UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K/A





AMENDMENT
NO. 1





x
            ANNUAL
      REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
fiscal year ended December 31,
2008





 ̈
              TRANSITION
      REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
transition period from______________


Commission
file number00-53475





CYBERDEFENDER
      CORPORATION(Name
      of registrant in its
charter)





California
                        
                        65-1205833(State
      or other jurisdiction of incorporation or organization)
                        
                        (I.R.S.
      Employer Identification No.)617
      West 7thStreet,
      Suite 401, Los Angeles, California
                        
                        90017(Address
      of principal executive offices)
                        
                        (Zip
      Code)





Issuer’s
telephone number (213)
689-8631





Securities
registered pursuant to Section 12(b) of the Act:  None





Securities
registered pursuant to Section 12(g) of the Act:  Common Stock, no par
value





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.  ̈ Yes
x
No





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.  ̈ Yes
x
No





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the last 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 if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrant’s knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.





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 Act).


 ̈ Yes
x
No





State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter.  On June 30, 2008, the aggregate market value of the voting
and non-voting common equity held by non-affiliates was
$12,551,026.





Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date. As of March 27, 2009 the number of
shares of the registrant’s classes of common stock outstanding was
19,195,114.





List
hereunder the following documents if incorporated by reference and the Part of
the Form 10-K (eg., Part I, Part II, etc.) into which the document is
incorporated:  (1) Any annual report to security holders; (2) Any
proxy or information statement; and (3) Any prospectus filed pursuant to Rule
424(b) or (c) under the Securities Act of 1933.  The listed documents
should be clearly described for identification purposes.








EXPLANATORY
NOTE





On
October 6, 2009 we received a comment letter from the Securities and Exchange
Commission relating to our Annual Report on Form 10-K for the fiscal year ended
December 31, 2008 which we filed with the Securities and Exchange Commission on
March 31, 2009 (the “Original Report”).  The primary purpose of this
amendment to the Original Report (the “Amendment”) is to respond to the comment
letter.





In this
Amendment we have revised the discussion of our controls and procedures and our
internal control over financial reporting included in Item 9A, “Disclosure
Controls and Procedures”.





This
Amendment includes information contained in the Original Report, and we have
made no attempt in the Amendment to modify or update the disclosures presented
in the Original Report, except as identified above.  The disclosures
in this Amendment continue to speak as of the date of the Original Report, and
do not reflect events occurring after the filing of the Original
Report.  Accordingly, this Amendment should be read in conjunction
with our other filings made with the Securities and Exchange Commission
subsequent to the filing of the Original Report, including any amendments to
those filings.  The filing of this Amendment shall not be deemed to be
an admission that the Original Report, when made, included any untrue statement
of a material fact or omitted to state a material fact necessary to make a
statement not misleading.








Item
9A. Controls and Procedures





Disclosure
Controls and Procedures





Regulations
under the Securities Exchange Act of 1934 (the “Exchange Act”) require public
companies to maintain “disclosure controls and procedures,” which are defined as
controls and other procedures that are designed to ensure that information
required to be disclosed by the issuer in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the Securities and Exchange Commission's rules and
forms.  Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by an issuer in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the issuer's management,
including its principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure.





We
conducted an evaluation, with the participation of our Chief Executive Officer
and Chief Financial Officer, of the effectiveness of our disclosure controls and
procedures as of December 31, 2008.  Based on that evaluation, our
Chief Executive Officer and Chief Financial Officer have concluded that as of
December 31, 2008, our disclosure controls and procedures were not effective at
the reasonable assurance level due to the material weaknesses described
below.





In light
of the material weaknesses described below, we performed additional analysis and
other post-closing procedures to ensure our financial statements were prepared
in accordance with generally accepted accounting
principles.  Accordingly, we believe that the financial statements
included in this report fairly present, in all material respects, our financial
condition, results of operations and cash flows for the periods
presented.





A
material weakness is a control deficiency (within the meaning of the Public
Company Accounting Oversight Board (PCAOB) Auditing Standard No. 2) or
combination of control deficiencies, that result in more than a remote
likelihood that a material misstatement of the annual or interim financial
statements will not be prevented or detected.  Management has
identified the following three material weaknesses which have caused management
to conclude that, as of December 31, 2008, our disclosure controls and
procedures were not effective at the reasonable assurance level:





1.           We
do not have written documentation of our internal control policies and
procedures.  Written documentation of key internal controls over
financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act
which is applicable to us for the year ending December 31,
2008.  Management evaluated the impact of our failure to have written
documentation of our internal controls and procedures on our assessment of our
disclosure controls and procedures and has concluded that the control deficiency
that resulted represented a material weakness.








2.           We
do not have sufficient segregation of duties within accounting functions, which
is a basic internal control.  Due to our size and nature, segregation
of all conflicting duties may not always be possible and may not be economically
feasible.  However, to the extent possible, the initiation of
transactions, the custody of assets and the recording of transactions should be
performed by separate individuals.  Management evaluated the impact of
our failure to have segregation of duties on our assessment of our disclosure
controls and procedures and has concluded that the control deficiency that
resulted represented a material weakness.





3.           We
have had, and continue to have, a significant number of audit
adjustments.  Audit adjustments are the result of a failure of the
internal controls to prevent or detect misstatements of accounting
information.  The failure could be due to inadequate design of the
internal controls or to a misapplication or override of
controls.  Management evaluated the impact of our significant number
of audit adjustments and has concluded that the control deficiency that resulted
represented a material weakness.





To
address these material weaknesses, management performed additional analyses and
other procedures to ensure that the financial statements included herein fairly
present, in all material respects, our financial position, results of operations
and cash flows for the periods presented.





