**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      DC 20549




**FORM
      10−QSB**


(Mark
      One)





x
      QUARTERLY REPORT UNDER
      SECTION 13 OR 15(d) OF THE SECURTIES EXCHANGE ACT OF 1934





For
      the
      quarterly period ended June 30, 2007





o
      TRANSITION REPORT UNDER
      SECTION 13 OR 15(d) OF THE EXCHANGE ACT





For
      the
      transition period from _______________ to ________________





Commission
      file number______________________________________





CYBRA
      CORPORATION





(Exact
      name of registrant as specified in its charter)




New
                York
            13-3303290(State
                or other jurisdiction of incorporated or
                organization)
            (IRS
                Employer Identification
                No.)




One
      Executive Blvd. Yonkers, New York 10701





(Address
      of principal executive offices)





(914)
      963-6600





(Issuer’s
      telephone number)




(Former
      Name, Former Address, and Former Fiscal Year, if changed since last
      report)





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





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b−2 of the Exchange Act).


Yes
o
      No x





**APPLICABLE
      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY**


**PROCEEDINGS
      DURING THE PRECDEING FIVE YEARS**





Check
      whether the registrant filed all documents and reports required to be filed
      by
      Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
      under a plan confirmed by a court. Yes o No o





**APPLICABLE
      ONLY TO CORPORATE ISSUERS**





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date: 11,205,433





Transitional
      Small Business Disclosure Format (Check One): Yes o No o









**PART
      I - FINANCIAL INFORMATION**





**ITEM
      1. FINANCIAL STATEMENTS.**







**CYBRA
      CORPORATION**





FINANCIAL
      STATEMENTS





JUNE
      30,
      2007










F-1




**CONTENTS**




**Page**FINANCIAL
                STATEMENTS
            
            F-1BALANCE
                SHEET
            
            F-3STATEMENTS
                OF OPERATIONS
            
            F-4STATEMENTS
                OF STOCKHOLDERS’ DEFICIENCY
            
            F-5CONDENSED
                STATEMENTS OF CASH FLOWS
            
            F-6NOTES
                TO FINANCIAL STATEMENTS
            
            F-7
                - F-18




F-2





CYBRA
      CORPORATION


BALANCE
      SHEET


June
      30,
      2007


**ASSETS**CURRENT
                  ASSETSCash
                  and cash equivalents
              
              $
              424,909Accounts
                  receivable, less allowance for doubtfulaccounts
                  of $5,000
              
              
              236,559Deferred
                  income taxes
              
              
              62,213Total
                  Current Assets
              
              
              723,681PROPERTY
                  AND EQUIPMENT, at cost, less accumulateddepreciation
                  and amortization
              
              
              85,774DEFERRED
                  INCOME TAXES
              
              
              951,604DEFERRED
                  FINANCE COSTS
              
              
              510,445SECURITY
                  DEPOSITS AND OTHER ASSETS
              
              
              11,457$
              2,282,961**LIABILITIES
                  AND STOCKHOLDERS' DEFICIENCY**CURRENT
                  LIABILITIESAccounts
                  payable and accrued expenses
              
              $
              313,102Accrued
                  interest
              
              
              239,147Deferred
                  revenue
              
              
              261,977Sales
                  tax payable
              
              
              1,084Accrued
                  liquidated damages - registration rights agreement
              
              
              110,000Total
                  Current Liabilities
              
              
              925,3108%
                  CONVERTIBLE DEBENTURES
              
              
              2,033,793$
              2,959,103COMMITMENT
                  AND LITIGATION
              
              
              -STOCKHOLDERS'
                  DEFICIENCYCommon
                  stock, no par value, 100,000,000 shares authorized;11,205,433
                  shares issued and outstanding
              
              
              334,545Stock
                  subscription receivable
              
              
              (1,826
              )Paid
                  - in capital
              
              
              564,254Accumulated
                  deficit
              
              
              (1,573,115
              )Total
                  Stockholders' Deficiency
              
              
              (676,142
              )$
              2,282,961
 
 F-3
 CYBRA
          CORPORATION
  STATEMENTS
          OF OPERATIONS
 (UNAUDITED)
 **Three
                  Months Ended**
              
