Chaoying will primarily focus on culture and entertainment, including spa activities, cosmetic and personal care, body building, gambling, catering,  and lodging, etc. SD Chaoying will have a specific emphasis on  casino gambling, which has been approved by Shandong Administration for Civil Affairs. As of December 31, 2009, SD Chaoying had substantially completed the construction of two residential buildings and had recognized revenue from sales of housing for the year ended.  The main structure of the commercial entertainment center has also been completed, except for the exterior, rooftop, the surrounding supporting projects and the community landscaping, which are expected to be completed in the year 2010 prior to the commencement of operations by merchant tenants.

On March 10, 2007 the Company entered into a Sales Agency Agreement with BioMax, Ltd., a reseller located in USA. In addition, the Company terminated its branch office in USA to reduce the general and administrative costs of Cybrdi Maryland in October 2007.

3. Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has incurred significant losses and has not demonstrated the ability to generate sufficient cash flows from operations to satisfy its liabilities and sustain operations.  The Company had an accumulated deficit of $1,745,969 as of September 30, 2010, including net loss of $648,828 for the nine months ended September 30, 2010.  In addition, current liabilities exceeded current assets by $2,102,678 at September 30, 2010.  These matters raise substantial doubt about the Company’s ability to continue as a going concern.

The Company finances its operations primarily through short-term bank borrowings and/or advances from related parties or officers/shareholders.  In order to complete the construction of SD Chaoying cultural and entertainment center, approximately $3.1 million (equivalent to RMB 21 million) of liquidity is expected to be needed.  The Company, taking into accounts the available banking facilities, internal financial resource, and supports from related companies, believes it has sufficient working capital to meet its present obligation for at least the next twelve months.  Management is taking actions to address the company's financial condition and deteriorating liquidity position.  The following sets forth management’s plans for dealing with the adverse effects of the conditions:

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(a) Sale of housing inventories:  Proceeds to be received from the sale of the remaining housing of the two completed residential buildings are expected to amount to approximately $1.4 million.

(b) Additional bank borrowing:  SD Chaoying has been in discussion with a local bank for approximately $2.2 million of short-term loan.

(c) Rental and management fee revenue from the cultural and entertainment center:  Annual rental revenue is estimated to be approximately $650,000 per year.  Management fee revenue will be charged to commercial tenants at 3% of annual gross revenue.

(d) Additional advances from related companies:  Shaanxi Chaoying Beauty & Cosmetics Group are anticipated to provide up to $730,000 of capital to support operational use.

The Company may require additional funds and may seek to raise such funds though public and private financings or from other sources.  There is no assurance that the above management’s plans will be realized or the additional financing will be available at all or that, if available, such financing will be obtainable on terms favorable to the Company or that any additional financing will not be dilutive.  The consolidated financial statements do not include any adjustments that might result from the outcome of those uncertainties.

4. 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 reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

5. Revenue Recognition

Revenue represents the invoiced value of goods sold recognized upon the delivery of goods to customers and service income is recognized when services are provided. Deferred revenue represents the undelivered portion of invoiced value of goods sold to customers. Sales transactions not meeting all the conditions of the full accrual method are accounted for using the deposit method of accounting.  Under the deposit method, all costs are capitalized as incurred, and payments received from the buyer are recorded as customer deposits.

8

6. Reverse Merger

On February 10, 2005, (the "Closing Date") the Company closed on an Agreement and Plan of Merger (the "Agreement") among Certron Corporation (“Certron”), a California corporation, Certron Acquisition Corp., a Maryland corporation and a wholly-owned subsidiary of Certron ("Acquisition Sub"), and Cybrdi, Inc., a Maryland corporation (“Cybrdi – Maryland”) relating to the acquisition by Certron of all of the issued and outstanding capital stock of Cybrdi -Maryland in exchange for shares of common stock of Certron that will aggregate approximately 93.8% of the issued and outstanding common stock of Certron. Pursuant to the terms of the Agreement, at the Closing Date (a) Acquisition Sub has been merged with and into Cybrdi - Maryland, with Cybrdi - Maryland being the surviving corporation, (b) the common stock of Cybrdi-Maryland has been cancelled and converted into the right to receive shares of the common stock of Certron at an exchange ratio of 1.566641609 per share. This resulted in the issuance of 47,328,263 shares of the Certron’s common stock, and (c) each share of the common stock of Acquisition Sub has been converted in to and become one share of the common stock of Cybrdi-Maryland. The share exchange has been accounted for as a reverse merger under the purchase method of accounting. Accordingly, Cybrdi, Inc. will be treated as the continuing entity for accounting purposes and the historical financial statements presented will be those of Cybrdi, Inc.

