UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549




FORM
10-K





(Mark
One)





x
            Annual report under Section 13
      or 15(d) of the
      Securities Exchange Act of 1934. For the fiscal year ended December
      31, 2008.





OR





o
            Transition report under Section
      13 or 15(d) of the
      Securities Exchange Act of 1934 for the transition period from
      __________ to __________.





Commission
File Number: 000-32341





OMPHALOS,
CORP.


(Exact
name of registrant as specified in its charter)





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




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


Luchu
Taoyuan County


Taiwan


(Address
of principal executive offices, Zip Code)





011-8863-322-9658


(Registrant’s
telephone number, including area code)





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





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




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (229.405 of this chapter) 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. x





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





Large
      accelerated filer  ̈
            Accelerated
      filer ̈Non-accelerated
      filer ̈
            Smaller
      reporting company x





Securities
Registered Pursuant to Section 12(b) of the Act: None


Securities
Registered Pursuant to Section 12(g) of the Act: None


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


At June
30, 2008, the aggregate market value of the voting and non-voting common equity
held by non-affiliates of the registrant:  $11,955,863.





The
number of shares of registrant’s common stock outstanding, as of February 17,
2009 was 30,063,759.










TABLE OF
CONTENTS





PART
      IItem
      1.
                                                        Business
                                                        3Item1A.
                                                        Risk
      Factors
                                                        6Item1B.
                                                        Unresolved
      Staff Comments
                                                        11Item
      2.
                                                        Properties
                                                        11Item
      3.
                                                        Legal  Proceedings
                                                        11Item
      4.
                                                        Submission
      of Matters to a Vote of Security Holders
                                                        11PART
      IIItem
      5.
                                                        Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
                                                        11Item
      6.
                                                        Selected
      Financial Data
                                                        12Item
      7.
                                                        Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                                                        12Item7A.
                                                        Quantitative
      and Qualitative Disclosures about Market Risk
                                                        16Item
      8.
                                                        Financial
      Statements and Supplementary Data
                                                        16Item
      9.
                                                        Changes
      In and Disagreements with Accountants on Accounting and Financial
      Disclosure
                                                        37Item9A.
                                                        Controls
      and Procedures
                                                        37Item9B.
                                                        Other
      Information
                                                        37PART
      IIIItem10.
                                                        Directors,
      Executive Officers and Corporate Governance
                                                        38Item11.
                                                        Executive
      Compensation
                                                        39Item12.
                                                        Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                                                        41Item13.
                                                        Certain
      Relationships and Related Transactions and Director
      Independence
                                                        41PART
      IVItem14.
                                                        Principal
      Accountant Fees and Services
                                                        42Item15.
                                                        Exhibits,
      Financial Statement Schedules
                                                        43SIGNATURES
                                                        44EX-31.1EX-31.2EX-32.1EX-32.2





2




PART
I





Item
1.  Business.





Soyodo
Group Holdings, Inc. (the “Soyodo”) was incorporated on May 15, 1997 as Quixit,
Inc. under the laws of the state of Colorado. On January 16, 2003, TOP Group
Corp., a New York corporation, purchased 4,400,000 shares of the Company's
common stock, which represented 88% of the Company's outstanding capital stock
at that time. Prior to the change in control, the Company's purpose was to
investigate opportunities to be acquired by a company that desired to be
registered under the Securities Exchange Act of 1934, as amended. In March 2003,
the Company changed its state of incorporation from Colorado to Delaware, and
changed its name from Quixit, Inc. to TOP Group Holdings, Inc. In August of
2005, the company changed its name from TOP Group Holdings, Inc. to Soyodo Group
Holdings, Inc.





In the
second quarter of 2005, the company decided to commence a chain of member-only
stores in locations with large Chinese immigrant populations, offering Chinese
culture-related merchandise such as books, pre-recorded CDs, stationery, gifts,
and sports goods. Subsequently, six retail stores had been opened. On June 30,
2006, however, the Company started to concentrate on its wholesale operation and
sold to its majority shareholder & principal executive officer, all the six
retail stores. Then on November 30, 2006, the company decided to go back to its
original plan of investigate opportunities to be acquired and sold to its
majority shareholder the remaining wholesale operation.





Omphalos
Corp. was incorporated on February 13, 1991 under the laws of Republic of China
(TWN), initially serving as a sales agent for an equipment and used machine
dealer. Omphalos Corp. (B.V.I.) was incorporated on October 30, 2001 under the
laws of the British Virgin Islands. All Fine Technology Co., Ltd. was
incorporated on March 23, 2004 under the laws of Republic of China. All Fine
Technology Co., Ltd. (B.V.I.) was incorporated on February 2, 2005 under the
laws of the British Virgin Islands.




On July
4, 2007, Omphalos Corp. (BVI) acquired Omphalos (TWN) and All Fine Technology
Co. (TWN), through a share exchange with the shareholders of these two entities.
On October 19, 2007 Omphalos (BVI) purchased All Fine Tech
(BVI).




On
February 5, 2008, Soyodo Group Holdings, Inc. entered into and completed the
transactions contemplated under a Share Exchange Agreement (the “Exchange
Agreement”) with each of the shareholders (the “Shareholders”) of Omphalos Corp.
(B.V.I.), a British Virgin Islands corporation, pursuant to which Soyodo
purchased from the Shareholders all issued and outstanding shares of Omphalos
Corp. (B.V.I.)’ common stock in consideration for the issuance of an aggregate
of 81,996,275 shares of Soyodo common stock (the "Share Exchange"). The Share
Exchange resulted in a change in control of Soyodo with the Shareholders owning
81,996,275 shares of common stock of the Company out of a total of 90,191,275
issued and outstanding shares after giving effect to the Share Exchange. Also,
the Shareholders were elected directors of the Company, subject to Soyodo’s
disclosure obligations under the Securities Exchange Act of 1934, as amended,
and appointed as its executive officers. As a result of the Exchange Agreement,
(i) Omphalos Corp. (B.V.I.) became a wholly-owned subsidiary of Soyodo and (ii)
the Soyodo succeeded to the business of Omphalos Corp. (B.V.I.) as its sole
business.





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





Collectively
Omphalos, Corp. (formerly Soyodo Group Holdings Inc.) and these four
corporations are referred to herein as the "Company" or “Omphalos”.




3


Overview
of Business





Omphalos,
through its wholly-owned subsidiaries, supplies a wide range of equipment and
parts including refurbished and modified reflow soldering ovens and automated
optical inspection machines for printed circuit board (PCB) manufacturers in
Taiwan and China. Omphalos also provides after sale services to its customers
and sells parts for the equipment.




A reflow
oven is a machine used primarily for reflow soldering of surface mount
electronic components to printed circuit boards . Reflow soldering represents
the most common means to attach a component to a circuit board, and typically
consists of applying solder paste, positioning the components, and reflowing the
solder in a specialized oven. The goal of the reflow process is to melt the
powder particles in the solder paste, with the surfaces being joined together,
and solidify the solder to create a strong metallurgical bond.




Omphalos
markets its products in both Taiwan and China. Omphalos’ clients are mainly big
name Taiwanese electronics manufacturing giants, including Quanta Computer Inc.,
MiTAC International Corp., Universal Scientific Industrial Co., ASUS, Gigabyte,
and Advantech in Taiwan, and Foxconn group, QSMC, in China.




Products




Omphalos
offers a wide range of products, including the following:




Saki Optical Inspection
Devices. The main purpose of using AOI is to inspect the process of the
SMT production line which can also be considered as the tool for quality
assurance and quality control.




Quality
assurance is the assurance for the back-end process, i.e. the 100% assurance for
zero-defect of production quality. All defects must be found and then repaired
to achieve this requirement. AOI is normally used at the post-reflow
process for this purpose. Therefore, the AOI plays an important role to detect
all defects and also to support the reparability of all defects found. Quality
Control is aimed to keep the highest process quality in the factory. In order to
achieve this purpose, AOI is usually used at the pre-reflow, pre-IC-mounting or
post-printing processes which enable the monitoring the real situation of the
production line by inspecting all of and the defects. Furthermore, the causes of
defects are able to be analyzed in real time. During the years ended December
31, 2008 and 2007, approximately 55% and 77% of Omphalos’ revenues were
generated by these devices, respectively.




Tamura N2 Reflow Ovens. 
Omphalos offers the Tamura Reflow Oven as its preferred choice for reflow
soldering. The ovens have multiple temperature controlled heat emitting infrared
radiation compartments that create a phase change in flux (Small Soldier
Particles) turning the solid into a liquid. When cooled in the final
compartment, the flux undergoes another phase change turning from a liquid back
into a solid forming a bond between the surface mount component and etched
circuit board. The Tamura Line takes the additional step of being an oxygen-free
environment, instead it utilizes nitrogen gas to minimize oxidation. During the
years ended December 31, 2008 and 2007, approximately 45% and 23% of Omphalos’
revenues were generated by these machines, respectively.




Argus Management Information
System. This system consists of Scanner Stations networked to a
Datastore. These scanners can be placed at any point in the production line as
they are intended to collect and analyze production data. As a laser barcoded
pcb passes through the Argus Scanner Station, the circuit board is identified
(scanned), the time is noted and stored. Data is then aggregated and analyzed to
compute bottle necks in production (actual vs. desired). To date, the Company
has not derived any significant revenues from this system.





Gryphon Laser Marking System.
This system is placed at the beginning of the SMT production line where it Laser
Etches a Uniquely Identifiable 2-Dimensional Barcode onto the surface of a
printed circuit board. 2D barcodes allow for more data to be physically written
to the circuit board, usually the threshold is when more than 20 characters need
to be written, 2D barcoding is required. The 2D barcode helps to simplify
MIS by making more information available offline, such as an identification
number, time of fabrication, plant of fabrication, etc making it easier to track
defects and finished products to their final destination. This barcode works
best when combined with the Argus Management Information System throughout the
fabrication process as its life will be tracked and analyzed. To date, the
Company has not derived any significant revenues from this system.




4




Marketing





Most of
the Omphalos’ business is generated through personal relationships with its
major customers. In addition, it may participate in trade shows and occasionally
run advertisements in trade journals and newspapers.




Markets
and Customers





Omphalos’s
customers include a number of major electronic manufacturing companies,
including the following





Name
                      
                      Location
                      
                      Percentage Revenues for
                        the Year ended
                        December 31, 2008Quanta
      Computer
                      
                      
                      Taiwan
      based publicly traded company; original design manufacturer of laptop
      computers
                      
                      
                      62
                      %Hon
      Hai
                      
                      
                      Taiwan
      based publicly traded company; manufacturing services provider to
      Computer, Communication and Consumer-electronics leaders
                      
                      
                      12
                      %Delta
      Networds International  Ltd.,
                      
                      
                      Taiwan
      based publicly traded company; Computer products design and
      production
                      
                      
                      9
                      %Universal
      Scientific Industrial
                      
                      
                      US
      based publicly traded company; Information and communications
      products
                      
                      
                      6
                      %





Regulations





Omphalos
is not subject to any significant government regulation that is particular to
its business.





Competition





Omphalos’s
industry is highly competitive. Omphalos believes that its principal direct
competitors are the manufacturers of the equipment themselves. These include
Japanese companies such as Sayaka, Tamura Furukawa and Ishikawa.





There are
also a number of companies in Asia that resell refurbished equipment. They
include Daichi International, Panasonic, Hitachi and Sony
Corporation.





Some of
these companies have significantly greater financial, technical and human
resources than we do, as well as a wider range of products than we have. In
addition, many of our competitors have much greater experience in marketing
their products, as well as more established relationships with our target
customers. Our competitors may also have greater name recognition and more
extensive customer bases that they can use to their benefit. As a result, we may
have difficulty maintaining our market share.




5


We
believe that our competitive edge is our responsiveness to our customers’ needs,
both in terms of speed as well as in our ability to modify the equipment in
accordance with the customers’ instructions.




Intellectual
Property





Omphalos
has been granted the following patents:





Name
                  
                  Patent No
                  
                  Country
                  
                  Patent TermAutomatically
      Labeling and Inspecting Apparatus and Method of Use
                  
                  M277230
                  
                  Taiwan
                  
                  2005/10/1-20/15-1/30Automatically
      Marking and Reading/Distinguishing Apparatus and Method of
    Use
                  
                  M277229
                  
                  Taiwan
                  
                  2005/10/1-20/15-1/30




In
addition it has the following patents pending:




Name
                
                Number
                
                CountryAutomatically
      Labeling and Inspecting Apparatus and Method of Use
                
                200510052694.4
                
                ChinaAutomatically
      Marking and Reading/Distinguishing Apparatus and Method of
    Use
                
                200510052693.X
                
                ChinaServo
      Motor Conntrol Method and Apparatus Using the Same
                
                2007-241297
                
                JapanServo
      Motor Conntrol Method and Apparatus Using the Same
                
                096114150
                
                TaiwanServo
      Motor Conntrol Method and Apparatus Using the Same
                
                200710107348.0
                
                ChinaAutomatically
      Labeling and Inspecting Apparatus and Method of Use
                
                11/248,218
                
                U.S.AAutomatically
      Marking and Reading/Distinguishing Apparatus and Method of
    Use
                
                11/248,212
                
                U.S.A





Employees





As of
March 19, 2009, Omphalos had  25 full-time employees .  None
of its employees is represented by a labor union, and Omphalos considers its
employee relations to be excellent. Omphalos seeks to use contract workers and
anticipates maintaining a small full-time employee base.