              **Six
                  Months Ended****June
                  30,**
              
              **June
                  30,****2007**
              
              **2006**
              
              **2007**
              
              **2006**REVENUES
              
              $
              385,833
              
              $
              392,544
              
              $
              754,080
              
              $
              787,878DIRECT
                  COSTSCosts
                  of goods sold
              
              
              106,893
              
              
              109,627
              
              
              216,049
              
              
              213,583Royalties
                  and consulting
              
              
              112,782
              
              
              8,500
              
              
              200,282
              
              
              19,462$
              219,675
              
              
              118,127
              
              $
              416,331
              
              $
              233,045GROSS
                  MARGIN
              
              $
              166,158
              
              $
              274,417
              
              $
              337,749
              
              $
              554,833GENERAL
                  AND ADMINISTRATIVE EXPENSES
              
              
              571,028
              
              
              368,263
              
              
              1,173,007
              
              
              715,938LOSS
                  FROM OPERATIONS
              
              
              ($404,870
              )
              
              ($93,846
              )
              
              ($835,258
              )
              
              ($161,105
              )OTHER
                  INCOME (EXPENSE)Interest
                  expense, 2007 includes
              
              
              (149,591
              )
              
              (106,429
              )
              
              (285,402
              )
              
              (108,003
              )$69,207
                  of amortization of deferredfinancing
                  costs for the six monthsInterest
                  income
              
              
              5,046
              
              
              16,852
              
              
              13,811
              
              
              16,890Gain
                  from derivative financial instruments
              
              
              -
              
              
              73,267
              
              
              -
              
              
              73,267Total
                  Other Income (Expense)
              
              
              ($144,545
              )
              
              (16,310
              )
              
              ($271,591
              )
              
              ($17,846
              )LOSS
                  BEFORE INCOME TAXES
              
              
              ($549,415
              )
              
              ($110,156
              )
              
              ($1,106,849
              )
              
              ($178,951
              )INCOME
                  TAX RECOVERY
              
              
              (164,522
              )
              
              (76,446
              )
              
              (373,316
              )
              
              (101,868
              )NET
                  LOSS
              
              
              ($384,893
              )
              
              ($33,710
              )
              
              ($733,533
              )
              
              ($77,083
              )PER
                  SHARE DATABasic
                  and diluted net loss per share
              
              $
              (0.03
              )
              $
              (0.00
              )
              $
              (0.07
              )
              $
              (0.01
              )Basic
                  and diluted weighted-average shares outstanding
              
              
              11,079,426
              
              
              10,455,726
              
              
              11,046,779
              
              
              9,947,160
  See
                  notes to financial statements
  F-4
 CYBRA
          CORPORATION
  CONDENSED
          STATEMENT OF CASH FLOWS
 (UNAUDITED)
 
 **Six
                  Months Ended****June
                  30,****2007**
              
              **2006**CASH
                  FLOWS FROM OPERATING ACTIVITIESNet
                  loss
              
              $
              (733,533
              )
              $
              (77,083
              )Adjustments
                  to reconcile net loss to net cash used in operating
                  activitiesDepreciation
              
              
              10,512
              
              
              7,566Deferred
                  income tax recovery
              
              
              (373,316
              )
              
              (102,058
              )Interest
                  expense - amortization of debt discount
              
              
              115,639
              
              
              41,109Amortization
                  of deferred finance cost
              
              
              69,207
              
              
              14,206Gain
                  on derivative financial instruments
              
              
              -
              
              
              (73,267
              )Change
                  in:Accounts
                  receivable
              
              
              38,247
              
              
              198,510Prepaid
                  corporate taxes/corporate taxes payable
              
              
              105
              
              
              70Security
                  deposits and other assets
              
              
              (76
              )
              
              (76
              )Accounts
                  payable and accrued expenses
              
              
              64,906
              
              
              (80,803
              )Accrued
                  interest
              
              
              88,774
              
              
              49,896Deferred
                  revenue
              
              
              4,833
              
              
              (14,222
              )Sales
                  tax payable
              
              
              (326
              )
              
              (1,506
              )Net
                  Cash Used in Operating Activities
              
              
              (715,028
              )
              
              (37,658
              )CASH
                  FLOWS FROM INVESTING ACTIVITIESAcquisition
                  of property and equipment
              
