UNITED STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





Form
10-Q




(Mark
One)





x
            QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





FOR THE
QUARTERLY PERIOD ENDED September 30, 2010





 ̈
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
  ACT





FOR THE
TRANSITION PERIOD FROM __________ TO __________





COMMISSION
FILE NUMBER ___000-32341_____________




OMPHALOS,
CORP.


(Exact
name of registrant as specified in its charter)





Nevada
                  
                  84-1482082(State or other jurisdiction of incorporation or organization)
                  
                  (I.R.S. Employer Identification No.)




Unit 2, 15 Fl.,
83, Nankan Rd. Sec. 1,


Luchu
Taoyuan County


Taiwan


(Address
of principal executive offices, Zip Code)





011-8863-322-9658


(Registrant’s
telephone number, including area code)





(Former
name, former address and former fiscal year, if changed since last
report)





Copies
to:


Marc
Ross, Esq.


Andrew
Smith, Esq.


Sichenzia
Ross Friedman Ference LLP


61
Broadway, 32nd
Floor


New York,
New York 10006


Phone:
(212) 930-9700


Fax:
(212) 930-9725





Indicate
by check mark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act 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
o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).    ̈ Yes   ̈ 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.





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  ̈  No x




The
number of shares of registrant’s common stock outstanding, as of September 30,
2010 was 30,063,759.





TABLE OF CONTENTS




PagePART
      I - FINANCIAL INFORMATIONItem 1.
                  Financial
      Statements
                  
                  3Item 2.
                  Management’s
      Discussion and Analysis or Plan of Operation
                  
                  12Item 3.
                  Quantitative
      and Qualitative Disclosures About Market Risk
                  
                  14Item 4.
                  Controls
      and Procedures
                  
                  14PART
      II - OTHER INFORMATIONItem 1.
                  Legal
      Proceedings
                  
                  14Item 2.
                  Unregistered
      Sales of Equity Securities and Use of Proceeds
                  
                  14Item 3.
                  Defaults
      Upon Senior Securities
                  
                  14Item 4.
                  Removed
      and Reserved
                  
                  14Item 5.
                  Other
      Information
                  
                  14Item 6.
                  Exhibits
                  
                  15SIGNATURES
                  
                  17


2





PART
I - FINANCIAL INFORMATION





Item 1.   Financial
Statements.





PageCondensed
      Consolidated Balance Sheets
                  
                  4 - 5Condensed
      Consolidated Statements of Operations
                  
                  6Condensed
      Consolidated Statements of Shareholders' Equity and Comprehensive
      Income
                  
                  7Condensed
      Consolidated Statements of Cash Flows
                  
                  8Notes
      to Consolidated Financial Statements
                  
                  9
      - 11


3


OMPHALOS,
CORP.


CONDENSED
CONSOLIDATED BALANCE SHEETS





September
                            30,
                          
                          
                          December
                            31,2010
                          
                          
                          2009(Unaudited)AssetsCurrent
      AssetsCash
      and cash equivalents
                          
                          $
                          2,053,292
                          
                          
                          $
                          1,968,816Accounts
      receivable, net
                          
                          
                          191,747
                          
                          
                          
                          524,128Inventory,
      net
                          
                          
                          1,539,595
                          
                          
                          
                          1,565,424Prepaid
      and other current assets
                          
                          
                          436,063
                          
                          
                          
                          352,434Total
      current assets
                          
                          
                          4,220,697
                          
                          
                          
                          4,410,802Leasehold
      Improvements and Equipment, net
                          
                          
                          5,149
                          
                          
                          
                          7,476Intangible
      assets, net
                          
                          
                          39,329
                          
                          
                          
                          37,326Deposits
                          
                          
                          22,915
                          
                          
                          
                          67,740Total
      Assets
                          
                          $
                          4,288,090
                          
                          
                          $
                          4,523,344





See
accompanying Notes to Condensed Consolidated Financial
Statements


4





OMPHALOS,
CORP.


