United States


Securities and Exchange
Commission


Washington, D.C.
20549


FORM 10-Q/A




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





For the
quarterly period ended June 30, 2008





OR





o  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 71006 1


(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 o





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





Large
      accelerated filero
            
            Accelerated
      filero
            
            Non-accelerated
      filero
              (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 o No x




The
number of shares of common stock, no par value per share, outstanding as of
August 18, 2008 was 50,456,569 .







This
amendment is being filed to amend Exhibit 31.1 (Certification of Yanbiao Bai,
Chief Executive Officer and President) and Exhibit 31.2 (Certification of Xue
Bu, Principal Financial Officer) to reflect that the registrant has designed
such internal control over financial reporting, or caused such internal control
over financial reporting to be designed under its supervision, to provided
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principals.




CYBRDI,
INC.


FORM
10-Q/A


QUARTERLY
PERIOD ENDED June 30, 2008





INDEX




TABLE OF
CONTENTS
  PagePART
      I – FINANCIAL INFORMATIONItem
      1:
                Financial
      Statements
                1Item
      2:
                Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                9Item
      3:
                Quantitative
      and Qualitative Disclosures About Market Risk
                16Item
      4T:
                Controls
      and Procedures
                16PART
      II – OTHER INFORMATIONItem
      1:
                Legal
      Proceedings
                17Item
      1A:
                Risk
      Factors
                17Item
      2:
                Unregistered
      Sales of Equity Securities and Use of Proceeds
                17Item
      3:
                Defaults
      Upon Senior Securities
                17Item
      4:
                Submission
      of Matters to a Vote of Security Holders
                17Item
      5:
                Other
      Information
                17Item
      6:
                Exhibits
                17




PART I. FINANCIAL
INFORMATION


Item 1. Financial
Statements


CYBRDI, INC. AND
SUBSIDIARIES


CONSOLIDATED BALANCE
SHEETS
 
 
 June 30, 2008
              
              December 31, 2007(Unaudited)
              
              (Audited)ASSETSCURRENT
      ASSETSCash
      and equivalents
              
              $
              469,058
              
              $
              637,056Accounts
      receivable
              
              
              5,658
              
              
              3,364Inventories
              
              
              431,257
              
              
              390,421Loan
      to unaffiliated company
              
              
              991,384
              
              
              1,000,740Other
      receivables and prepaid expenses
              
              
              159,052
              
              
              145,805TOTAL
      CURRENT ASSETS
              
              
              2,056,409
              
              
              2,177,386PROPERTY,
      PLANT AND EQUIPMENT, NET
              
              
              491,127
              
              
              493,273CONSTRUCTION
      IN PROGRESS
              
              
              3,311,039
              
              
              1,929,002INTANGIBLE
      ASSETS, NET
              
              
              3,888,476
              
              
              3,700,195TOTAL
    ASSETS
              
              
              9,747,051
              
              
              8,299,856LIABILITIES AND
      STOCKHOLDERS’ EQUITYCURRENT
      LIABILITIESAccounts
      payable
              
              
              3,432
              
              
              3,917Accrued
      expenses
              
              
              994,225
              
              
              1,700,363Current
      maturities of long term debt
              
              
              1,385,021
              
              
              -Customers
      deposits
              
              
              93,713
              
              
              74,321Loan
      from related companies
              
              
              845,592
              
              
              274,175Amount
      due to stockholders/officers
              
              
              227,777
              
              
              432,494Other
      payables
              
              
              37,479
              
              
              45,826TOTAL
      CURRENT LIABILITIES
              
              
              3,587,239
              
              
              2,531,096MINORITY
      INTERESTS
              
              
              1,523,527
              
              
              1,499,125TOTAL
      LIABILITIES
              
              
              5,110,766
              
              
              4,030,221STOCKHOLDERS’
      EQUITYPreferred
      Stock, $1.00 per value, 500,000 shares authorized, zero shares issued and
      outstanding
              
              
              -
              
              
              -Common
      Stock, no par value, 150,000,000 shares authorized, 50,456,569 shares
      issued and outstanding
              
              
              -
              
              
              -Additional
      paid-in capital
              
              
              3,571,864
              
              
              3,571,864Reserve
      funds
              
              
              336,885
              
              
              336,885Accumulated
      deficit
              
              
              (335,128
              )
              
              (301,323
              )Accumulated
      other comprehensive income
              
              
              1,062,664
              
              
              662,209TOTAL STOCKHOLDERS’
      EQUITY
              
              
              4,636,285
              
              
              4,269,635TOTAL LIABILITIES AND
      STOCKHOLDERS’ EQUITY
              
              $
              9,747,051
              
              $
              8,299,856
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  1
  CYBRDI, INC. AND
SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 
 Three Months Ended
              
              Three Months Ended
              
              Six Months Ended
              
              Six Months EndedJune 30, 2008
              
              June 30, 2007
              
              June 30, 2008
              
              June 30, 2007(Unaudited)
              
              (Unaudited)
              
              (Unaudited)
              
