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 1934For the quarterly
      period ended March 31, 2010ORo
            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 ofincorporation
      or organization)
            (I.R.S.
      EmployerID
      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 xNo 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 oNo o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. 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 o
            Accelerated
      filer o
            Non-accelerated
      filer o
              (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 oNo x




The number of shares of common stock,
no par value per share, outstanding as of May 13, 2010 was
65,756,567.










CYBRDI,
INC.


FORM
10-Q


QUARTERLY
PERIOD ENDED March 31, 2010





INDEX





TABLE OF
CONTENTS


PagePART
      I – FINANCIAL INFORMATIONItem
      1:
            Financial
      Statements
            
            
            3Item
      2:
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
            
            
            12Item
      3:
            Quantitative
      and Qualitative Disclosures About Market Risk
            
            
            17Item
      4T:
            Controls
      and Procedures
            
            
            18PART
      II – OTHER INFORMATIONItem
      1:
            Legal
      Proceedings
            
            
            19Item
      1A:
            Risk
      Factors
            
            
            19Item
      2:
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            
            
            19Item
      3:
            Defaults
      Upon Senior Securities
            
            
            19Item
      4:
            Removed
      and Reserved
            
            
            19Item
      5:
            Other
      Information
            
            
            19Item
      6:
            Exhibits
            
            
            19





2


PART
I. FINANCIAL INFORMATION




Item
1 Financial Statements




CYBRDI,
      INC. AND SUBSIDIARIESCONSOLIDATED
      BALANCE SHEETS




March
      31,
              2010
            
            
            December
      31,
              2009ASSETS
            
            (Unaudited)
            
            
            (Audited)CURRENT
      ASSETSCash
      and equivalents
            
            $
            659,059
            
            
            $
            861,457Accounts
      receivable
            
            
            6,006
            
            
            
            14,646Inventories
            
            
            1,234,255
            
            
            
            1,334,463Due
      from related companies
            
            
            219,751
            
            
            
            219,716Loan
      to unaffiliated company
            
            
            171,785
            
            
            
            171,758Other
      receivables and prepaid expenses
            
            
            188,586
            
            
            
            161,891TOTAL
      CURRENT ASSETS
            
            
            2,479,442
            
            
            
            2,763,931PROPERTY,
      PLANT AND EQUIPMENT, NET
            
            
            367,236
            
            
            
            371,116CONSTRUCTION
      IN PROGRESS
            
            
            6,907,869
            
            
            
            6,739,726INTANGIBLE
      ASSETS, NET
            
            
            289,129
            
            
            
            312,519OTHER
      ASSETS
            
            
            -
            
            
            
            38,630TOTAL
      ASSETS
            
            $
            10,043,676
            
            
            $
            10,225,922LIABILITIES AND
      EQUITYCURRENT
      LIABILITIESShort-term
      loan
            
            $
            1,538,259
            
            
            $
            1,538,011Accounts
      payable
            
            
            14,251
            
            
            
            49,938Accrued
      expenses
            
            
            1,202,879
            
            
            
            1,265,695Deferred
      revenue
            
            
            38,268
            
            
            
            28,871Customers
      deposits
            
            
            115,285
            
            
            
            116,731Due
      to related parties
            
            
            1,812,636
            
            
            
            1,786,113Deferred
      tax liabilities
            
            
            9,490
            
            
            
            9,490Other
      payables
            
            
            43,644
            
            
            
            132,912TOTAL
      LIABILITIES
            
            
            4,774,712
            
            
            
            4,927,761EQUITYPreferred
      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
            
            
            
            3,571,864Reserve
      funds
            
            
            336,885
            
            
            
            336,885Accumulated
      deficit
            
            
            (1,449,281
            )
            
            
            (1,097,141
            )Accumulated
      other comprehensive income
            
            
            1,092,758
            
            
            
            1,075,711TOTAL
      STOCKHOLDERS’ EQUITY
            
            
            3,858,226
            
            
            
            3,887,319NONCONTROLLING
      INTEREST
            
            
            1,410,738
            
            
            
            1,410,842TOTAL
      EQUITY
            
            
            5,268,964
            
            
            
            5,298,161TOTAL
      LIABILITIES AND EQUITY
            
            $
            10,043,676
            
            
            $
            10,225,922The
      accompanying notes are an integral part of these consolidated financial
      statements.