Available
Information





We file
or furnish annual reports on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K and any amendments to those reports filed or furnished
pursuant to Section 13(a) and 15(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), with the SEC. These reports will be available as
soon as reasonably practical after such reports are electronically filed with,
or furnished to, the SEC.  All of these documents are available in
print without charge to stockholders upon request. Our SEC filings are available
to the public over the Internet at the SEC’s web site at http://www.sec.gov. You
may also read and copy any document we file at the SEC’s public reference rooms
in Washington, D.C.





Item
1A.  Risk Factors.





The
following risk factors and other information included in this Annual Report on
Form 10-K should be carefully considered. The risks and uncertainties described
below are not the only ones we face. Additional risks and uncertainties not
presently known to us or which we currently deem immaterial also may impair our
business operations. If any of the following risks occur, our business,
financial condition, operating results, and cash flows could be materially
adversely affected.




6


Risk
Factors Related to Our Business.





We
may need to raise capital to fund our operations, and our failure to obtain
funding when needed may force us to delay, reduce or eliminate our expansion
efforts.





If in the
future, we are not capable of generating sufficient revenues from operations and
our capital resources are insufficient to meet future requirements, we may have
to raise funds to continue the development, commercialization, marketing and
sale of our products.




We cannot
be certain that funding will be available on acceptable terms, or at all. To the
extent that we raise additional funds by issuing equity securities, our
stockholders may experience significant dilution. Any debt financing, if
available, may involve restrictive covenants that impact our ability to conduct
our business. If we are unable to raise additional capital if required or on
acceptable terms, we may have to significantly delay, scale back or discontinue
the development and/or commercialization of one or more of our products, obtain
funds by entering into agreements on unattractive terms or restrict or cease our
operations and go out of business.





The
success of our business depends on our ability to successfully obtain a supply
of merchandise for our buyers and to attract and retain active professional
buyers to create sufficient demand for our sellers.





Our
ability to increase our revenue and maintain profitability depends on whether we
can successfully expand the supply of merchandise available for sale on our
online marketplaces and attract and retain active professional buyers to
purchase the merchandise. Our ability to attract sufficient quantities of
suitable merchandise and new buyers will depend on various factors, some of
which are out of our control. These factors include our ability to:





·
            offer
      buyers a sufficient supply of merchandise;·
            develop
      and implement effective sales and marketing strategies;·
            comply
      with regulatory or corporate seller requirements affecting marketing and
      disposition of certain categories of merchandise;·
            efficiently
      catalogue, handle, store, ship and track merchandise;
  and·
            achieve
      high levels of seller and buyer satisfaction with the trading
      experience.




Omphalos
is exposed to risks as a result of ongoing changes in the semiconductor and
semiconductor-related industries.




The
global industries in which we operate are characterized by ongoing changes,
including: (1) higher capital requirements for building and operating new
semiconductor and LCD fabrication plants and the resulting effect on customers’
ability to raise the necessary capital; (2) differing rates of market
growth for, and capital investments by, various semiconductor device makers,
such as memory (including NAND Flash and DRAM), logic and foundry, as well as
LCD and solar manufacturers; (3) industry growth rates; (4) the
increasing cost and decreasing affordability of research and development due to
many factors, including decreasing line widths, the increasing number of
materials, applications and process steps, and the greater complexity of process
development and chip design; (5) the increasing difficulty for customers to
move from product design to volume manufacturing; (6) the importance of
reducing the cost of system ownership, due in part to the increasing
significance of consumer electronics as a driver for semiconductor and LCD
demand and the related focus on lower prices; (7) varying levels of
business information technology spending; (8) the heightened importance to
customers of system reliability and productivity, and the effect on demand for
systems as a result of their increasing productivity, device yield and
reliability; (9) the growing types and varieties of semiconductors and
expanding number of applications across multiple substrate sizes, resulting in
customers’ divergent technical demands; (10) demand for shorter cycle times
for the development, manufacture and installation of manufacturing equipment;
(11) the challenge to semiconductor manufacturers of moving volume
manufacturing from one technology node to the next smaller technology node, and
the resulting impact on the technology transition rate and the rate of
investment in capital equipment; (12) price trends for certain
semiconductor devices and LCDs; (13) difficulties associated with
transitioning to larger substrate sizes; and (14) the increasing importance
of the availability of spare parts to assure maximum system uptime. If we do not
successfully manage the risks resulting from the ongoing changes occurring in
the semiconductor and semiconductor-related industries, its business, financial
condition and results of operations could be materially and adversely
affected.




7




The
industries that Omphalos serves are volatile and unpredictable.




As a
supplier to the global semiconductor, computer and related industries, we are
subject to business cycles, the timing, length and volatility of which can be
difficult to predict and which may vary by reportable segment. The industries
have historically been cyclical due to sudden changes in customers’
manufacturing capacity requirements and spending, which depend in part on
capacity utilization, demand for customers’ products, and inventory levels
relative to demand. The effects on Omphalos of these changes in demand,
including end-customer demand, are occurring more rapidly. These changes have
affected the timing and amounts of customers’ purchases and investments in
technology, and continue to affect our orders, net sales, gross margin,
contributed profit and results of operations.




We must
effectively manage our resources and production capacity to meet rapidly
changing demand. During periods of decreasing demand for our products, we must
be able to appropriately align its cost structure with prevailing market
conditions, motivate and retain key employees, and effectively manage its supply
chain. During periods of increasing demand, we must have sufficient
manufacturing capacity and inventory to meet customer demand; attract, retain
and motivate a sufficient number of qualified individuals; and effectively
manage its supply chain. If we are not able to timely and appropriately adapt to
changes in industry cycles, our business, financial condition or results of
operations may be materially and adversely affected.




Omphalos
is exposed to risks associated with a highly concentrated customer base in the
semiconductor and flat panel display industries.




Our
semiconductor and other customer base historically has been, and is becoming
even more, highly concentrated. For the year ended December 31, 2008, two
customers, each of whom accounted for more than 10% of Omphalos’ total revenues,
represented approximately 74% of the its total revenues.   Orders from a
relatively limited number of manufacturers have accounted for, and are expected
to continue to account for, a substantial portion of our net sales. In addition,
the mix and type of customers, and sales to any single customer, may vary
significantly from quarter to quarter and from year to year. If customers do not
place orders, or they delay or cancel orders, we may not be able to replace the
business. As our products are configured to customer specifications, changing,
rescheduling or canceling orders may result in significant, non-recoverable
costs. Major customers may also seek, and on occasion receive, pricing, payment,
intellectual property-related, or other commercial terms that are less favorable
to us. In addition, certain customers have undergone significant ownership
changes, have outsourced manufacturing activities, and/or have entered into
strategic alliances or industry consortia that have increased the influence of
key semiconductor manufacturers in technology decisions made by their partners,
which may result in additional complexities in managing customer relationships
and transactions. These factors could have a material, adverse effect on our
business, financial condition and results of operations.




Omphalos
is highly dependent on two suppliers.




For the
year ended December 31, 2008, Omphalos obtained 96% of the equipment that it
sells to its customers from only two vendors. If either one of these two vendors
or both were to cease supplying us with products for any reason, this would
force us to find alternative sources for our products. A change in suppliers
could cause a delay in availability of products and a possible loss of sales,
which could adversely affect operating results.




Manufacturing
interruptions or delays could affect our ability to meet customer demand, while
the failure to estimate customer demand accurately could result in excess or
obsolete inventory.




Our
business depends on its ability to supply equipment, services and related
products that meet the rapidly changing technical and volume requirements of its
customers, which depends in part on the timely delivery of parts, components and
subassemblies (collectively, parts) from suppliers. Some key parts may be
subject to long lead-times and/or obtainable only from a single supplier or
limited group of suppliers, and some sourcing or subassembly is provided by
suppliers in developing regions, including China. Significant interruptions of
manufacturing operations or the delivery of services as a result of:
(1) the failure or inability of suppliers to timely deliver quality parts;
(2) volatility in the availability and cost of materials;
(3) difficulties or delays in obtaining required export approvals;
(4) information technology or infrastructure failures; (5) natural
disasters (such as earthquakes, floods or storms); or (6) other causes
(such as regional economic downturns, pandemics, political instability,
terrorism, or acts of war), could result in delayed deliveries, manufacturing
inefficiencies, increased costs or order cancellations. Moreover, if actual
demand for our products is different than expected, we may purchase more/fewer
parts than necessary or incur costs for canceling, postponing or expediting
delivery of parts. Any or all of these factors could materially and adversely
affect our business, financial condition and results of operations.




8




We
may not be able to effectively manage our growth, which may harm our
profitability.




Our
strategy envisions expanding our business. If we fail to effectively manage our
growth, our financial results could be adversely affected. Growth may place a
strain on our management systems and resources. We must continue to refine and
expand our business development capabilities, our systems and processes and our
access to financing sources. As we grow, we must continue to hire, train,
supervise and manage new employees. We cannot assure you that we will be able
to:





·
            meet
      our capital needs;·
            expand
      our systems effectively or efficiently or in a timely
    manner;·
            allocate
      our human resources optimally;·
            identify
      and hire qualified employees or retain valued employees;
  or·
            incorporate
      effectively the components of any business that we may acquire in our
      effort to achieve growth.




If we are
unable to manage our growth, our operations and our financial results could be
adversely affected by inefficiency, which could diminish our
profitability.




Loss
of Sheng-Peir Yang, our Chief Executive Officer, could impair our ability to
operate.





If we
lose our key employee, Sheng-Peir Yang, our Chief Executive Officer, our
business could suffer. Our success is highly dependent on our ability to attract
and retain qualified technical and management personnel. We are highly dependent
on our management. Mr. Yang has an employment agreement with the Company.
However, the loss of Mr. Yang’s services could have a material adverse effect on
our operations. If we were to lose this individual, we may experience
difficulties in competing effectively, developing our technology and
implementing our business strategies. We do not have key-man life insurance in
place for any person working for us.




Our
management team does not have extensive experience in public company matters,
which could impair our ability to comply with legal and regulatory
requirements.





Our
management team has had limited public company management experience or
responsibilities. This could impair our ability to comply with legal and
regulatory requirements such as the Sarbanes-Oxley Act of 2002 and applicable
federal securities laws including filing required reports and other information
required on a timely basis. There can be no assurance that our management will
be able to implement and affect programs and policies in an effective and timely
manner that adequately respond to increased legal, regulatory compliance and
reporting requirements imposed by such laws and regulations. Our failure to
comply with such laws and regulations could lead to the imposition of fines and
penalties and further result in the deterioration of our business.




9


RISKS
RELATED TO OUR COMMON STOCK





There
has been a limited trading market for our common stock and no
market.  There is no assurance of an established public trading
market, which would adversely affect the ability of investors in our company to
sell their securities in the public markets.


It is
anticipated that there will be a limited trading market for the Company's common
stock on the National Association of Securities Dealers' ("NASD")
Over-the-Counter Bulletin Board. The lack of an active market may impair your
ability to sell your shares at the time you wish to sell them or at a price that
you consider reasonable. The lack of an active market may also reduce the fair
market value of your shares. An inactive market may also impair our ability to
raise capital by selling shares of capital stock and may impair our ability to
acquire other companies or technologies by using common stock as
consideration.




You
may have difficulty trading and obtaining quotations for our common
stock.





The
common stock may not be actively traded, and the bid and asked prices for our
common stock on the NASD's Over-the-Counter Bulletin Board may fluctuate widely.
As a result, investors may find it difficult to dispose of, or to obtain
accurate quotations of the price of, our securities. This severely limits the
liquidity of the common stock, and would likely reduce the market price of our
common stock and hamper our ability to raise additional capital.





The
market price of our common stock may, and is likely to continue to be, highly
volatile and subject to wide fluctuations.





The
market price of our common stock is likely to be highly volatile and could be
subject to wide fluctuations in response to a number of factors that are beyond
our control, including:




·
                      dilution
      caused by our issuance of additional shares of common stock and other
      forms of equity securities, which we expect to make in the Offering and in
      connection with future capital financings to fund our operations and
      growth, to attract and retain valuable personnel and in connection with
      future strategic partnerships with other companies;·
                      announcements
      of new acquisitions, reserve discoveries or other business initiatives by
      our competitors;·
                      our
      ability to take advantage of new acquisitions, reserve discoveries or
      other business initiatives;·
                      quarterly
      variations in our revenues and operating expenses;·
                      changes
      in the valuation of similarly situated companies, both in our industry and
      in other industries;·
                      changes
      in analysts’ estimates affecting our Company, our competitors and/or our
      industry;·
                      changes
      in the accounting methods used in or otherwise affecting our
      industry;·
                      additions
      and departures of key personnel;·
                      announcements
      by relevant governments pertaining to incentives for alternative energy
      development programs;·
                      fluctuations
      in interest rates and the availability of capital in the capital markets;
      and·
                      significant
      sales of our common stock, including sales by the investors following
      registration of the shares of common stock issued in this Offering and/or
      future investors in future offerings we expect to make to raise additional
      capital.