              (Unaudited)RevenueProducts
              
              $
              111,897
              
              $
              149,625
              
              $
              229,916
              
              $
              317,721Service
      rendered
              
              
              1,052
              
              
              29,659
              
              
              12,864
              
              
              38,838Total
      revenue
              
              
              112,949
              
              
              179,284
              
              
              242,780
              
              
              356,559Cost of
      SalesProducts
              
              
              67,132
              
              
              54,155
              
              
              119,650
              
              
              131,594Service
      rendered
              
              
              -
              
              
              3,957
              
              
              -
              
              
              3,962Total cost of
      sales
              
              
              67,132
              
              
              58,112
              
              
              119,650
              
              
              135,556Gross
    Profit
              
              
              45,817
              
              
              121,172
              
              
              123,130
              
              
              221,003Operating
      Expenses:Selling
      and distribution expenses
              
              
              12,879
              
              
              32,222
              
              
              20,699
              
              
              59,277General
      and administrative expenses
              
              
              129,882
              
              
              112,424
              
              
              262,206
              
              
              277,098Total Operating
      Expenses
              
              
              142,761
              
              
              144,646
              
              
              282,905
              
              
              336,375Loss from
      Operations
              
              
              (96,944
              )
              
              (23,474
              )
              
              (159,775
              )
              
              (115,372
              )Other
      Income/(Expense)Interest
      income
              
              
              15,605
              
              
              34,823
              
              
              28,968
              
              
              77,842Other
      (expense) income, net
              
              
              (283
              )
              
              64,948
              
              
              121,405
              
              
              68,535Total Other
      Income
              
              
              15,322
              
              
              99,771
              
              
              150,373
              
              
              146,377(Loss) Income before Income
      Taxes
              
              
              (81,622
              )
              
              76,297
              
              
              (9,402
              )
              
              31,005Income
      Taxes Expenses
              
              
              -
              
              
              -
              
              
              -
              
              
              -(Loss) Income before Minority
      Interest
              
              
              (81,622
              )
              
              76,297
              
              
              (9,402
              )
              
              31,005Minority
      Interest
              
              
              (8,609
              )
              
              15,448
              
              
              24,403
              
              
              18,379Net (Loss)
      Income
              
              $
              (73,013
              )
              $
              60,849
              
              $
              (33,805
              )
              $
              12,626Other
      Comprehensive Income:Foreign
      Currency Translation Gain
              
              
              140,657
              
              
              55,172
              
              
              400,455
              
              
              93,527Comprehensive
      Income
              
              $
              67,644
              
              $
              116,021
              
              $
              366,650
              
              $
              106,153Net
      (Loss) Income Per Common Share Basic and Diluted
              
              $
              (0.00
              )
              $
              0.00
              
              $
              (0.00
              )
              $
              0.00Weighted
      Average Number of Shares Outstanding Basic and Diluted
              
              
              50,456,569
              
              
              50,456,569
              
              
              50,456,569
              
              
              50,456,569
  The
accompanying notes are an integral part of these consolidated financial
statements.
  2
  CYBRDI INC. AND
SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
 For Six Months Ended
              
              For Six Months EndedJune 30, 2008
              
              June 30, 2007(Unaudited)
              
              (Unaudited)CASH FLOWS FROM OPERATING
      ACTIVITIESNet (Loss)
      Income
              
              $
              (33,805
              )
              $
              12,626Adjustments to Reconcile Net
      Loss to Net Cash Provided by Operating Activities:Depreciation
      and amortization
              
              
              84,874
              
              
              84,271Loss
      on disposal of fixed assets
              
              
              3,324
              
              
              -Minority
      interest
              
              
              24,403
              
              
              18,379Changes in Operating Assets and
      Liabilities:Accounts
      receivable
              
              
              (1,956
              )
              
              30,602Inventories
              
              
              (15,089
              )
              
              (5,331
              )Other
      receivable and prepaid expenses
              
              
              (3,751
              )
              
              (56,303
              )Accounts
      payable
              
              
              (689
              )
              
              23,699accrued
      expenses
              
              
              (765,495
              )
              
              -Other
      payables
              
              
              (10,584
              )
              
              5,117Customer
      deposits
              
              
              13,797
              
              
              -Net Cash (Used in) Provided by
      Operating Activities
              
              
              (704,972
              )
              
              113,060CASH FLOWS FROM INVESTING
      ACTIVITIESPurchase
      of property, plant and equipment
              
              
              (7,410
              )
              
              (1,651
              )Payment
      for construction in progress
              
              
              (1,266,232
              )
              
              -Payment
      to loan to affiliated companies
              
              
              -
              
              
              (2,496,059
              )Proceeds
      from (payment to) loan to unaffiliated companies
              
              
              68,544
              
              
              2,050,205Net Cash Used in Investing
      Activities
              
              
              (1,205,098
              )
              
              (447,505
              )CASH FLOWS FROM FINANCING
      ACTIVITIESProceeds
      from long-term debt
              
              
              1,385,021
              
              
              -Proceeds
      from loan from related companies
              
              
              520,934
              
              
              -Proceeds
      from shareholders/officers
              
              
              32,031
              
              
              27,563Payment
      to shareholders/officers
              
              
              (225,143
              )
              
              (31,024
              )Net Cash Provided by (Used in)
      Financing Activities
              
              
              1,712,843
              
              
              (3,461
              )NET DECREASE IN CASH AND
      EQUIVALENTSNet
      Decrease in Cash and Equivalents
              
              
              (197,227
              )
              
              (337,906
              )Effect
      of Exchange Rate Changes on Cash and Equivalents
              
              
              29,229
              
              
              17,886Cash
      and Equivalents, at Beginning of Period
              
              
              637,056
              
              
              782,899Cash and Equivalents, at End of
      Period
              
              $
              469,058
              
              $
              462,879
  The
accompanying notes are an integral part of these consolidated financial
statements.