CONDENSED
CONSOLIDATED BALANCE SHEETS





September
                          30,
                        
                        
                        December
                          31,2010
                        
                        
                        2009(Unaudited)Liabilities
      and Shareholders' EquityCurrent
      LiabilitiesAccounts
      payable
                        
                        $
                        499,832
                        
                        
                        $
                        309,174Accrued
      salaries and bonus
                        
                        
                        30,016
                        
                        
                        
                        34,350Accrued
      expenses
                        
                        
                        27,712
                        
                        
                        
                        34,874Total
      current liabilities
                        
                        
                        557,560
                        
                        
                        
                        378,398Shareholders'
      EquityCommon
      stock, $0.0001 par value, 120,000,000 shares authorized, 30,063,759 shares
      issued and outstanding as of December 31, 2009 and September 30,
      2010
                        
                        
                        3,007
                        
                        
                        
                        3,007Additional
      paid-in capital
                        
                        
                        47,523
                        
                        
                        
                        47,523Other
      comprehensive income
                        
                        
                        334,176
                        
                        
                        
                        226,760Retained
      earnings
                        
                        
                        3,345,824
                        
                        
                        
                        3,867,656Total
      shareholders' equity
                        
                        
                        3,730,530
                        
                        
                        
                        4,144,946Total
      Liabilities and Shareholders' Equity
                        
                        $
                        4,288,090
                        
                        
                        $
                        4,523,344




See
accompanying Notes to Condensed Consolidated Financial
Statements


5


OMPHALOS,
CORP.


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


For
the Nine Months Ended September 30, 2010 and 2009


(Unaudited)





Nine Months Ended
                  
                  
                  Three Months EndedSeptember 30,
                    2010
                  
                  
                  September 30,
                    2009
                  
                  
                  September 30,
                    2010
                  
                  
                  September 30,
                    2009Revenues:Sales
      of goods, net
                  
                  $
                  811,296
                  
                  
                  $
                  1,537,744
                  
                  
                  $
                  44,567
                  
                  
                  $
                  598,345Operating
      costs and expenses:Cost
      of sales
                  
                  
                  605,818
                  
                  
                  
                  999,782
                  
                  
                  
                  23,999
                  
                  
                  
                  378,560Selling,
      general and administrative expenses
                  
                  
                  672,542
                  
                  
                  
                  818,758
                  
                  
                  
                  169,509
                  
                  
                  
                  264,428`Loss
      from operations
                  
                  
                  (467,064
                  )
                  
                  
                  (280,796
                  )
                  
                  
                  (148,941
                  )
                  
                  
                  (44,643
                  )Other
      income (expenses)Interest
      income
                  
                  
                  3,836
                  
                  
                  
                  38,759
                  
                  
                  
                  670
                  
                  
                  
                  3,738Other
      income
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  518Gain
      (loss) on foreign currency exchange
                  
                  
                  (58,604
                  )
                  
                  
                  (61,167
                  )
                  
                  
                  (52,949
                  )
                  
                  
                  (42,979
                  )Total
      other income (expense)
                  
                  
                  (54,768
                  )
                  
                  
                  (22,408
                  )
                  
                  
                  (52,279
                  )
                  
                  
                  (38,723
                  )Loss
      before provision for income taxes
                  
                  
                  (521,832
                  )
                  
                  
                  (303,204
                  )
                  
                  
                  (201,220
                  )
                  
                  
                  (83,366
                  )Provision
      for income taxes
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Net
      loss
                  
                  $
                  (521,832
                  )
                  
                  $
                  (303,204
                  )
                  
                  $
                  (201,220
                  )
                  
                  $
                  (83,366
                  )Weighted
      average number of common shares:Basic
      and diluted
                  
                  
                  30,063,759
                  
                  
                  
                  30,063,759
                  
                  
                  
                  30,063,759
                  
                  
                  
                  30,063,759Not
      loss per share:Basic
      and diluted
                  
                  $
                  (0.02
                  )
                  
                  $
                  (0.01
                  )
                  
                  $
                  (0.01
                  )
                  
                  $
                  (0.00
                  )





See
accompanying Notes to Condensed Consolidated Financial
Statements


6





OMPHALOS,
CORP.