In connection with the Agreement, on February 10, 2005, the Company amended its articles of incorporation to authorize the issuance of 150 million shares of common stock no par value and 500,000 shares of preferred stock, $1.00 par value per share, none of which are issued or outstanding.

Concurrent with the filing of the Articles of Merger, all of the Company then existing officers and directors tendered their resignation and Yanbiao Bai was appointed as its Chairman of the Board of Directors.  Mr. Bai then nominated the balance of the Board of Directors.

7. Income Taxes

Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to the differences between the basis of assets and liabilities for financial and income tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes also are recognized for operating losses that are available to offset future income taxes.

8. Recent Accounting Pronouncements

In July 2009, the FASB’s ASC became the single, official source of authoritative, non-governmental GAAP in the United States. The historical GAAP hierarchy was eliminated and the ASC became the only level of authoritative GAAP, other than guidance issued by the Securities and Exchange Commission (the “SEC”). This guidance is effective for interim and annual periods ending after September 15, 2009. The Company adopted the provisions of this guidance for the year ended December 31, 2009. The Company’s accounting policies were not affected by the conversion to the ASC. However, references to specific accounting standards have been changed to refer to the appropriate section of the ASC.

In December 2007, the FASB issued guidance now incorporated in ASC Topic 810 “Consolidation” (formerly SFAS No. 160). The guidance clarifies the accounting for noncontrolling interests and establishes accounting and reporting standards for the noncontrolling interest in a subsidiary, including classification as a component of stockholders’ equity. This guidance was effective for the Company’s fiscal year beginning January 1, 2009. The Company has adopted this guidance in its consolidated financial statements for the year ended December 31, 2009.

9

In March 2008, the FASB issued guidance now incorporated in ASC Topic 815 “Derivatives and Hedging” (formerly SFAS No. 161). The guidance is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand how and why an entity uses derivative instruments and the instruments’ effects on an entity’s financial position, financial performance and cash flows. The guidance is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 with early application encouraged. This pronouncement is related to disclosure and did not have a material impact on the Company’s consolidated financial statements.

In December 2008, the FASB issued guidance now incorporated in ASC Topic 860 “Transfers and Servicing” (formerly FASB Staff Position (“FSP”) SFAS 140-4 and FASB Interpretation (“FIN”) 46R). The guidance increases disclosure requirements for public companies and is effective for reporting periods (interim and annual) that end after December 15, 2008. The guidance requires public entities to provide additional disclosures about transferors’ continuing involvements with transferred financial assets. It also requires public enterprises, including sponsors that have a variable interest in a variable interest entity, to provide additional disclosures about their involvement with variable interest entities. This pronouncement is related to disclosure only and did not have a material impact on the Company’s consolidated financial statements.

In April 2009, the FASB issued guidance now incorporated in ASC Topic 825 “Financial Instruments” (formerly FSP SFAS 107-1). The guidance requires that the fair value disclosures required for financial instruments be included in interim financial statements. In addition, the guidance requires public companies to disclose the method and significant assumptions used to estimate the fair value of those financial instruments and to discuss any changes of method or assumptions, if any, during the reporting period. The guidance was effective for the Company’s year ended December 31, 2009. This pronouncement is related to disclosure only and did not have a material impact on the Company’s consolidated financial statements.

In May 2009, the FASB issued guidance now incorporated in ASC Topic 855 “Subsequent Events” (formerly SFAS No. 165). This guidance establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before the consolidated financial statements are issued or are available to be issued. Among other items, the guidance requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. The Company has adopted this guidance in its consolidated financial statements for the year ended December 31, 2009. See Note 20 for disclosure.

In June 2009, the FASB issued guidance now incorporated in ASC Topic 810 “Consolidation” (formerly SFAS No. 167) amending the consolidation guidance applicable to variable interest entities and the definition of a variable interest entity, and requiring enhanced disclosures to provide more information about a company’s involvement in a variable interest entity. This guidance also requires ongoing assessments of whether an enterprise is the primary beneficiary of a variable interest entity. This guidance is effective for the Company’s fiscal year beginning January 1, 2010. The Company is currently reviewing the impact of the guidance on its consolidated financial statements.

NOTE B – ASSETS

The September 30, 2010 balance sheet included total current assets of $2,119,391 and non-current assets of $7,898,003.  Of these amounts, $551,738 in cash and equivalents and $12,991 in accounts receivable are planned for funding current operations and for future business expansion.