3


CYBRDI, INC. AND SUBSIDIDARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)





NOTE A - BASIS OF PRESENTATION





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, 2007 was derived from
the audited consolidated financial statements included in the Company’s Annual
Report on Form 10-KSB. These interim financial statements should be read in
conjunction with that report.





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) was incorporated on August 1, 1966, under the
laws of the State of California. Until June 2004, the Company’s business
consisted primarily 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. At that time, the Company placed its emphasis on attempting
to find a buyer for the Company.





In
November 2004, the Company formed a wholly-owned subsidiary, Certron Acquisition
Corp., a Maryland corporation ("Acquisition Sub") to acquire all of the
ownership interests in Cybrdi, Inc., a privately held company incorporated in
the State of Maryland ("Cybrdi Maryland"). The Company acquired Cybrdi Maryland
in exchange for 47,328,263 shares of its common stock in a merger transaction.
As a result of the merger, the former shareholders of Cybrdi Maryland acquired
approximately 93.8% of the outstanding shares of the Company’s common stock. 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 (the “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.





4


Chaoying
Biotech is a sino-foreign equity joint venture between Shaanxi Chao Ying
Personal Care Group Ltd. (the “Chinese Partner”), a PRC corporation and
Immuno-OncoGenomics Inc. (the “Foreign Partner”), a US corporation. The joint
venture agreement has a 15 year operating period starting from its formation in
July 2000 and may be extended upon mutual consent. The principal activities of
Chaoying Biotech are the research, manufacture and sale of various high-quality
tissue arrays and related services, in the PRC. Cybrdi has established a
comprehensive and integrated system to collect various normal and diseased human
tissues, and continuing throughout the manufacturing process of hundreds of
tissue microarrays. Together with DNA (gene) array techniques, tissue microarray
technology is a powerful tool for the rapid analysis of molecular targets,
discovery and assessment of new therapeutics, as well as helpful in determining
the prognosis of a disease.





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 Shaanxi
Chaoying Personal Care Group Co., Ltd, 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 the Shandong province of P.R.China. On September 5, 2007, Shandong Commercial
government had approved this acquisition and ownership title of SD Chaoying had
been transferred to Chaoying Biotech from its Chinese Partner. The future
business of SD Chaoying will primarily be focused on culture and entertainment,
including Spa activities, cosmetic and personal care, body building, gambling,
catering, and lodging, SD Chaoying will have a specific emphasis on casino
gambling, which has been approved by Shandong Administration for Civil Affairs.
As of June 30, 2008, SD Chaoying was still in the development stage and there is
no actual business. The development and construction of facility is anticipated
to be completed in December 2008 .





3. Use of
Estimates:





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.





4. 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.


5


5. 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.





6. Government
Grant





During
the first quarter of 2008, SD Chaoying had received a grant in the amount of
$115,879 (equivalent to RMB 818,000) from the Shangdong Government for the
Shandong Culture & Entertainment Square project that SD Chaoying created
during year 2007. The Company included the government grants in the other
income, net in the accompanying statements of operations and comprehensive
income/ (loss).





7. Recent Accounting
Pronouncements




In May
2008, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standards (“SFAS”) No.162, “The Hierarchy of Generally
Accepted Accounting Principles”. SFAS 162 indicates the entity (not its auditor)
that is responsible for selecting accounting principles for financial statements
that are presented in conformity with GAAP. Accordingly, the GAAP hierarchy
should reside in the accounting literature established by the FASB and is
issuing SFAS 162 to achieve that result. SFAS 162 also identifies the sources of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States (the GAAP hierarchy).SFAS 162 is effective 60 days following
the SEC’s approval of the Public Company Accounting Oversight Board amendments
to AU Section 411, The Meaning of Present
Fairly in Conformity With Generally Accepted Accounting Principles. The Company
is in the process of evaluating the new disclosure requirements under SFAS 162.




In March
2008, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standards (“SFAS”) No.161,“Disclosures about Derivative
Instruments and Hedging Activities — An Amendment of SFAS No. 133” (“SFAS 161”).
SFAS 161 seeks to improve financial reporting for derivative instruments and
hedging activities by requiring enhanced disclosures regarding the impact on
financial position, financial performance, and cash flows. To achieve this
increased transparency, SFAS 161 requires (1) the disclosure of the fair value
of derivative instruments and gains and losses in a tabular format;(2) the
disclosure of derivative features that are credit risk-related; and
(3)cross-referencing within the footnotes. SFAS 161 is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008 (that is, January 1, 2009, for entities with calendar year-ends)., with
early application encouraged. The Company is in the process of evaluating the
new disclosure requirements under SFAS 161.