CONDENSED
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY


AND
COMPREHENSIVE INCOME


For
the Nine Months Ended September 30, 2010


(Unaudited)





Common Stock
                        
                        
                        Additional
                          Paid-in
                        
                        
                        Retained
                        
                        
                        ComprehensiveShares
                        
                        
                        Amount
                        
                        
                        Capital
                        
                        
                        Earning
                        
                        
                        Income
                        
                        
                        TotalBalance
      at December 31, 2009
                        
                        
                        30,063,759
                        
                        
                        $
                        3,007
                        
                        
                        $
                        47,523
                        
                        
                        $
                        3,867,656
                        
                        
                        $
                        226,760
                        
                        
                        $
                        4,144,946Translation
      adjustment
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        107,416
                        
                        
                        
                        107,416Net
      loss
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (521,832
                        )
                        
                        
                        -
                        
                        
                        
                        (521,832
                        )Balance
      at September 30, 2010
                        
                        
                        30,063,759
                        
                        
                        $
                        3,007
                        
                        
                        $
                        47,523
                        
                        
                        $
                        3,345,824
                        
                        
                        $
                        334,176
                        
                        
                        $
                        3,730,530





See
accompanying Notes to Condensed Consolidated Financial
Statements


7





OMPHALOS,
CORP.


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


For
the Nine Months Ended September 30, 2010 and 2009


(Unaudited)





September
                          30, 2010
                        
                        
                        September
                          30, 2009Cash
      flows from operating activitiesNet
      loss
                        
                        $
                        (521,832
                        )
                        
                        $
                        (303,204
                        )Adjustments
      to reconcile net income to net cash provided by (used in) operating
      activities:Amortization
      and depreciation
                        
                        
                        3,064
                        
                        
                        
                        3,847Reduction
      in inventory valuation allowance
                        
                        
                        -
                        
                        
                        
                        (55,969
                        )Foreign
      currency exchange loss
                        
                        
                        58,604
                        
                        
                        
                        61,167Changes
      in assets and liabilities:Decrease
      (increase) in accounts receivable
                        
                        
                        341,313
                        
                        
                        
                        (276,775
                        )Decrease
      (increase) in inventory
                        
                        
                        68,574
                        
                        
                        
                        134,625Decrease
      (increase) in prepaid and other assets
                        
                        
                        (26,571
                        )
                        
                        
                        (570,920
                        )Increase
      (decrease) in accounts payable
                        
                        
                        178,962
                        
                        
                        
                        (1,111,078
                        )Increase
      (decrease) in accrued expenses
                        
                        
                        (13,213
                        )
                        
                        
                        (32,562
                        )Net
      cash provided by (used in)  operating activities
                        
                        
                        88,901
                        
                        
                        
                        (2,150,869
                        )Cash
      flows from investing activitiesPatent
      registration
                        
                        
                        (1,512
                        )
                        
                        
                        -Net
      cash used in investing activities
                        
                        
                        (1,512
                        )
                        
                        
                        -Cash
      flows from financing activitiesProceeds
      from repayment of loans from shareholders
                        
                        
                        -
                        
                        
                        
                        6,319Net
      cash provided by financing activities
                        
                        
                        -
                        
                        
                        
                        6,319Effect
      of exchange rate changes on cash and cash equivalents
                        
                        
                        (2,913
                        )
                        
                        
                        (61,600
                        )Net
      increase (decrease) in cash and cash equivalents
                        
                        
                        84,476
                        
                        
                        
                        (2,206,150
                        )Cash
      and cash equivalentsBeginning
                        
                        
                        1,968,816
                        
                        
                        
                        4,494,963Ending
                        
                        $
                        2,053,292
                        
                        
                        $
                        2,288,813Supplemental
      disclosure of cash flowsCash
      paid during the year for:Interest
      expense
                        
                        $
                        -
                        
                        
                        $
                        -Income
      tax
                        
                        $
                        -
                        
                        
                        $
                        -





See
accompanying Notes to Condensed Consolidated Financial
Statements


8


OMPHALOS,
CORP.