Other current assets also included inventories, Due from related companies, loan to unaffiliated company, and other receivables and prepaid expenses.  Inventories are mainly finished goods.  Other components of inventories include raw materials, work in process, packaging material and housing inventories. Inventories are stated at the lower of cost or market.  Cost of raw materials is determined on the basis of first in first out method (“FIFO”).  Finished goods are determined on the weighted average basis and are comprised of direct materials, direct labor, and an appropriate proportion of overhead.

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The other primary assets included in current assets are loans to an unaffiliated company, QuanYe Security Co., Ltd (“QuanYe”), an unrelated PRC registered company located in Xian, PRC. QuanYe is engaged in the pawnshop business and its primary business is offering alternative financing sources to small, local companies. According to the loan agreement, QuanYe has received loans from Chaoying Biotech in a total amount of RMB 29.3 million (equivalent to $3,849,185) since January 2006.  A remaining balance of RMB 7.3 million (equivalent to $1,069,989) was extended to and expired on March 24, 2008.  As of September 30,2010, the principal balance and interest receivable for this loan had been reduced to RMB 0.6 Million (equivalent to $89,670) and RMB 0, respectively, net of allowance of $171,147 for doubtful interest receivable after charging $84,123 of bad debt expense for the nine-month period ended September 30, 2010.  The interest rate for these loans initially was initially 8% per year, and subsequently reduced to 5% since October 9, 2006.

The Company’s management believes and views QuanYe as suitable alternative financial institution and it is an optimal way to use its cash on hand.  The regular market interest rate in the PRC is proximately 0.72% per annum. The Company expects to obtain higher interest income for its unused fund through these types of loan arrangements.  However, these advances are unsecured and have a default risk higher than that associated with a bank deposit.

Included in non-current assets are property, plant and equipment, construction-in-progress and intangible assets.  Property, plant and equipment mainly consist of building, office equipments, motor vehicles, leasehold improvement, software-website, and machinery used for product manufacturing located in the People’s Republic of China (“PRC”).  Depreciation on property, plant and equipment is computed using the straight-line method over the estimated useful life of the assets.  The majority of the assets have estimated useful lives of 10 years. Building and office equipment have estimated useful lives of 20 and 5 years, respectively.  The “construction in progress” in the amount of $7,253,308 mainly consisted of land under development and construction of the entertainment, culture, and casino facility in Shandong Province, which will be transferred to fixed assets in SD Chaoying when construction is completed.  As of September 30, 2010, construction-in-progress of $4.28 million and land use right of $2.99 million of SD Chaoying were collateralized under a short-term loan from Changle Rural Credit Union.  Intangible assets included a tissue chip patent.  Effective January 1, 2002, with the adoption of the accounting guidance for Goodwill and Other Intangible Assets, intangible assets with a definite life are amortized on a straight-line basis.  The patent is being amortized over its estimated life of 10 years.

NOTE C - LIABILITIES

As of September 30, 2010, the balance sheet included total liabilities of $5,025,282 which consisted of current liabilities of $4,222,069 and construction payable of $803,213.  Included in the current liabilities was short-term loan of $1,419,775 (equivalent to RMB9.5million) from Changle Rural Credit Union, which is a bank located in Shandong Province of the PRC.  This short-term loan had been secured by the Company’s land use right and construction-in-progress of SD Chaoying with a book value of $2.99 million (equivalent to RMB 20.03 million) and $4.28 million (equivalent to RMB 28.6 million) as of September 30, 2010, respectively.  The original term of the loan was from August 25, 2009 to August 24, 2010 withaninterest rate of 7.965% per annum.  The Company renewed the loan with the bank for a new term from August 31, 2010 to August 25, 2011 (total of twelve months) withannualinterest rate at 9.558%.  Additionally, there is another short-term loan of $149,450 (equivalent to RMB1.0million) from Fengguo Liu, an unrelated party.  Also included in the current liabilities was $ 1,958,733 of loans from related companies, including Xi’an Yanfeng Biotechnology Co., Ltd., Shaanxi Yanfeng Real Estate Co. Ltd, Shaanxi Chaoying Beauty & Cosmetics Group Co., Ltd and the stockholders who are also the Company’s officers.  These entities were related to the Company through common ownership and principal officers.  These loans are non-interest bearing and have no set repayment terms.