6




In
December 2007, the Financial Accounting Standard Board (“FASB”) issued SFAS No.
160, “Non-controlling Interests in Consolidated Financial Statements-an
amendment of ARB No. 51” which clarifies that a non-controlling interest in a
subsidiary is an ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements. This statement also
changes the way the consolidated income statement is presented. It requires
consolidated net income to be reported at amounts that include the amounts
attributable to both the parent and the non-controlling interest. In addition,
it requires disclosure, on the face of the consolidated statement of income, of
the amounts of consolidated net income attributable to the parent and to the
non-controlling interest. SFAS No. 160 is effective for fiscal years, and
interim periods within those fiscal years beginning on or after December 15,
2008 (that is, January 1, 2009, for entities with calendar year-ends). Earlier
adoption is prohibited. The company is currently in the process of evaluating
the effect, if any, the adoption of SFAS No. 160 will have on its consolidated
results of operations, financial position, and financial disclosure.




In
December 2007, Statement of Financial Accounting Standards No. 141(R), Business
Combinations, was issued. SFAS No. 141R replaces SFAS No. 141, Business
Combinations. SFAS 141R retains the fundamental requirements in SFAS 141 that
the acquisition method of accounting (which SFAS 141 called the purchase method)
be used for all business combinations and for an acquirer to be identified for
each business combination. SFAS 141R requires an acquirer to recognize the
assets acquired, the liabilities assumed, and any non-controlling interest in
the acquiree at the acquisition date, measured at their fair values as of that
date, with limited exceptions. This replaces SFAS 141‘s cost-allocation process,
which required the cost of an acquisition to be allocated to the individual
assets acquired and liabilities assumed based on their estimated fair values.
SFAS 141R also requires the acquirer in a business combination achieved in
stages (sometimes referred to as a step acquisition) to recognize the
identifiable assets and liabilities, as well as the non-controlling interest in
the acquiree, at the full amounts of their fair values (or other amounts
determined in accordance with SFAS 141R). SFAS 141R applies prospectively to
business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008 (that is, January 1, 2009, for entities with calendar year-ends). An
entity may not apply it before that date. The Company is currently evaluating
the impact that adopting SFAS 141R will have on its financial statements.




NOTE B – ASSETS





The June
30, 2008 balance sheet included total current assets of $2,056,409 and
non-current assets of $7,690,642. Of these amounts, $469,058 in cash and
equivalents and $5,658 in accounts receivable are planned for funding current
operations and for future business expansion.





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





The other
primary assets included in current assets are loans to an unaffiliated company. The loans
to the unaffiliated company consists of loans to 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 29.3Million (equivalent to $3,849,185) since January 2006. As of June 30,
2008, the loan balance had been reduced to RMB 6.8 Million (equivalent to
$991,384). The interest rate for these loans initially was initially 8% per
year, and subsequently reduced to 5% as of October 9, 2006. The Company
anticipates being repaid most of the outstanding loan amount from QuanYe before
the ended of December 2008.




7




Management
believes and views QuanYe as an alternative financial institution, and believes
it is an efficient way to use its cash on hand. The regular market interest rate
in the PRC is 0.72% per annum. Cybrdi expects to obtain higher interest income
for its unused funds through these types of loan arrangements. However, despite
these advantages, these advances are unsecured and thus have a higher default
risk than a bank deposit.





Included
in-non-current assets are property, plant and equipment, construction in
process, and intangible assets. Property, plant and equipment mainly consist of
building, motor vehicles, leasehold improvement, software-website, and machinery
used for product manufacturing located in the People’s Republic of China
(“PRC”), and office equipment located in PRC and United States. 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 process”
amount of $3,311,039 mainly consists of development and construction of a casino
in Shandong Province; which will be transferred to fixed assets in SD Chaoying
when it is finished. Intangible assets include a tissue chip patent and land use
right. Effective January 1, 2002, with the adoption of SFAS No. 142, 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. As of June 30, 2008, SD
Chaoying is still in the development stage, accordingly, the land use right will
be amortized in the estimated useful life from SD Chaoying operating.





NOTE C - LIABILITIES





As of
June 30, 2008, the balance sheet included total liabilities of $5,110,766, of
which $1,523,527 represents the 20% minority interest in Chaoying Biotech
and  16.67%
minority interest in SD Chaoying, and which $3,587,239 in the amount of the
current liabilities, Included in the current liabilities was due to current
maturity of Long term debt of $1,385,021(equivalent to RMB9.5million) from
Changle Rural Credit Union, which is a bank located in Shandong Province of the
PRC. This long-term debt had been pledged by the Company’s land use right in SD
Chaoying which is worth approximately $3.2 million (equivalent to RMB22
million).the term of debt were from January 31, 2008 to May 30, 2009 (total
sixteen months). The interest rate for this debt will be 30% more of the basic
interest rate from “The People’s Bank of China” in PRC. At the time of the
filing of this Form 10Q, the basic monthly interest rate in China is 6.3%.
Included in the current liabilities, was $845,592 of loans from related
companies, Xi’an Yanfeng Biotechnology Co., Ltd., Shaanxi Yanfeng Real Estate
Co.,Ltd and Shaanxi Chaoying Personal Care Group Co., these loans are
non-interest bearing and have no set repayment terms. Also included in the
current liabilities was $227,777 due to stockholders who are also the Company’s
officers. The amounts were mainly an advance to assist with its operations in
prior years. This advance is also non-interest bearing and has no set repayment
terms.