NOTES
TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


SEPTEMBER
30, 2010





1.
            ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES





Basis of
Presentation— The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles in the United States (“GAAP”) for interim financial reporting and in
accordance with instructions for Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, the unaudited condensed consolidated financial
statements contained in this report reflect all adjustments that are normal and
recurring in nature and considered necessary for a fair presentation of the
financial position and the results of operations for the interim periods
presented. The year-end condensed balance sheet data was derived from audited
financial statements, but does not include all disclosures required by GAAP. The
results of operations for the interim period are not necessarily indicative of
the results expected for the full year. These unaudited, condensed consolidated
financial statements, footnote disclosures and other information should be read
in conjunction with the financial statements and the notes thereto included in
the Company’s Annual Report on Form 10-K for the year ended December 31,
2009.





Organization— Omphalos Corp. was incorporated as Soyodo Group Holdings, Inc. (the
“Soyodo”) under the laws of Delaware in March 2003. On February 5, 2008, Soyodo
acquired the outstanding shares of Omphalos Corp. Omphalos Corp. (the “Omphalos
BVI) was incorporated on October 30, 2001 under the laws of the British Virgin
Islands. For accounting purposes, the acquisition was treated as a
recapitalization of Omphalos BVI. Omphalos BVI owns 100% of Omphalos Corp.
(Taiwan), All Fine Technology Co., Ltd. (Taiwan), and All Fine Technology Co.,
Ltd. (B.V.I.). Omphalos Corp. (Taiwan) and was incorporated on February 13, 1991
under the laws of Republic of China. All Fine Technology Co., Ltd. (Taiwan) was
incorporated on March 23, 2004 under the laws of Republic of China. All Fine
Technology Co., Ltd. (B.V.I.) was incorporated on February 2, 2005 under the
laws of the British Virgin Islands. Omphalos Corp. (B.V.I.) and its subsidiaries
supplies a wide range of equipments and parts including reflow soldering ovens
and automated optical inspection machines for printed circuit board (PCB)
manufacturers in Taiwan and China.





Effective
April 18, 2008 Soyodo entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with Omphalos, Corp., a Nevada corporation. Pursuant to the
Merger Agreement, Soyodo was merged with and into the surviving corporation,
Omphalos Corp. The certificate of incorporation and bylaws of the surviving
corporation became the certificate of incorporation and bylaws of the Company,
and the directors and officers of Soyodo became the members of the board of
directors and officers of the Company. Following the execution of the Merger
Agreement, the Company filed with the Secretary of State of Delaware and Nevada,
a Certificate of Merger. Omphalos, Corp is incorporated on April 15, 2008 under
the laws of the state of Nevada. The main purpose of the merger is to change the
company’s name to Omphalos, Corp.





Basis of
Consolidation— The consolidated financial statements include the accounts
of Omphalos Corp. and its wholly owned subsidiaries.  All significant
intercompany accounts and transactions are eliminated.





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 from those
estimates.




Cash and Cash
Equivalents— Cash and cash equivalents include cash on hand and cash in
time deposits, certificates of deposit and all highly liquid debt instruments
with original maturities of three months or less.


9


Inventory— Inventory is carried at the lower of cost or market. Cost is determined
by using the specific identification method. The Company periodically reviews
the age and turnover of its inventory to determine whether any inventory has
become obsolete or has declined in value, and charges to operations for known
and anticipated inventory obsolescence. Inventory consists substantially of
finished goods and is net of an allowance for slow-moving inventory of $504,901
and $491,126 at September 30, 2010 and December 31, 2009,
respectively.




