0001062993-12-004773.txt : 20121114 0001062993-12-004773.hdr.sgml : 20121114 20121114143509 ACCESSION NUMBER: 0001062993-12-004773 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20120930 FILED AS OF DATE: 20121114 DATE AS OF CHANGE: 20121114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Cybrdi, Inc. CENTRAL INDEX KEY: 0000019002 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 952461404 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-09081 FILM NUMBER: 121203423 BUSINESS ADDRESS: STREET 1: 401 ROSEMONT AVENUE STREET 2: - CITY: FREDERICK STATE: MD ZIP: 21701 BUSINESS PHONE: 301-644-3901 MAIL ADDRESS: STREET 1: 401 ROSEMONT AVENUE STREET 2: - CITY: FREDERICK STATE: MD ZIP: 21701 FORMER COMPANY: FORMER CONFORMED NAME: CERTRON CORP DATE OF NAME CHANGE: 19920703 10-Q 1 form10q.htm FORM 10-Q Cybrdi Inc. - Form 10-Q - Filed by newsfilecorp.com

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2012

OR

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

Commission File No: 09081

CYBRDI, INC.
(Exact name of registrant as specified in its charter)

CALIFORNIA
(State or other jurisdiction of incorporation or organization)

95-2461404
(I.R.S. Employer ID No)

No 29 Chang'An South Road Xi'an Shaanxi P.R. China 71006 1
(Address of principal executive office) (Zip Code)

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

N/A
Former name, former address and former fiscal year, (if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]     No [   ]


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X]     No [   ]

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

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

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

Yes [   ]     No [X]

The number of shares of common stock, no par value per share, outstanding as of November 14, 2012 was 120,225,323.

2


FORM 10-Q
QUARTERLY PERIOD ENDED SEPTEMBER 30, 2012
INDEX

TABLE OF CONTENTS

    Page
  PART I – FINANCIAL INFORMATION   
Item 1: Financial Statements 4
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations 5
Item 3: Quantitative and Qualitative Disclosures About Market Risk 14
Item 4T: Controls and Procedures 14
  PART II – OTHER INFORMATION     
Item 1: Legal Proceedings 15
Item 1A: Risk Factors 15
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds 16
Item 3: Defaults Upon Senior Securities 16
Item 4: Mine Safety Disclosures 16
Item 5: Other Information 16
Item 6: Exhibits 17

3


PART I. FINANCIAL INFORMATION

Item 1 Financial Statements

4


CYBRDI, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

    September 30, 2012     December 31, 2011  
ASSETS   (Unaudited)     (Audited)  
             
CURRENT ASSETS            
   Cash and equivalents $  488,243   $  781,048  
   Accounts receivable, net   12,390     -  
   Inventories   952,395     1,053,038  
   Due from related companies   85,922     79,442  
   Other receivables, net and prepaid expenses   71,492     75,089  
   Advance to suppliers   3,440     832  
TOTAL CURRENT ASSETS   1,613,882     1,989,449  
PROPERTY, PLANT AND EQUIPMENT, NET   1,222,610     1,310,529  
CONSTRUCTION IN PROGRESS   6,854,861     6,829,329  
INTANGIBLE ASSETS, NET   693,446     782,215  
             
TOTAL ASSETS $  10,384,799   $  10,911,522  
             
LIABILITIES AND EQUITY            
             
CURRENT LIABILITIES            
   Short-term loan $  1,670,698   $  1,668,282  
   Accounts payable   3,316     4,942  
   Accrued expenses   737,360     693,436  
   Deferred revenue   116,957     139,284  
   Customers deposits   90,117     188,186  
   Due to related parties   1,839,454     1,850,181  
   Deferred tax liabilities   10,307     10,293  
   Other payables   461,176     366,020  
TOTAL CURRENT LIABILITIES   4,929,385     4,920,624  
CONSTRUCTION PAYABLE   849,267     894,750  
TOTAL LIABILITIES   5,778,652     5,815,374  
             
EQUITY            
   Preferred Stock, $1.00 per value, 500,000 shares authorized, 
         no shares issued and outstanding
  -     -  
   Common Stock, no par value, 150,000,000 shares authorized, 
         and 120,225,323 and 120,225,323 shares issued and outstanding, respectively
  4,313,614     4,313,614  
   Additional paid-in capital   172,308     172,308  
   Reserve funds   336,885     336,885  
   Accumulated deficit   (2,854,278 )   (2,447,643 )
   Accumulated other comprehensive income   1,546,243     1,540,329  
TOTAL STOCKHOLDERS’ EQUITY   3,514,772     3,915,493  
NONCONTROLLING INTEREST   1,091,375     1,180,655  
TOTAL EQUITY   4,606,147     5,096,148  
             
TOTAL LIABILITIES AND EQUITY $  10,384,799   $  10,911,522  

See notes to consolidated financial statements.

F-1


CYBRDI, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

    Three Months Ended     Three Months Ended     Nine Months Ended     Nine Months Ended  
    September 30, 2012     September 30, 2011     September 30, 2012     September 30, 2011  
Revenue                        
   Housing $  -   $  (6,519 ) $  141,953   $  (6,519 )
   Commercial rental   -     -     -     -  
   Tissue array products   129,032     153,228     341,596     390,458  
      Total revenue   129,032     146,709     483,549     383,939  
Cost of Sales                        
   Housing   -     58,625     123,091     58,625  
   Commercial rental   16,140     16,195     49,235     47,947  
   Tissue array products   77,895     104,848     222,329     294,172  
     Total cost of sales   94,035     179,668     394,655     400,744  
                         
Gross Profit   34,997     (32,959 )   88,894     (16,805 )
                         
Operating Expenses:                        
   Salaries and wages   51,279     45,581     153,839     127,157  
   Depreciation and amortization   37,264     37,516     112,272     110,509  
   Professional fees   28,529     14,268     66,264     71,376  
   Operating tax expenses   3,374     110     30,588     235  
   (Reversal) Estimated Loss from contingent liabilities   (37,910 )   36,942     (37,910 )   36,942  
   Selling and distribution expenses   1,370     6,211     4,123     16,422  
   Other general and administrative expenses   43,931     53,550     98,785     105,187  
   Bad debt expense   -     23,526     -     92,356  
Total Operating Expenses   127,837     217,704     427,961     560,184  
                         
Loss from Operations   (92,840 )   (250,663 )   (339,067 )   (576,989 )
                         
Other Income                        
   Net interest (expense) income   (39,284 )   1,328     (131,406 )   3,978  
   Other (expense) income, net   (2,567 )   (6,370 )   (25,128 )   (9,389 )
Total Other Income, Net   (41,851 )   (5,042 )   (156,534 )   (5,411 )
                         
Loss before Income Taxes   (134,691 )   (255,705 )   (495,601 )   (582,400 )
Income Tax Benefit (Expense)   (152 )   -     (314 )   -  
Net loss   (134,843 )   (255,705 )   (495,915 )   (582,400 )
Net loss attributable to the noncontrolling interest   (20,955 )   (61,720 )   (89,280 )   (114,889 )
Net loss attributable to CYBRDI, INC. AND SUBSIDIARIES $  (113,888 ) $  (193,985 ) $  (406,635 ) $  (467,511 )
                         
Net Loss Per Common Share                        
   Basic and Diluted $  (0.00 ) $  (0.00 ) $  (0.00 ) $  (0.01 )
                         
Weighted Average Number of Shares Outstanding                        
   Basic and Diluted   120,225,323     91,780,528     120,225,323     74,431,221  

See notes to consolidated financial statements.