In
accordance with the relevant tax laws and regulations of the PRC, Chaoying
Biotech is entitled to full exemption from Corporation Income Tax (“CIT”) for
the first two years and a 50% reduction in CIT for the next three years,
commencing from the first profitable year after offsetting all tax losses
carried forward from the previous five years. 2003 was Chaoying Biotech’s first
profitable year, thus the Company began to record 50% CIT provision for the
first quarter of 2005. Commencing from January 2008, the Chinese government had
adjusted the CIT rate to 25% instead of 33%. The Company enjoys a 50% reduction
in preferential policy of CIT, according to Western Developing Plan of the PRC,
making the company’s effective tax rate approximately 12.5% in the first quarter
of 2008. Since there is no taxable income after offsetting all tax losses
carried forward, no income taxes provision is required as of June 30, 2008 and
2007, respectively.




8




NOTE D – STOCKHOLDERS’
EQUITY
 
 As a
result of the reverse merger (see Note A item 5), 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 June 30, 2008, the Company had 50,456,569 shares of common
stock issued and outstanding. Historical information of the surviving company is
that of Cybrdi – Maryland.
 
 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,
2007.
 
 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 microtissue 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) ·
            Launch
      the health diagnosis kit for obesity and skin disease ·
            Participate
      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
from the third quarter of year 2007, the Company had developed a new
genedetective tissue array, called New Kits, and started 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 since 2009, which 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. Commencing in
September 2007, SD Chaoying began constructing the facility, 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, The construction is anticipated to be
completed in December 2008, 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.
  9
 
 RESULTS OF
OPERATIONS
 
 FOR THE
THREE MONTHS ENDED JUNE 30, 2008 COMPARED TO THREE MONTHS ENDED JUNE 30, 2007
 Three Months Ended
                
                
                
                Three Months Ended
                
                
                
                2008 Vs 2007June 30, 2008
                
                
                
                June 30, 2007
                
                
                
                Increase/ (decrease)(Unaudited)
                
                
                
                (Unaudited)RevenueProducts
                
                $
                111,897
                
                
                
                
                $
                149,625
                
                
                
                
                $
                (37,728
                )
                
                -25
                %Service
      rendered
                
                
                1,052
                
                
                
                
                
                29,659
                
                
                
                
                
                (28,607
                )
                
                -96
                %Total
      revenue
                
                
                112,949
                
                
                
                
                
                179,284
                
                
                
                
                
                (66,335
                )
                
                -37
                %Cost of
      SalesProducts
                
                
                67,132
                
                
                60
                %
                
                54,155
                
                
                36
                %
                
                12,977
                
                
                24
                %Service
      rendered
                
                
                -
                
                
                
                
                
                3,957
                
                
                13
                %
                
                (3,957
                )
                
                -100
                %Total cost of
      sales
                
                
                67,132
                
                
                
                
                
                58,112
                
                
                
                
                
                9,020
                
                
                16
                %Gross
    Profit
                
                
                45,817
                
                
                41
                %
                
                121,172
                
                
                68
                %
                
                (75,355
                )
                
                -62
                %Operating
      Expenses:Selling
      and distribution expenses
                
                
                12,879
                
                
                
                
                
                32,222
                
                
                
                
                
                (19,343
                )
                
                -60
                %General
      and administrative expenses
                
                
                129,882
                
                
                
                
                
                112,424
                
                
                
                
                
                17,458
                
                
                16
                %Total Operating
      Expenses
                
                
                142,761
                
                
                
                
                
                144,646
                
                
                
                
                
                (1,885
                )
                
                -1
                %Loss from
      Operations
                
                
                (96,944
                )
                
                
                
                
                (23,474
                )
                
                
                
                
                (73,470
                )
                
                313
                %Other
      Income/(Expense)Interest
      income
                
                
                15,605
                
                
                
                
                
                34,823
                
                
                
                
                
                (19,218
                )
                
                -55
                %Other
      (loss) income, net
                
                
                (283
                )
                
                
                
                
                64,948
                
                
                
                
                
                (65,231
                )
                
                -100
                %Total Other
      Income
                
                
                15,322
                
                
                
                
                
                99,771
                
                
                
                
                
                (84,449
                )
                
                -85
                %(Loss) Income before Income
      Taxes
                
                
                (81,622
                )
                
                
                
                
                76,297
                
                
                
                
                
                (157,919
                )
                