Intangible Assets—Include cost of patent applications that are deferred and charged to
operations over their useful lives. The accumulated amortization is $3,407 and
$2,750 at September 30, 2010 and December 31, 2009, respectively. Annual
amortization expense of such intangible assets is expected to be $770 per year
for the next five years.





Foreign-currency
Transactions— Foreign-currency transactions are recorded in New Taiwan
dollar (“NTD”) at the rates of exchange in effect when the transactions occur.
Gains or losses resulting from the application of different foreign exchange
rates when cash in foreign currency is converted into New Taiwan dollar, or when
foreign-currency receivables or payables are settled, are credited or charged to
income in the year of conversion or settlement. On the balance sheet dates, the
balances of foreign-currency assets and liabilities are restated at the
prevailing exchange rates and the resulting differences are charged to current
income except for those foreign currencies denominated investments in shares of
stock where such differences are accounted for as translation adjustments under
stockholders’ equity.





Translation
Adjustment—The Company financial statements are presented in the U.S.
dollar ($), which is the Company’s reporting currency, while its functional
currency is New Taiwan dollar (“NTD”). Transactions in foreign currencies are
initially recorded at the functional currency rate ruling at the date of
transaction. Any differences between the initially recorded amount and the
settlement amount are recorded as a gain or loss on foreign currency transaction
in the consolidated statements of income. Monetary assets and liabilities
denominated in foreign currency are translated at the functional currency rate
of exchange ruling at the balance sheet date. Any differences are taken to
profit or loss as a gain or loss on foreign currency translation in the
statements of income.




In
accordance with ASC 830, Foreign Currency Matters, the Company translates the
assets and liabilities into U.S. dollar ($) using the rate of exchange
prevailing at the balance sheet date and the statements of operations and cash
flows are translated at an average rate during the reporting period. Adjustments
resulting from the translation from NTD into U.S. dollar are recorded in
stockholders’ equity as part of accumulated other comprehensive
income.




Recently Issued
Accounting Pronouncements — In January 2010, the FASB issued Accounting
Standards Update (“ASU”) No. 2010-06, Improving Disclosures about Fair
Value Measurements , which, among other things, amends Accounting Standards Topic 820 Fair
Value Measurements and Disclosures (ASC 820) to require entities to
separately present purchases, sales, issuances, and settlements in their
reconciliation of Level 3 fair value measurements (i.e., to present
such items on a gross basis rather than on a net basis), and which clarifies
existing disclosure requirements provided by ASC 820 regarding the level of
disaggregation and the inputs and valuation techniques used to measure fair
value for measurements that fall within either Level 2 or Level 3 of
the fair value hierarchy. ASU No. 2010-06 is effective for interim and
annual periods beginning after December 15, 2009, except for the
disclosures about purchases, sales, issuances, and settlements in the roll
forward of activity in Level 3 fair value measurements which are effective
for fiscal years beginning after December 15, 2010 and for interim periods
within those fiscal years. The Company’s adoption of this standard had no impact
on its consolidated financial position, results of operations or cash
flows.




In April
2010, the FASB issued ASU No. 2010-17—Revenue Recognition—Milestone Method
(Topic 605), which provides guidance on the criteria that should be met for
determining whether the milestone method of revenue recognition is appropriate.
A vendor can recognize consideration that is contingent upon achievement of a
milestone in its entirety as revenue in the period in which the milestone is
achieved only if the milestone meets all criteria to be considered substantive.
A milestone should be considered substantive in its entirety. An individual
milestone may not be bifurcated. The amendments in this Update are effective on
a prospective basis for milestones achieved in fiscal years, and interim periods
within those years, beginning on or after June 15, 2010. The Company’s adoption
of the amendments in this update had no impact on its financial position,
results of operations or cash flows.


10





2.
              RELATED-PARTY
      TRANSACTIONS





Operating
Leases—The Company leases its facility from a shareholder under an
operating lease agreement which expires on December 31, 2010. The monthly base
rent is approximately $2,200. Rent expense under this lease agreement amounted
to approximately $19,800 and $19,800 for the periods ended September 30, 2010
and 2009, respectively.