Remediation
of Material Weaknesses





We have
attempted to remediate the material weaknesses in our disclosure controls and
procedures identified above by hiring a full-time CFO, with SEC reporting
experience, in January 2009 and by working with our independent registered
public accounting firm and refining our internal procedures.  To date,
we have not been successful in reducing the number of audit adjustments, but
will continue our efforts in the coming fiscal year as more fully detailed
below.





Management's
Report on Internal Control Over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting.  Internal control over financial
reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the
Exchange Act as a process designed by, or under the supervision of, the issuer’s
principal executive and principal financial officers and effected by the
issuer’s board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America and
includes those policies and procedures that:





·
            Pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and dispositions of the assets of the
      issuer;





·
            Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with accounting
      principles generally accepted in the United States of America and that
      receipts and expenditures of the Company are being made only in accordance
      with authorizations of management and directors of the issuer;
      and








·
            Provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of the issuer’s assets that
      could have a material effect on the financial
  statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements.  Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.  All internal control
systems, no matter how well designed, have inherent
limitations.  Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparation and presentation.  Because of the inherent limitations of
internal control, there is a risk that material misstatements may not be
prevented or detected on a timely basis by internal control over financial
reporting.  However, these inherent limitations are known features of the
financial reporting process.  Therefore, it is possible to design into
the process safeguards to reduce, though not eliminate, this risk.





As of the
end of our most recent fiscal year, management assessed the effectiveness of our
internal control over financial reporting based on the criteria for effective
internal control over financial reporting established in Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission ("COSO") and SEC guidance on conducting such
assessments.  Based on that evaluation, they concluded that, as
of December 31, 2008, such internal control over financial reporting was not
effective.  This was due to deficiencies that existed in the design or
operation of our internal control over financial reporting that adversely
affected our internal controls and that may be considered to be material
weaknesses.





The
matters involving internal control over financial reporting that our management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee due
to a lack of a majority of independent members and a lack of a majority of
outside directors on our board of directors, resulting in ineffective oversight
in the establishment and monitoring of required internal controls and
procedures; (2) inadequate segregation of duties consistent with control
objectives of having segregation of the initiation of transactions, the
recording of transactions and the custody of assets; and (3) ineffective
controls over period end financial disclosure and reporting
processes.  The aforementioned material weaknesses were identified by
our Chief Financial Officer in connection with the review of our financial
statements as of December 31, 2008.





Management
believes that the material weaknesses set forth in items (2) and (3) above did
not have an effect on our financial results as these weaknesses were mitigated
by the hiring of a CFO who is responsible for reviewing all transactions and all
financial disclosures as well as the financial audit as evidenced by the number
of audit adjustments.  However, management believes that the lack of a
functioning audit committee and the lack of a majority of outside directors on
our board of directors results in ineffective oversight in the establishment and
monitoring of required internal controls and procedures, which could result in a
material misstatement in our financial statements in future
periods.








This
annual report does not include an attestation report of the Company's registered
public accounting firm regarding internal control over financial
reporting.  Management's report was not subject to attestation by the
Company's registered public accounting firm pursuant to temporary rules of the
SEC that permit the Company to provide only the management's report in this
annual report.





Management's
Remediation Initiatives





In an
effort to remediate the identified material weaknesses and other deficiencies
and enhance our internal controls, we have initiated, or plan to initiate, the
following series of measures:





We will
increase our personnel resources and technical accounting expertise within the
accounting function when funds are available to us. First, we will create a
position to segregate duties consistent with control objectives of having
separate individuals perform (i) the initiation of transactions, (ii) the
recording of transactions and (iii) the custody of assets. Second, we will
create a senior position to focus on financial reporting and standardizing and
documenting our accounting procedures with the goal of increasing the
effectiveness of the internal controls in preventing and detecting misstatements
of accounting information. Third, we plan to appoint one or more outside
directors to our board of directors who shall be appointed to an audit committee
resulting in a fully functioning audit committee who will undertake the
oversight in the establishment and monitoring of required internal controls and
procedures such as reviewing and approving estimates and assumptions made by
management when funds are available to us. We anticipate the costs of
implementing these remediation initiatives will be approximately $200,000 to
250,000 a year in increased salaries and $50,000 to $100,000 a year in increased
legal and accounting expenses.





Management
believes that the appointment of one or more outside directors, who shall be
appointed to a fully functioning audit committee, will remedy the lack of a
functioning audit committee and a lack of a majority of outside directors on our
Board.





We
anticipate that these initiatives will be at least partially, if not fully,
implemented by December 31, 2009.  Additionally, we plan to test our
updated controls and remediate our deficiencies by December 31,
2009.





Changes
in Internal Control over Financial Reporting





There
have been no changes in our internal control over financial reporting (as such
term is defined in Rules 13a-15(f) and 15d-15 (f) under the Exchange Act) during
the fourth quarter of 2008 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting.








PART
IV





Item
15. Exhibits, Financial Statement Schedules





31.1
            Certification
      Pursuant to Rule 13a-14(a) and 15d-14(a) (4)*31.2
            Certification
      Pursuant to Rule 13a-14(a) and 15d-14(a) (4)*32
            Certification
      Pursuant to Section 1350 of Title 18 of the United States
      Code*





*Filed
herewith.








SIGNATURES





Pursuant to the requirements of Section
13 or 15(d) 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.





Date:  October
      19, 2009
                  CYBERDEFENDER
      CORPORATIONBy:
                  /s/ Gary GuseinovGary
      GuseinovChief
      Executive OfficerBy:
                  /s/ Kevin HarrisKevin
      HarrisChief
      Financial Officer