These and
other factors are largely beyond our control, and the impact of these risks,
singly or in the aggregate, may result in material adverse changes to the market
price of our common stock and/or our results of operations and financial
condition.




We
do not expect to pay dividends in the foreseeable future.





We do not
intend to declare dividends for the foreseeable future, as we anticipate that we
will reinvest any future earnings in the development and growth of our business.
Therefore, investors will not receive any funds unless they sell their common
stock, and stockholders may be unable to sell their shares on favorable terms or
at all. Investors cannot be assured of a positive return on investment or that
they will not lose the entire amount of their investment in the common
stock.




10


Applicable
SEC rules governing the trading of “penny stocks” limit the trading and
liquidity of our common stock, which may affect the trading price of our common
stock.





Shares of
common stock may be considered a “penny stock” and be subject to SEC rules and
regulations which impose limitations upon the manner in which such shares may be
publicly traded and regulate broker-dealer practices in connection with
transactions in “penny stocks.” Penny stocks generally are equity securities
with a price of less than $5.00 (other than securities registered on certain
national securities exchanges or quoted on the NASD's automated quotation
system, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or system). The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document that provides information about penny stocks and the risks
in the penny stock market. The broker-dealer must also provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction, and monthly account
statements showing the market value of each penny stock held in the customer’s
account. In addition, the penny stock rules generally require that prior to a
transaction in a penny stock, the broker-dealer make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser’s written agreement to the transaction. These
disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for a stock that becomes subject to the penny
stock rules which may increase the difficulty investors may experience in
attempting to liquidate such securities.





Item
1B.  Unresolved Staff Comments.





Not
applicable.





Item
2.  Properties.




Our
principal executive offices are located at





Omphalos
does not own any real property. The company leases an office and a warehouse
from a shareholder. The office maintains office administration and sales
facilities and the warehouse maintains inventory, and research and design
facilities. The location of the office and warehouse are Unit 2, 15 Fl., 83,
Nankan Rd. Sec. 1, Luchu, Taoyuan County, Taiwan and No.1371-1, Sec. 3, Fuguo
Rd., Lujhu Township, Taoyuan County 338, Taiwan. The office space is
approximately 3,700 square feet and the warehouse space is approximately 4,034
square feet.





Generally,
Omphalos maintains short-term leases for its office and warehouse, with options
to renew, where possible. The terms of the lease for office and warehouse are
both from January 1, 2008 to December 31, 2009. The company pays a monthly rent
of approximately $2,200 for the periods ended December 31, 2008 and
2007, respectively. Rent expenses under the office and warehouse lease
agreements amounted to approximately $26,700 and $26,000 for the periods ended
December 31, 2008 and 2007, respectively.





Item
3.  Legal Proceedings.





None.





Item
4.  Submission of Matters to a Vote of Security Holders.





Not
applicable.


PART
II





Item
5.  Market for Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities.





There
were approximately 72 holders of record of our common stock as of February 17,
2009.




Recent
Transaction Involving Unregistered Securities


None.


11





Item
6.  Selected Financial Data.





Not
applicable.


Item
7.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations.





Forward
Looking Statements





Some of
the statements contained in this Form 10-K that are not historical facts are
"forward-looking statements" which can be identified by the use of terminology
such as "estimates," "projects," "plans," "believes," "expects," "anticipates,"
"intends," or the negative or other variations, or by discussions of strategy
that involve risks and uncertainties. We urge you to be cautious of the
forward-looking statements, that such statements, which are contained in this
Form 10-K, reflect our current beliefs with respect to future events and involve
known and unknown risks, uncertainties, and other factors affecting our
operations, market growth, services, products, and licenses. No assurances can
be given regarding the achievement of future results, as actual results may
differ materially as a result of the risks we face, and actual events may differ
from the assumptions underlying the statements that have been made regarding
anticipated events. Factors that may cause actual results, our performance or
achievements, or industry results, to differ materially from those contemplated
by such forward-looking statements include without limitation:




1.
            Our
      ability to attract and retain management, and to integrate and maintain
      technical information and management information
  systems;





2.
            Our
      ability to generate customer demand for our
  services;





3.
            The
      intensity of competition; and





4.
            General
      economic conditions.




All
written and oral forward-looking statements made in connection with this Form
10-K that are attributable to us or persons acting on our behalf are expressly
qualified in their entirety by these cautionary statements. Given the
uncertainties that surround such statements, you are cautioned not to place
undue reliance on such forward-looking statements.  This MD&A
should also be read in conjunction with the Item 1.A. “Risk
Factors.”





Overview





The
Company, through Omphalos Corp. - Taiwan, is in the business of supplying a wide
range of equipment and parts including reflow soldering ovens and Automated
Optical Inspection (AOI) machines to printed circuit board (PCB) manufacturers
in Taiwan and China. The clients are mainly Taiwanese electronics manufacturing
companies, including Quanta Computer Inc., MiTAC International Corp., Universal
Scientific Industrial Co., ASUS, Gigabyte, and Advantech in Taiwan, and Foxconn
group, QSMC, etc. in China.





The major
equipment manufacturers Omphalos represents are SAYAKA, SAKI, TAMURA, FURUKAWA,
and ISHIKAWA, all of which have complete technical supports licensed from the
original manufacturers.





The
company operates in an industry characterized by rapid technological changes. It
will need additional investments to complete the development and improvement
necessary for the development and production of the testing equipment and parts
for PCB assembly processes.





The
company's business strategy is to increase its market share by expanding into
other industries. Since PCB has a vast application range, the Company is
currently researching and developing many additional uses for testing equipment
and parts.




12


In the
future, the Company expects to expand the number and type of industries it is
able to service. The company is currently working with Chung-shan Institute of
Science and Technology, Armaments Bureau. M.N.D. to develop testing equipment
for auto industry.





Critical
Accounting Policies and Estimates





This
discussion and analysis of our financial condition and results of operations are
based on our financial statements that have been prepared under accounting
principle generally accepted in the United States of America. The preparation of
financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.





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





Long-term
investments consist of certificates of deposit (CDs) with maturities in excess
of one year.





Accounts
Receivable - Accounts receivable are carried at original invoice amount less
estimates made for doubtful receivables. Management determines the allowance for
doubtful accounts on a quarterly basis based on a review of the current status
of existing receivables, account aging, historical collection experience,
subsequent collections, management's evaluation of the effect of existing
economic conditions, and other known factors. The provision is provided for the
above estimates made for all doubtful receivables. Account balances are charged
off against the allowance only when the Company considers it is probable that a
receivable will not be recovered. Recoveries of trade receivables previously
written off are recorded when received.




Inventory
- Inventory is carried at the lower of cost or market. Cost is determined by
using the specific identification method. The Company periodically reviews the
age and turnover of its inventory to determine whether any inventory has become
obsolete or has declined in value, and charges to operations for known and
anticipated inventory obsolescence. Inventory consists substantially of finished
goods and is net of an allowance for slow-moving inventory of $298,502 and
$188,503 at December 31, 2008 and 2007, respectively.





Other
Intangible Assets - Other intangible assets consist of patents and are accounted
for at historical costs. The Company amortizes other intangible assets over
their useful lives, as applicable.





Effective
July 2002, the Company adopted Statement of Financial Accounting Standards
("SFAS") No. 142, "Goodwill and Other Intangible Assets." The adoption of SFAS
No. 142 requires an initial impairment assessment involving a comparison of the
fair value of trademarks, patents and other intangible assets to current
carrying value. No impairment loss was recognized for the year ended December
31, 2007. Patents, trademarks, and other intangible assets determined to have
indefinite useful lives are not amortized. The Company tests such intangible
assets with indefinite useful lives for impairment annually, or more frequently
if events or circumstances indicate that an asset might be impaired. Trademarks,
patents, and other intangible assets determined to have definite lives are
amortized over their useful lives or the life of the trademark and other
intangible asset, whichever is less.





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




13




Recently Issued Accounting
Pronouncements - In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements, which defines fair value, establishes a framework for measuring
fair value in accordance with generally accepted accounting principles and
expands disclosures about fair value measurements. SFAS 157 is effective January
1, 2008. In February 2008, the FASB deferred for one year the effective date of
SFAS 157 only with respect to nonfinancial assets and nonfinancial liabilities
that are recognized or disclosed at fair value in the financial statements on a
nonrecurring basis, and removed certain leasing transactions from the scope of
SFAS 157.The adoption of SFAS 157 does not have a material impact on its
financial statements.




In February 2007, the FASB issued SFAS
No. 159, The Fair Value Option for Financial Assets and Financial Liabilities -
including an amendment to FASB Statement No. 115, which permits entities to
choose to measure many financial instruments and certain other items at fair
value that are not currently required to be measured at fair value. SFAS 159 is
effective January 1, 2008.The adoption of SFAS 159 does not have a
material impact on its financial statements.





In
December 31,2007 the FASB issued SFAS No. 141 (revised 2007), Business
Combinations, ("SFAS 141R"), which changes how business combinations are
accounted for and will impact financial statements both on the acquisition date
and in subsequent periods. SFAS 141R is effective January 1, 2009, and will be
applied prospectively. The impact of adopting SFAS 141R will depend on the
nature and terms of future acquisitions.





In
December 31, 2007 the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements, which changes the accounting and reporting
standards for the noncontrolling interests in a subsidiary in consolidated
financial statements. SFAS 160 recharacterizes minority interests as
noncontrolling interests and requires noncontrolling interests to be classified
as a component of shareholders' equity. SFAS 160 is effective January 1, 2009
and requires retroactive adoption of the presentation and disclosure
requirements for existing minority interests. The Company is currently
evaluating the impact of SFAS 160 on its consolidated financial
statements.





In
January 2008, the SEC released SAB No. 110, which amends SAB No. 107 which
provided a simplifiedapproach for estimating the expected term of a “plain
vanilla” option, which is required for application of the Black-Scholes option
pricing model (and other models) for valuing share options. At the time, the
Staff acknowledged that, for companies choosing not to rely on their own
historical option exercise data (i.e., because such data did not provide a
reasonable basis for estimating the term), information about exercise patterns
with respect to plain vanilla options granted by other companies might not be
available in the near term; accordingly, in SAB No. 107, the Staff permitted use
of a simplified approach for estimating the term of plain vanilla options
granted on or before December 31, 2007. The information concerning exercise
behavior that the Staff contemplated would be available by such date has not
materialized for many companies. Thus, in SAB No. 110, the Staff continues to
allow use of the simplified rule for estimating the expected term of plain
vanilla options until such time as the relevant data becomes widely available.
The Company does not expect its adoption of SAB No. 110 to have a material
impact on its financial position, results of operations or cash
flows.





In March
2008, the FASB issued SFAS No. 161 “Disclosures about Derivative
Instruments and Hedging Activities—An Amendment of FASB Statement
No. 133.” (“SFAS 161”). SFAS 161 establishes the disclosure
requirements for derivative instruments and for hedging activities with the
intent to provide financial statement users with an enhanced understanding of
the entity’s use of derivative instruments, the accounting of derivative
instruments and related hedged items under Statement 133 and its related
interpretations, and the effects of these instruments on the entity’s financial
position, financial performance, and cash flows. This statement is
effective for financial statements issued for fiscal years beginning after
November 15, 2008. The Company does not expect its adoption of SFAS 161 to
have a material impact on its financial position, results of operations or cash
flows.





In April
2008, the FASB issued FASB Staff Position (“FSP”) SFAS No. 142-3, “Determination of the Useful Life of
Intangible Assets”. This FSP amends the factors that should be considered
in developing renewal or extension assumptions used to determine the useful life
of a recognized intangible asset under FASB Statement No. 142, “Goodwill and Other Intangible
Assets”(“SFAS 142”). The intent of this FSP is to improve the
consistency between the useful life of a recognized intangible asset under
SFAS 142 and the period of expected cash flows used to measure the fair
value of the asset under SFAS 141R, and other GAAP. This FSP is effective for
financial statements issued for fiscal years beginning after December 15,
2008, and interim periods within those fiscal years. Early adoption is
prohibited. The Company is currently evaluating the impact of SFAS FSP 142-3,
but does not expect the adoption of this pronouncement will have a material
impact on its financial position, results of operations or cash
flows.




14


In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles”(SFAS 162”).  SFAS 162 identifies the sources
of accounting principles and the framework for selecting principles to be used
in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States.  This statement shall be effective 60 days following the
SEC’s approval of the Public Company Accounting Oversight Board’s amendments to
AU section 411, The Meaning of Present Fairly in Conformity with Generally
Accepted Accounting Principles. The Company is currently evaluating the impact
of SFAS 162, but does not expect the adoption of this pronouncement will have a
material impact on its financial position, results of operations or cash
flows.





Results of
Operations





The
following table presents the consolidated results of the Company for the years
ended December 31, 2008 and 2007.





Net
Sales. Net sales for the year ended December 31, 2008 were $7,867,973 compared
to $10,047,118 for the year ended December 31, 2007. The decrease in net sales
was due to a general decrease in market demand, as compared to sales volume in
the 2007 period, which was affected by the decrease in business to existing
customers.





Cost of
Sales. Cost of sales for the year ended December 31, 2008 was $5,561,363 or
70.68% of net sales, as compared to $6,648,419 or 66.17% of net sales, for the
year ended December 31, 2007. The increase in cost of sales as a percentage of
net sales was due to a decrease in overall sales margin which was caused by the
increase in competition.