F-2


CYBRDI INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

    Nine Months Ended     Nine Months Ended  
    September 30, 2012     September 30, 2011  
             
CASH FLOWS FROM OPERATING ACTIVITIES            
   Net Loss $  (406,635 ) $  (467,511 )
   Adjustments to Reconcile Net Loss to Net Cash            
     Provided by Operating Activities:            
         Depreciation and amortization   186,564     204,650  
         Bad debt expense   -     92,356  
         (Reversal) Estimated Loss from contingent liabilities   (37,910 )   36,942  
         Minority interest   (89,280 )   (114,889 )
   Changes in Operating Assets and Liabilities:            
         Accounts receivable   (12,299 )   (5,064 )
         Inventories   101,427     56,637  
         Other receivable and prepaid expenses   242     (11,917 )
         Accounts payable and other current liabilities   142,364     418,117  
         Deferred revenue   10,360     86,087  
         Customer deposits   (97,628 )   29,344  
   Net Cash (Used in) Provided by Operating Activities   (202,795 )   324,752  
             
CASH FLOWS FROM INVESTING ACTIVITIES            
         Proceeds from repayments of loan to affiliated companies   -     135,828  
         Advance for loan to affiliated companies   (3,159 )   -  
         Purchase of property, plant, and equipment   (8,151 )   (87,955 )
         Payments for construction in progress   (61,970 )   (520,285 )
   Net Cash Used in Investing Activities   (73,280 )   (472,412 )
             
CASH FLOWS FROM FINANCING ACTIVITIES            
         Proceeds from loans from related companies   69,502     116,984  
         Proceeds from shareholders/officers   168,060     163,593  
         Repayments of loan from shareholders/officers   (252,734 )   -  
   Net Cash (Used in) Provided by Financing Activities   (15,172 )   280,577  
             
NET INCREASE(DECREASE) IN CASH & CASH EQUIVALENTS   (291,247 )   132,917  
EFFECT OF EXCHANGE RATE CHANGE ON CASH & CASH EQUIVALENTS   (1,558 )   22,975  
CASH & CASH EQUIVALENTS, BEGINNING BALANCE   781,048     585,020  
             
CASH & CASH EQUIVALENTS, ENDING BALANCE $  488,243     740,912  
             
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION            
         Interest paid $  106,207     146,921  
         Income taxes paid $  853     -  

See notes to consolidated financial statements.

F-3


CYBRDI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

1. Interim Financial Statements

The unaudited consolidated financial statements of Cybrdi Inc. and subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and pursuant to the requirements for reporting on Form 10-Q. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. However, the information included in these interim financial statements reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for the fair presentation of the consolidated financial position and the consolidated results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full year. The consolidated balance sheet information as of December 31, 2011 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K. These interim financial statements should be read in conjunction with that report. Certain comparative amounts have been reclassified to conform to the current period's presentation.

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

2. Description of Business

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

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

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

F-4


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

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

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

On July 26 , 2007, Chaoying Biotech entered into an acquisition agreement with its Chinese partner, which is a principal shareholder of the company, Mr. Bai, the Company’s chief executive officer and a director is also a principal of its Chinese partner.

On July 28,2007, Chaoying Biotech invested RMB15 millions (equivalent to US$1,983,078) to acquire an 83.33% equity ownership of Shandong Chaoying Culture and Entertainment Co., Ltd. (“SD Chaoying”) from its Chinese partner. SD Chaoying is a corporation organized in Shandong Province P.R.China. On September 5, 2007, Shandong Commercial government had approved this acquisition and the ownership title of SD Chaoying had been transferred to Chaoying Biotech from its Chinese partner. The future business of SD Chaoying will primarily focus on culture and entertainment, including spa activities, cosmetic and personal care, body building, gambling, catering, and lodging, etc. SD Chaoying will have a specific emphasis on casino gambling, which has been approved by Shandong Administration for Civil Affairs. As of December 31, 2009, SD Chaoying had substantially completed the construction of two residential buildings and had recognized revenue from sales of housing for 2009. The main structure of the commercial entertainment center has also been completed, except for the exterior, rooftop, the surrounding supporting projects and the community landscaping, which are expected to be completed in 2013 prior to the commencement of operations by merchant tenants if we can obtain an estimated $2.8 million to complete construction.

On March 10, 2007 the Company entered into a Sales Agency Agreement with BioMax, Ltd., a reseller located in the United States.

On April 29, 2011, Chaoying Biotech invested $154,732 (equivalent to RMB 1 million) to restore the operation of the Institute of Shaanxi Chaoying Clinical Pathology (“IOSCCP”), a wholly-owned subsidiary established on July 31, 2003, whose main business includes pathology research and consulting, consulting and diagnostic clinical pathology and pathology-related research and development of new technologies, and basic training in pathology. Its sole shareholder has been Chaoying Biotech. However, Chaoying Biotech withdrew the original investment from IOSCCP in September 2007 as we believed that both internal and external conditions of IOSCCP were not mature at that time. In light of foreseeable benefits and new business opportunities for this entity, we resumed its business and re-invested $154,732 (equivalent to RMB 1 million) in it in April 2011.

F-5


3. Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred significant losses and has not demonstrated the ability to generate sufficient cash flows from operations to satisfy its liabilities and sustain operations. The Company had an accumulated deficit of $2,854,278 and $2,447,643 as of September 30, 2012 and December 31, 2011, including net losses of $495,915 and $582,400 for the nine months ended September 30, 2012 and 2011, respectively. In addition, current liabilities exceeded current assets by $3,315, 503 and $2,931,175 as of September 30, 2012 and December 31, 2011, respectively. These matters raise substantial doubt about the Company’s ability to continue as a going concern.

The Company finances its operations primarily through short-term bank borrowings and advances from related parties and/or officers/shareholders. In order to complete the construction of SD Chaoying cultural and entertainment center, approximately $3.0 million (equivalent to RMB 19 million) of capital is expected to be needed. The Company, taking into account the available banking facilities, internal financial resource, and supports from related companies, believes it has sufficient working capital to meet its present obligation for at least the next twelve months. Management is taking actions to address the company's financial condition and deteriorating liquidity position. The following sets forth management’s plans for dealing with the adverse effects of the conditions:

(a) Sale of housing inventories: Proceeds to be received from the sale of the remaining housing of the two completed residential buildings are expected to amount to approximately $0.5 million.

(b) Rental and management fee revenue from the cultural and entertainment center: Annual rental revenue is estimated to be approximately $0.68 million per year. Management fee revenue will be charged to commercial tenants at 3% of annual gross revenue. As of September 30, 2012, the Company has not commenced collecting rental and management fee revenue for the culture and entertainment center.

(c) Additional advances from related companies and affiliates: Mr. Bai, our Chief Executive Officer, advanced $83,081 to the Company in the current period to finance operations and the costs to maintain the Company’s public status in the U.S. In addition, Shaanxi Chaoying Beauty & Cosmetics Group, which is also an affiliate, is anticipated to provide up to approximately $790,000 (equivalent to RMB 5 million) of capital to support operations. Shaanxi Chaoying Beauty & Cosmetics Group advanced $12,640 for the nine-month period ended September 30, 2012 to the Company to finance its operations.

