United
States


Securities
and Exchange Commission


Washington,
D.C.  20549


FORM
10-Q





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





For the
quarterly period ended September 30, 2010





OR





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





Commission
File No: 09081





CYBRDI,
INC.


(Exact
name of registrant as specified in its charter)





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





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


(Address
of principal executive office)  (Zip Code)





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





N/A


Former
name, former address and former fiscal year,





(if
changed since last report)





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





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




Large
      accelerated filer  ̈
              
              Accelerated
      filer  ̈
              
              Non-accelerated
      filer  ̈
                (Do
      not check if a smaller reporting
                company)
              
              Smaller
      reporting company x


Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes  ̈   No x





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








CYBRDI,
INC.


FORM
10-Q


QUARTERLY
PERIOD ENDED June 30, 2010





INDEX





TABLE OF
CONTENTS





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
                                                    
                                                    20Item
      4T:
                                                    Controls
      and Procedures
                                                    
                                                    20PART
      II – OTHER INFORMATIONItem
      1:
                                                    Legal
      Proceedings
                                                    
                                                    21Item
      1A:
                                                    Risk
      Factors
                                                    
                                                    21Item
      2:
                                                    Unregistered
      Sales of Equity Securities and Use of Proceeds
                                                    
                                                    21Item
      3:
                                                    Defaults
      Upon Senior Securities
                                                    
                                                    21Item
      4:
                                                    Removed
      and Reserved
                                                    
                                                    21Item
      5:
                                                    Other
      Information
                                                    
                                                    21Item
      6:
                                                    Exhibits
                                                    
                                                    21


2


PART
I. FINANCIAL INFORMATION


Item
1 Financial Statements


CYBRDI,
INC. AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEETS


September 30, 2010
                                    
                                    
                                    December 31, 2009(Unaudited)
                                    
                                    
                                    (Audited)ASSETSCURRENT
      ASSETSCash
      and equivalents
                                    
                                    $
                                    551,738
                                    
                                    
                                    $
                                    861,457Accounts
      receivable
                                    
                                    
                                    12,991
                                    
                                    
                                    
                                    14,646Inventories
                                    
                                    
                                    1,089,452
                                    
                                    
                                    
                                    1,334,463Deferred
      tax assets
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Due
      from related companies
                                    
                                    
                                    224,175
                                    
                                    
                                    
                                    219,716Loan
      to unaffiliated company
                                    
                                    
                                    89,670
                                    
                                    
                                    
                                    171,758Other
      receivables and prepaid expenses
                                    
                                    
                                    151,365
                                    
                                    
                                    
                                    161,891TOTAL
      CURRENT ASSETS
                                    
                                    
                                    2,119,391
                                    
                                    
                                    
                                    2,763,931PROPERTY,
      PLANT AND EQUIPMENT, NET
                                    
                                    
                                    397,569
                                    
                                    
                                    
                                    371,116CONSTRUCTION
      IN PROGRESS
                                    
                                    
                                    7,253,308
                                    
                                    
                                    
                                    6,739,726INTANGIBLE
      ASSETS, NET
                                    
                                    
                                    247,126
                                    
                                    
                                    
                                    312,519OTHER
      ASSETS
                                    
                                    
                                    -
                                    
                                    
                                    
                                    38,630DEFERRED
      TAX ASSETS
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -TOTAL
      ASSETS
                                    
                                    $
                                    10,017,394
                                    
                                    
                                    $
                                    10,225,922LIABILITIES AND EQUITYCURRENT
      LIABILITIESShort-term
      loan
                                    
                                    $
                                    1,569,225
                                    
                                    
                                    $
                                    1,538,011Accounts
      payable
                                    
                                    
                                    3,316
                                    
                                    
                                    
                                    49,938Accrued
      expenses
                                    
                                    
                                    466,536
                                    
                                    
                                    
                                    400,249Deferred
      revenue
                                    
                                    
                                    60,337
                                    
                                    
                                    
                                    28,871Customers
      deposits
                                    
                                    
                                    125,447
                                    
                                    
                                    