                -207
                %Income
      Taxes Expenses(Loss) Income before Minority
      Interest
                
                
                (81,622
                )
                
                
                
                
                76,297
                
                
                
                
                
                (157,919
                )
                
                -207
                %Minority
      Interest
                
                
                (8,609
                )
                
                
                
                
                15,448
                
                
                
                
                
                (24,057
                )
                
                -156
                %Net (Loss)
      Income
                
                $
                (73,013
                )
                
                
                
                $
                60,849
                
                
                
                
                $
                (133,862
                )
                
                -220
                %
 10


Net Sales





The
Company generated two categories of revenues: tissue chip & kits products
and services. The net sales decreased $66,335 to $112,949 for the three months
ended June 30, 2008 from $179,284 for the three months ended June 30, 2007, a
reduction of 37%.





Tissue
Chip & Kit Products: The net sales decreased $37,728 to $111,897 for the
three months ended June 30, 2008 as compared to $149,625 for the three months
ended June 30, 2007, a decrease of 25%.  The
decrease in net sales of tissue chip & kit product was primarily
attributable to the termination of Cybrdi - Maryland’s operations on October
2007. During the second quarter of 2007, the net sales of tissue chip & chip
product had included $14,852 of product sales generated by Cybrdi - Maryland,
but there was none for the second quarter of 2008. In addition, the Company has
reduced the unit sales price for the products sold to its US major distributor
in the current quarter as compared to the same period of 2007





Services:
Fewer technical service orders were received for the three months ended June 30
2008 as compared to the same period in 2007, resulting in a decrease in sales of
$28,607 to $1,052 from $29,659 for the three months ended June 30, 2008 as
compared to June 30, 2007, a decrease of 37%.  This
decrease was primarily attributable to service demand decreased in China.





Gross Margin





Gross
margin as a percentage of sales decreased to 41% for the three months ended June
30, 2008 from 68% for three months ended June 30, 2007. Gross profit for the
three months ended June 30, 2008 decreased $75,355 to $45,817 from $121,172 for
the three months ended June 30, 2007, a decrease of 62%. The reason for the
decrease was primarily due to the increase in sales of tissue chip & kit
product with lower individual unit prices to its US distributor during the
quarter ended June 30, 2008 as compared to the same quarter of 2007.





Operating
Expenses





The
Company’s operating expenses decreased $1,885 to $142,761 for the three months
ended June 30, 2008 from $144,646 for the three months ended June 30, 2007, a
decrease of 1%. This was primarily due to a slight increase in general and
administrative expenses of $17,458 to $129,882 for the three months ended June
30, 2008 from $112,424 for the three months ended June 30, 2007, which was
offset by a larger decrease in selling expenses of $19,343 to $12,879 for the
three months ended June 30, 2008 from $32,222 for the three months ended June
30, 2007. The decrease in selling expenses was primary due to the termination of
the cooperation agreement with the Leller company on December 31, 2007, and the
termination of the Cybrdi-Maryland operations in October 2007. For the three
months ended June 30, 2007, the selling, expenses had included $6,954 of
expenditures from Cybrdi-Maryland, whereas the increase in general and
administrative expenses was primary a result of the acquisition of SD Chaoying
in the fourth quarter of 2007, whereby the company incurred $16,092 of start-up
costs during the three months ended June 30 2008.





Other Income





Interest
income decreased by $19,218 to $15,605 for the three months ended June 30, 2008
as compared to $34,823 for the three months ended June 30, 2007, a decrease of
55%. Most of the interest income was earned from the loans to QuanYe . The
repayment of the loans by Quanye during 2007 reduced the amount of interest
income received by the Company.





Other
(loss) income, net decreased by $65,231 to $(283) for the three months ended
June 30, 2008 compared to $64,948 for the three months ended June 30, 2007, a
decrease of 100%. The reason was primarily attributable to Chaoying Biotech
receiving a government grant $59,466 (equivalent to RMB459,000) from Shaanxi
government during the second quarter of 2007.




11




Income Taxes





The
Company had not recorded a provision for income tax for the second quarter ended
June 30, 2008 and 2007, due to no taxable income after offsetting all taxes
losses carried forward from prior periods. In accordance with the relevant tax
laws and regulations of the People’s Republic of China, Chaoying Biotech is
entitled to full exemption from Corporation Income Tax (“CIT”) for the first two
years and a 50% reduction in CIT for the next three years, commencing from the
first profitable year after offsetting all tax losses carried forward from the
previous five years. 2003 was Chaoying Biotech’s first profitable year, thus the
Company began to record 50% CIT provision from the first quarter of 2005.
Commencing from January 2008, the Chinese government had adjusted the CIT rate
to 25% instead of 33%. The Company enjoys a 50% reduction in preferential policy
of CIT, according to Western Developing Plan of PRC, making the company’s
effective tax rate approximately 12.5% in the second quarter of 2008. Since
there is no taxable income after offsetting all tax losses carried forward, no
income taxes provision is required as of June 30, 2008 and 2007,
respectively.