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

F-6


4. Use of Estimates:

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

5. Revenue Recognition

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

6. Reverse Merger

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

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

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

F-7


7. Income Taxes

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

8. Contingencies

Currently we are involved in disputes, litigation and other legal proceedings. We prosecute and defend these matters aggressively. However, there are many uncertainties associated with any litigation, and we cannot assure you that these actions or other third party claims against us will be resolved without costly litigation and/or substantial settlement charges. We record a charge equal to at least the minimum estimated liability for a loss contingency when both of the following conditions are met: (i) information available prior to issuance of the financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements and (ii) the range of loss can be reasonably estimated. However, the actual liability in any such disputes or litigation may be materially different from our estimates, which could result in the need to record additional costs.

9. Recent Accounting Pronouncements

The Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.

NOTE B – ASSETS

The September 30, 2012 consolidated balance sheet included total current assets of $1,613,882 and non-current assets of $8,770,917. Of these amounts, $488,243 in cash and equivalents is planned for funding current operations and for future business expansion.

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

F-8


The other primary assets included in current assets are loans to an unaffiliated company, QuanYe Security Co., Ltd (“QuanYe”), an unrelated People’s Republic of China (“PRC”) registered company located in Xian PRC. QuanYe is engaged in the pawnshop business and their primary business is offering alternative financing to small, local companies. According to the loan agreement, QuanYe had received loans from Chaoying Biotech for a total amount of RMB 29.3Million (equivalent to $4,652,640) since January 2006. A remaining balance of RMB 7.3 million (equivalent to $1,159,190) was extended to and expired on March 24, 2008. As of September 30, 2012 and December 31, 2011, the principal balance and interest receivable for this loan had been reduced to $0, net of allowance of $95,468 and $182,214 for doubtful principal balance and interest receivable, respectively. The interest rate for these loans initially was initially 8% per year, and subsequently reduced to 5% since October 9, 2006.

Included in non-current assets are property, plant and equipment, construction-in-progress and intangible assets. Property, plant and equipment mainly consist of building, office equipments, motor vehicles, leasehold improvement, software-website, and machinery used for product manufacturing located in the People’s Republic of China (“PRC”). Depreciation on property, plant and equipment is computed using the straight-line method over the estimated useful life of the assets. The majority of the assets have estimated useful lives of 10 years. Building and office equipment have estimated useful lives of 20 and 5 years, respectively. The “construction in progress” in the amount of $6,854,861 mainly consisted of land under development and construction of the entertainment, culture, and casino facility in Shandong Province, which will be transferred to fixed assets in SD Chaoying when construction is completed. As of September 30, 2012, construction-in-progress of $4.33 million and land use rights of $3.19 million of SD Chaoying were collateralized under a short-term loan from Changle Rural Credit Union. For the $3.19 million land use rights, $2.52million was classified under construction-in-progress for the commercial property and the remaining $0.67 million was classified under intangible assets subject to amortization. Intangible assets included a tissue chip patent at Chaoying Biotech and $0.67 million of land use rights being put in operation for the partial completed commercial property at SD Chaoying. Effective January 1, 2002, with the adoption of the accounting guidance for Goodwill and Other Intangible Assets, intangible assets with a definite life are amortized on a straight-line basis. The patent is being amortized over its estimated life of 10 years. The land use rights classified in intangible asset is being amortized over its estimated life of 36.9 years through the maturity of the land use rights for commercial use on November 6, 2047.

F-9


NOTE C - LIABILITIES

As of September 30, 2012, the balance sheet included total liabilities of $5,778,652, which consisted of current liabilities of $4,929,385 and construction payable of $849,267. Included in the current liabilities was a short-term loan of $1,511,584(equivalent to RMB 9.5 million) from Changle Rural Credit Union, which is a bank located in Shandong Province of the PRC. The original term of the loan was from August 25, 2009 to August 24, 2010 with an interest rate of 7.965% per annum. In August 2011, the Company renewed this short-term loan with the same amount of with Changle Rural Credit Union. The term of the renewal loan started from August 31, 2011 with a maturity date of August 20, 2012. The adjustable interest rate is a rate per annum equal to the Prime Rate plus 50% of prime rate. The prime rate is based on six-month-to-one-year loan interest rate released by The People's Bank of China. On September 4, 2012, the Company renewed this short-term loan with the same amount of $1,511,584 (equivalent to RMB 9.5 million) with Changle Rural Credit Union. The term of the renewal loan started from September 4, 2012 with a maturity date of September 2, 2013. The interest rate for the short-term loan was 12% per annum as of September 30, 2012. This short-term loan had been secured by the Company’s land use right and construction-in-progress of SD Chaoying with a book value of $3.19 million (equivalent to RMB 20.03 million) and $4.33 million (equivalent to RMB 27.21 million) as of September 30, 2012, respectively. For the $3.19 million land use rights, $2.52 million was classified under construction-in-progress for the commercial property and the remaining $0.67 million was classified under intangible assets subject to amortization. Additionally, there is another short-term loan of $159,114 (equivalent to RMB 1.0 million) from Mr. Fengguo Liu, an unrelated party. The short-term loan is due January 12, 2013 with an interest rate at 2% per month. Also included in the current liabilities was $1,839,454 of loans from related companies, including Xi’an Yanfeng Biotechnology Co., Ltd., Shaanxi Yanfeng Real Estate Co. Ltd, Shaanxi Chaoying Beauty & Cosmetics Group Co., Ltd., and the stockholders who are also the Company’s officers. These entities were related to the Company through common ownership and principal officers. These loans are non-interest bearing and have no set repayment terms.

NOTE D – STOCKHOLDERS’ EQUITY

As a result of the reverse merger (see Note A item 6), the common stock of Cybrdi-Maryland has been cancelled and converted into shares of common stock of Certron at an exchange ratio of 1.566641609 per share. This resulted in the issuance of 47,328,263 shares of Certron’s common stock to the Cybrdi shareholders. As of September 30, 2012 and December 31, 2011, the Company had 120,225,323 and 120,225,323 shares issued and outstanding, respectively.

As of September 30, 2012, the balance sheet included total equity of $4,606,147, of which $1,091,375 was for non-controlling interest, representing 20% minority interest in Chaoying Biotech and 16.67% minority interest in SD Chaoying.

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

F-10


On June 30, 2011, the Company entered into a written Debt Conversion Agreement with Shaanxi Chaoying Beauty & Cosmetics Group Co., Ltd. (a related party), Shaanxi NuoQi Healthfood Co., Ltd. (a related party), and Mr. Yanbiao Bai, Chairman and CEO of the Company. In the Agreement, the Company agreed to repay a total of $605,723 (RMB 3,920,000) debt due to Shaanxi Chaoying Beauty & Cosmetics Group Co., Ltd. by issuing the Company’s common stock. Simultaneously upon the execution of the repayment, Shaanxi Chaoying Beauty & Cosmetics Group Co., Ltd. agreed to transfer to Mr. Yanbiao Bai the number of shares to be issued through the debt repayment. The number of shares transferred to Mr. Yanbiao Bai was further offset by a number of shares equivalent to $169,973 (RMB 1,100,000) due by Shaanxi NuoQi Health Food Co., Ltd., a company wholly-controlled by Ms. Xue Bu, the spouse of Mr. Yanbiao Bai and former COO and Director of the Company, to offset its debt due to the Company. The Agreement was approved by the Company’s Board of Directors on June 30, 2011. As a result of the debt conversion and offset, the number of shares of common stock issued to Mr. Yanbiao Bai was 54,468,756 shares, which was determined based on the closing price of $0.008 per share on June 30, 2011. The share issuance for repayment of debt as agreed upon and approved was executed on August 17, 2011.