Selling,
General and Administrative Expenses. Selling, general and administrative
expenses for the one year ended December 31, 2008 were $1,781,178 or 22.64% of
net sales, as compared to $1,922,076 or 19.13% of net sales, for the one year
ended December 31, 2007. The decrease in selling, general and administrative
expenses was primarily due to a decrease in traveling cost and professional
service cost control.




Income
from Operations. Income from operations for the year ended December 31, 2008 was
$ 525,432 as compared to $1,476,623 for the year ended December 31, 2007. The
decrease in income from operations for the year ended December 31, 2008 compared
with income from operations for the 2007 resulted primarily from a decrease in
net sales.





Other
Income. Other income for the one year ended December 31, 2008 was $79,583 as
compared to $324,100 for the one year ended December 31, 2007. This change was
primarily attributable to the decreases in interest income which was partially
offset by the increase in foreign currency exchange gain.


t Income.
Net income for the one year ended December 31, 2008 was $605,015 as compared to
$1,800,723 for the one year ended December 31, 2007. The decrease in net income
was due to the reasons described above.





Liquidity
and Capital Resources





Cash and
cash equivalents were $4,494,963 at December 31, 2008 and $2,783,243 at December
31, 2007. Our total current assets were $6,565,894 at December 31, 2008 as
compared to $7,645,892 at December 31, 2007. Our total current liabilities were
$1,819,054 at December 31, 2008 as compared to $4,163,738 at December 31,
2007.





We had
working capital at December 31, 2008 of $4,746,840 compared with working capital
of $3,302,154 at December 31, 2007. This increase in working capital was
primarily due to increases in cash and cash equivalents, inventory, and due from
shareholders which were partially offset by the decreases in accounts payable
and accured expenses. During the year ended December 31, 2008, net cash provided
by operating activities was $1,008,389. Net cash provided by investing
activities was $1,126,177, and net cash used in financing activities was
$(385,392). Net change in cash and cash equivalents was an increase of
$1,711,720.




15


Capital
Expenditure





Total
capital expenditures during the year ended December 31, 2008 was
$3,788.





Currency
Exchange Fluctuations





Translation
Adjustment— The accounts of the Company was maintained, and its
financial statements were expressed, in New Taiwan Dollar (“NTD”). Such
financial statements were translated into U.S. Dollars (“$” or “USD”) in
accordance SFAS No. 52, "Foreign Currency Translation", with the NTD as the
functional currency. According to the Statement, all assets and liabilities are
translated at the current exchange rate, stockholder's equity are translated at
the historical rates and income statement items are translated at the weighted
average exchange rate for the period. The resulting translation adjustments are
reported under other comprehensive income in accordance with SFAS No. 130,
"Reporting Comprehensive Income" as a component of shareholders’
equity.





As of
December 31, 2008 and December 31, 2007 the exchange rates between the NTD and
the USD ($) were NTD1=$0.03050 and NTD1=$0.03077, respectively. The
weighted-average rates of exchange between NTD and USD were NTD1=$0.03175 and
NTD1=$0.03044 for the years ended December 31, 2008 and December 31, 2007,
respectively. Total translation adjustment recognized as of December 31, 2008
and December 31, 2007 is $161,930 and $211,407, respectively.





Off-Balance
Sheet Arrangements





We do not
have any off-balance sheet arrangements as of December 31, 2008.





Item
7A.  Quantitative and Qualitative Disclosures about Market
Risk.





Not
Applicable.





Item
8.  Financial Statements and Supplementary Data.





The
consolidated financial statements of Omphalos, Corp, including the notes
thereto, together with the report thereon of KCCW Accountancy Corp. is
presented beginning at page F-1.




16




Item
9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.


Item 9A.  Controls and
Procedures.
 
 Management’s
Report of Internal Control over Financial Reporting
 
 We are
responsible for establishing and maintaining adequate internal control over
financial reporting in accordance with Exchange Act Rule 13a-15. With the
participation of our Chief Executive Officer and Chief Financial Officer, our
management conducted an evaluation of the effectiveness of our internal control
over financial reporting as of December 31, 2008 based on the criteria
established in Internal
Control-Integrated Frameworkissued by the Committee of Sponsoring
Organizations of the Treadway Commission.  Based on this evaluation,
management concluded that our internal control over financial reporting was
effective as of December 31, 2008, based on those criteria.  A control
system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are
met.  Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the Company have been
detected.
  This
Annual Report does not include an attestation report of the Company’s registered
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.
 
 Evaluation
of Disclosure Controls and Procedures
 
 Disclosure
controls and procedures and other procedures that are designed to ensure that
information required to be disclosed in our reports or submitted under the
Exchange Act is recorded, processed, summarized and reported within the time
period specified in the SEC’s rules and forms.  Disclosure controls
and procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our reports filed under the
Exchange Act is accumulated and communicated to management including our Chief
Executive Officer and Chief Financial Officer as appropriate, to allow timely
decisions regarding required disclosure.
 
 As of the
end of the period covered by this report, we carried out an evaluation, under
the supervision and with the participation of our Chief Executive Officer and
our Chief Financial Officer, of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) of the Exchange Act).   Based on this evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures were effective as of the end of the period covered by
this report.
  Changes
in Internal Control Over Financial Reporting
 
 There was
no change in our internal control over financial reporting during the most
recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
 
 Item
9B.  Other Information.
 
 On March
15, 2009, the Board of Directors of Omphalos, Corp., approved and adopted
Amended and Restated By-Laws of Omphalos, Corp., a copy of which is filed
herewith as Exhibit 3.7.
  17
  PART
III
 
 Item
10.  Directors, Executive Offices and Corporate
Governance.
 
 Directors
and Executive Officers
 
 Name
              
              Age
              
              PositionSheng-Peir Yang
              
              52
              
              President and DirectorChu Pi Yun
              
              38
              
              Chief Financial OfficerLi Shen-Ren
              
              46
              
              Chief Operating Officer
  Shen-Peir
Yang, Chief Executive Officer
 
 Mr. Yang
has been President of Omphalos since 1991. He holds a degree in Mechanical
Engineering from National Taipei University of Technology.
  Chu
Pi Yun, Chief Financial Officer
  Ms. Yun
has been with Omphalos since 2000. During that time she functioned in various
accounting related positions. She was appointed our Chief Financial Officer in
October 2007. Ms. Yun has done extensive accounting coursework.
 
 Li
Shen-Ren, Chief Operating Officer
  Mr.
Shen-Ren has been with Omphalos since 1997. He has worked primarily in sales and
was appointed our Chief Operating Officer in 2007. He holds a degree from the
Department of Mechanics at Taiwan Technical University.
 
 Our
directors and officers hold office until the earlier of their resignation, or
removal or until their successors have been duly elected and
qualified.
 
 There are
no family relationships among our directors or executive officers.
 
 To our
knowledge, during the last five years, none of our directors and executive
officers (including those of our subsidiaries) has:
 
 ·
              Had a bankruptcy petition filed
      by or against any business of which such person was a general partner or
      executive officer either at the time of the bankruptcy or within two years
      prior to that time.
 
 ·
              Been convicted in a criminal
      proceeding or been subject to a pending criminal proceeding, excluding
      traffic violations and other minor
  offenses.
 
 ·
              Been subject to any order,
      judgment or decree, not subsequently reversed, suspended or vacated, of
      any court of competent jurisdiction, permanently or temporarily enjoining,
      barring, suspending or otherwise limiting his involvement in any type of
      business, securities or banking
  activities.
 
 ·
              Been found by a court of
      competent jurisdiction (in a civil action), the SEC, or the Commodities
      Futures Trading Commission to have violated a federal or state securities
      or commodities law, and the judgment has not been reversed, suspended or
      vacated.
  18
  Audit
Committee Financial Expert
 
 Our board ofdirectors
currently acts as our audit committee. Because we only recently consummated the
Reverse Merger and appointed the current members of our board of directors, our
board of directors has not yet determined whether we have a member who qualifies
as an "audit committee financial expert" as defined in Item 401(e) of Regulation
S-B, and is "independent" as the term is used in Item 7(d)(3)(iv) of Schedule
14A under the Exchange Act. Our board of directors is in the process of
searching for a suitable candidate for this position.
 
 Audit
Committee
 
 We have
not yet appointed an audit committee, and our board of directors currently acts
as our audit committee. At the present time, we believe that the members of
board of directors are collectively capable of analyzing and evaluating our
financial statements and understanding internal controls and procedures for
financial reporting. Our company, however, recognizes the importance of good
corporate governance and intends to appoint an audit committee comprised
entirely of independent directors, including at least one financial expert,
during our 2008 fiscal year.
  Limitation
on Liability and Indemnification of Directors and Officers
  Our
certificate of incorporation provides that no director or officer shall have any
liability to the company if that person acted in good faith and with the same
degree of care and skill as a prudent person in similar
circumstances.
  Our
certificate of incorporation and bylaws provide that we will indemnify our
directors and officers and may indemnify our employees or agents to the fullest
extent permitted by law against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices or
positions with us.  However, nothing in our certificate of
incorporation or bylaws protects or indemnifies a director, officer, employee or
agent against any liability to which that person would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of that person’s office or
position.  To the extent that a director has been successful in
defense of any proceeding, the Delaware General Corporation Law provides that
the director shall be indemnified against reasonable expenses incurred in
connection with the proceeding.
 
 Code
of Ethics
 
 We have
not as yet adopted a code of ethics that applies to our principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions because we just recently
became subject to this requirement.  We plan to adopt a code of ethics
as soon as practicable, at which time, it will be available in print to any
person who requests it and on our website, when our website is
completed.  Any amendments and waivers to the code will also be
available in print and on our website.
  Item
11.  Executive Compensation.
 
 SUMMARY
COMPENSATION TABLE
 
 Name and principal position
                                        
                                        Year
                                        
                                        Salary
                                          ($)
                                        
                                        Bonus
                                          ($)
                                        
                                        Stock
                                          Awards
                                          ($)
                                        
                                        Option
                                          Awards
                                          ($)
                                        
                                        Non-
                                          Equity
                                          Incentive
                                          Plan
                                          ($)
                                        
                                        Non-
                                          qualified
                                          Deferred
                                          Compen-
                                          sation
                                          Earnings
                                          ($)
                                        
                                        All
                                          other
                                          compen-sation
                                          ($)
                                        
                                        Total
                                          ($)Sheng-Peir Yang
                                          CEO and President
                                        
                                        2008
                                          2007
                                        
                                        $
                                          $
                                        70,485
                                          53,196
                                        
                                        —
                                          —
                                        
                                        
                                        —
                                          —
                                        
                                        —
                                          —
                                        
                                        
                                        —
                                          —
                                        
                                        —
                                          —
                                        
                                        —
                                          —
                                        
                                        $
                                          $
                                        70,485
                                          53,196Pi-Yun
      Chu
                                          CFO
                                        
                                        2008
                                          2007
                                        
                                        $
                                          $
                                        21,036
                                          15,876
                                        
                                        —
                                          —
                                        
                                        
                                        —
                                          —
                                        
                                        —
                                          —
                                        
                                        
                                        —
                                          —
                                        
                                        —
                                          —
                                        
                                        —
                                          —
                                        
                                        $
                                          $
                                        21,036
                                          15,876Shen-Ren Li
                                          COO
                                        
                                        2008
                                          2007
                                        
                                        $
                                          $
                                        36,576
                                          27,600
                                        
                                        —
                                          —
                                        
                                        
                                        —
                                          —
                                        
                                        —
                                          —
                                        
                                        
                                        —
                                          —
                                        
                                        —
                                          —
                                        
                                        —
                                          —
                                        
                                        $
                                          $
                                        36,576
                                          27,600
  19
  Outstanding
Equity Awards at Fiscal Year-End
 
 As of our
fiscal years ended December 31, 2008 and 2007, we did not have any stock option
plan or stock incentive plan and there were no outstanding equity awards as of
our fiscal years ended December 31, 2008 and 2007. No equity awards were granted
during the year ended December 31, 2008.
 
 We have
entered into the follow employment agreements:
 
 ·
              Sheng-Peir Yang entered into an
      employment agreement with Omphalos on November 30, 2007, to serve as its
      Chief Executive Officer for a term of two (2) years at an monthly salary
      of New Taiwan Dollars (“NTD”) 185,000 (approximately $5,874). Mr. Yang
      will be required to comply with the Non-Competition provision contained
      within the employment agreement. Either party, with proper notice, may
      terminate the employment agreement, and the employment agreement will be
      governed and construed by the laws of the Republic of
      China.
 
 ·
              Shen-Ren Li entered into an
      employment agreement with Omphalos on November 30, 2007, to serve as its
      Chief Operating Officer for a term of two (2) years at an monthly salary
      of NTD96,000 (approximately $3,048). Mr. Li will be required to comply
      with the Non-Competition provision contained within the employment
      agreement. Either party, with proper notice, may terminate the employment
      agreement, and the employment agreement will be governed and construed by
      the laws of the Republic of
China.
 