12





FOR THE
SIX MONTHS ENDED JUNE 30, 2008 COMPARED TO SIX MONTHS ENDED JUNE 30, 2007


Six Months Ended
              
              
              
              Six Months Ended
              
              
              
              2008 Vs 2007June 30, 2008
              
              
              
              June 30, 2007
              
              
              
              Increase/ (decrease)(Unaudited)
              
              
              
              (Unaudited)RevenueProducts
              
              $
              229,916
              
              
              
              
              $
              317,721
              
              
              
              
              $
              (87,805
              )
              
              -28
              %Service
      rendered
              
              
              12,864
              
              
              
              
              
              38,838
              
              
              
              
              
              (25,974
              )
              
              -67
              %Total
      revenue
              
              
              242,780
              
              
              
              
              
              356,559
              
              
              
              
              
              (113,779
              )
              
              -32
              %Cost of
      SalesProducts
              
              
              119,650
              
              
              52
              %
              
              131,594
              
              
              41
              %
              
              (11,944
              )
              
              -9
              %Service
      rendered
              
              
              -
              
              
              
              
              
              3,962
              
              
              10
              %
              
              (3,962
              )
              
              -100
              %Total cost of
      sales
              
              
              119,650
              
              
              49
              %
              
              135,556
              
              
              38
              %
              
              (15,906
              )
              
              -12
              %Gross
    Profit
              
              
              123,130
              
              
              51
              %
              
              221,003
              
              
              62
              %
              
              (97,873
              )
              
              -44
              %Operating
      Expenses:Selling
      and distribution expenses
              
              
              20,699
              
              
              
              
              
              59,277
              
              
              
              
              
              (38,578
              )
              
              -65
              %General
      and administrative expenses
              
              
              262,206
              
              
              
              
              
              277,098
              
              
              
              
              
              (14,892
              )
              
              -5
              %Total Operating Expenses
              
              
              282,905
              
              
              
              
              
              336,375
              
              
              
              
              
              (53,470
              )
              
              -16
              %Loss from
      Operations
              
              
              (159,775
              )
              
              
              
              
              (115,372
              )
              
              
              
              
              (44,402
              )
              
              38
              %Other
      Income/(Expense)Interest
      income
              
              
              28,968
              
              
              
              
              
              77,842
              
              
              
              
              
              (48,874
              )
              
              -63
              %Other
      income, net
              
              
              121,405
              
              
              
              
              
              68,535
              
              
              
              
              
              52,870
              
              
              77
              %Total Other Income
              
              
              150,373
              
              
              
              
              
              146,377
              
              
              
              
              
              3,996
              
              
              3
              %(Loss) Income before Income
      Taxes
              
              
              (9,402
              )
              
              
              
              
              31,005
              
              
              
              
              
              (40,407
              )
              
              -130
              %Income
      Taxes Expenses
              
              
              -
              
              
              
              
              
              -
              
              
              
              
              
              -(Loss) Income before Minority
      Interest
              
              
              (9,402
              )
              
              
              
              
              31,005
              
              
              
              
              
              (40,407
              )
              
              -130
              %Minority
      Interest
              
              
              24,403
              
              
              
              
              
              18,379
              
              
              
              
              
              6,024
              
              
              33
              %Net (Loss)
      Income
              
              $
              (33,805
              )
              
              
              
              $
              12,626
              
              
              
              
              $
              (46,432
              )
              
              -368
              %





Net Sales





The
Company generated two categories of revenues: tissue chip & kits products
and services. The net sales decreased $113,779 to $242,780 for the six months
ended June 30, 2008 from $356,559 for the six months ended June 30, 2007, a
decrease of 32%.





Tissue
Chip & Kit Products: The net sales decreased $87,805 to $229,916 for the six
months ended June 30, 2008 as compared to $317,721 for the six months ended June
30, 2007, a decrease of 28%.  The
decrease in net sales of tissue chip & kit products was primarily
attributable to the termination of Cybrdi - Maryland’s operations in October
2007. During the six months ended June 30, 2007, the net sales of tissue chip
& chip product had included $65,951 of product sales generated by Cybrdi -
Maryland, as opposed to none for the second quarter of 2008. In addition, the
Company has reduced the unit sales price for the products sold to its US major
distributor in the current quarter as compared to the same period of 2007




13




Services:
Fewer technical service orders were received during the six months ended June 30
2008 as compared to the same period of 2007, resulting in a decrease in sales of
$25,974 to $12,864 from $38,838 for the six months ended June 30, 2008 as
compared to June 30, 2007, a decrease of 67%.  This
decrease was primarily attributable to a decrease in service demand in China.





Gross Margin





Gross
margin as a percentage of sales decreased to 51% for the six months ended June
30, 2008 from 62% for six months ended June 30, 2007. Gross profit for the six
months ended June 30, 2008 decreased $97,873 to $123,130 from $221,003 for the
six months ended June 30, 2007, a decrease of 44%. The reason for the decrease
was primarily due to the decrease of unit prices sold to its US major
distributor during the six months ended June 30, 2008. In order to develop an
international market share, the company offered the lower unit prices to its
major US distributor during the second quarter of 2008 as compared to the same
period in 2007, which, as a result, reduced the gross margin rate for the six
months ended June 30, 2008.