NOTE E – INCOME TAXES

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

The Company’s income tax expense includes U.S. and PRC income taxes. There were no U.S. current taxes for the nine months ended September 30, 2012 according to net loss incurred in the U.S. entity, which will not be anticipated to have any tax benefit in the future since no revenue is expected to be generated in the U.S as a result of discontinuing the U.S. operating company in Maryland in October 2007. There was $152 and $314 of PRC current income taxes accrued for the three-month and nine- month period ended September 30, 2012 in SD Chaoying, respectively.

NOTE F – CONTINGENCIES AND LITIGATION LIABILITIES

On June 7, 2011, Weifang Shili Hesin Engineering Equipment Co., Ltd. (the “Plaintiff”) filed a complaint against SD Chaoying at the Basic People's Court of Changle County in Shandong Province, China, for alleged damages caused by SD Chaoying for not performing appropriately and completely the obligations in accordance with the agreement signed by both parties on April 28, 2011. Pursuant to the agreement, SD Chaoying agreed to transfer: (1) the rights of development, construction, and land of the #1 and #2 residential buildings for RMB 7.6 million, or $1,207,518, and (2) the 12 unsold residential units in the #3 and #4 residential buildings at a price as agreed upon. As of September 30, 2012, the Plaintiff paid $95,468 (equivalent to RMB 600,000) deposit as agreed upon, and prepaid $186,182 (equivalent to RMB 1,170,114), both of which were recorded as Other Payables under current liabilities. Plaintiff was seeking for the discharge of the original agreement signed, the return of prepayment of $186,182 (equivalent to RMB 1,170,114), repayment of the deposit plus 100% penalty, totaling $190,936 (equivalent to RMB 1,200,000), and for attorneys’ fees and costs. The Company disputed Plaintiff’s claim for a land use right certificate of underlying construction base of the #1 and #2 residential buildings, which certificate was inseparable from other part of the land and was not specifically stated in the agreement. The Company also disputed Plaintiff’s entitlement to the amounts claimed and instructed the Company’s legal counsel to contest the action, while concurrently pursuing opportunities for reasonable settlement. The case went to trial on July 7, 2011. On November 15, 2011, the Basic People's Court of Changle County pronounced its judgment against Plaintiff and that SD Chaoying had no liability. The verdict was released by the court on March 23, 2012. An appeal was filed on April 6, 2012 by the Plaintiff. The hearing for the appeal was held on May 16, 2012 at the Intermediate Court in Weifang City, Shandong Province, China. On July 16, 2012, the Intermediate Court in Weifang City issued a decision and held that SD Chaoying should not be found liable. The decision is a final adjudication by the courts in China. Hence, the estimated contingent liabilities of approximately $36,942 (or RMB 240,000) recorded in other payable as of December 31, 2011 have been reversed in current quarter this year.

F-11


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

The following discussion and analysis should be read in conjunction with the company’s Financial Statements and Notes thereto appearing elsewhere in this Report on Form 10-Q as well as the company’s other SEC filings, including our annual report on Form 10-K for the year ended December 31, 2011.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this quarterly report on Form 10-Q contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause its actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond its control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this quarterly report in its entirety, including but not limited to its financial statements and the notes thereto. Except for its ongoing obligations to disclose material information under the Federal securities laws, the Company undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. For any forward-looking statements contained in any document, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. This report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as "anticipate," "expect," "intend," "plan," "will," "we believe," "Cybrdi believes," "management believes" and similar language. The forward-looking statements are based on the current expectations of Cybrdi and are subject to certain risks, uncertainties and assumptions, including those set forth in the discussion under "Description of Business" and "Management's Discussion and Analysis." The actual results may differ materially from results anticipated in these forward-looking statements. We base the forward-looking statements on information currently available to us, and we assume no obligation to update them.

5


PLAN OF OPERATIONS

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

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

  • Enhancing R&D in Tissue Microarrays (TMA)s and technical service;

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

  • Launching the health diagnosis kit for obesity and skin disease;

  • Participating in the culture and entertainment field.

With its sophisticated research in genes, the Company can provide a professional health diagnostic service for its customers. The Company provides genetic tests for the mechanism of obesity and skin diseases. By its genetic analysis, the Company can diagnose the reasons for obesity and other skin diseases such as freckles, which offers more accurate and specialized diagnosis than other similar services in the market. Such information can be utilized to guide customers to set up a proper health or fitness program.

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

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

On July 28, 2007, the Company acquired an 83.33% equity ownership of SD Chaoying from its Chinese partner, which will be primarily engaged in developing and operating culture and entertainment business. The culture and entertainment business will consist primarily of a spa activities, cosmetic personal care, hotel and casino. The Chinese partner is a principal shareholder of the Company and Mr. Bai, the Company chief executive officer and a director is also a principal of the Chinese partner. SD Chaoying began constructing the facility in September 2007. The total useable land and net building area for the project consists of approximately 50,000 and 33,000 square meters, respectively of which 52% will constitute property for business use and 48% for residential use. The project includes four multi-family residential buildings (about 14,188 square meters). As of September 30, 2012, SD Chaoying had substantially completed the construction of two residential buildings and had recognized revenue from sales of housing units of these buildings. Approximately 20.88% of the cultural and entertainment part of the facility opened in January 2011 and the balance remains under construction, which is expected to be completed in 2013 prior to the commencement of operations by merchant tenants. SD Chaoying intends to focus on spa activities, cosmetic personal care, hotel and casino gambling, which has been approved by the Shandong Administration for Civil Affairs. In January 2011, SD Chaoying entered into a verbal agreement with Dongshan Victoria Spring Hotel (“Victoria”) allowing Victoria to manage and operate the SPA business at the completed section of the cultural and entertainment facility. SD Chaoying agreed to charge no fee from Victoria during the first year of operation as the trial period. SD Chaoiying and Weifang Shili Hesin Engineering Equipment Co., Ltd. executed an agreement on April 28, 2011, pursuant to which agreement, SD Chaoying agreed to transfer: (1) the rights of development, construction, and land use of the #1 and #2 residential buildings for RMB 7.6 million, or approximately $1,206,800, and (2) 12 unsold residential units in the #3 and #4 residential buildings at a price as agreed upon. As of September 30, 2012, the land use right and construction-in-progress with a total book value of $7.52 million (equivalent to RMB 47.5 million) of SD Chaoying were collateralized under the short-term loan of $1,511,584 (equivalent to RMB 9.5 million) from Changle Rural Credit Union.