 ·
              Pi-Yun Chu entered into an
      employment agreement with Omphalos on November 30, 2007, to serve as its
      Chief Financial Officer for a term of two (2) years at an monthly salary
      of NTD55,200 (approximately $1,753). Ms. Chu will be required to comply
      with the Non-Competition provision contained within the employment
      agreement. Either party, with proper notice, may terminate the employment
      agreement, and the employment agreement will be governed and construed by
      the laws of the Republic of
China.
 
 OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
 
 As of our
fiscal years ended December 31, 2008 and 2007, we did not have any stock option
plan or stock incentive plan and there were no outstanding equity awards as of
our fiscal years ended December 31, 2008 and 2007. No equity awards were granted
during the year ended December 31, 2008.
 
 COMPENSATION
OF DIRECTORS
  No
Directors received compensation for their services on our Board of Directors.
Our directors are also reimbursed for reasonable travel and other expenses
incurred in connection with attending meetings of the board and its committees,
if any.
  20
  Item
12.  Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters.
 
 SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
 The
following table sets forth the number of shares of common stock beneficially
owned as of March 24, 2009 by (i) those persons or groups known to us to
beneficially own more than 5% of our common stock; (ii) each director; (iii)
each executive officer; and (iv) all directors and executive officers as a
group. The information is determined in accordance with Rule 13d-3 promulgated
under the Exchange Act based upon information furnished by persons listed or
contained in filings made by them with the SEC or by information provided by
such persons directly to us. Except as indicated below, each of the stockholders
listed below possesses sole voting and investment power with respect to their
shares and the address of each person is c/o Omphalos, Corp..
 
 Name of Beneficial Owner
                    
                    Common Stock
                      Beneficially
                      Owned
                    
                    Percentage of
                      Common Stock
                      Beneficially
                      Owned (1)Sheng-Peir
      Yang
                    
                    
                    18,449,162
                    
                    61.3
                    %Chu
      Pi Yun
                    
                    
                    683,302
                    
                    2.3
                    %Li
      Shen-Ren
                    
                    
                    1,366,605
                    
                    4.5
                    %All
      officers and directors as a group (5 persons)
                    
                    
                    20,499,069
                    
                    68.1
                    %
 * Denotes less than
1%
  Beneficial
ownership percentages gives effect to the completion of the Share Exchange, and
are calculated based on shares of common stock issued and outstanding and is
based on a total of 30,063,759 shares of common stock that were issued and
outstanding as of March 24, 2009. Beneficial ownership is determined in
accordance with Rule 13d-3 of the Exchange Act. The number of shares
beneficially owned by a person includes shares of common stock underlying
options or warrants held by that person that are currently exercisable or
exercisable within 60 days of March 24, 2009. The shares issuable pursuant to
the exercise of those options or warrants are deemed outstanding for computing
the percentage ownership of the person holding those options and warrants but
are not deemed outstanding for the purposes of computing the percentage
ownership of any other person. The persons and entities named in the table have
sole voting and sole investment power with respect to the shares set forth
opposite that person’s name, subject to community property laws, where
applicable, unless otherwise noted in the applicable footnote.
 
 Item
13.  Certain Relationships and Related Transactions, and Director
Independence.
 
 Our sole
director is a named executive officer of the Company and, accordingly, is not
“independent” for purposes of any securities market
requirements.
  21
  Item
14.  Principal Accounting Fees and Services.
 
 Summary
of Principal Accounting Fees for Professional Services Rendered
 
 The
following table presents the aggregate fees for professional audit services and
other services rendered by KCCW Accountancy Corp..
 
 Year
                            Ended
                            December
                            31, 2008
                          
                          
                          Year
                            Ended
                            December
                            31, 2007Audit
      Fees
                          
                          $
                          40,000
                          
                          
                          $
                          46,338Audit-Related
      FeesTax
      FeesAll
      Other Fees
                          
                          
                          -$
                          40,000
                          
                          
                          $
                          46,338
 
 Audit Fees consist of fees
billed for the annual audit of our financial statements and other audit services
including the provision of consents and the review of documents filed with the
SEC.
  We do not
have an independent audit committee and the full Board of Directors, therefore,
serves as the audit committee for all purposes relating to communication with
our auditors and responsibility for our audit. All engagements for audit
services, audit- related services and tax services are approved in advance by
our full Board of Directors. Our Board of Directors has considered whether the
provision of the services described above for the fiscal year ended December 31,
2008, is compatible with maintaining the auditor’s independence.
  All audit
and non-audit services that may be provided by our principal accountant to us
shall require pre-approval by the Board of Directors. Further, our auditor shall
not provide those services to us specifically prohibited by the SEC, including
bookkeeping or other services related to the accounting records or financial
statements of the audit client; financial information systems design and
implementation; appraisal or valuation services, fairness opinion, or
contribution-in-kind reports; actuarial services; internal audit outsourcing
services; management functions; human resources; broker-dealer, investment
adviser, or investment banking services; legal services and expert services
unrelated to the audit; and any other service that the Public Company Oversight
Board determines, by regulation, is impermissible.
  22
  Item
15.  Exhibits, Financial Statement Schedules.
  1.
                Financial
      Statements:  See “Index to Consolidated Financial Statements” in
      Part II, Item 8 of the Form 10-K.2.
                Financial
      Statement Schedule:  Schedules are included in the Consolidated
      Financial Statements or notes of this Form 10-K or are not
      required.3.
                Exhibits:  The
      exhibits listed in the accompanying index to exhibits are filed or
      incorporated by reference as part of this Form
  10-K.
 Exhibit Number
                
                Description2.1
                
                Share
      Exchange Agreement dated February 5, 2008, between the Company and the
      parties set forth on the signature page thereof, incorporated by reference
      to Exhibit  2.1 to the Company’s current report on Form
      8-K, filed with the Securities and Exchange Commission (the “SEC”) on
      April 9, 20083.1
                
                Certificate
      of Incorporation of the Company (incorporated by reference to the
      Company's proxy statement on Schedule 14A filed with the Commission on
      March 5, 2003 (the "Proxy Statement")3.2
                
                Articles
      of Amendment to the Articles of Incorporation of the Company (incorporated
      by reference to the Proxy Statement)3.3
                
                Agreement
      and Plan of Merger between Quixit, Inc., a Colorado corporation, and TOP
      Group Corporation(now known as SOYODO Group Holdings, Inc.), a Delaware
      corporation (incorporated by reference to the Proxy
    Statement)3.4
                
                By-Laws
      of the Company (incorporated by reference to the
      ProxyStatement)3.5
                
                Amended
      and Restated Certificate of Incorporation of the Company Incorporated by
      reference to the information statement on Schedule 14c filed with the
      Commission on March 15, 2005)3.6
                
                Articles
      of Amendment to the Articles of Incorporation of the Company (incorporated
      by reference to the information statement on Schedule 14C filed with
      Commission on August 26, 2005)3.7
                
                Amended
      and Restated By-Laws of Omphalos, Corp., filed
herewith.10.1
                
                Employment
      Agreement with Pi-Yun Chu, incorporated by reference to Exhibit 10.1 to
      the Company’s current report on Form 8-K, filed with the SEC on April 9,
      2008.10.2
                
                Employment
      Agreement with Shen-Ren Li, incorporated by reference to Exhibit 10.2 to
      the Company’s current report on Form 8-K, filed with the SEC on April 9,
      2008.10.3
                
                Employment
      Agreement with Sheng-Peir Yang, , incorporated by reference to
      Exhibit 10.3 to the Company’s current report on Form 8-K, filed with
      the SEC on April 9,
2008.
  31.1
                Certification
      of principal executive officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200231.2
                Certification
      of principal financial officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200232.1
                Certification
      of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act32.2
                Certification
      of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act
 
 23
  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.
 
 Dated: March __, 2009
              By:
              /s/ Sheng-Peir YangSheng-Peir YangChief Executive Officer
 
 In
accordance with the Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
 
 Name
              
              Title
              
              Date/s/Sheng-Peir Yang
              
              Chief
      Executive Officer and
                Chairman
      of the Board of Directors
              
              March
      __, 2009Sheng-Peir
      Yang/s/ Chu Pi Yun
              
              Chief
      Financial Officer (principal
                financial
      and accounting officer)
                and
      Director
              
              March
      __, 2009Chu
      Pi Yun/s/ Li Shen-Ren
              
              Director
              
              March
      __, 2009Li
      Shen-Ren
  24




OMPHALOS,
CORP.
  CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED
  DECEMBER
31, 2008 AND 2007 AND
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  F-1
  CONTENTS
 
 PageREPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                  F-3FINANCIAL
      STATEMENTSConsolidated
      Balance Sheets
                  F-4Consolidated
      Statements of Income
                  F-6Consolidated
      Statements of Changes in Shareholders' Equity and Comprehensive
      Income
                  F-7Consolidated
      Statements of Cash Flows
                  F-8Notes
      to Financial Statements
                  F-9
  F-2
  REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 Board of
Directors
 Omphalos
Corp.
 
 We have
audited the accompanying consolidated balance sheets of Omphalos, Corp. and its
subsidiaries (the “Company”) as of December 31, 2008 and 2007, and the related
consolidated statements of income, shareholders’ equity and comprehensive
income, and cash flows for the years then ended. These financial statements are
the responsibility of the Company’s management. Our responsibility is to express
an opinion on these financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provide a reasonable
basis for our opinion.
 
 In our
opinion, such financial statements present fairly, in all material respects, the
consolidated financial positions of Omphalos, Corp. as of December 31, 2008 and
2007, and the consolidated results of their operations and their consolidated
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
 
 KCCW
Accountancy Corp.
 
 Walnut,
California
 March 16,
2009
 
 F-3
 
 OMPHALOS,
CORP.
  CONSOLIDATED
BALANCE SHEETS
 December
31, 2008 and 2007
 
 December
      31,
                                  
                                  
                                  December
      31,Assets
                                  
                                  2008
                                  
                                  
                                  2007Current
      AssetsCash
      and cash equivalents
                                  
                                  $
                                  4,494,963
                                  
                                  
                                  $
                                  2,783,243Accounts
      receivable, net
                                  
                                  
                                  712,281
                                  
                                  
                                  
                                  3,892,353Inventory,
      net
                                  
                                  
                                  1,116,918
                                  
                                  
                                  
                                  657,788Prepaid
      and other current assets
                                  
                                  
                                  39,873
                                  
                                  
                                  
                                  132,508Due
      from shareholders
                                  
                                  
                                  201,859
                                  
                                  
                                  
                                  -Total
      current assets
                                  
                                  
                                  6,565,894
                                  
                                  
                                  
                                  7,465,892Leasehold
      Improvements and Equipment, net
                                  
                                  
                                  11,864
                                  
                                  
                                  
                                  13,808Intangible
      assets, net
                                  
                                  
                                  37,416
                                  
                                  
                                  
                                  29,946Deposits
                                  
                                  
                                  24,842
                                  
                                  
                                  
                                  -Long-term
      investments
                                  
                                  
                                  -
                                  
                                  
                                  
                                  1,100,704Total
      Assets
                                  
                                  $
                                  6,640,016
                                  
                                  
                                  $
                                  8,610,350
 
 F-4
  OMPHALOS,
CORP.
  CONSOLIDATED
BALANCE SHEETS
 December
31, 2008 and 2007
 
 December
      31,
                                  
                                  
                                  December
      31,Liabilities
      and Shareholders' Equity
                                  
                                  2008
                                  
                                  
                                  2007Current
      LiabilitiesAccounts
      payable
                                  
                                  $
                                  1,724,092
                                  
                                  
                                  $
                                  3,940,816Accrued
      salaries and bonus
                                  
                                  
                                  42,704
                                  
                                  
                                  
                                  42,081Accured
      expenses
                                  
                                  
                                  52,258
                                  
                                  
                                  
                                  180,841Total
      current liabilities
                                  
                                  
                                  1,819,054
                                  
                                  
                                  
                                  4,163,738Commitments
      and contingenciesShareholders'
      EquityCommon
      stock, $0.0001 par value, 120,000,,000 shares authorized, 27,332,092
      and 30,063,759 shares issued  and outstanding as of December 31, 2007
      and 2008, respectively
                                  
                                  
                                  3,007
                                  
                                  
                                  
                                  2,733Additional
      paid-in capital
                                  
                                  
                                  47,523
                                  
                                  
                                  
                                  47,267Other
      comprehensive income
                                  
                                  
                                  161,930
                                  
                                  
                                  
                                  211,407Retained
      Earnings
                                  
                                  
                                  4,608,502
                                  
                                  
                                  
                                  4,185,205Total
      shareholders' equity
                                  
                                  
                                  4,820,962
                                  
                                  
                                  
                                  4,446,612Total
      Liabilities and Shareholders' Equity
                                  
                                  $
                                  6,640,016
                                  
                                  
                                  $
                                  8,610,350
 
 The
Accompanying Notes Are an Integral Part of the Financial
Statements.
  F-5
  OMPHALOS,
CORP.
  CONSOLIDATED
STATEMENTS OF INCOME
 For
the Years Ended December 31, 2008 and 2007
  2008
                                        
                                        
                                        2007Revenues:Sales
      of goods, net
                                        
                                        $
                                        7,867,973
                                        
                                        
                                        $
                                        10,047,118Total
      revenues
                                        
                                        
                                        7,867,973
                                        
                                        
                                        