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NOTE D – STOCKHOLDERS’ EQUITY

As a result of the reverse merger (see Note A item 6), the common stock of Cybrdi-Maryland has been cancelled and converted into shares of common stock of Certron at an exchange ratio of 1.566641609 per share. This resulted in the issuance of 47,328,263 shares of Certron’s common stock to the Cybrdi shareholders. As of September 30, 2010 and December 31, 2009, the Company had 65,756,567 and 50,456,567 shares issued and outstanding.

As of September 30, 2010, the balance sheet included total equity of $4,992,112, of which $1,346,378 was for non-controlling interest, representing 20% minority interest in Chaoying Biotech and 16.67% minority interest in SD Chaoying.

On January 15, 2010, the Board of Directors adopted resolutions that authorized incentive compensation to key management of the Company for services it has provided to the Company.  As set forth in the Board of Directors’ resolution dated January 15, 2010, the incentive compensation shall be paid by the issuance of 12,000,000 shares of common stock of the Company to Mr. Yanbiao Bai, Chief Executive Officer and President of the Company, and 3,300,000 shares of common stock of the Company to Ms. Xue Bu, Chief Financial and Operating Officer of the Company.  Compensation cost of $306,000 was recorded during the first quarter of 2010 at $0.02 per share, the market price of the Company’s common stock on January 15, 2010, the grant date.

NOTE E – INCOME TAXES

Under the Enterprise Income Tax (“EIT”) of the PRC, prior to 2007, Chinese enterprises are generally subject to an income tax at an effective rate of 33% (30% statutory income taxes plus 3% local income taxes) on income reported in the statutory financial statements after appropriate tax adjustments, unless the enterprise is located in a specially designated region for which more favorable effective tax rates are applicable.  Beginning on January 1, 2008, the new EIT law has replaced the existing laws for Domestic Enterprises (“DEs”) and Foreign Invested Enterprises (“FIEs”).  The new standard EIT rate of 25% will replace the 33% rate previously applicable to both DES and FIEs.  The two year tax exemption, six year 50% tax reduction and tax holiday for production-oriented FIEs will be eliminated.  According to the Western Developing Plan implemented by the PRC Government, Chaoying Biotech is entitled to a 50% reduction in EIT of preferential policy, but not less than 15%.  As a result, Chaoying Biotech’s effective EIT tax rate has been 15% since 2008.

The Company’s income tax expense includes U.S. and PRC income taxes.  There were no U.S. current taxes for the nine months ended September 30, 2010 according to net loss incurred in the U.S. entity, which will not be anticipated to have any tax benefit in the future since no revenue is expected to be generated in the U.S as a result of discontinuing the U.S. operating company in Maryland in October 2007.  There were also no PRC current taxes for the nine months ended September 30, 2010 due to net loss incurred.

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

The following discussion and analysis should be read in conjunction with the company’s Financial Statements and Notes thereto appearing elsewhere in this Report on Form 10-Q as well as the company’s other SEC filings, including our annual report on Form 10-K for the year ended December 31, 2009.

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PLAN OF OPERATIONS

The Company focuses on biogenetics commercialization and healthcare product applications. The Company’s primary business includes sales of tissue microarray products and services. Tissue chips, also called micro tissue arrays, provide high-throughput molecular profiling and parallel analysis of biological and molecular characteristics for hundreds of pathologically controlled tissue specimens. Tissue arrays can provide rapid and cost-effective localization and evaluation of proteins, RNA, or DNA molecules, which is particularly useful for functioning genomic studies. Cybrdi manufactures both human and animal tissue microarray for a wide variety of scientific uses, including drug discovery and development purposes.

The Company’s business strategy and focus in the near future include

· Enhancing R&D in TMAs and technical service

· Expanding its product portfolio and virtual tissue array data bank (vTMAB)

· Launching the health diagnosis kit for obesity and skin disease

· Participating in the culture and entertainment field

With its sophisticated research in genes, the Company can provide the professional health diagnostic service for its customers. The Company can check the reasons for obesity and other skin diseases like freckles by its genetic analysis, which offers more accurate and specialized diagnosis than other similar services in the current market.  Such information can be utilized to guide customers to set up the right health or fitness program.At present, the Company provide genetic test for the mechanism of obesity or skin diseases.

The Company will also explore other business development opportunities that can leverage its sales platform and relationship with affiliated companies. Until such time as the Company can identify attractive marketing opportunities, the Company will loan available cash on a short term unsecured basis to non-affiliated third parties in order to generate interest income.