              
              (31,483
              )
              
              (14,020
              )Net
                  Cash Used in Investing Activities
              
              
              (31,483
              )
              
              (14,020
              )CASH
                  FLOWS FROM FINANCING ACTIVITIESProceeds
                  from loan payable - bank
              
              
              -
              
              
              54,100Repayments
                  of loan payable - bank
              
              
              -
              
              
              (145,058
              )Proceeds
                  from loan payable
              
              
              -
              
              
              19,000Repayment
                  of loan payable
              
              
              (250,000
              )
              
              (79,998
              )Proceeds
                  from sale of common stock
              
              
              158,050
              
              
              2,080,000Net
                  Cash (Used In) Provided by Financing Activities
              
              
              (91,950
              )
              
              1,928,044(DECREASE)
                  INCREASE IN CASH AND CASH EQUIVALENTS
              
              
              (838,461
              )
              
              1,876,366CASH
                  AND CASH EQUIVALENTSBeginning
                  of period
              
              
              1,263,370
              
              
              10,859End
                  of period
              
              $
              424,909
              
              $
              1,887,225SUPPLEMENTAL
                  DISCLOSURES OF CASH FLOW INFORMATION:Cash
                  paid during the period for:Interest
              
              $
              -
              
              $
              1,574Income
                  taxes
              
              $
              -
              
              $
              -
  See
                  notes to financial statements
  F-5
  **CYBRA
                  CORPORATION****STATEMENTS
                  OF STOCKHOLDERS DEFICIENCY****FOR
                  THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006****(UNAUDITED)**
  StockCommon
                  Stock
              
              
              Additional
              
              
              Subscription
              
              
              AccumulatedShares
              
              
              Amount
              
              
              paid-in-capital
              
              
              Receivable
              
              
              deficit
              
              
              TotalBalance
                  at December 31, 2006
              
              
              10,956,000
              
              $
              176,495
              
              $
              12,344
              
              $
              (1,826
              )
              $
              (839,582
              )
              $
              (652,569
              )Common
                  stock issuance
              
              
              249,433
              
              
              158,050
              
              
              -
              
              
              -
              
              
              -
              
              
              158,050Derivative
                  instruments converted in APIC
              
              
              -
              
              
              -
              
              
              551,910
              
              
              -
              
              
              -
              
              
              551,910Net
                  loss for the period
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (733,533
              )
              
              (733,533
              )Balance
                  at June 30, 2007
              
              
              11,205,433
              
              $
              334,545
              
              $
              564,254
              
              $
              (1,826
              )
              $
              (1,573,115
              )
              $
              (676,142
              )Balance
                  at December 31, 2005
              
              
              9,130,000
              
              $
              1,800
              
              $
              12,344
              
              $
              -
              
              $
              (343,920
              )
              $
              (329,776
              )Common
                  stock issuance as placement fee
              
              
              1,826,000
              
              
              174,695
              
              
              -
              
              
              (1,826
              )
              
              -
              
              
              172,869Net
                  loss for the period
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (77,083
              )
              
              (77,083
              )Balance
                  at June 30, 2006
              
              
              10,956,000
              
              $
              176,495
              
              $
              12,344
              
              $
              (1,826
              )
              $
              (421,003
              )
              $
              (233,990
              )
  The
          accompanying notes are an integral part of these condensed financial
          statements


F-6
 
 1.
          BASIS OF PRESENTATION
 
 The
          unaudited financial information of CYBRA Corp. has been prepared by the
          Company
          pursuant to the rules and regulations of the Securities and Exchange Commission
          (the “SEC”) and reflects all adjustments, which in the opinion of management are
          necessary to fairly state the Company’s interim financial position and the
          results of its operations for the periods presented. Certain information
          and
          note disclosures normally included in financial statements prepared in
          accordance with GAAP have been condensed or omitted from these statements
          pursuant to such rules and regulations and, accordingly, this report on
          FORM
          10-QSB should be read in conjunction with the Company’s financial statements and
          notes thereto included in the Company’s Form 10-KSB for the fiscal year ended
          December 31, 2006. The Company assumes that the users of the interim financial
          information herein have read or have access to the audited financial statements
          for the preceding fiscal year and that the adequacy of additional disclosure
          needed for a fair presentation may be determined in that context. Accordingly,
          footnote disclosure, which would substantially duplicate the disclosure
          contained in the Company’s Form 10-KSBfor the fiscal year ended December 31,
          2006, has been omitted. The results of operations for the three month and
          six
          month period ended June 30, 2007 are not necessarily indicative of results
          for
          the entire fiscal year ending December 31, 2007
 