                                        10,047,118Operating
      costs and expenses:Cost
      of sales
                                        
                                        
                                        5,561,363
                                        
                                        
                                        
                                        6,648,419Selling,
      general and administrative expenses
                                        
                                        
                                        1,781,178
                                        
                                        
                                        
                                        1,922,076Income
      from operations
                                        
                                        
                                        525,432
                                        
                                        
                                        
                                        1,476,623Other
      income (expenses)Rental
      income
                                        
                                        
                                        -
                                        
                                        
                                        
                                        174Interest
      income
                                        
                                        
                                        19,805
                                        
                                        
                                        
                                        284,272Gain
      on foreign currency exchange
                                        
                                        
                                        57,571
                                        
                                        
                                        
                                        38,755Miscellaneous
      income
                                        
                                        
                                        2,207
                                        
                                        
                                        
                                        899Total
      other income
                                        
                                        
                                        79,583
                                        
                                        
                                        
                                        324,100Income
      before provision for income taxes
                                        
                                        
                                        605,015
                                        
                                        
                                        
                                        1,800,723Provision
      for income taxes
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -Net
      Income
                                        
                                        $
                                        605,015
                                        
                                        
                                        $
                                        1,800,723Weighted
      average number of common shares:Basic
      and diluted
                                        
                                        
                                        29,809,302
                                        
                                        
                                        
                                        27,332,092Not
      income per share:Basic
      and diluted
                                        
                                        $
                                        0.02
                                        
                                        
                                        $
                                        0.07
 
  F-6
  OMPHALOS,
CORP.
  CONSOLIDATED
STATEMENTS OF SHAREHOLDERS’ EQUITY
 AND
COMPREHENSIVE INCOME
 For
the Years Ended December 31, 2008 and 2007
 
 Common
      Stock
                              
                              
                              Additonal
                              
                              
                              Retained
                              
                              
                              Subscription
                              
                              
                              ComprehensiveShares
                              
                              
                              Amount
                              
                              
                              Paid-in
      Capital
                              
                              
                              Earning
                              
                              
                              Receivable
                              
                              
                              Income
                              
                              
                              TotalBalance
      at January 1, 2007
                              
                              
                              27,332,092
                              
                              
                              $
                              2,733
                              
                              
                              $
                              431,482
                              
                              
                              $
                              9,260,326
                              
                              
                              $
                              (100,000
                              )
                              
                              $
                              213,824
                              
                              
                              $
                              9,808,365Capital
      contribution
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              100,000
                              
                              
                              
                              -
                              
                              
                              
                              100,000Reorganization
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (384,215
                              )
                              
                              
                              (2,045,230
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (2,429,445
                              )Dividend
      distributions
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (4,830,614
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (4,830,614
                              )Translation
      adjustment
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (2,417
                              )
                              
                              
                              (2,417
                              )Net
      income
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              1,800,723
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              1,800,723Balance
      at December 31, 2007
                              
                              
                              27,332,092
                              
                              
                              
                              2,733
                              
                              
                              
                              47,267
                              
                              
                              
                              4,185,205
                              
                              
                              
                              -
                              
                              
                              
                              211,407
                              
                              
                              
                              4,446,612Reorganization
      and recapitalization
                              
                              
                              2,731,667
                              
                              
                              
                              274
                              
                              
                              
                              256
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              530Dividend
      distributions
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (181,718
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (181,718
                              )Translation
      adjustment
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (49,477
                              )
                              
                              
                              (49,477
                              )Net
      income
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              605,015
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              605,015Balance
      at December 31, 2008
                              
                              
                              30,063,759
                              
                              
                              $
                              3,007
                              
                              
                              $
                              47,523
                              
                              
                              $
                              4,608,502
                              
                              
                              $
                              -
                              
                              
                              $
                              161,930
                              
                              
                              $
                              4,820,962
 F-7
 
 OMPHALOS,
CORP.
  CONSOLIDATED
STATEMENTS OF CASH FLOWS
 For
the Years Ended December 31, 2008 and 2007
  2008
                                                
                                                
                                                2007Cash
      flows from operating activitiesNet
      income
                                                
                                                $
                                                605,015
                                                
                                                
                                                $
                                                1,800,723Adjustments
      to reconcile net income to net cash provided by (used in)operating
      activities:Amortization
      and depreciation
                                                
                                                
                                                6,456
                                                
                                                
                                                
                                                11,522Loss
      due to inventory value decline
                                                
                                                
                                                116,229
                                                
                                                
                                                
                                                -Loss
      (gain) on disposal of fixed assets
                                                
                                                
                                                (3,024
                                                )
                                                
                                                
                                                2,541Foreign
      currency exchange (gains)
                                                
                                                
                                                (57,571
                                                )
                                                
                                                
                                                (38,755
                                                )Changes
      in assets and liabilities:(Increase)
      Decrease in accounts receivable
                                                
                                                
                                                3,274,848
                                                
                                                
                                                
                                                (2,069,560
                                                )(Increase)
      Decrease in inventory
                                                
                                                
                                                (600,184
                                                )
                                                
                                                
                                                283,580(Increase)
      Decrease in prepaid and other assets
                                                
                                                
                                                69,363
                                                
                                                
                                                
                                                (27,128
                                                )Increase
      (Decrease) in accounts payable
                                                
                                                
                                                (2,271,576
                                                )
                                                
                                                
                                                730,184(Decrease)
      in accrued expenses
                                                
                                                
                                                (131,167
                                                )
                                                
                                                
                                                (886,369
                                                )Net
      cash provided by (used in) operating activities
                                                
                                                
                                                1,008,389
                                                
                                                
                                                
                                                (193,262
                                                )Cash
      flows from investing activitiesAcquisition
      of fixed assets
                                                
                                                
                                                (3,788
                                                )
                                                
                                                
                                                (19,228
                                                )Proceeds
      received from disposition of assets
                                                
                                                
                                                3,024
                                                
                                                
                                                
                                                115,026Maturities
      of held-to-maturity securities
                                                
                                                
                                                1,135,761
                                                
                                                
                                                
                                                877,603Payments
      of patent registration
                                                
                                                
                                                (8,820
                                                )
                                                
                                                
                                                -Net
      cash provided by investing activities
                                                
                                                
                                                1,126,177
                                                
                                                
                                                
                                                973,401Cash
      flows from financing activitiesRepayment
      of loans from related parties
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (46,616
                                                )Loan
      to shareholders
                                                
                                                
                                                (210,132
                                                )
                                                
                                                
                                                -Capital
      contribution
                                                
                                                
                                                -
                                                
                                                
                                                
                                                100,000Distributions
      to shareholders for reorganization
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (2,429,445
                                                )Dividend
      distributions
                                                
                                                
                                                (175,260
                                                )
                                                
                                                
                                                (4,830,614
                                                )Net
      cash used in financing activities
                                                
                                                
                                                (385,392
                                                )
                                                
                                                
                                                (7,206,675
                                                )Effect
      of exchange rate changes on cash and cash equivalents
                                                
                                                
                                                (37,454
                                                )
                                                
                                                
                                                85,601Net
      increase (decrease) in cash and cash equivalents
                                                
                                                
                                                1,711,720
                                                
                                                
                                                
                                                (6,340,935
                                                )Cash
      and cash equivalentsBeginning
                                                
                                                
                                                2,783,243
                                                
                                                
                                                
                                                9,124,178Ending
                                                
                                                $
                                                4,494,963
                                                
                                                
                                                $
                                                2,783,243Supplemental
      disclosure of cash flowsCash
      paid during the year for:Interest
      expense
                                                
                                                $
                                                1,028
                                                
                                                
                                                $
                                                -Income
      tax
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                -
  The
Accompanying Notes Are an Integral Part of the Financial
Statements.
  F-8
  OMPHALOS,
CORP.
  NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2008
 
 NOTE
      1.
                ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
 
 Organization— Soyodo Group Holdings, Inc. (the “Soyodo”) was incorporated on May 15,
1997 as Quixit, Inc. under the laws of the state of Colorado. On January 16,
2003, TOP Group Corp., a New York corporation, purchased 4,400,000 shares of the
Company's common stock, which represented 88% of the Company's outstanding
capital stock at that time. Prior to the change in control, the Company's
purpose was to investigate opportunities to be acquired by a company that
desired to be registered under the Securities Exchange Act of 1934, as amended.
In March 2003, the Company changed its state of incorporation from Colorado to
Delaware, and changed its name from Quixit, Inc. to TOP Group Holdings, Inc. In
August of 2005, the company changed its name from TOP Group Holdings, Inc. to
Soyodo Group Holdings, Inc.
 
 In the
second quarter of 2005, the company decided to commence a chain of member-only
stores in locations with large Chinese immigrant populations, offering Chinese
culture-related merchandise such as books, pre-recorded CDs, stationery, gifts,
and sports goods. Subsequently, six retail stores had been opened. On June 30,
2006, however, the Company started to concentrate on its wholesale operation and
sold to its majority shareholder & principal executive officer, all the six
retail stores. Then on November 30, 2006, the company decided to go back to its
original plan of investigate opportunities to be acquired and sold to its
majority shareholder the remaining wholesale operation.
 
 On
February 5, 2008, Soyodo Group Holdings, Inc. entered into and completed the
transactions contemplated under a Share Exchange Agreement (the “Exchange
Agreement”) with each of the shareholders (the “Shareholders”) of Omphalos Corp.
(B.V.I.), a British Virgin Islands corporation, pursuant to which Soyodo
purchased from the Shareholders all issued and outstanding shares of Omphalos
Corp. (B.V.I.)’ common stock in consideration for the issuance of an aggregate
of 81,996,275 shares of Soyodo common stock (the "Share Exchange"). The Share
Exchange resulted in a change in control of Soyodo with the Shareholders owning
81,996,275 shares of common stock of the Company out of a total of 90,191,275
issued and outstanding shares after giving effect to the Share Exchange. Also,
the Shareholders were elected directors of the Company, subject to Soyodo’s
disclosure obligations under the Securities Exchange Act of 1934, as amended,
and appointed as its executive officers. As a result of the Exchange Agreement,
(i) Omphalos Corp. (B.V.I.) became a wholly-owned subsidiary of Soyodo and (ii)
the Soyodo succeeded to the business of Omphalos Corp. (B.V.I.) as its sole
business.
 
 Effective
April 18, 2008 Soyodo entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with Omphalos, Corp., a Nevada corporation. Pursuant to the
Merger Agreement, Soyodo was merged with and into the surviving corporation,
Omphalos Corp. The certificate of incorporation and bylaws of the surviving
corporation became the certificate of incorporation and bylaws of the Company,
and the directors and officers of Soyodo became the members of the board of
directors and officers of the Company. Following the execution of the Merger
Agreement, the Company filed with the Secretary of State of Delaware and Nevada,
a Certificate of Merger. Omphalos, Corp is incorporated on April 15, 2008 under
the laws of the state of Nevada. The main purpose of the merger is to change the
company’s name to Omphalos, Corp.
  F-9
  NOTE
      1.
                ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
 (CONTINUED)
 
 Organization
(Continued)—Omphalos Corp. (B.V.I.) was incorporated on October 30, 2001
under the laws of the British Virgin Islands. Omphalos Corp. (Taiwan) was
incorporated on February 13, 1991 under the laws of Republic of China. All Fine
Technology Co., Ltd. (Taiwan) was incorporated on March 23, 2004 under the laws
of Republic of China. All Fine Technology Co., Ltd. (B.V.I.) was incorporated on
February 2, 2005 under the laws of the British Virgin Islands. These companies
were under common control and owned by same shareholders. On July 4, 2007,
Omphalos Corp. (BVI) acquired Omphalos Corp. (Taiwan) and All Fine Technology
Co. Ltd. (Taiwan) by paying $334,215 in cash to the shareholders. On October 19,
2007 Omphalos Corp. (BVI) completed the purchase of All Fine Technology Co. Ltd.
(BVI) by paying $2,095,230 in cash to the shareholders. Omphalos Corp. (B.V.I)
became the 100% shareholder of the other three entities. Omphalos Corp. (B.V.I.)
and its subsidiaries supplies a wide range of equipments and parts including
reflow soldering ovens and automated optical inspection machines for printed
circuit board (PCB) manufacturers in Taiwan and China. Collectively Omphalos,
Corp. (formerly Soyodo Group Holdings Inc.) and these four corporations are
referred to herein as the "Company".
 
 Basis of
Consolidation— The aforementioned stock exchange transaction made
Omphalos Corp. (B.V.I.) a wholly owned subsidiary of Soyodo after issuing
81,996,275 shares of Soyodo's common stock and resulted in the shareholders of
Omphalos (B.V.I.) obtaining a majority voting interest in Soyodo. Accounting
principles generally accepted in the United States require an assessment of
which entity is considered the accounting acquirer when an exchange of stock
occurs regardless of the legal form of the acquisition. The factors to consider
include which entity's shareholders will own the majority of the voting common
stock after the acquisition and the composition of the governing body and the
management of the company after the acquisition. Omphalos was determined to be
the acquirer for accounting purposes. Additionally, when an acquisition takes
place between a company with minimal or no operations (a shell company) and an
operating company, the transaction is treated as a recapitalization rather than
a business combination. As Soyodo is considered to be a shell company, the
transaction was treated as a recapitalization of Omphalos Corp.
(B.V.I.).
 