6


RESULTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2011

    Three Months Ended     Three Months Ended              
    September 30, 2012     September 30, 2011     $ Change     % Change  
Revenue                        
   Housing $  -   $  (6,519 )   6,519     -100.0%  
   Commercial rental   -     -     -     0.0%  
   Tissue array products   129,032     153,228     (24,196 )   -15.8%  
       Total revenue   129,032     146,709     (17,677 )   -12.0%  
Cost of Sales                        
   Housing   -     58,625     (58,625 )   -100.0%  
   Commercial rental   16,140     16,195     (55 )   -0.3%  
   Tissue array products   77,895     104,848     (26,953 )   -25.7%  
       Total cost of sales   94,035     179,668     (85,633 )   -47.7%  
                         
Gross Profit   34,997     (32,959 )   67,956     -206.2%  
                         
Operating Expenses:                        
   Salaries and wages   51,279     45,581     5,698     12.5%  
   Depreciation and amortization   37,264     37,516     (252 )   -0.7%  
   Professional fees   28,529     14,268     14,261     100.0%  
   Operating tax expenses   3,374     110     3,264     2967.3%  
   (Reversal) Estimated Loss from contingent liabilities   (37,910 )   36,942     (74,852 )   -202.6%  
   Selling and distribution expenses   1,370     6,211     (4,841 )   -77.9%  
   Other general and administrative expenses   43,931     53,550     (9,619 )   -18.0%  
   Bad debt expense   -     23,526     (23,526 )   -100.0%  
Total Operating Expenses   127,837     217,704     (89,867 )   -41.3%  
                         
Loss from Operations   (92,840 )   (250,663 )   157,823     -63.0%  
                         
Other Income                        
   Net interest (expense) income   (39,284 )   1,328     (40,612 )   -3058.1%  
   Other (expense) income, net   (2,567 )   (6,370 )   3,803     -59.7%  
Total Other Income, Net   (41,851 )   (5,042 )   (36,809 )   730.0%  
                         
Loss before Income Taxes   (134,691 )   (255,705 )   121,014     -47.3%  
Income Tax Benefit (Expense)   (152 )   -     (152 )   100.0%  
Net loss   (134,843 )   (255,705 )   120,862     -47.3%  
Net loss attributable to the noncontrolling interest   (20,955 )   (61,720 )   40,765     -66.0%  
Net loss attributable to CYBRDI, INC. AND SUBSIDIARIES $  (113,888 ) $  (193,985 )   80,097     -41.3%  

Net Sales

Cybrdi now mainly generates two categories of revenues, including sales of tissue chip & kits products and residential housing. The net sales decreased $17,677 to $129,032 for the three months ended September 30, 2012 from $146,709 for the three months ended September 30, 2011, a decrease of 12%.

Tissue Chip & Kit Products: The net sales decreased $24,196 to $129,032 for the three months ended September 30, 2012 as compared to $153,228 for the three months ended September 30, 2011, a decrease of 15.8% . The decrease in net sales of tissue chip & kit product was primarily due to the decrease in the export sales revenues which accounted for approximately 84.1% of total tissue product sales revenues for the current period. Export sales revenues decreased $30,910 to $108,511 for the three months ended September 30, 2012 compared to $139,421 for the three months ended September 30, 2011, a decrease of 22.2% . The sales revenues generated from export sales now are subject to value added tax (VAT) according to PRC tax regulation, whereas the VAT imposed by PRC tax bureau was absorbed by the Company without charging to the customers before May 2012. The current selling price for export sales has been adjusted accordingly to maintain a reasonable range of gross margin since May 2012. Currently, our sole domestic sales representative in China is Xi’an AiLiNa Biotechnology Co., Ltd., and the only overseas sales representative is Biomax. We mainly distribute our products through these two sales representatives.

Housing: SD Chaoying completed the construction of the two six-story multi-family residential buildings with a total of 72 housing units in 2009, 9 and 37 of which units qualified as being recognized as sales revenue aggregating $296,521 and $1,010,632 for the years ended December 31, 2010 and 2009. An additional two residential units were sold in 2011. Another five residential units were qualified as being recognized as sales revenues during the first quarter of 2012. There was no sales from housing division in the quarter ended September 30, 2012. Since SD Chaoying is required to continue its involvement with the property after the sale, including installations of utility systems, improvements and amenities, and community landscaping, profit from the sale was recognized using the percentage of completion method as required by ASC Topic 360-20, “Property, Plant, and Equipment – Real Estate Sales”.

7


Gross Margin

Gross margin as a percentage of sales increased to 27.1% for the three months ended September 30, 2012 from (22.5%) for the three months ended September 30, 2011

Tissue Chip & Kit Products: The gross margin of Tissue Chip & Kit Products division increased to 39.6% for the third quarter of 2012 compared to 31.6% for the same period in 2011. The increase in gross margin for the three months ended September 30, 2012 was mainly because more technical services were rendered to customers in domestic market and the service incomes were charged to the selling price of products.

Housing: There is no gross profit of the Housing division for the three months ended September 30, 2012. The negative gross profit for the three months ended September 30, 2011 was mainly due to weak sales in the residential housing division. As profits from the sale was recognized using the percentage of completion method as required by ASC Topic 360-20, “Property, Plant, and Equipment – Real Estate Sales”, only 93.20% of revenues can be recognized based on the current percentage of completion as of September 30, 2011 and 2012.

In addition, the commencement of the business in the commercial property segment has not generated revenue but has incurred costs directly associated with the business.

Operating Expenses

The Company's operating expenses decreased by $89,867, or 41.3%, to $127,837 for the three months ended September 30, 2012 from $217,704 for the three months ended September 30, 2011. The decrease was primarily due to the decrease of bad debt expense and selling and distribution expenses and a gain on  reversal of contingent liabilities accrued in the same period last year, partially offset by the increase in professional fees and salaries and wages for the three months ended September 30, 2012.

There was no bad debt expense assessed for the three months ended September 30, 2012, whereas the bad debt expense was $23,526 for the same period last year. The Company recorded an estimate of loss contingencies of $36,942 in the third quarter last year, which was estimated by the Company's legal counsel to be reasonable. The Company recorded the estimated liability and loss contingencies according to FASB ASC 450-20-25-2 under Topic 450, “Contingencies Loss Contingencies Recognition”. On July 16, 2012, the Intermediate Court in Weifang City pronounced its judgment against Plaintiff and that SD Chaoying had no liability. The litigation is a final adjudication. Hence, the estimated contingent liabilities recorded in last year have been reversed in current quarter this year.

The decrease of operating expense for the three-month period this year was partially offset by an increase of $14,261 in professional fees from $14,268 for the three months ended September 30, 2011 to $28,529 for the three months ended September 30, 2012 and an increase in salaries and wages of $5,698 to $51,279 for the three months ended September 30, 2012 from $45,581 for the same period last year.

8


Other Income (Expense)

Other income decreased by $36,809 to $(41,851) for the three months ended September 30, 2012 as compared to $(5,042) for the three months ended September 30, 2011, a decrease of 730%. The decrease was primarily due to the interest expense of $40,617 for the three months ended September 30, 2012 that was not subject to capitalization due to temporary suspension of the construction of the entertainment center, whereas interest expense was capitalized and recorded as construction-in-progress in the third quarter of 2011.

Income Taxes

The Company did not record U.S. current income tax for the three months ended September 30, 2012, and 2011, since there was no taxable income during these periods. There was $152 of PRC current income taxes accrued for the three months ended September 30, 2012 in SD Chaoying.

Net Loss

As a result of the above factors, our net loss before minority interests decreased $120,862, or 47.3%, from $255,705 for the three months ended September 30, 2011 to $134,843 for the three months ended September 30, 2012.