 2.  NATURE
          OF OPERATIONS AND FINANCIAL STATUS OF COMPANY
 
 CYBRA
          Corporation (“the Company”) is a software developer, publisher, and systems
          integrator in the IBM midrange market. Its flagship product, MarkMagic/400,
          is
          an online bar code software product for IBM i Series (AS/400) computers.
          Substantially all of the Company's accounts receivables are due from
          manufacturing companies and software vendors located throughout the United
          States.
 
 At
          June
          30, 2007, the Company had cash and cash equivalents of $424,909, a working
          capital deficit of $201,629 and an accumulated deficit of $1,573,115.
          Additionally, the Company has incurred a net loss of $733,533 for the six
          months
          ended June 30, 2007.
 
 Management
          has taken several steps to improve sales and thus profitability and cash
          flows 2007, including the restructuring of current key OEM contracts which
          will more than double revenues from those sources, and the potential acquisition
          of a profitable systems integration company and development and release in
          the third quarter of 2007 of a new RFID product line with revenue potential
          far
          in excess of the current product mix
  3.  SUMMARY
          OF SIGNIFICANT ACCOUNTING POLICIES
 
 Research
          and Development Costs
  In
          May 2005, the Company began development of MarkMagic Version 6 and has
          incurred
          research and development expense of $119,957 and $88,613 for the six months
          ended June 30, 2007 and 2006, respectively. The cumulative development
          costs for
          Version 6 are $576,098 at June 30, 2007. Total research and development
          expense
          for the six months ended June 30, 2007 and 2006 were $431,506 and $125,993,
          respectively ($37,380 for Version 5.1 and $88,613 for Version 6). These
          costs
          have been included in general and administrative expenses. ****
 
 Warrants
          - Adoption of New Accounting Pronouncement
  Warrants
          issued in conjunction with equity financing were accounted for under the
          Emerging Issues Task Force FSP (“EITF”) Issue No. 00-19, ‘Accounting
          for
          Derivative Financial Instruments Indexed to and Potentially Settled in
          a
          Company’s Own
          Stock’. In
          December 2006, the FASB approved FSP EITF 00-19-2 Accounting for Registration
          Payment Arrangements, which establishes the standard that contingent obligations
          to make future payments under a registration rights arrangement shall be
          recognized and measured separately in accordance with Statement 5 and FASB
          Interpretation No. 14, Reasonable Estimation of the Amount of a Loss. The
          Company has evaluated the effect of how FSP EITF 00-19-2 and FSP EITF Topic
          D-98
          affected these accompanying financial statements. The adoption of FSP EITF
          00-19-2 accounting pronouncement on January 1, 2007 changed the classification
          of the warrant liability, total $551,910 at January 1, 2007, to stockholders’
equity (additional paid in capital).
  Derivative
          Financial Instruments
 
 The
          Company accounts for its warrants which were issued in a private placement
          of
          the 8% Convertible Debentures with detachable warrants on April 10, 2006,
          as
          derivatives under the guidance of Statement of Financial Accounting Standards
          No. 133 - *Accounting for Derivative Instruments and Hedging Activities* (“SFAS 133”), and Emerging Issues Task Force Issue 00-19 - *Accounting for Derivative Financial Instruments Indexed to and Potentially
          Settled In, a Company's Own Stock* (“EITF 00-19”). The Company considers these standards applicable by adopting
“View A” of the Issue Summary relating to Emerging Issues Task Force Issue 05-04
          - *The Effect of a Liquidated Damages Clause on a Freestanding Financial Instrument
          Subject to Issue No. 00-19* (“EITF 05-04”) in which the warrants and the related registration rights
          agreement are viewed together as a combined instrument that is indexed
          to the
          Company's stock. The embedded conversion feature of the debentures has
          not been
          classified as a derivative financial instrument because the Company believes
          that they are “conventional” as defined in Emerging Issues Task Force Issue
          05-02 - *The Meaning of “Conventional Convertible Debt Instrument” in Issue No.
          00-19* (“EITF 05-02”)
  F-7
 Use
          of Estimates
  The
          preparation of financial statements, in conformity with accounting principles
          generally accepted in the United States of America, requires management
          to make
          estimates and assumptions that affect the reported amounts of assets and
          liabilities and disclosure of contingent assets and liabilities at the
          date of
          the financial statements, and the reported amounts of revenue and expenses
          during the reporting period. Actual results could differ from those
          estimates.
 