3





CYBRDI, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF OPERATIONS




Three
      Months Ended
            
            
            Three
      Months EndedMarch
      31, 2010
            
            
            March
      31, 2009(Unaudited)
            
            
            (Unaudited)RevenueHousing
            
            $
            94,614
            
            
            $
            -Tissue
      array products
            
            
            97,830
            
            
            
            102,600Total
      revenue
            
            
            192,444
            
            
            
            102,600Cost
      of SalesHousing
            
            
            84,869
            
            
            
            -Tissue
      array products
            
            
            64,459
            
            
            
            78,517Total
      cost of sales
            
            
            149,328
            
            
            
            78,517Gross
      Profit
            
            
            43,116
            
            
            
            24,084Operating
      Expenses:Selling
      and distribution expenses
            
            
            6,576
            
            
            
            15,425General
      and administrative expenses
            
            
            409,317
            
            
            
            170,799Research
      and development expenses
            
            
            7,404
            
            
            
            -Total
      Operating Expenses
            
            
            423,297
            
            
            
            186,224Loss
      from Operations
            
            
            (380,181
            )
            
            
            (162,140
            )Other
      Income/(Expense)Interest
      income
            
            
            848
            
            
            
            948Other
      (expense) income, net
            
            
            27,089
            
            
            
            4,151Total
      Other Income, Net
            
            
            27,937
            
            
            
            5,099Loss
      before Income Taxes
            
            
            (352,244
            )
            
            
            (157,041
            )Income
      Tax Benefit (Expense)
            
            
            -
            
            
            
            -Net
      loss
            
            
            (352,244
            )
            
            
            (157,041
            )Net
      (loss) income attributable to the noncontrolling interest
            
            
            (104
            )
            
            
            (22,315
            )Net
      loss attributable to CYBRDI, INC. AND SUBSIDIARIES
            
            $
            (352,140
            )
            
            $
            (134,725
            )Net
      Loss Per Common ShareBasic
      and Diluted
            
            $
            (0.01
            )
            
            $
            (0.01
            )Weighted
      Average Number of Shares OutstandingBasic
      and Diluted
            
            
            63,376,567
            
            
            
            50,456,567The
      accompanying notes are an integral part of these consolidated financial
      statements.





4





CYBRDI INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF CASH FLOWS




Three
      Months Ended
            
            
            Three
      Months EndedMarch
      31, 2010
            
            
            March
      31,2009(Unaudited)
            
            
            (Unaudited)CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      Loss
            
            $
            (352,140
            )
            
            $
            (134,725
            )Adjustments
      to Reconcile Net Loss to Net CashProvided
      by Operating Activities:Issuance
      of common shares for compensation
            
            
            306,000
            
            
            
            -Depreciation
      and amortization
            
            
            48,164
            
            
            
            54,878Gain
      on sale of other assets
            
            
            (28,161
            )
            
            
            1,714Minority
      interest
            
            
            (104
            )
            
            
            (22,315
            )Changes
      in Operating Assets and Liabilities:Accounts
      receivable
            
            
            8,640
            
            
            
            8,271Inventories
            
            
            100,400
            
            
            
            17,561Other
      receivable and prepaid expenses
            
            
            (26,663
            )
            
            
            (32,202
            )Accounts
      payable and accrued expenses
            
            
            (98,692
            )
            
            
            85,927Deferred
      revenue
            
            
            9,390
            
            
            
            -Other
      payables
            
            
            (89,269
            )
            
            
            (9,185
            )Customer
      deposits
            
            
            (1,465
            )
            
            
            31,891Net
      Cash Provided by (Used in) Operating Activities
            
            
            (123,900
            )
            
            
            1,816CASH
      FLOWS FROM INVESTING ACTIVITIESNet
      proceeds from disposal of other assets
            