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2011

    Nine Months Ended     Nine Months Ended              
    September 30, 2012     September 30, 2011     $ Change     % Change  
Revenue                        
   Housing $  141,953   $  (6,519 )   148,472     -2277.5%  
   Commercial rental   -     -     -     0.0%  
   Tissue array products   341,596     390,458     (48,862 )   -12.5%  
       Total revenue   483,549     383,939     99,610     25.9%  
Cost of Sales                        
   Housing   123,091     58,625     64,466     110.0%  
   Commercial rental   49,235     47,947     1,288     2.7%  
   Tissue array products   222,329     294,172     (71,843 )   -24.4%  
     Total cost of sales   394,655     400,744     (6,089 )   -1.5%  
                         
Gross Profit   88,894     (16,805 )   105,699     -629.0%  
                         
Operating Expenses:                        
   Salaries and wages   153,839     127,157     26,682     21.0%  
   Depreciation and amortization   112,272     110,509     1,763     1.6%  
   Professional fees   66,264     71,376     (5,112 )   -7.2%  
   Operating tax expenses   30,588     235     30,353     12916.2%  
   (Reversal) Estimated Loss from contingent liabilities   (37,910 )   36,942     (74,852 )   -202.6%  
   Selling and distribution expenses   4,123     16,422     (12,299 )   -74.9%  
   Other general and administrative expenses   98,785     105,187     (6,402 )   -6.1%  
   Bad debt expense   -     92,356     (92,356 )   -100.0%  
Total Operating Expenses   427,961     560,184     (132,223 )   -23.6%  
                         
Loss from Operations   (339,067 )   (576,989 )   237,922     -41.2%  
                         
Other Income                        
   Net interest (expense) income   (131,406 )   3,978     (135,384 )   -3403.3%  
   Other (expense) income, net   (25,128 )   (9,389 )   (15,739 )   167.6%  
Total Other Income, Net   (156,534 )   (5,411 )   (151,123 )   2792.9%  
                         
Loss before Income Taxes   (495,601 )   (582,400 )   86,799     -14.9%  
Income Tax Benefit (Expense)   (314 )   -     (314 )   100.0%  
Net loss   (495,915 )   (582,400 )   86,485     -14.8%  
Net loss attributable to the noncontrolling interest   (89,280 )   (114,889 )   25,609     -22.3%  
Net loss attributable to CYBRDI, INC. AND SUBSIDIARIES $  (406,635 ) $  (467,511 )   60,876     -13.0%  

9


Net Sales

Cybrdi now mainly generates two categories of revenues, including sales of tissue chip & kits products and residential housing. The net sales increased $99,610 to $483,549 for the nine months ended September 30, 2012 from $383,939 for the nine months ended September 30, 2011, an increase of 25.9% .

Tissue Chip & Kit Products: The net sales decreased $48,862 to $341,596 for the nine months ended September 30, 2012 as compared to $390,458 for the nine months ended September 30, 2011, a decrease of 12.5% . The decrease in net sales of tissue chip & kit product was primarily due to the decrease in the export sales revenues which accounted for approximately 85.0% of total tissue product sales revenues for the current period. Export sales revenues decreased $65,612 to $290,222 for the nine months ended September 30, 2012 as compared to $355,834 for the nine months ended September 30, 2011, a decrease of 18.4% . The sales revenues generated from export sales now are subject to value added tax (VAT) according to PRC tax regulation, whereas the VAT imposed by PRC tax bureau was absorbed by the Company without charging to the customers before May 2012. The current selling price for export sales has been adjusted accordingly to maintain a reasonable range of gross margin since May 2012. Currently, our sole domestic sales representative in China is Xi'an AiLiNa Biotechnology Co., Ltd., and the only overseas sales representative is Biomax. We mainly distribute our products through these two sales representatives.

Housing: SD Chaoying completed the construction of the two six-story multi-family residential buildings with a total of 72 housing units in 2009, 9 and 37 of which units qualified as being recognized as sales revenue aggregating $296,521 and $1,010,632 for the years ended December 31, 2010 and 2009. An additional two residential units were sold in 2011. Another five residential units were qualified as being recognized as sales revenues during the first quarter of 2012. Since SD Chaoying is required to continue its involvement with the property after the sale, including installations of utility systems, improvements and amenities, and community landscaping, profit from the sale was recognized using the percentage of completion method as required by ASC Topic 360-20, “Property, Plant, and Equipment – Real Estate Sales”.

Gross Margin

Gross margin as a percentage of sales increased to 18.4% for the nine months ended September 30, 2012 from (4.4%) for the nine months ended September 30, 2011.

Tissue Chip & Kit Products: The gross margin of Tissue Chip & Kit Products division increased to 34.9% for the nine months ended September 30, 2012 compared to 24.7% for the same period in 2011. The increase in gross margin for the nine months ended September 30, 2012 was mainly because more technical services were rendered to customers in domestic market and the service incomes were charged to the selling price of products.

Housing: The gross margin of housing division increased to 13.3% for the nine months ended September 30, 2012 compared to 0% for the same period in 2011. The negative gross profit for the nine months ended September 30, 2011 was mainly due to weak sales in the residential housing division. As profits from the sale was recognized using the percentage of completion method as required by ASC Topic 360-20, “Property, Plant, and Equipment – Real Estate Sales”, only 93.20% of revenues can be recognized based on the current percentage of completion as of September 30, 2011 and 2012.

10


In addition, the commencement of the business in the commercial property segment has not generated revenue but has incurred costs directly associated with the business.

Operating Expenses

The Company’s operating expenses decreased by $132,223 to $427,961 for the nine months ended September 30, 2012 from $560,184 for the nine months ended September 30, 2011, a decrease of 23.6% . The decrease in operating expenses was primarily because there was no bad debt expense assessed for the nine months ended September 30, 2012. Also Selling and distribution expenses decreased from $16,422 for the nine months ended September 30, 2011 to $4,123 for the same period in 2012. The Company recorded an estimate of loss contingencies of $36,942 in the third quarter last year, which was estimated by the Company’s legal counsel to be reasonable. The Company recorded the estimated liability and loss contingencies according to FASB ASC 450-20-25-2 under Topic 450, “Contingencies Loss Contingencies Recognition”. On July 16, 2012, the Intermediate Court in Weifang City pronounced its judgment against Plaintiff and that SD Chaoying had no liability. The litigation is a final adjudication. Hence, the estimated contingent liabilities recorded in last year have been reversed in current quarter this year, resulting in a decrease in operating expense for the nine months ended September 30, 2012.

The decrease of operating expense for the nine-month period this year was partially offset by an increase of $30,353 in operating tax expenses from $235 for the nine months ended September 30, 2011 to $30,588 for the nine months ended September 30, 2012 and an increase of salaries and wages of $26,682 to $153,839 for the nine months ended September 30, 2012 from $127,157 for the same period last year.

Other Income (Expense)

Other income decreased by $151,123 to $(156,534) for the nine months ended September 30, 2012 as compared to $(5,411) for the nine months ended September 30, 2011, a decrease of 2792.9% . The increase was primarily due to the interest expense of $134,637 for the nine months ended September 30, 2012 that was not subject to capitalization due to suspension of the construction of the entertainment center, whereas interest expense was capitalized and recorded as construction-in-progress for the same period in 2011.