3.
              OTHER
      COMPREHENSIVE INCOME





Balances
of related after-tax components comprising accumulated other comprehensive
income (loss), included in stockholders' equity, at September 30, 2010 and
December 31, 2009 are as follows:





Foreign Currency
                        Translation Adjustment
                      
                      
                      Accumulated Other
                        Comprehensive IncomeBalance
      at December 31, 2009
                      
                      $
                      226,760
                      
                      
                      $
                      226,760Change
      for the period
                      
                      
                      107,416
                      
                      
                      
                      107,416Balance
      at September 30, 2010
                      
                      $
                      334,176
                      
                      
                      $
                      334,176





******


11





Item 2.   Management’s Discussion and Analysis
or Plan of Operation.





Cautionary Note Regarding
Forward-Looking Statements





This Quarterly Report on Form 10-Q,
including this discussion and analysis by management, contains or incorporates
forward-looking statements.   All statements other than
statements of historical fact made in report are forward looking.  In
particular, the statements herein regarding industry prospects and future
results of operations or financial position are forward-looking
statements.  These forward-looking statements can be identified by the
use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,”
anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other
variations or similar words.  No assurances can be given that the
future results anticipated by the forward-looking statements will be
achieved.  Forward-looking statements reflect management’s current
expectations and are inherently uncertain.  Our actual results may
differ significantly from management’s expectations. The potential risks and
uncertainties that could cause our actual results to differ materially from
those expressed or implied herein are set forth in our Annual Report on Form
10-K for the year ended December 31, 2009.





The following discussion and analysis
should be read in conjunction with our financial statements, included
herewith.  This discussion should not be construed to imply that the
results discussed herein will necessarily continue into the future, or that any
conclusion reached herein will necessarily be indicative of actual operating
results in the future.  Such discussion represents only the best
present assessment of our management.





Results
of Operations





Three Months and Nine Months Ended September 30,
2010 Compared to the Three Months and Nine Months Ended September 30,
2009





Three
Months Ended September 30, 2010 Compared to the Three Months Ended September 30,
2009





Net sales
for the three months ended September 30, 2010 were $44,567 as compared to
$598,345 for the three months ended September 30, 2009. This represents a
decrease of $553,778 or approximately 92.55% comparing the two
periods.  The decrease in net sales is primarily the result of a
decrease in demand for end products due to poor economic
conditions.





Cost of
sales decreased by $354,561 or approximately 93.66%, to $23,999 for the three
months ended September 30, 2010 as compared to $378,560 for the three months
ended September 30, 2009. The decrease in cost of sales is primarily the result
of a decrease in sales volume.





For the
three months ended September 30, 2010, selling, general and administrative
expenses totaled $169,509. This was a decrease of $94,919 or approximately
35.90% as compared to the same period in 2009. The decrease in selling, general
and administrative expenses is primarily the result of a decrease in commission,
salary and wages, and professional service fees.





For the
three months ended September 30, 2010, income (loss) from operations decreased
to ($148,941) as compared to ($44,643) for the three months ended September 30,
2009.  This represents an increased loss of $104,298 comparing the two
periods.  The loss from operations for the three months ended
September 30, 2010 is primarily the result of a decrease in net sales which
partially offset by a decrease in selling, general and administration
expenses.





Other
income (expenses) was ($52,279) and ($38,723) for the three months ended
September 30, 2010 and 2009, respectively.  This was an increased
expense of $13,556 or approximately 35%.  The main reason for this
increased expense was a decrease in interest income and an increase in loss on
foreign currency exchange.





Our net
income (loss) was ($201,220) for the three months ended September 30, 2010
compared to net income (loss)  of ($83,366) for the three months ended
September 30, 2009. The increases loss for the three months ended September 30,
2010 was due to the reasons described above.