 4.
          8%
          CONVERTIBLE DEBENTURES AND DERIVATIVE FINANCIAL INSTRUMENTS
  On
          April 10, 2006, the Company issued 8% Convertible Debentures (the “Debentures”)
          with a principal (“face”) value of $2,500,000, along with 7,500,000 detachable
          Stock Warrants (the “Warrants”) to several investors. The gross proceeds of this
          transaction were $2,500,000, consisting of $2,080,000 cash, $151,000 from
          the
          cancellation of debt incurred in 2005, $19,000 from the cancellation of
          debt
          incurred earlier in 2006 and $250,000 applied as finders' fees. The convertible
          debenture balance at June 30, 2007 was $2,033,793. The amortization of
          deferred
          finance costs was $69,207 for the six months ended June 30, 2007 and $38,608
          for
          the 3 months ended June 30, 2007. The deferred finance cost balance at
          June 30,
          2007 was $510,445.
 
 The
          investors also received 7,500,000 Warrants, 2,500,000 of Class A and 5,000,000
          of Class B. Each Class A Warrant gives the holder the right to buy one
          share of
          common stock for $0.75. Each Class B Warrant gives the holder the right
          to buy
          one share of common stock for $1.75. The Warrants are exercisable at any
          time
          through April 10, 2011. The 7,500,000
          warrants are the
          only outstanding warrants at June 30, 2007.
 
 5.
          STOCKHOLDERS’ DEFICIENCY
  In
          April, 2006, the Company issued 1,826,000 shares for $1,826 to three
          individuals who were involved in finding investors for the Company. The
          $1,826
          has not yet been collected, is carried on the balance sheet as “stock
          subscription receivable” and is included as an offset to stockholders'
          equity.
 
 During
          the six months ended June 30, 2007, the Company issued 116,100 shares of
          common
          stock, at $0.50 per share and 133,333
 shares
          of common stock, at $0.75 per share for total proceeds of $ $158,050.
 
 6.
          COMMITMENT AND LITIGATION
 
 The
          Company occupies office space under a lease agreement that expires on January
          31, 2010.
  The
          minimum rental commitment is as follows:
  2007
                
                $
                77,0002008
                
                
                77,2502009
                
                
                77,2502010
                
                
                6,438$
                237,938
  LITIGATION
 
 A
          complaint was filed against the Company and its CEO on December 28, 2006
          in
          Magistrate's court in Herzeliya, Israel by Raz-Lee
 Security
          Ltd., a former distributor of the Company's products (Case No. 8443/06).
          The
          action seeks $50,000 in damages for alleged
 unpaid
          license fees. The Company has filed a motion to dismiss the case on
          jurisdictional grounds, which is pending with the court.
 The
          Company believes that it has meritorious defenses to this lawsuit, as well
          as
          counterclaims against the plaintiff, and intends to
 vigorously
          defend this action. Management feels that this matter will be resolved
          and will
          not have a material affect on the company's
 financial
          position.
  7.
          EARNINGS PER SHARE
 
 Earnings
          per share for the six months ended June 30, 2007 do not include the effects
          of
          the 7,500,000 warrants or the 5,000,000 shares
 into
          which the 8% Convertible Debentures are convertible because the effects
          would be
          anti-dilutive.
  F-8


**ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION**





This
      report on Form 10QSB contains forward-looking statements. Forward-looking
      statements are statements not based on historical information and that relate
      to
      future operations, strategies, financial results or other developments.
      Forward-looking statements are necessarily based upon estimates and assumptions
      that are inherently subject to significant business, economic and competitive
      uncertainties and contingencies, many of which are beyond our control and many
      of which, with respect to future business decisions, are subject to change.
      These uncertainties and contingencies can affect actual results and could cause
      actual results to differ materially from those expressed in any forward-looking
      statements made by us or on our behalf. We disclaim any obligation to update
      forward-looking statements.