Income Taxes

The Company did not record U.S. current income tax for the nine months ended September 30, 2012, and 2011, since there was no taxable income during these periods. There was $314 of PRC current income taxes accrued for the nine months ended September 30, 2012 in SD Chaoying.

Net Loss

As a result of the above factors, our net loss before minority interests decreased $86,485, or 14.8%, from $582,400 for the nine months ended September 30, 2011 to $495,915 for the nine months ended September 30, 2012.

11


LIQUIDITY AND CAPITAL RESOURCES

Operating working capital deficit (total current asset deduct total current liabilities) increased by $384,328 from $(2,931,175) as of December 31, 2011 to $(3,315,503) as of September 30, 2012. The decrease was primarily due to a decrease of $100,643 in inventories from $1,053,038 as of December 31, 2011 to $952,395 as of September 30, 2012 , an increase of $43,924 in accrued expense from $693,436 as of December 31, 2011 to $737,360 as of September 30, 2012, and an increase of $95,156 in other payables from $366,020 as of December 31, 2011 to $461,176 as of September 30, 2012.

For investing activities, the Company incurred net cash outflow during the nine months ended September 30, 2012. The primary reason was due to $61,970 used in the construction in progress of the SD Chaoying project during the nine months ended September 30, 2012.

For financing activities, the Company obtained net proceeds of $69,502 and $168,060 from related parties and shareholders/officers of the Company, respectively for the nine months ended September 30, 2012, partially offset by the repayments of loan from the Company’s shareholders/officers of $252,734 for the nine months ended September 30, 2012.

The Company had a short-term loan in the principal amount of $1,511,584 (equivalent to RMB 9.5 million) with Changle Rural Credit Union. The loan had a maturity date of August 20, 2012. The adjustable interest rate was a rate per annum equal to the Prime Rate plus 50% of prime rate. The prime rate is based on six-month-to-one-year loan interest rate released by The People's Bank of China. On September 4, 2012, the Company renewed this short-term loan with the same amount of $1,511,584 (equivalent to RMB 9.5 million) with Changle Rural Credit Union. The term of the renewal loan started from September 4, 2012 with a maturity date of September 2, 2013. The interest rate for the short-term loan was 12% per annum as of September 30, 2012. This short-term loan had been secured by the Company’s land use right and construction-in-progress of SD Chaoying with a book value of $3.19 million (equivalent to RMB 20.03 million) and $4.33 million (equivalent to RMB 27.21 million) as of September 30, 2012, respectively. For the $3.19 million land use rights, $2.52 million was classified under construction-in-progress for the commercial property and the remaining $0.67 million was classified under intangible assets subject to amortization.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred significant losses and has not demonstrated the ability to generate sufficient cash flows from operations to satisfy its liabilities and sustain operations. The Company had an accumulated deficit of $2,854,278 and $2,447,643 as of September 30, 2012 and December 31, 2011, including net losses of $495,915 and $582,400 for the nine months ended September 30, 2012 and 2011, respectively. In addition, current liabilities exceeded current assets by $3,315, 503 and $2,931,175 as of September 30, 2012 and December 31, 2011, respectively. These matters raise substantial doubt about the Company’s ability to continue as a going concern.

12


The Company finances its operations primarily through short-term bank borrowings and advances from related parties and/or officers/shareholders. In order to complete the construction of SD Chaoying cultural and entertainment center, approximately $3.0 million (equivalent to RMB 19 million) of capital is expected to be needed. The Company, taking into accounts the available banking facilities, internal financial resource, and supports from related companies, believes it has sufficient working capital to meet its present obligation for at least the next twelve months. Management is taking actions to address the company's financial condition and deteriorating liquidity position. The following sets forth management’s plans for dealing with the adverse effects of the conditions:

(a) Sale of housing inventories: Proceeds to be received from the sale of the remaining housing of the two completed residential buildings are expected to amount to approximately $0.5 million.

(b) Rental and management fee revenue from the cultural and entertainment center: Annual rental revenue is estimated to be approximately $0.68 million per year. Management fee revenue will be charged to commercial tenants at 3% of annual gross revenue. As of September 30, 2012, the Company has not commenced collecting rental and management fee revenue for the culture and entertainment center.

(c) Additional advances from related companies and affiliates: Mr. Bai, our Chief Executive Officer, advanced $83,081 to the Company in the current period to finance operations and the costs to maintain the Company’s public status in the U.S. In addition, Shaanxi Chaoying Beauty & Cosmetics Group, which is also an affiliate, is anticipated to provide up to approximately $790,000 (equivalent to RMB 5 million) of capital to support operations. Shaanxi Chaoying Beauty & Cosmetics Group advanced $12,640 for the nine-month period ended September 30, 2012 to the Company to finance its operations.

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

INFLATION

Inflation has not had a material impact on our business.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

13


Item 3. Quantitative and Qualitative Disclosures about Market Risk

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

Item 4. Controls and Procedures

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

Changes in Internal Control Over Financial Reporting. During the most recent quarter ended September 30, 2012, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) ) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

14


PART II. OTHER INFORMATION

Item 1. Legal Proceedings

On June 6, 2000, we received a notice to inform us that we may have a potential liability from waste disposal in the Casmalia Disposal Site at Santa Barbara County, California. We were given a choice of either signing an agreement that would toll the statute of limitations for eighteen (18) months in order to allow us to resolve any liability with the government without incurring costs associated with being named a defendant in a lawsuit, or becoming an immediate defendant in a lawsuit. We signed the tolling agreement. On November 20, 2001, the tolling agreement was extended for an additional 18 months. On May 20, 2003 the tolling agreement was again extended for an additional 18 months and on November 24, 2004 the tolling agreement was again extended for additional 18 months. On June 29, 2004, we received a proposed settlement from the EPA in the amount of $21,131, which had been accrued as other payable. We are waiting for communication from the government concerning payment of the final settlement. As of September 30, 2012 and subsequent to December 31, 2011, the Company had not received further correspondences from the EPA regarding this matter.

On June 7, 2011, Weifang Shili Hesin Engineering Equipment Co., Ltd. (the “Plaintiff”) filed a complaint against SD Chaoying at the Basic People's Court of Changle County in Shandong Province, China, for alleged damages caused by SD Chaoying for not performing appropriately and completely the obligations in accordance with the agreement signed by both parties on April 28, 2011. Pursuant to the agreement, SD Chaoying agreed to transfer: (1) the rights of development, construction, and land of the #1 and #2 residential buildings for RMB 7.6 million, or $1,207,518, and (2) the 12 unsold residential units in the #3 and #4 residential buildings at a price as agreed upon. As of September 30, 2012, the Plaintiff paid $95,468 (equivalent to RMB 600,000) deposit as agreed upon, and prepaid $186,182 (equivalent to RMB 1,170,114), both of which were recorded as Other Payables under current liabilities. Plaintiff was seeking for the discharge of the original agreement signed, the return of prepayment of $186,182 (equivalent to RMB 1,170,114), repayment of the deposit plus 100% penalty, totaling $190,936 (equivalent to RMB 1,200,000), and for attorneys’ fees and costs. The Company disputed Plaintiff’s claim for a land use right certificate of underlying construction base of the #1 and #2 residential buildings, which certificate was inseparable from other part of the land and was not specifically stated in the agreement. The Company also disputed Plaintiff’s entitlement to the amounts claimed and instructed the Company’s legal counsel to contest the action, while concurrently pursuing opportunities for reasonable settlement. The case went to trial on July 7, 2011. On November 15, 2011, the Basic People's Court of Changle County pronounced its judgment against Plaintiff and that SD Chaoying had no liability. The verdict was released by the court on March 23, 2012. An appeal was filed on April 6, 2012 by the Plaintiff. The hearing for the appeal was held on May 16, 2012 at the Intermediate Court in Weifang City, Shandong Province, China. On July 16, 2012, the Intermediate Court in Weifang City issued a decision and held that SD Chaoying should not be found liable. The decision is a final adjudication by the courts in China. Hence, the estimated contingent liabilities of approximately $36,942 (or RMB 240,000) recorded in other payable as of December 31, 2011 have been reversed in current quarter this year.