12





Liquidity
and Capital Resources





Cash and
cash equivalents were $2,053,292 at September 30, 2010 and $1,968,816 at
December 31, 2009. Our total current assets were $4,220,697 at September 30,
2010 as compared to $4,410,802 at December 31, 2009. Our total current
liabilities were $557,560 at September 30, 2010 as compared to $378,398 at
December 31, 2009.





We had
working capital at September 30, 2010 of $3,663,137 compared with working
capital of $4,032,404 at December 31, 2009. This decrease in working capital was
primarily due to a decrease in accounts receivable and an increase in accounts
payable which partially offset by an increase in cash and cash
equivalents.





During
the nine months ended September 30, 2010, net cash provided by operating
activities was $88,901. Net cash used in investing activities was $1,512, and
net cash provided by financing activities was $0. Net change in cash and cash
equivalents was an increase of $84,476.





Nine
Months Ended September 30, 2010 compared to the Nine Months Ended September 30,
2009





Net sales
for the nine months ended September 30, 2010 were $811,296 as compared to
$1,537,744 for the nine months ended September 30, 2009. This represents a
decrease of $726,448 or approximately 47.24% comparing the two periods. The
decrease in net sales for the nine months ended September 30, 2010 is primarily
the result of a decrease in demand for end products due to poor economic
conditions.





Cost of sales decreased by $393,964 or
approximately 39.40%, to $605,818 for the nine months ended September 30, 2010
as compared to $999,782 for the nine months ended September 30,
2009.  The decrease in cost of sales is primarily the result of a
decrease in sales volume and the increase in purchase costs.





For the nine months ended September 30,
2010, selling, general and administrative expenses totaled
$672,542.  This was a decrease of $146,216 or approximately 17.86% as
compared to the same period in 2009. The decrease in selling, general and
administrative expenses is primarily the result of decreases in commission,
salary and wages, and professional service fees.





For the nine months ended September 30,
2010, income (loss) from operations increased to ($467,064) as compared to
($280,796) for the nine months ended September 30, 2009.  This
represents an increased loss of $186,268 comparing the two periods. The decrease
in income from operations for the nine months ended September 30, 2010 is
primarily the result of a decrease in net sales and an increase in cost of sales
which was partially offset by a decrease in selling, general and administrative
expenses.





Other income (expense) was ($54,768)
and ($22,408) for the nine months ended September 30, 2010 and 2009,
respectively. This was an increased expense of $32,360.  The main
reason for this increased expense was due to a decrease in interest
income.





Our net income (loss) was ($521,832)
for the nine months ended September 30, 2010 compared to net income (loss) of
($303,204) for the nine months ended September 30, 2009. The decrease in
profitability for the nine months ended September 30, 2010 was due to the
reasons described above.





Inflation




Our
opinion is that inflation has not had a material effect on our operations and is
not expected to have any material affect on our operations.




Climate Change




Our
opinion is that neither climate change, nor governmental regulations
related to climate change, have had, or are expected to have, any
material affect on our operations.


13





Item
3.   Quantitative and Qualitative Disclosures About Market
Risk.





N/A.





Item 4.   Controls and
Procedures.





As of the
end of the period covered by this report, we conducted an evaluation, under the
supervision and with the participation of our Chief Executive Officer and Chief
Financial Officer of our disclosure controls and procedures (as defined in Rule
13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation,
our Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures were effective as of September 30, 2010 to
ensure that information required to be disclosed by us in the reports that we
file or submit under the Exchange Act is: (1) accumulated and communicated to
our management, including our Chief Executive Officer and Chief Financial
Officer, as appropriate to allow timely decisions regarding required disclosure;
and (2) recorded, processed, summarized and reported, within the time periods
specified in the Commission's rules and forms.





Changes
in Internal Control Over Financial Reporting





There was
no change to our internal controls or in other factors that could affect these
controls during our last fiscal quarter that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.





PART II





Item 1.   Legal
Proceedings.




We are
not a party to any pending legal proceeding, nor is our property the subject of
a pending legal proceeding, that is not in the ordinary course of business or
otherwise material to the financial condition of our business. None of our
directors, officers or affiliates is involved in a proceeding adverse to our
business or has a material interest adverse to our business.