Commencing in the third quarter of 2007, the Company developed a new genedetective tissue array, called New Kits, and began to offer them to its customers.

On July 28, 2007 the Company acquired an 83.33% equity ownership of SD Chaoying from its Chinese partner, which will be primarily engaged in developing and operating culture and entertainment business which is expected to open in 2010.  The culture and entertainment business will consist primarily of a spa activities, cosmetic personal care, hotel and casino. Its Chinese partner is a principal shareholder of the Company and Mr. Bai, its chief executive officer and a director is also a principal of its Chinese partner.  SD Chaoying began constructing the facility in September 2007.  The total useable land and net building area for the project consists of approximately 50,000 and 33,000 square meters, respectively of which 52% will constitute property for business use and 48% for residential use.  As of December 31, 2009, SD Chaoying had substantially completed the construction of two residential buildings and had recognized revenue from sales of housing units from these buildings for the year then ended.  The main structure of the commercial entertainment center has also been completed, with the exterior, rooftop, the surrounding supporting projects and the community landscaping yet to be completed, but which are expected to be completed in the year 2010 prior to the commencement of operations by merchant tenants. SD Chaoying intends to focus on Spa activities, cosmetic personal care, hotel and casino gambling, which has been approved by Shandong Administration for Civil Affairs.  As of June 30, 2010, the land use right and construction-in-progress with total book value of $7.06 million (equivalent to RMB 47.87 million) of SD Chaoying were collateralized under the short-term loan of $1,400,891 (equivalent to RMB9.5 million) from Changle Rural Credit Union.

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RESULTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2010 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2009

	Three Months Ended			Three Months Ended			2010 Vs 2009
	September 30, 2010			September 30, 2009			Increase/ (decrease)
	(Unaudited)			(Unaudited)
Revenue
Housing	$	118,076			-			118,076
Tissue array products		150,399			115,463			34,936
Total revenue		268,475			115,463			153,012
Cost of Sales
Housing		116,809			-			116,809
Tissue array products		95,818			77,579			18,239
Total cost of sales		212,627			77,579			135,047
Gross Profit		55,849			37,884			17,965
Operating Expenses:
Selling and distribution expenses		10,956			27,631			-16,675
General and administrative expenses		194,157			113,407			80,750
Research and development expenses		29			-			29
Total Operating Expenses		205,142			141,038			64,104
Loss from Operations		(149,293	)		(103,154	)		-46,140
Other Income/(Expense)
Interest income (expense)		(396	)		501			-897
Other expense, net		(973	)		(20,861	)		19,888
Loss on disposal of fix assets		-			(6,017	)		6,017
Total Other Expense, Net		(1,369	)		(26,377	)		25,008
Loss before Income Taxes		(150,662	)		(129,531	)		-21,131
Income Taxes		-			-
Net loss		(150,662	)		(129,531	)		-21,131
Net loss attributable to the noncontrolling interest		(27,324	)		(34,301	)		6,977
Net loss attributable to CYBRDI, INC. AND SUBSIDIARIES	$	(123,338	)		(95,230	)		-28,109

Net Sales

We have two categories of revenues: sales of tissue chip & kits products and tissue product related services, and housing. The net sales increased $153,012 to $268,475 for the three months ended September 30, 2010 from $115,463 for the three months ended September 30, 2009, an increase of 133%.

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Tissue Chip & Kit Products: The net sales increased $34,936 to $150,399 for the three months ended September 30, 2010 as compared to $115,463 for the three months ended September 30, 2009, an increase of 30%.The increase in net sales of tissue chip & kit product was primarily because we adjusted our distribution to the domestic market at the beginning of 2010. Our sole domestic sales representative in China is Xi’an AiLiNa Biotechnology Co., Ltd., and the only overseas sales representative is Biomax.  We will mainly distribute our products through these two sales representatives.

Tissue product related services: No technical service order was received for the three months ended September 30, 2010 and 2009, resulting in no services revenues for the three months ended September 30, 2010 and 2009.This decrease was primarily attributable to reduced service demand in China.

Housing: The net  sales were $118,076 during the third quarter of 2010, SD Chaoying completed the construction of the two six-story multi-family residential buildings with a total of 72 housing units last year, 37 of which qualified as being recognized as sales revenue aggregating $1,010,632 for the year ended December 31, 2009.  For the three months ended September 30, 2010, an additional 4 units qualified for being recognized as sales revenue.