            
            66,789
            
            
            
            -Repayment
      proceeds from affiliated companies
            
            
            3,797
            
            
            
            -Purchase
      of property, plant, and equipment
            
            
            (20,790
            )
            
            
            -Payments
      for construction in progress
            
            
            (167,019
            )
            
            
            (159,113
            )Repayment
      proceeds from loan to unaffiliated companies
            
            
            -
            
            
            
            (12,055
            )Net
      Cash Provided by (Used in) Investing Activities
            
            
            (117,223
            )
            
            
            (171,168
            )CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from shareholders/officers
            
            
            29,069
            
            
            
            44,883Repayments
      of loan from related companies
            
            
            (2,840
            )
            
            
            -Proceeds
      from short-term loan
            
            
            -
            
            
            
            146,278Proceeds
      from loans from related companies
            
            
            -
            
            
            
            70,181Repayments
      of long-term debt
            
            
            -
            
            
            
            (12,914
            )Net
      Cash Provided by Financing Activities
            
            
            26,229
            
            
            
            248,428NET
      INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS
            
            
            (214,893
            )
            
            
            79,075EFFECT
      OF EXCHANGE RATE CHANGE ON CASH & CASH EQUIVALENTS
            
            
            12,495
            
            
            
            (167
            )CASH
      & CASH EQUIVALENTS, BEGINNING BALANCE
            
            
            861,457
            
            
            
            381,357CASH
      & CASH EQUIVALENTS, ENDING BALANCE
            
            $
            659,059
            
            
            $
            460,265




The
      accompanying notes are an integral part of these 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.





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.




6





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 then
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 October 2007, in an effort to reduce the general and
administrative costs of Cybrdi Maryland, the Company terminated its branch
office in the United States. .





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 $1,449,281 as of
March 31, 2010, including a net loss of $352,140 for the three months ended
March 31, 2010. In addition, current liabilities exceeded current assets by
$2,295,270 at March 31, 2010. These matters raise substantial doubt about the
Company’s ability to continue as a going concern.




7





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 $3.4 million (equivalent to RMB 23 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:





(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 fees will be charged to commercial tenants at a rate of 3% of
      annual gross revenues.


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





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 to existing stockholders. 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.





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.




8





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.





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.




9




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 March
31, 2010 balance sheet included total current assets of $2,479,442 and
non-current assets of $7,564,234. Of these amounts, $659,059 in cash and
equivalents and $6,006 in accounts receivable are planned for funding current
operations and for future business expansion.





Other
current assets also included inventories, loan to related companies, loan to
unaffiliated company, and other receivable 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.





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 March 31, 2010, the principal
balance and interest receivable for this loan had been reduced to RMB 0.6
Million (equivalent to $87,901) and RMB 572,591 (equivalent to $83,884),
respectively, net of allowance of $83,885 for doubtful interest receivable. 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.




10





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 $6,907,869 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 March 31,
2010, construction-in-progress and land use right of $2.9 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
March 31, 2010, the balance sheet included total liabilities of $4,774,712 which
consisted of current liabilities. Included in the current liabilities was
short-term loan of $1,538,239 (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 $2.9 million
(equivalent to RMB 20.03 million) and $3.97 million (equivalent to RMB 27.12
million) as of March 31, 2010, respectively. The term of the loan is from August 25, 2009 to August 24, 2010 (total of twelve
months). TheAnnualinterest rate for this
debt is 7.965%. Additionally, there is another short-term loan of $146,501
(equivalent to RMB1.0million) from
Fengguo Liu, an unrelated party. Also included in the current liabilities was
$1,812,636 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.





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 March 31, 2010, the Company had 65,756,567 and 50,456,567
shares issued and outstanding. Historical information of the surviving company
is that of Cybrdi – Maryland.





As of
March 31, 2010, the balance sheet included total equity of $5,268,964, of which
$1,410,738 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, the
Chief Executive Officer and President of the Company, and 3,300,000 shares of
common stock of the Company to Ms. Xue Bu, the 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.




11





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 three months ended March 31, 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 three months ended March 31,
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.