Operating
Expenses





The
Company’s operating expenses decreased $53,470 to $282,905 for the six months
ended June 30, 2008 from $336,375 for the six months ended June 30, 2007, a
decrease of 16%. This was primarily due to a decrease in selling expenses of
$38,578 to $20,699 for the six months ended June 30, 2008 compared to $59,277
for the six months ended June 30, 2007, and a slight t decrease in general and
administrative expenses of $14,892 to $262,206 for the six months ended June 30,
2008 compared to $277,098 for the six months ended June 30, 2007. The decrease
in selling expenses was primary due to the termination of the cooperation
agreement with the Leller Company on December 31, 2007, and the termination of
the Cybrdi-Maryland operations in October 2007. For the six months ended June
30, 2007, the selling, expenses had included $18,788 of expenditures from
Cybrdi-Maryland,





Other Income





Interest
income decreased by $48,874 to $28,968 for the six months ended June 30, 2008
compared to $77,842 for the six months ended June 30, 2007, a decrease of 63%.
Most of the interest income was earned from the loans to QuanYe. The repayment
of the loans by Quanye during 2007 reduced the interest income received by the
Company.





Other
income, net increased by $52,870 to $121,405 for the six months ended June 30,
2008 compared to $68,535 for the six months ended June 30, 2007, an increase of
77%. The reason was primarily attributable to SD Chaoying receiving a government
grant of $115,879(equivalent to RMB 818,000) in the first quarter of 2008, in
addition to the government grant $59,466 (equivalent to RMB459,000) from
received from a Shaanxi government grant during the second quarter of
2007.





Income Taxes





The
Company had not recorded a provision for income tax for the six months ended
June 30, 2008 and 2007, due to no taxable income after offsetting all taxes
losses carried forward from prior periods. In accordance with the relevant tax
laws and regulations of the People’s Republic of China, Chaoying Biotech is
entitled to full exemption from Corporation Income Tax (“CIT”) for the first two
years and a 50% reduction in CIT for the next three years, commencing from the
first profitable year after offsetting all tax losses carried forward from the
previous five years. 2003 was Chaoying Biotech’s first profitable year, thus the
Company began to record 50% CIT provision from the first quarter of 2005.
Commencing from January 2008, the Chinese government had adjusted the CIT rate
to 25% instead of 33%. The Company enjoy a 50% reduction in preferential policy
of CIT, according to Western Developing Plan of PRC, making the company’s
effective tax rate approximately 12.5% in year 2008. Since there is no taxable
income after offsetting all tax losses carried forward, no income taxes
provision is required as of June 30, 2008 and 2007, respectively.





14





LIQUIDITY AND CAPITAL
RESOURCES





Operating
working capital (total current asset deduct total current liabilities) decreased
by $1,177,120 from $(353,710) as of December 31, 2007 to $(1,530,830) as of June
30, 2008. The decrease was primarily due to the pending maturity of long term
debt of $1,385,021(equivalent to RMB9.5million) from Changle Rural Credit Union,
which is a bank located in Shandong province of PRC. This debt is due on May 20,
2009.





For
operating activities, the Company had a negative balance for cash used in
operating activities for the six months ended June 30, 2008, since the Company
had paid significant amounts of accrued expenses in the current
quarter,.





For
investing activities, the Company had a negative balance for cash used in
investing activities. The primary reason was due to the payment of $1,266,232
used for the construction of the SD Chaoying project during the six months ended
June 30, 2008.





For
financing activities, the Company had loans from Changle Rural Credit Union and
its related companies in the amounts of $1,385,021 and $520,934, respectively.
Accordingly, the Company had positive cash provided by financing activities for
the six months ended June 30, 2008.





Since the
Company has a construction project in Shandong for SD Chaoying which it
anticipates completing by the end of 2008. In order to finance this project, the
Company anticipates borrowing additional funds from related parties, other
banks, and to utilize the funds received from the repayment of loan proceeds
from Quan Ye. There can be no assurance, however, that the Company will be able
to obtain the necessary financing for the construction of the
project.





15


CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS





Certain
statements in this quarterly report on Form 10-Q/A 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, 2008, 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.





16


PART II. OTHER
INFORMATION





Item 1. Legal Proceedings





There is
no material pending legal proceedings to which the Company is a party. The
Company was notified by a letter dated June 2, 2000 that the Company may have a
potential liability from waste disposal in the Casmalia Disposal Site at Santa
Barbara County, California. The Company was given a choice of either signing an
agreement that would toll the statute of limitations for eighteen (18) months in
order to allow the company 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. The Company 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, the Company received
a proposed settlement from the EPA in the amount of $21,131. The Company is
waiting for communication from the government concerning payment of the proposed
settlement. As of June 30, 2008, The Company has accrued a sufficient amount to
cover any potential liabilities from 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. Submission of Matters to a
Vote of Security Holders





None.





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





17





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:
      December 22, 2008
            By:
            /s/
      Yanbiao BaiYanbiao Bai, Chief Executive Officer and President




18