Gross Margin

Gross margin as a percentage of sales decreased to 20.80% for the three months ended in September 30, 2010 from 32.81% for three months ended in September 30, 2009.  Gross profit for the three months ended in September 30, 2010 increased $17,965 to $55,849 from $37,884 for the three months ended in September 30, 2009, an increase of 47%.  The reason for the decrease in gross margin was primarily due tothe diluting effect caused by the lower gross margin of SD Chaoying at 1%.Gross profit of ChaoYing Biotechnology for the three months ended September 30, 2010 increased to $54,581 from $37,884 for the three months ended September 30, 2009.  Gross profit of SD Chaoying for the three months ended September 30, 2010 was $1,267, accounting for approximately 1% of sales revenue.

Operating Expenses

The Company’s operating expenses increased $64,292 to $205,142 for the three months ended September 30, 2010 from $140,850 for the three months ended September 30, 2009, an increase of 46 %.  This was primarily due to an increase in general and administrative expenses of $80,938 to $194,157 for the three months ended September 30, 2010 compared to $113,219 for the three months ended September 30, 2009.  The increase was mainly resulted from accruing the bad debt expense of $44,494 on interest receivable associated with the loan to QuanYe Security Co., Ltd (“QuanYe”), an unrelated PRC registered company located in Xian, PRC. As of September 30,2010, the principal balance and interest receivable for this loan had been reduced to RMB 0.6 Million (equivalent to $89,670) and RMB 0, respectively, net of allowance of $171,147 for doubtful interest receivable.

Selling expenses decreased $16,675 to $10,956 for the three months ended September 30, 2010 compared to $27,631 for the three months ended September 30, 2009.  The decrease in selling expenses was primarily due to the change in our marketing strategy at the beginning of 2010.  Our sole domestic sales representative in China is Xi’an AiLiNa Biotechnology Co., Ltd., and the only overseas sales representative is Biomax.  As such, the Company could significantly reduce its spending on selling expenses.

Other Expense

Other expense decreased by $25,008 to $1,369 for the three months ended September 30, 2010 as compared to $26,377 for the three months September 30, 2009, a decrease of 95%.  The higher amount of other expense for the three months ended September 30, 2009 was mainly due to the initial bank loan related expenses incurred at SD Chaoying in the amount of $20,531.

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Income Taxes

The Company did not record U.S. and PRC current income tax for three months ended September 30, 2010, and 2009, since there was no taxable income during these periods.

Net Loss

As a result of the above factors, our net loss increased $28,107, or 30%, from $95,230 for the three months ended September 30, 2009 to $123,338 for the three months ended September 30, 2010.

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2009

	Nine Months Ended			Nine Months Ended			2010 Vs 2009
	September 30, 2010			September 30, 2009			Increase/ (decrease)
	(Unaudited)			(Unaudited)
Revenue
Housing	$	254,525			-			254,525
Tissue array products		353,336			340,305			13,031
Total revenue		607,861			340,305			267,556
Cost of Sales
Housing		250,601			-			250,601
Tissue array products		261,770			226,234			35,536
Total cost of sales		512,371			226,234			286,137
Gross Profit		95,490			114,071			-18,581
Operating Expenses:
Selling and distribution expenses		28,922			65,621			-36,699
General and administrative expenses		797,097			402,101			394,996
Research and development expenses		10,186			-			10,186
Total Operating Expenses		836,205			467,722			368,483
Loss from Operations		(740,715	)		(353,651	)		-387,064
Other Income/(Expense)
Interest income		878			2,215			-1,337
Other (expense) income, net		26,545			(17,057	)		43,602
Loss on disposal of fix assets		-			(6,206	)
Total Other Income (Expense), Net		27,423			(21,048	)		48,471
Loss before Income Taxes		(713,292	)		(374,700	)		-338,592
Income Taxes		-			-
Net loss		(713,292	)		(374,700	)		-338,592
Net loss attributable to the noncontrolling interest		(64,464	)		(75,342	)		10,878
Net loss attributable to CYBRDI, INC. AND SUBSIDIARIES	$	(648,828	)	$	(299,358	)		-349,470

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Net Sales

Two categories of revenues: sales of tissue chip & kits products and tissue product related services, and housing. The net sales increased $267,556 to $607,861 for the nine months ended September 30, 2010 from $340,305 for the nine months ended September 30, 2009, an increase of 79%.

Tissue Chip & Kit Products: The net sales increased $13,031 to $353,336 for the nine months ended September 30, 2010 as compared to $340,305 for the nine months ended September 30, 2009, an increase of 4%.The increase in net sales of tissue chip & kit product was primarily because we adjusted domestic market at the beginning of 2010. Our sole domestic sales representative in China will be Xi’an AiLiNa Biotechnology Co., Ltd., and the only overseas sales representative will be Biomax.  We will mainly distribute our products through these two sales representatives.