 The
consolidated financial statements include the accounts of Omphalos, Corp. and
its wholly owned subsidiaries.  All significant intercompany accounts
and transactions are eliminated.
 
 Segment Reporting— The Company determines and discloses its segments in accordance with
SFAS No. 131 “ Disclosures about Segments of an Enterprise and Related
Information” which uses a “management” approach for determining segments. The
management approach designates the internal organization that is used by
management for making operating decisions and assessing performance as the
source of the Company’s reportable segments. SFAS No. 131 also requires
disclosures about products or services, geographic areas, and major customers.
The Company’s management reporting structure provided for only one segment in
2008 and 2007 and accordingly, no separate segment information is
presented.
 
 Accounting
Estimates— The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
  F-10
  NOTE
      1.
                  ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
 (CONTINUED)
 
 Contingencies— Certain conditions may exist as of the date the financial statements
are issued, which may result in a loss to the Company but which will only be
resolved when one or more future events occur or fail to occur. The Company's
management and legal counsel assess such contingent liabilities, and such
assessment inherently involves an exercise of judgment. In assessing loss
contingencies related to legal proceedings that are pending against the Company
or unasserted claims that may result in such proceedings, the Company's legal
counsel evaluates the perceived merits of any legal proceedings or unasserted
claims as well as the perceived merits of the amount of relief sought or
expected to be sought.
  If the
assessment of a contingency indicates that it is probable that a material loss
has been incurred and the amount of the liability can be estimated, then the
estimated liability would be accrued in the Company's financial statements. If
the assessment indicates that a potential material loss contingency is not
probable but is reasonably possible, or is probable but cannot be estimated,
then the nature of the contingent liability, together with an estimate of the
range of possible loss if determinable and material would be
disclosed.
  Loss
contingencies considered to be remote by management are generally not disclosed
unless they involve guarantees, in which case the guarantee would be
disclosed.
  Cash Equivalents,
and Long-term Investments— Cash and cash equivalents include cash on
hand and cash in time deposits, certificates of deposit and all highly liquid
debt instruments with original maturities of three months or less.
 
 Long-term
investments consist of certificates of deposit (CDs) with maturities in excess
of one year.
 
 Accounts
Receivable— Accounts receivable are carried at original invoice amount
less estimates made for doubtful receivables. Management determines the
allowance for doubtful accounts on a quarterly basis based on a review of the
current status of existing receivables, account aging, historical collection
experience, subsequent collections, management's evaluation of the effect of
existing economic conditions, and other known factors. The provision is provided
for the above estimates made for all doubtful receivables. Account balances are
charged off against the allowance only when the Company considers it is probable
that a receivable will not be recovered. Recoveries of trade receivables
previously written off are recorded when received.
  Inventory— Inventory is carried at the lower of cost or market. Cost is determined
by using the specific identification method. The Company periodically reviews
the age and turnover of its inventory to determine whether any inventory has
become obsolete or has declined in value, and charges to operations for known
and anticipated inventory obsolescence. Inventory consists substantially of
finished goods and is net of an allowance for slow-moving inventory of $298,502
and $188,503 at December 31, 2008 and 2007, respectively.
  F-11
  NOTE
      1.
                  ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
 (CONTINUED)
 
 Property and
Equipment— Property and equipment are recorded at cost, less accumulated
depreciation.  Depreciation is computed on the straight-line method
over the estimated useful lives of the related assets as follows:
 
 Automobile
                  5 yearsFurniture
      and fixtures
                  3 yearsMachinery
      and equipment
                  3 to 5 yearsLeasehold
      improvements
                  55 years
 
 Expenditures
for major renewals and betterment that extend the useful lives of property and
equipment are capitalized.  Expenditures for repairs and maintenance
are charged to expense as incurred.  When property and equipment are
retired or otherwise disposed of, the asset and accumulated depreciation are
removed from the accounts and the resulting profit or loss is reflected in the
statement of income for the period.
 
 Other Intangible
Asset— Other intangible assets consist of patents and are accounted for
at historical costs. The Company amortizes other intangible assets over their
useful lives, as applicable.
 
 Effective
July 2002, the Company adopted Statement of Financial Accounting Standards
("SFAS") No. 142, "Goodwill and Other Intangible Assets." The adoption of SFAS
No. 142 requires an initial impairment assessment involving a comparison of the
fair value of trademarks, patents and other intangible assets to current
carrying value. No impairment loss was recognized for the year ended December
31, 2008. Patents, trademarks, and other intangible assets determined to have
indefinite useful lives are not amortized. The Company tests such intangible
assets with indefinite useful lives for impairment annually, or more frequently
if events or circumstances indicate that an asset might be impaired. Trademarks,
patents, and other intangible assets determined to have definite lives are
amortized over their useful lives or the life of the trademark and other
intangible asset, whichever is less.
  Revenue
Recognition— The Company recognizes revenue in accordance with Staff
Accounting Bulletin No. 104, Revenue Recognition  ("SAB104"), which
superceded Staff Accounting Bulletin No. 101, Revenue Recognition in Financial
Statements  ("SAB101").  SAB 104 requires that four basic
criteria must be met before revenue can be recognized:  (1) persuasive
evidence of an arrangement exists; (2) delivery has occurred; (3) the selling
price is fixed and determinable; and (4) collectibility is reasonably
assured.  Determination of criteria (3) and (4) are based on
management's judgments regarding the fixed nature of the selling prices of the
products delivered and services performed and the collectibility of those
amounts.  Provisions for discounts and rebates to customers, estimated
returns and allowances, and other adjustments are provided for in the same
period the related sales are recorded.  The Company defers any revenue
for which the product has not been delivered or service has not been performed
or is subject to refund until such time that the Company and the customer
jointly determine that the product or service has been delivered or performed or
no refund will be required.
  The
Company derives revenues from the sale of equipments and parts to customers.
 The Company’s standard shipping term is Free on Board (FOB) shipping
point. The Company recognizes revenue upon shipment for the sales under the term
FOB shipping point.  For the sales under other shipping term
arrangements, such as FOB destination, the Company recognizes revenue when title
passes to and the risks and rewards of ownership have transferred to the
customer based on the terms of the sales. Usually
  F-12
  NOTE
      1.
                ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
 (CONTINUED)
 
 Revenue
Recognition (Continued)— no returns, discounts or other allowances are
provided to customers. Shipping and handling charges tocustomers are included
in net sales. Shipping and handling charges incurred by the Company are included
in cost of good sold.
  SAB
104   incorporates   Emerging Issues Task Force
00-21  ("EITF 00-21"), Multiple-Deliverable Revenue
Arrangements.  EITF 00-21 addresses accounting for arrangements that
may involve the delivery or performance of multiple products, services and/or
rights to use assets.  The effect of implementing EITF 00-21 on the
Company's financial position and results of operations was not
significant.
  Research and
Development Expenses— Research and development costs are generally
expensed as incurred.
  Advertising  Expense— Advertising costs are expensed as incurred. Advertising expense
incurred for the years ended December 31, 2008 and 2007 totaled approximately
$1,809 and $3,729, respectively.
  Income Taxes— Provisions for income taxes are based on taxes payable or refundable
for the current year and deferred taxes on temporary differences between the
amount of taxable income and pretax financial income and between the tax bases
of assets and liabilities and their reported amounts in the financial
statements.
 
 Deferred
income tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective income
tax bases.  Deferred income tax assets and liabilities are measured
using enacted tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled as prescribed in SFAS No.
109.  A valuation allowance is established against deferred tax assets
if it is more likely than not that all, or some portion, of such assets will not
be realized.
  Stock Based
Compensation—The Company adopted Statement of Financial Accounting
Standards No 123(R), “Share-Based Payments” (“SFAS No. 123R”) effective
January 1, 2006. SFAS No. 123R amends existing accounting
pronouncements for share-based payment transactions in which an enterprise
receives employee and certain non-employee services in exchange for
(a) equity instruments of the enterprise or (b) liabilities that are
based on the fair value of the enterprise’s equity instruments or that may be
settled by the issuance of such equity instruments. SFAS No. 123R generally
requires such transactions be accounted for using a fair-value-based method. The
Company does not have any awards of stock-based compensation issued and
outstanding at December 31, 2008.
 
 Earnings Per
Share— The Company computes net income (loss) per share pursuant to
Statement of Financial Accounting Standards No. 128 “Earnings Per Share”. Basic
net income (loss) per share is computed by dividing income or loss applicable to
common shareholders by the weighted average number of shares of the Company’s
common stock outstanding during the period. Diluted net income (loss) per share
is determined in the same manner as basic net income (loss) per share except
that the number of shares is increased assuming exercise of dilutive stock
options, warrants and convertible debt using the treasury stock method and
dilutive conversion of the Company’s convertible preferred stock. For the years
ended December 31, 2008and 2007, the Company did not have any potential common
shares.
  F-13
 
 NOTE
      1.
                ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
 (CONTINUED)
 
 Impairment of
Long-Lived Assets—The Company adopted SFAS No. 144 "Accounting for the
Impairment or Disposal of Long-Lived Assets", effective December 15, 2001. The
Company periodically evaluates long-lived assets for impairment whenever events
or changes in circumstances indicate that the carrying value of an asset may not
be recoverable.  If the estimated future cash flows (undiscounted and
without interest charges) from the use of an asset were less than the carrying
value, a write-down would be recorded to reduce the related asset to its
estimated fair value.
 
 The
assumptions used by management in determining the future cash flows are
critical. In the event these expected cash flows are not realized, future
impairment losses may be recorded. Management has determined that no impairments
of long-lived assets currently exist.
  Concentrations
—
 
 Credit
Risk:Financial
instruments that subject the Company to credit risk consist primarily of trade
accounts receivable and investments. The Company performs ongoing credit
evaluations of its customers and maintains an allowance for potential credit
losses. The Company regularly evaluates securities to determine whether there
has been any diminution in value that is deemed to be other than
temporary.
 
 Customers:
The Company sells equipments and parts to printed circuit board (PCB)
manufacturers in Taiwan and China. The Company performs ongoing credit
evaluations of its customers’ financial condition and generally, requires no
collateral. For the year ended December 31, 2007, three customers, each of who
accounted for more than 10% of the Company’s total revenues, represented
approximately 74% of its total revenues, and 67% of accounts receivable in
aggregate at December 31, 2007. For the year ended December 31, 2008, two
customers, each of who accounted for more than 10% of the Company’s total
revenues, represented approximately 74% of its total revenues, and 57% of
accounts receivable in aggregate at December 31, 2008.
 
 Sales for the year
                                    
                                    
                                    A/R balance as ofCustomer
                                    
                                    2007
                                    
                                    
                                    2008
                                    
                                    
                                    12/31/07
                                    
                                    
                                    12/31/08A
                                    
                                    $
                                    4,292,038
                                    
                                    
                                    $
                                    4,847,459
                                    
                                    
                                    $
                                    739,683
                                    
                                    
                                    $
                                    291,902B
                                    
                                    $
                                    1,933,722
                                    
                                    
                                    $
                                    971,713
                                    
                                    
                                    $
                                    596,070
                                    
                                    
                                    $
                                    114,328C
                                    
                                    $
                                    1,240,966
                                    
                                    
                                    
                                    
                                    
                                    
                                    $
                                    1,254,419
  Suppliers:For the year ended
December 31, 2008, 96% of the Company’s inventory is purchased from two vendors.
Management believes other vendors could supply similar products, but their terms
may not be as favorable as currently being offered by these vendors. A change in
suppliers, however, could cause a delay in availability of products and a
possible loss of sales, which could adversely affect operating
results.
  F-14
  NOTE
      1.
                ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
 (CONTINUED)
 
 Foreign-currency
Transactions— Foreign-currency transactions are recorded in New Taiwan
dollars (“NTD”) at the rates of exchange in effect when the transactions occur.
Gains or losses resulting from the application of different foreign exchange
rates when cash in foreign currency is converted into New Taiwan dollars, or
when foreign-currency receivables or payables are settled, are credited or
charged to income in the year of conversion or settlement. On the balance sheet
dates, the balances of foreign-currency assets and liabilities are restated at
the prevailing exchange rates and the resulting differences are charged to
current income except for those foreign currencies denominated investments in
shares of stock where such differences are accounted for as translation
adjustments under stockholders’ equity.
 
 Translation
Adjustment— The accounts of the Company was maintained, and its
financial statements were expressed, in New Taiwan Dollar (“NTD”). Such
financial statements were translated into U.S. Dollars (“$” or “USD”) in
accordance SFAS No. 52, "Foreign Currency Translation", with the NTD as the
functional currency. According to the Statement, all assets and liabilities are
translated at the current exchange rate, stockholder's equity are translated at
the historical rates and income statement items are translated at the weighted
average exchange rate for the period. The resulting translation adjustments are
reported under other comprehensive income in accordance with SFAS No. 130,
"Reporting Comprehensive Income" as a component of shareholders’
equity.
 
 As of
December 31, 2008 and December 31, 2007 the exchange rates between the NTD and
the USD ($) were NTD1=$0.03050 and NTD1=$0.03077, respectively. The
weighted-average rates of exchange between NTD and USD were NTD1=$0.03175 and
NTD1=$0.03044 for the years ended December 31, 2008 and December 31, 2007,
respectively. Total translation adjustment recognized as of December 31, 2008
and December 31, 2007 is $161,930 and $211,407, respectively.
 