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.




12





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 March 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 March 31, 2010, the land use right and
construction-in-progress with total book value of $6.9 million (equivalent to
RMB 47.0 million) of SD Chaoying were collateralized under the short-term loan
of $1,391,758 (equivalent to RMB9.5 million) from Changle
Rural Credit Union.




13





RESULTS
OF OPERATIONS





FOR THE
THREE MONTHS ENDED MARCH 31, 2010 COMPARED TO THREE MONTHS ENDED MARCH 31,
2009




CYBRDI, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF OPERATIONS




Three
      Months Ended
            
            
            Three
      Months Ended
            
            
            2010
      Vs 2009March
      31,
              2010
            
            
            March
      31,
              2009
            
            
            Increase/
              (decrease)(Unaudited)
            
            
            (Unaudited)RevenueHousing
            
            $
            94,614
            
            
            
            
            
            
            94,614
            
            
            
            100
            %Tissue
      array products
            
            
            97,830
            
            
            $
            102,600
            
            
            
            (4,770
            )
            
            
            -5
            %Total
      revenue
            
            
            192,444
            
            
            
            102,600
            
            
            
            89,844
            
            
            
            88
            %Cost
      of SalesHousing
            
            
            84,869
            
            
            
            -
            
            
            
            84,869
            
            
            
            100
            %Tissue
      array products
            
            
            64,459
            
            
            
            78,517
            
            
            
            (14,058
            )
            
            
            -18
            %Total
      cost of sales
            
            
            149,328
            
            
            
            78,517
            
            
            
            70,812
            
            
            
            90
            %Gross
      Profit
            
            
            43,116
            
            
            
            24,084
            
            
            
            19,032
            
            
            
            79
            %Operating
      Expenses:Selling
      and distribution expenses
            
            
            6,576
            
            
            
            15,425
            
            
            
            (8,849
            )
            
            
            -57
            %General
      and administrative expenses
            
            
            409,317
            
            
            
            170,798
            
            
            
            238,519
            
            
            
            140
            %Research
      and development expenses
            
            
            7,404
            
            
            
            -
            
            
            
            7,404
            
            
            
            100
            %Total
      Operating Expenses
            
            
            423,297
            
            
            
            186,223
            
            
            
            237,074
            
            
            
            127
            %Loss
      from Operations
            
            
            (380,181
            )
            
            
            (162,140
            )
            
            
            (218,042
            )
            
            
            134
            %Other
      Income/(Expense)Interest
      income
            
            
            848
            
            
            
            948
            
            
            
            (100
            )
            
            
            -11
            %Other
      (expense) income, net
            
            
            27,089
            
            
            
            4,151
            
            
            
            22,938
            
            
            
            553
            %Total
      Other (Expense) Income, Net
            
            
            27,937
            
            
            
            5,099
            
            
            
            23,838
            
            
            
            448
            %Loss
      before Income Taxes
            
            
            (352,244
            )
            
            
            (157,041
            )
            
            
            (195,203
            )
            
            
            124
            %Income
      Tax Benefit (Expense)
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Net
      loss
            
            
            (352,244
            )
            
            
            (157,041
            )
            
            
            (195,203
            )
            
            
            124
            %Net
      (loss) income attributable to the noncontrolling interest
            
            
            (104
            )
            
            
            (22,315
            )
            
            
            22,211
            
            
            
            -100
            %Net
      loss attributable to CYBRDI, INC. AND SUBSIDIARIES
            
            $
            (352,140
            )
            
            $
            (134,725
            )
            
            
            (217,416
            )
            
            
            161
            %





14




Net
Sales





Three
categories of revenues: sales of tissue chip & kits products and tissue
product related services, and housing. The net sales increased $89,844 to
$192,444 for the three months ended March 31, 2010 from $102,600 for the three
months ended March 31, 2009, an increase of 88%.





Tissue
Chip & Kit Products: The net sales decreased $4,770 to $97,830 for the three
months ended March 31, 2010 as compared to $102,600 for the three months ended
March 31, 2009, a decrease of 5%.The decrease 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 three
months ended March 31, 2010 and 2009, resulting in no services revenues for the
three months ended March 31, 2010 and 2009.This decrease was primarily
attributable to reduced service demand in China.