Tissue product related services: No technical service order was received for the nine months ended September 30, 2010 and 2009, resulting in no services revenues for the nine months ended September 30, 2010 and 2009.This decrease was primarily attributable to reduced service demand in China.

Housing: The net sales was $254,525 for the nine mouths ended September 30,of 2010, SD Chaoying completed the construction of the two six-story multi-family residential buildings with a total of 72 housing units last year, 37 of which qualified as being recognized as sales revenue aggregating $1,010,632 for the year ended December 31, 2009.  For the nine months ended September 30, 2010, additional 9 units qualified for being recognized as sales revenue after being funded with mortgage loans by the buyers’ bank creditors.

Gross Margin

Gross margin as a percentage of sales decreased to 15.71% for the nine months ended September 30, 2010 from 33.52% for nine months ended in September 30, 2009.  Gross profit for the nine months ended in September 30, 2010 decreased  $18,581 to $95,490 from $114,071 for the nine months ended in September 30, 2009, a decrease of 16%.  The reason for the decrease in gross margin was primarily due tothe diluting effect caused by the lower gross margin of SD Chaoying at 1.54%.Gross profit of ChaoYing Biotechnology for the nine months ended September 30, 2010 decreased to $91,566 from $114,071 for the nine months ended September 30, 2009, mainly due to lower gross margin of the products sold during the current period as compared to the same period last year..  Gross profit of SD Chaoying for the year ended September, 2010 was $3,925, accounting for approximately 1.54% of sales revenue.Under normal circumstances, the rates of margin of real estate development are lower than other industries.

Operating Expenses

The Company’s operating expenses increased $368,483 to $836,205 for the nine months ended September 30, 2010 from $467,722 for the nine months ended September 30, 2009, an increase of 79%.  This was primarily due to an increase in general and administrative expenses of $394,996 to $797,097 for the nine months ended September 30, 2010 compared to $402,101 for the nine months ended September 30, 2009.  The increase mainly resulted from the compensation expense of $306,000 recorded during the first quarter of 2010 for 12,000,000 shares and 3,300,000 shares of common stocks issued to the Company’s two key executives, respectively.

Selling expenses decreased $36,699 to $28,922 for the nine months ended September 30, 2010 compared to $65,621 for the nine months ended September 30, 2009.  The decrease in selling expenses was primarily due to the change in our marketing strategy at the beginning of 2010.  Our sole domestic sales representative in China will be Xi’an AiLiNa Biotechnology Co., Ltd., and the only overseas sales representative will be Biomax.  As such, the Company could significantly reduce its spending on selling expenses.

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Other Income (Expense)

Other income increased by $48,471 to $27,423 for the nine months ended September 30, 2010 as compared to a net expense of ($21,048) for the nine months September 30, 2009, an increase of 230%.  Other income was mainly comprised of $28,247 generated from the sale of non-operating real property of Chao Ying Biotech during the first quarter of 2010.  Thenet book value of non-operating real property was $38,746 at the time of sale and net proceeds from the sale amounted to $66,993.In addition, the initial bank loan related expense incurred at SD Chaoying in the amount of $20,531 for the three months ended September30, 2009 also contributed to the higher expense for the nine months ended September 30, 2009.

Income Taxes

The Company did not record U.S. and PRC current income tax for nine months ended September 30 2010, and 2009, since there was no taxable income during these periods.

Net Loss

As a result of the above factors, our net loss increased $349,470, or 117%, from $299,358 for the nine months ended September 30, 2010 to $648,828 for the nine months ended September 30, 2009.

LIQUIDITY AND CAPITAL RESOURCES

Operating working capital (total current asset deduct total current liabilities) decreased by $804,294 from $(1,298,384) as of December 31, 2009 to $(2,102,678) as of September 30, 2010.  The decrease was primarily due to the decrease in cash and cash equivalents from $861,457 as of December 31, 2009 to $551,738 as of September 30,2010, and decrease in inventories from $1,334,463 as of December 31, 2009 to $1,089,452 as of September 30, 2010.  The $172,620 increase in due to related parties from $1,786,113 as of December 31, 2009 to $1,958,733 as of September 30, 2010 also caused the decrease in working capital.