 Statement of Cash
Flows— In accordance with SFAS No. 95, "Statement of Cash Flows", cash
flows from the Company's operations are based upon the local currencies. As a
result, amounts related to assets and liabilities reported on the statement of
cash flows will not necessarily agree with changes in the corresponding balances
on the balance sheet.
  Comprehensive
Income— Comprehensive income includes accumulated foreign currency
translation gains and losses. The Company has reported the components of
comprehensive income on its statements of stockholders’ equity and comprehensive
income (loss).
  Fair Value of
Financial Instruments— The carrying amounts of cash and cash
equivalents, accounts receivable, deposits and accounts payable approximate
their fair value because of the short maturity of those
instruments.
  The
carrying amounts of the Company's long-term debt approximate their fair value
because of the short maturity and/or interest rates which are comparable to
those currently available to the Company on obligations with similar
terms.
  Recently Issued
Accounting Pronouncements— In September 2006, the FASB issued SFAS No.
157, Fair Value
Measurements, which defines fair value, establishes a framework for
measuring fair value in accordance with generally accepted accounting principles
and expands disclosures about fair value measurements. SFAS 157 is effective
January 1, 2008. In February 2008, the FASB deferred for one year the effective
date of SFAS 157 only with respect to nonfinancial assets and nonfinancial
liabilities that are recognized or disclosed at fair value in the financial
statements on a nonrecurring basis, and removed certain leasing transactions
from the scope of SFAS 157. The adoption of SFAS 157 does not have a material
impact on its financial statements.
  F-15
  NOTE
      1.
                ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
 (CONTINUED)
  In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities - including an amendment to FASB Statement No.
115, which permits entities to choose to measure many financial
instruments and certain other items at fair value that are not currently
required to be measured at fair value. SFAS 159 is effective January 1, 2008.
The adoption of SFAS 159 does not have a material impact on its financial
statements.
  Recently Issued
Accounting Pronouncements (Continued)—In December 2007, the FASB issued
SFAS No. 141 (revised 2007), Business Combinations, ("SFAS
141R"), which changes how business combinations are accounted for and will
impact financial statements both on the acquisition date and in subsequent
periods. SFAS 141R is effective January 1, 2009, and will be applied
prospectively. The impact of adopting SFAS 141R will depend on the nature and
terms of future acquisitions.
  In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements, which changes the accounting and
reporting standards for the noncontrolling interests in a subsidiary in
consolidated financial statements. SFAS 160 recharacterizes minority interests
as noncontrolling interests and requires noncontrolling interests to be
classified as a component of shareholders' equity. SFAS 160 is effective January
1, 2009 and requires retroactive adoption of the presentation and disclosure
requirements for existing minority interests. The Company is currently
evaluating the impact of SFAS 160 on its consolidated financial
statements.
  In
January 2008, the SEC released SAB No. 110, which amends SAB No. 107 which
provided a simplified approach for estimating the expected term of a “plain
vanilla” option, which is required for application of the Black-Scholes option
pricing model (and other models) for valuing share options. At the time, the
Staff acknowledged that, for companies choosing not to rely on their own
historical option exercise data (i.e., because such data did not provide a
reasonable basis for estimating the term), information about exercise patterns
with respect to plain vanilla options granted by other companies might not be
available in the near term; accordingly, in SAB No. 107, the Staff permitted use
of a simplified approach for estimating the term of plain vanilla options
granted on or before December 31, 2007. The information concerning exercise
behavior that the Staff contemplated would be available by such date has not
materialized for many companies. Thus, in SAB No. 110, the Staff continues to
allow use of the simplified rule for estimating the expected term of plain
vanilla options until such time as the relevant data becomes widely available.
The Company does not expect its adoption of SAB No. 110 to have a material
impact on its financial position, results of operations or cash
flows.
 
 In March
2008, the FASB issued SFAS No. 161 “Disclosures about Derivative
Instruments and Hedging Activities—An Amendment of FASB Statement
No. 133.” (“SFAS 161”). SFAS 161 establishes the disclosure
requirements for derivative instruments and for hedging activities with the
intent to provide financial statement users with an enhanced understanding of
the entity’s use of derivative instruments, the accounting of derivative
instruments and related hedged items under Statement 133 and its related
interpretations, and the effects of these instruments on the entity’s financial
position, financial performance, and cash flows. This statement is
effective for financial statements issued for fiscal years beginning after
November 15, 2008. The Company does not expect its adoption of SFAS 161 to
have a material impact on its financial position, results of operations or cash
flows.
  F-16
  NOTE
      1.
                ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
 (CONTINUED)
 
 In April
2008, the FASB issued FASB Staff Position (“FSP”) SFAS No. 142-3, “Determination of the Useful Life of
Intangible Assets”. This FSP amends the factors that should be considered
in developing renewal or extension assumptions used to determine the useful life
of a recognized intangible asset under FASB Statement No. 142, “Goodwill and Other Intangible
Assets”(“SFAS 142”). The intent of this FSP is to improve the
consistency between the useful life of a recognized intangible asset under
SFAS 142 and the period of expected cash flows used to measure the fair
value of the asset under SFAS 141R, and other GAAP. This FSP is effective for
financial statements issued for fiscal years beginning after December 15,
2008, and interim periods within those fiscal years. Early adoption is
prohibited.
 
 Recently Issued
Accounting Pronouncements (Continued)—The Company is currently evaluating
the impact of SFAS FSP 142-3, but does not expect the adoption of this
pronouncement will have a material impact on its financial position, results of
operations or cash flows.
 
 In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (SFAS 162”).  SFAS 162 identifies the sources
of accounting principles and the framework for selecting principles to be used
in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States.  This statement shall be effective 60 days following the
SEC’s approval of the Public Company Accounting Oversight Board’s amendments to
AU section 411, The Meaning of Present Fairly in Conformity with Generally
Accepted Accounting Principles. The Company is currently evaluating the impact
of SFAS 162, but does not expect the adoption of this pronouncement will have a
material impact on its financial position, results of operations or cash
flows.
  NOTE
      2.
                  PROPERTY
      AND EQUIPMENT
  The
following is a summary of the Company’s property and equipment for the years
ended December 31:
  2008
                        
                        
                        2007Automobiles
                        
                        $
                        -
                        
                        
                        $
                        29,232Machinery
      and equipment
                        
                        
                        62,248
                        
                        
                        
                        59,128Leashold
      improvements
                        
                        
                        3,538
                        
                        
                        
                        3,56965,786
                        
                        
                        
                        91,929Less:
      accumulated depreciation
                        
                        
                        (53,922
                        )
                        
                        
                        (78,121
                        )Property
      and equipment, net
                        
                        $
                        11,864
                        
                        
                        $
                        13,808
  F-17
  NOTE
      3.
                  OTHER
      INTANGIBLE ASSETS
  The
following reconciliation of other intangible assets is as follows:
  Gross Carrying Value
                        
                        
                        Accumulated AmortizationAmortized
      intangible assets:Patents
                        
                        $
                        39,403
                        
                        
                        $
                        1,987
 
 Amortization
of intangible assets was $770 and $630 for the year ended December 31, 2008 and
2007, respectively.
 
 Estimated
amortization expense for the years ending December 31 is as
follows:
  2009
                          
                          $
                          7702010
                          
                          $
                          7702011
                          
                          $
                          7702012
                          
                          $
                          7702013
                          
                          $
                          770
  NOTE
      4.
                  INCOME
      TAXES
  Income
before income taxes for the years ended December 31, 2008 and 2007 includes the
results of operations of Taiwan and British Virgin Islands. Omphalos Corp.
(B.V.I.) and All Fine Technology Co., Ltd. (B.V.I.) are incorporated in British
Virgin Islands and are not required to pay income tax. Omphalos Corp. and All
Fine Technology Co., Ltd. are incorporated in Taiwan and are subject to Taiwan
tax law. The statutory tax rate under Taiwan tax law is 25%. Omphalos Corp. and
All Fine Techonolgy Co., Ltd. incurred losses for the years 2008 and 2007. As a
result, no tax liability was incurred. Omphalos Corp.’s loss was qualified for
net operating losses carryforward for income tax purposes under Taiwan tax law
for the year 2008. The Company believes that it is more likely than not that the
net operating loss will not be utilized in the future. Therefore, the Company
has provided full valuation allowance for the deferred tax assets arising from
the losses as of December 31, 2008. The provision for income taxes calculated at
the statutory rates in the combined statements of income is as follows for the
years ended December 31:
  2008
                  
                  
                  2007Current
      provision:Computed
      (provision for) income taxesat
      statutory rates in BVI
                  
                  $
                  -
                  
                  
                  $
                  -Computed
      (provision for) income taxesat
      statutory rates in Taiwan
                  
                  
                  -
                  
                  
                  
                  -Total
      current provision
                  
                  
                  -
                  
                  
                  
                  -Deferred
      provision:
                  
                  
                  -
                  
                  
                  
                  -BVI
                  
                  
                  -
                  
                  
                  
                  -Taiwan-
      Net operating loss carryforward
                  
                  
                  43,850Valuation
      allowance
                  
                  
                  (43,850
                  )
                  
                  
                  -Total
      deferred provision
                  
                  
                  -
                  
                  
                  
                  -Provision
      for income taxes
                  
                  $
                  -
                  
                  
                  $
                  -
  F-18
  NOTE
      5.
                  RELATED-PARTY
      TRANSACTIONS
  Operating
Leases—The Company leases its facility from a shareholder under an
operating lease agreement which expires on December 31, 2009. The monthly base
rent is approximately $2,200. Rent expense under this lease agreement amounted
to approximately $26,700 and $26,000 for the years ended December 31, 2008 and
2007, respectively.
 Advances to /
from Shareholders –The advances to or from shareholders are non-interest
bearing and without fixed terms of repayment.
 
 NOTE
      6.
                  COMPENSATED
      ABSENCES
 Employees
earn annual vacation leave at the rate of seven days per year for the first
year. Upon completion of the first year of employment, employees earn one
additional day for each additional year. At termination, employees are paid for
any accumulated annual vacation leave. As of December 31, 2008, vacation
liability existed in the amount of $12,525.
 
 NOTE
      7.
                  THER
      COMPREHENSIVE INCOME
 Balances
of related after-tax components comprising accumulated other comprehensive
income (loss), included in stockholders' equity, at December 31, 2008 and 2007
are as follows:
  Foreign Currency
                        Translation Adjustment
                      
                      
                      Accumulated Other
                        Comprehensive IncomeBalance
      at January 1, 2007
                      
                      $
                      213,824
                      
                      
                      $
                      213,824Change
      for 2007
                      
                      
                      (2,417
                      )
                      
                      $
                      (2,417
                      )Balance
      at December 31, 2007
                      
                      
                      211,407
                      
                      
                      
                      211,407Change
      for 2008
                      
                      
                      (49,477
                      )
                      
                      
                      (49,477
                      )Balance
      at December 31, 2008
                      
                      $
                      161,930
                      
                      
                      $
                      161,930
  NOTE
      8.
                  COMMON
      STOCK
  On
December 14, 2007, the Board of Directors authorized a two-for-one stock split
of the Company’s common stock.
 
 Effective
April, 15, 2008, Soyodo Group Holdings, Inc. filed a Certificate of Amendment to
its Certificate of Incorporation with the Secretary of State of Delaware, to
effect a one (1) for three (3) reverse split of the issued and outstanding
common shares of Soyodo whereby every three shares of common stock held were
exchanged for one share of common stock. As a result, the issued and outstanding
shares of common stock were reduced from 90,191,275 prior to the reverse split
to approximately 30,063,759 following the reverse stock split. The authorized
capital remained at 120,000,000 shares of common stock and any shareholder who
beneficially owned a fractional share of common stock after the reverse stock
split had their fractional share rounded up to the nearest whole share. All
references in the accompanying financial statements to the number of shares
outstanding,per
share amounts of the Company’s common stock have been adjusted to reflect the
effect of the stock reverse split. Shareholders’ equity reflects the stock
reverse split by reclassifying from “Common Stock” to “Additional Paid-in
Capital” an amount equal to the par value of the decreased shares arising from
the reverse split.
  F-19
  NOTE
      9.
                  PENSION
      PLAN
  Omphalos
Corp. (Taiwan) and All Fine Technology Co., Ltd. (Taiwan) were required to make
monthly contributions, equal to 2% of salaries and wages, to a pension fund that
is administered by a pension fund monitoring committee and deposited in the
Central Trust of China in the Republic of China (Taiwan).
  Taiwan
has a new pension scheme law effective July 1, 2005. The new pension scheme
is a defined contribution scheme. All new employees who joined Omphalos Corp.
(Taiwan) and All Fine Technology Co., Ltd. (Taiwan) after July 1, 2005 must
participate in the new scheme. Existing employees can choose to stay with the
old scheme or to join the new scheme. Under the new scheme, Omphalos Corp.
(Taiwan) and All Fine Technology Co. (Taiwan) are required to contribute 6% of
the employees’ salary into employees’ own pension fund accounts managed by the
government.
  Contributions
to the pension plan totaled $21,479 and $19,635 for the years ended December 31,
2008 and 2007, respectively.
 
 ******
  F-20