Housing:
The net sales was $94,614 during the first 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 March 31, 2010, an additional 3
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 22% for the three months ended in
March 31, 2010 from 23% for three months ended in March 31, 2009. Gross profit
for the three months ended in March 31, 2010 increased $19,032 to $43,116 from
$24,084 for the three months ended in March 31, 2009, an increase of 79%. The
reason for the decrease in gross margin was primarily due tothe diluting effect caused
by the lower gross margin of SD Chaoying at 10.3%.Gross profit of ChaoYing
Biotechnology for the three months ended March 31, 2010 increased to $33,371
from $24,084 for the three months ended in March 31, 2009, mainly due to higher
gross margin of the products sold during the current quarter as compared to the
same quarter last year.. Gross profit of SD Chaoying for the three months ended
March 31, 2010 was $9,745, accounting for approximately 10.3% of sales
revenue.Under normal
circumstances, the rates of margin of real estate development is lower than
other industries.





Operating
Expenses





The
Company’s operating expenses increased $237,074 to $423,297 for the three months
ended March 31, 2010 from $186,223 for the three months ended March 31, 2009, an
increase of 127%. This was primarily due to an increase in general and
administrative expenses of $238,519 to $409,317 for the three months ended March
31, 2010 compared to $170,798 for the three months ended March 31, 2009. The
increase was 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 $8,849 to $6,576 for the three months ended March 31, 2010
compared to $15,425 for the three months ended March 31, 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.




15





Other
Income





Other
income increased by $22,938 to $27,937 for the three months ended March 31, 2010
as compared to $5,099 for the three months March 31, 2009, an increase of 448%.
Other income was mainly comprised of $28,168 generated from the sale of
non-operating real property of Chao Ying Biotech for the first quarter of 2010.
Thenet
book value of non-operating real property was $38,636 and net proceeds from the
sale amounted to $66,804.





Income
Taxes





The
Company did not record U.S. and PRC current income tax for three months ended
March 31 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 $195,203, or 124%, from
$157,041 for the three months ended March 31, 2010 to $352,244 for the three
months ended March 31, 2009.





LIQUIDITY
AND CAPITAL RESOURCES





Operating
working capital (total current asset deduct total current liabilities) decreased
by $131,440 from $(2,163,830) as of December 31, 2009 to $(2,295,270) as of
March 31, 2010. The decrease was primarily due to cash and cash equivalents and
inventories decreased $202,398 and $100,208 as of March 31, 2010, respectively
as compared to the amounts at December 31, 2009.





For
investing activities, the Company incurred net cash outflow during the three
months ended March 31, 2010. The primary reason was due to the payment of
$167,019 used for the construction in progress of the SD Chaoying project during
the three months ended March 31, 2010, and $20,790 used in purchase of operating
equipment.





For
financing activities, the Company obtained net proceeds of $29,069 from its
principal shareholder and officer of the Company for the three months ended
March 31, 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 $1,449,281 as of
March 31, 2010, including a net loss of $352,140 for the three months ended
March 31, 2010. In addition, current liabilities exceeded current assets by
$2,295,270 at March 31, 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 $3.4 million (equivalent to RMB 23 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:





(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.




16




(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 fees will be charged to commercial tenants at a rate of 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
      operations.





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.





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.




17




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 quarter ended March 31, 2010, there were
no changes in our internal control over financial reporting (as defined in Rule
13a-15(f) and 15d-15(f) under the Exchange Act) ) that have materially affected,
or are reasonably likely to materially affect, our internal control over
financial reporting.





18


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 March 31, 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
  200231.2
            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
  200232.1
            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
  200232.2
            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





19




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:
      May 17, 2010
              By
              /s/
      Yanbiao
      BaiYanbiao
      Bai,
                Chief
      Executive Officer and presidentBy:
              Xue
      BuXue
      Bu,
                Principal
      Financial Officer
  20