**OFF-BALANCE
      SHEET ARRANGEMENTS**





We
      do not
      currently have any off-balance sheet arrangements that have or are reasonably
      likely to have a current or future affect on our financial condition, change
      in
      financial condition, revenues or expenses, results of operations, liquidity
      capital expenditures, or capital resources that are material to our
      shareholders.





**OVERVIEW**





We
      are
      now at a critical inflection point in our business development. Because of
      the
      significant investments we have made in our infrastructure, we believe we can
      leverage that capacity and introduce our products and services into existing
      distribution channels operated by others. This would be expected to benefit
      the
      Company immediately. We will be able to increase sales by approaching companies
      with an existing distribution network of their own focused on a customer base
      which is ready for enhanced telecommunications services.





**RESULTS
      OF OPERATIONS**





**Critical
      accounting policies**





We
      follow
      the guidance of the SEC Staff Accounting Bulletin 104 for revenue
      recognition.  In general, we record revenue when persuasive evidence of an
      arrangement exists, services have been rendered or product delivery has
      occurred, the sales price to the customer is fixed or determinable, and
      collectability is reasonably assured.





We
      recognize income when products have been shipped or services have been
      performed. In cases where a customer prepays a subscription for services to
      be
      delivered in a period which extends from one accounting period into a subsequent
      period, we only recognize the portion of income due for services in the current
      reporting period. In cases where there is an acceptance period during which
      a
      customer may cancel their agreement without penalty, we defer the revenue
      recognition until the end of that acceptance period.




The
      Company accounts for software development costs in accordance with Statement
      of
      Financial Accounting Standards No. 86, Accounting for the Costs of Computer
      Software to be Sold, Leased or Otherwise Marketed (“SFAS 86”), SFAS 86 requires
      that costs related to the development of enhancements to Mark Magic be
      capitalized as an asset when incurred subsequent to the point at which
      technological feasibility of the enhancement is established.  SFAS 86
      specifies that “technological feasibility” for purposes of SFAS 86 can only be
      established by the completion of a “detailed program design” or if no such
      design is prepared, upon the completion of a “working model” of the
      software.  The Company’s development process does not include a detailed
      program design.  Management believes that such a design could be produced
      in the early stages of development but would entail significant wasted expense
      and delay.  Consequently, SFAS 86 requires the development costs to be
      recorded as expense until the completion of a “working model”.  In the
      Company’s case, the completion of a working model does not occur until almost
      the time when the software is ready for sale.









**Impact
      of Recently Issued Accounting Pronouncements**





We
      do not
      believe that any recently issued, but not yet effective accounting standards
      will have a material effect on our financial position, results of operations
      or
      cash flows.





**THREE
      MONTHS ENDED JUNE 30, 2007 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
      2006.**




**RESULTS
      OF OPERATIONS**


**Operating
      Revenues**





Sales
      for
      the three months ended June 30, 2007 decreased 2% over the prior year, from
      $392,544 to $385,833, primarily due to the ongoing change in the mix of our
      product lines towards more profitable items. Lower profit hardware sales were
      reduced in the first and second quarters of 2007, while higher profit software
      sales increased.





We
      are
      currently working on developing new software for the RFID market. We anticipate
      that this software will undergo beta testing in the third quarter 2007 and
      will
      be released sometime during the fourth quarter of 2007. We feel that the future
      sales of this new software product, once it is tested and released, will have
      a
      significant positive impact on our operating results and increase our future
      revenues and profit margins.





**Cost
      of Sales and Gross Margin**





Cost
      of
      sales including royalty and consulting increased, 86%, from $118,127
      to $219,675 and increased as a percentage of sales from 30% of sales to 57%
      of
      sales. Overall, gross margin decreased from $274,417 to $166,158, a decrease
      of
      27%. This decrease in the gross margin was due to an increase in software
      development costs and maintenance on existing software already sold to customers
      through use of programming consultants. Also, beginning in 2007, sales and
      marketing expenses were reclassified to general and administrative
      expenses.