Item
1A.Risk Factors.





Not Applicable.





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.


14





Item 6.   Exhibits.





Exhibit
                        Number
                      
                      Description2.1
                      
                      Share
      Exchange Agreement dated February 5, 2008, between the Company and the
      parties set forth on the signature page thereof. (incorporated by
      reference to the Company’s Current Report on Form 8-K filed with the
      Commission on March 14, 2008)2.2
                      
                      Agreement
      and Plan of Merger (incorporated by reference to the Company’s Current
      Report on Form 8-K filed with the Commission on April 15,
      2008)3.1
                      
                      Articles
      of Amendment to the Articles of Incorporation of the Company (incorporated
      by reference to the
                        Company's
      proxy statement on Schedule 14A filed with the Commission on March 5, 2003
      (the "Proxy Statement")3.2
                      
                      Agreement
      and Plan of Merger between Quixit, Inc., a Colorado corporation, and TOP
      Group Corporation (now
                        known
      as   TOP Group Holdings, Inc.), a Delaware corporation
      (incorporated by reference to the Proxy Statement)3.3
                      
                      Certificate
      of Incorporation of the Company (incorporated by reference to the Proxy
      Statement)3.4
                      
                      By-Laws
      of the Company (incorporated by reference to the Proxy
      Statement)3.5
                      
                      Restated
      Certificate of Incorporation of the Company (incorporated by reference to
      the Company’s proxy statement on Schedule 14C filed with the commission on
      March 15, 2005 for an increase of authorized shares)3.6
                      
                      Restated
      Certificate of Incorporation of the Company (incorporated by reference to
      the Company’s proxy statement on Schedule l4C filed with the commission on
      August 26, 2005 for a name change)3.7
                      
                      Restated
      Certificate of Incorporation of the Company (incorporated by reference to
      the Company’s proxy statement on Schedule l4C filed with the commission on
      June 20, 2006 to set the new total authorized shares)3.8
                      
                      Certificate
      of Merger filed with the Secretary of State of Delaware (incorporated by
      reference to the Company’s Current Report on Form 8-K filed with the
      Commission on April 15, 2008)3.9
                      
                      Certificate
      of Merger filed with Secretary of State of Nevada (incorporated by
      reference to the Company’s Current Report on Form 8-K filed with the
      Commission on April 15, 2008)3.10
                      
                      Certificate
      of Amendment to the Articles of Incorporation (incorporated by reference
      to the Company’s Current Report on Form 8-K filed with the Commission on
      April 15, 2008)10.1
                      
                      Employment
      Agreement with Pi-Yun Chu (incorporated by reference to the Company’s
      Current Report on Form 8-K filed with the Commission on March 14,
      2008)10.2
                      
                      Employment
      Agreement with Shen-Ren Li (incorporated by reference to the Company’s
      Current Report on Form 8-K filed with the Commission on March 14,
      2008)10.3
                      
                      Employment
      Agreement with Sheng-Peir Yang (incorporated by reference to the Company’s
      Current Report on Form 8-K filed with the Commission on March 14,
      2008)31.1
                      
                      Certification
      by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a)
      of the Exchange Act.*31.2
                      
                      Certification
      by Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a)
      of the Exchange
Act.*


15




32.1
              
              Certification
      by Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b)
      of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the
      United States Code.*32.2
              
              Certification
      by Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b)
      of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the
      United States Code.*
  ·
                Filed
      herewith.


16





SIGNATURES





In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.




OMPHALOS,
      CORP.Date:
      November 5, 2010
                By:
                /s/ Sheng-Peir
      YangSheng-Peir
      YangChief
      Executive Officer, President
                  and
      Chairman of the BoardDate:
      November 5, 2010
                By:
                /s/
      Chu Pi
      YunChu
      Pi YunChief
      Financial Officer, Chief Accounting
                  Officer
      and Director


17