                                    116,731Due
      to related parties
                                    
                                    
                                    1,958,733
                                    
                                    
                                    
                                    1,786,113Deferred
      tax liabilities
                                    
                                    
                                    9,681
                                    
                                    
                                    
                                    9,490Other
      payables
                                    
                                    
                                    28,794
                                    
                                    
                                    
                                    132,912TOTAL
      CURRENT LIABILITIES
                                    
                                    
                                    4,222,069
                                    
                                    
                                    
                                    4,062,315CONSTRUCTION
      PAYABLE
                                    
                                    
                                    803,213
                                    
                                    
                                    
                                    865,446TOTAL
      LIABILITIES
                                    
                                    
                                    5,025,282
                                    
                                    
                                    
                                    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
                                    
                                    
                                    (1,745,969
                                    )
                                    
                                    
                                    (1,097,141
                                    )Accumulated
      other comprehensive income
                                    
                                    
                                    1,176,954
                                    
                                    
                                    
                                    1,075,711TOTAL
      STOCKHOLDERS’ EQUITY
                                    
                                    
                                    3,645,734
                                    
                                    
                                    
                                    3,887,319NONCONTROLLING
      INTEREST
                                    
                                    
                                    1,346,378
                                    
                                    
                                    
                                    1,410,842TOTAL
      EQUITY
                                    
                                    
                                    4,992,112
                                    
                                    
                                    
                                    5,298,161TOTAL
      LIABILITIES AND EQUITY
                                    
                                    $
                                    10,017,394
                                    
                                    
                                    $
                                    10,225,922


See notes
to consolidated financial statements.


3





CYBRDI,
INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)





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





See notes
to consolidated financial statements.


4





CYBRDI
INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)





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





See notes
to consolidated financial statements.


5


CYBRDI,
INC. AND SUBSIDIDARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)





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





1.
Interim Financial Statements





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





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





2.
Description of Business





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





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





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


6


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





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





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





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





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





3.
Going Concern





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





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


7





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


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


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


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





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





4.
Use of Estimates:





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ materially from those
estimates.





5.
Revenue Recognition





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


8


6.
Reverse Merger





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





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





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





7.
Income Taxes





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





8.
Recent Accounting Pronouncements





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





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


9





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





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





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





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





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




NOTE
B – ASSETS





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





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


10





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





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





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





NOTE
C - LIABILITIES





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


11





NOTE
D – STOCKHOLDERS’ EQUITY





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





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





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





NOTE
E – INCOME TAXES





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





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





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





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


12





PLAN
OF OPERATIONS





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





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


·
            Enhancing
      R&D in TMAs and technical
service


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


·
            Launching
      the health diagnosis kit for obesity and skin
  disease


·
            Participating
      in the culture and entertainment
field





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





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





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





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


13





RESULTS
OF OPERATIONS





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





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





Net
Sales





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


14





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





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





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





Gross
Margin





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





Operating
Expenses





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





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





Other
Expense





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


15





Income
Taxes





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





Net
Loss





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





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





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


16





Net
Sales





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





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





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





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





Gross
Margin





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





Operating
Expenses





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





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


17





Other
Income (Expense)





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





Income
Taxes





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





Net
Loss





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





LIQUIDITY
AND CAPITAL RESOURCES





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





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





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





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


18


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





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


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


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


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





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





INFLATION





Inflation
has not had a material impact on our business.


19


CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS





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





Item
3. Quantitative and Qualitative Disclosures about Market Risk




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





Item
4. Controls and Procedures





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





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


20


PART
II. OTHER INFORMATION





Item
1. Legal Proceedings





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





Item
1A.  Risk Factors





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





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





None.





Item
3. Defaults Upon Senior Securities.





None.





Item 4.  (Removed and
Reserved)





Item 5. Other Information





None





Item
6. Exhibits





31.1
                
                Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 302 of the Sarbanes-Oxley Act of
  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


21





SIGNATURE





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





CYBRDI,
INC.





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


22