**General,
      and Administrative Expenses**





General,
      Selling and Administrative costs increased $202,765 from $368,263 in 2006 to
      $571,028 in 2007, due to an increase in research and development costs of
      approximately $129,344 for the development of our software products and an
      increase in payroll expenses of $116,260. Also, as previously mentioned,
      beginning in 2007, for all periods presented, sales and marketing expenses
      were
      reclassified from cost of sales thereby increasing general and administrative
      expenses.





**Provision
      for Income Taxes**





The
      Company had a pre-tax loss of $549,415 and $110,156 for the three months ended
      June 30, 2007 and 2006, respectively. Accordingly, there has been no provision
      for current income taxes in 2007 or 2006. Deferred income tax assets have been
      provided for the likely benefits of net operating loss carryovers and other
      temporary differences between financial statement and taxable
      income.




**SIX
      MONTHS ENDED JUNE 30, 2007 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
      2006.**




**RESULTS
      OF OPERATIONS**


**Operating
      Revenues**





Sales
      for
      the six months ended June 30, 2007 decreased 4% over the prior year, from
      $787,878 to $754,080, primarily due .to the ongoing change in the mix of our
      product lines towards more profitable items. Lower profit hardware sales were
      reduced in the first and second quarters of 2007, while higher profit software
      sales increased.





We
      are
      currently working on developing new software for the RFID market. We anticipate
      that this software will undergo beta testing in the third quarter 2007 and
      will
      be released sometime fourth quarter of 2007. We feel that the future sales
      of
      this new software product, once it is tested and released, will have a
      significant positive impact on our operating results and increase our future
      revenues and profit margins.









**Cost
      of Sales and Gross Margin**





Cost
      of
      sales including royalty and consulting increased, 78%, from $233,045 to $416,331
      and increased as a percentage of sales from 30% of sales to 55% of sales.
      Overall, gross margin decreased from $554,833 to $337,749, a decrease of 39%.
      This decrease in the gross margin was due to an increase in software development
      costs and maintenance on existing software already sold to customers through
      use
      of programming consultants. Also, beginning in 2007, sales and marketing
      expenses were reclassified to general and administrative expenses.





**Selling,
      General, and Administrative Costs**





General,
      Selling and Administrative costs increased $457,069 from $715,938 in 2006 to
      $1,173,007 in 2007, due to an increase in marketing expenses of approximately
      $136,000 associated with the company’s marketing campaign and general business
      activities, increase on research and development costs of approximately $305,513
      for the development of our software products and an increase in our professional
      fees incurred to maintain our public reporting status of approximately $21,305.
      Also, as previously mentioned, beginning in 2007, sales and marketing expenses
      were reclassified from cost of sales thereby increasing general and
      administrative.





**Provision
      for Income Taxes**





The
      Company had a pre-tax loss of $1,106,849 and $178,951 for the six months ended
      June 30, 2007 and 2006, respectively. Accordingly, there has been no provision
      for current income taxes in 2007 or 2006. Deferred income tax assets have been
      provided for the likely benefits of net operating loss carryovers and other
      temporary differences between financial statement and taxable
      income.




**Liquidity
      and Capital Resources**





As
      of
      June 30, 2007, the Company had approximately $723,000 in current assets. On
      April 10, 2006 the Company sold $2,500,000 of its 8% Convertible Debenture
      to a
      group of accredited investors. The net proceeds of this placement were
      approximately $2,027,500 after payment of commissions, expenses and repayment
      of
      a short term loan. In June 2007, 133,333 shares were sold to investors. The
      net
      proceeds of this sale were $100,000. In July 2007, 233,333 shares were sold
      with
      net proceeds of $175,000. Hence, we expect to be adequately funded for the
      next twelve months. Further, with the registration of our shares, the cost
      of
      registering additional shares will be lower, giving us increased access to
      both
      private and public capital markets should our capital needs increase within
      the
      next twelve months or thereafter.





However,
      our operations were not yet profitable, and we continue to require additional
      funding in order to continue business operations. To date, we have funded our
      cash shortage and obtained the cash necessary to continue operations primarily
      through debt and equity transactions with management and through equity private
      placements.