For investing activities, the Company incurred net cash outflow during the nine months ended September 30, 2010.  The primary reason was due to the payment of $448,516 used in the construction in progress of the SD Chaoying project during the nine months ended September 30, 2010, and $81,964 used in purchase of operating equipment.

For financing activities, the Company obtained net proceeds of $145,366 from its related parties of the Company for the nine months ended September  30, 2010.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has incurred significant losses and has not demonstrated the ability to generate sufficient cash flows from operations to satisfy its liabilities and sustain operations.  The Company had an accumulated deficit of $1,745,969 as of September 30, 2010, including net loss of $648,828 for the nine months ended September 30, 2010.  In addition, current liabilities exceeded current assets by $2,102,678 at September 30, 2010.  These matters raise substantial doubt about the Company’s ability to continue as a going concern.

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The Company finances its operations primarily through short-term bank borrowings and/or advances from related parties or officers/shareholders.  In order to complete the construction of SD Chaoying cultural and entertainment center, approximately $3.1 million (equivalent to RMB 21 million) of liquidity is expected to be needed.  The Company, taking into account the available banking facilities, internal financial resource, and support from related companies, believes it has sufficient working capital to meet its present obligation for at least the next twelve months.  Management is taking actions to address the company's financial condition and deteriorating liquidity position.  The following sets forth management’s plans for dealing with the adverse effects of the condition:

(a) Sale of housing inventories:  Proceeds to be received from the sale of the remaining housing of the two completed residential buildings are expected to amount to approximately $1.4 million.

(b) Additional bank borrowing:  SD Chaoying has been in discussion with a local bank for a short term loan of approximately $2.2 million.

(c) Rental and management fee revenue from the cultural and entertainment center:  Annual rental revenue is estimated to be approximately $650,000 per year.  Management fee revenue will be charged to commercial tenants at 3% of annual gross revenue.

(d) Additional advances from related companies:  Shaanxi Chaoying Beauty & Cosmetics Group are anticipated to provide up to $730,000 of capital to support operational use.

The Company may require additional funds and may seek to raise such funds though public and private financings or from other sources.  There is no assurance that the above management’s plans will be realized or the additional financing will be available at all or that, if available, such financing will be obtainable on terms favorable to the Company or that any additional financing will not be dilutive.  The consolidated financial statements do not include any adjustments that might result from the outcome of those uncertainties.

INFLATION

Inflation has not had a material impact on our business.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this quarterly report on Form 10-Q contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause its actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond its control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this quarterly report in its entirety, including but not limited to its financial statements and the notes thereto. Except for its ongoing obligations to disclose material information under the Federal securities laws, the Company undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. For any forward-looking statements contained in any document, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

A smaller reporting company is not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. Under the supervision and with the participation of our management, including our Chief Executive Officer, Yanbiao Bai, and Principal Financial Officer, Xue Bu, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to our management to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Changes in  Internal  Control  Over  Financial  Reporting.  During the most recent quarter ended June 30, 2010, there has been no change in our internal control over financial  reporting  (as defined in Rule  13a-15(f) and 15d-15(f) under the Exchange Act) ) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

There are no material pending legal proceedings to which we are a party. We received a notice on June 6, 2000 to inform us that we may have a potential liability from waste disposal in the Casmalia Disposal Site at Santa Barbara County, California.  We were given a choice of either signing an agreement that would toll the statute of limitations for eighteen (18) months in order to allow us to resolve any liability with the government without incurring costs associated with being named a defendant in a lawsuit, or becoming an immediate defendant in a lawsuit. We signed the tolling agreement. On November 20, 2001, the tolling agreement was extended for an additional 18 months. On May 20, 2003 the tolling agreement was again extended for an additional 18 months and on November 24, 2004 the tolling agreement was again extended for additional 18 months. On June 29, 2004, we received a proposed settlement from the EPA in the amount of $21,131, which had been accrued as other payable. We are waiting for communication from the government concerning payment of the final settlement.  As of September 30, 2010 and subsequent to December 31, 2009, the Company had not received further correspondences from the EPA regarding this matter.

Item 1A.  Risk Factors

A smaller reporting company is not required to provide the information required by this Item.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4.   (Removed and Reserved)

Item 5. Other Information

None

Item 6. Exhibits

31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer 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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SIGNATURE

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 thereunto duly authorized.

CYBRDI, INC.

DATE:  November 22, 2010		By	/s/  Yanbiao Bai
		Yanbiao Bai, Chief Executive Officer and president
	By:	Xue Bu
		Xue Bu, Principal Financial Officer

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