**Capital
      Commitments**





The
      Company currently has no material commitments for capital
      expenditures.





**Trends**





The
      industry in which the Company operates is in a state of significant change.
      RFID
      software and services are gaining acceptance in the marketplace and the Company
      intends to take advantage of that trend by attempting to sell into a more
      willing marketplace, despite the increased competition.





**Changes
      in income elements**





There
      are
      no expected changes in the sources of income for the Company, with the exception
      that the liquid assets held by the Company are earning interest income
      currently, whereas there was no significant interest income in past years.
      The
      Company believes operating income will come from newly acquired customers for
      our services.





**Material
      changes in our financial statements**





None.









**Seasonal
      Fluctuations**


There
      have been no fluctuations in our business to date which can be attributed to
      seasonality.





**ITEM
      3. CONTROLS AND PROCEDURES**





*Evaluation
      of Disclosure Controls and Procedures* .    The
      Company’s Management under the supervision and with the participation of the
      Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”)
      are responsible for establishing and maintaining “disclosure controls and
      procedures” (as defined in rules promulgated under the Securities Exchange Act
      of 1934, as amended) for the Company. Based on their evaluation of the Company’s
      disclosure controls and procedures as of March 31, 2006, the CEO and CFO have
      concluded that the Company’s disclosure controls and procedures were effective
      to ensure that the information required to be disclosed by the Company in this
      Quarterly Report on Form 10-QSB was (i) recorded, processed, summarized and
      reported within the time periods specified in the Securities and Exchange
      Commission’s rules and (ii) accumulated and communicated to the Company’s
      management, including the Company’s principal executive and principal financial
      officers, to allow timely decisions regarding required disclosure.





*Changes
      in Internal Control over Financial Reporting.* During
      the second quarter of the Company’s 2007 fiscal year, there were no changes
      in the Company’s internal control over financial reporting during the period
      covered by this report that have materially affected, or are reasonably likely
      to materially affect, the Company’s internal control over financial
      reporting.





*Limitations
      on the Effectiveness of Controls.* 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,
      if any, within a company have been detected. The Company’s disclosure controls
      and procedures are designed to provide reasonable assurance of achieving their
      objectives, and the CEO and CFO have concluded that these controls and
      procedures are effective at the “reasonable assurance” level.





**PART
      II**





**ITEM
      1. LEGAL PROCEEDINGS**





A
      complaint was filed against the Company and its CEO on December 28, 2006 in
      Magistrate’s court in Herzeliya, Israel by Raz-Lee Security Ltd., a former
      distributor of the Company’s products (Case No. 8443/06). The action seeks
      $50,000 in damages for alleged unpaid license fees. The Company has filed a
      motion to dismiss the case on jurisdictional grounds, which is pending with
      the
      court. The Company believes that it has meritorious defenses to this lawsuit,
      as
      well as counterclaims against the plaintiff, and intends to vigorously defend
      this action. The Company is not party to any other pending or threatened legal
      proceedings.





**ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS**




During
        the quarter ended June 30, 2007, the Company sold 133,334 shares of its
        restricted common stock to two individuals in a private transaction exempt
        under
        Section 4 (2) of the Securities Act of 1933, as amended. The price per share
        was
        $.75 and gross proceeds received were $100,000.




**ITEM
      3. DEFAULTS UPON SENIOR SECURITIES**





(a)  None.





(b)  None.





**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**





None.





**ITEM
      5. OTHER INFORMATION**





None.









**ITEM
      6. EXHIBITS**





The
      following Exhibits are being filed herewith:


**Exhibit
                No.**
            **Exhibit
                Description**31.1
            Section
                302 Sarbanes Oxley Certification - CEO31.2
            Section
                302 Sarbanes Oxley Certification - CFO32.1
            Section
                906 Sarbanes Oxley Certification - CEO32.2
            Section
                906 Sarbanes Oxley Certification - CFO










**SIGNATURES**





In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.






CYBRA
                CORPORATION
              (Registrant)Date: August
              14, 2007
            By:
            /s/ Harold BrandHarold
              BrandChief
                Financial Officer and
              Interim
                Chief Financial Officer