Other than stated above, there are no material pending legal proceedings to which the Registrant is a party or as to which any of its property is subject, and no such proceedings are known to the Registrant to be threatened or contemplated against it.

Item 1A. Risk Factors

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

15


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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures

Not Applicable

Item 5. Other Information

None

16


Item 6. Exhibits

XBRL Exhibit

101.

INS† XBRL Instance Document.

101.

SCH† XBRL Taxonomy Extension Schema Document.

101.

CAL† XBRL Taxonomy Extension Calculation Linkbase Document.

101.

DEF† XBRL Taxonomy Extension Definition Linkbase Document.

101.

LAB† XBRL Taxonomy Extension Label Linkbase Document.

101.

PRE† XBRL Taxonomy Extension Presentation Linkbase Document.

SIGNATURE

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

  CYBRDI, INC.
   
DATE: November 14, 2012 By /s/ Yanbiao Bai
  Yanbiao Bai, Chief Executive Officer and president
   
  By /s/ Yonghong Ren
  Yonghong Ren, Principal Financial Officer

17


EX-31.1 2 exhibit31-1.htm EXHIBIT 31.1 Cybrdi, Inc.: Exhibit 31.1 - Filed by newsfilecorp.com

Exhibit 31.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Yanbiao Bai, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Cybrdi, Inc.

     
2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances made, not misleading with respect to the period covered by this quarterly report;

     
3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

     
4.

The Company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and the internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d- 15(f) for the Company and have:

     
a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     
b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals;

     
c.

Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions after the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     
d.

Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and

     
5.

The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

     
a.

All significant deficiencies in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

     
b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: November 14, 2012

By: /s/ YanBiao Bai                               
Yanbiao Bai,
Chief Executive Officer and President


EX-31.2 3 exhibit31-2.htm EXHIBIT 31.2 Cybrdi, Inc.: Exhibit 31.2 - Filed by newsfilecorp.com

Exhibit 31.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Yonghong Ren, certifies that:

1.

I have reviewed this quarterly report on Form 10-Q of Cybrdi, Inc.

     
2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances made, not misleading with respect to the period covered by this quarterly report;

     
3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

     
4.

The Company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and the internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f) for the Company and have:

     
a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     
b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals;

     
c.

Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions after the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     
d.

Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and

     
5.

The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):

     
a.

All significant deficiencies in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and

     
b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: November 14, 2012

By: /s/ Yonghong Ren                       
Yonghong Ren,
Principal Financial Officer


EX-32.1 4 exhibit32-1.htm EXHIBIT 32.1 Cybrdi, Inc.: Exhibit 32.1 - Filed by newsfilecorp.com

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER UNDER SECTION 906
OF THE SARBANES OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of Cybrdi Inc. for the period ended September 30, 2012 as filed with the Securities and Exchange Commission as of the date hereof (the "Report"), I, Yanbiao Bai, the chief executive officer of us, hereby certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

  (1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     
  (2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of us.

Date: November 14, 2012

/s/ Yanbiao Bai                          
Yanbiao Bai,
CEO and President


EX-32.2 5 exhibit32-2.htm EXHIBIT 32.2 Cybrdi, Inc.: Exhibit 32.2 - Filed by newsfilecorp.com

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER UNDER SECTION 906
OF THE SARBANES OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of Cybrdi Inc. for the period ended September 30, 2012 as filed with the Securities and Exchange Commission as of the date hereof (the "Report"), I, Yonghong Ren, the principal financial officer of us, hereby certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

  1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     
  2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of us

Date: November 14, 2012

/s/ Yonghong Ren                           
Name: Yonghong Ren
Principal Financial Officer


EX-101.INS 6 cydi-20120930.xml XBRL INSTANCE DOCUMENT --12-31 cydi Cybrdi, Inc. 2012-09-30 0000019002 No Smaller Reporting Company No 10-Q false 120225323 Yes 2012 Q3 0000019002 2012-11-14 0000019002 2012-01-01 2012-09-30 0000019002 2012-09-30 0000019002 2011-12-31 0000019002 2012-07-01 2012-09-30 0000019002 2011-07-01 2011-09-30 0000019002 2011-01-01 2011-09-30 0000019002 2010-12-31 0000019002 2011-09-30 shares iso4217:USD iso4217:USD shares pure iso4217:CNY 488243 781048 12390 0 952395 1053038 85922 79442 71492 75089 3440 832 1613882 1989449 1222610 1310529 6854861 6829329 693446 782215 10384799 10911522 1670698 1668282 3316 4942 737360 693436 116957 139284 90117 188186 1839454 1850181 10307 10293 461176 366020 4929385 4920624 849267 894750 5778652 5815374 0 0 4313614 4313614 172308 172308 336885 336885 -2854278 -2447643 1546243 1540329 3514772 3915493 1091375 1180655 4606147 5096148 10384799 10911522 1.00 1.00 500000 500000 150000000 150000000 120225323 120225323 120225323 120225323 0 -6519 141953 -6519 0 0 0 0 129032 153228 341596 390458 129032 146709 483549 383939 0 58625 123091 58625 16140 16195 49235 47947 77895 104848 222329 294172 94035 179668 394655 400744 34997 -32959 88894 -16805 51279 45581 153839 127157 37264 37516 112272 110509 28529 14268 66264 71376 3374 110 30588 235 -37910 36942 -37910 36942 1370 6211 4123 16422 43931 53550 98785 105187 0 23526 0 92356 127837 217704 427961 560184 -92840 -250663 -339067 -576989 -39284 1328 -131406 3978 -2567 -6370 -25128 -9389 -41851 -5042 -156534 -5411 -134691 -255705 -495601 -582400 152 0 314 0 -134843 -255705 -495915 -582400 -20955 -61720 -89280 -114889 -113888 -193985 -406635 -467511 0.00 0.00 0.00 -0.01 120225323 91780528 120225323 74431221 186564 204650 12299 5064 -101427 -56637 -242 11917 142364 418117 10360 86087 -97628 29344 -202795 324752 0 135828 3159 0 8151 87955 61970 520285 -73280 -472412 69502 116984 168060 163593 252734 0 -15172 280577 -291247 132917 -1558 22975 585020 740912 106207 146921 853 0 <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> <b>NOTE A - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b> </font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> <b>1. Interim Financial Statements</b> </font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;">The unaudited consolidated financial statements of Cybrdi Inc. and subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and pursuant to the requirements for reporting on Form 10-Q. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. However, the information included in these interim financial statements reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for the fair presentation of the consolidated financial position and the consolidated results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full year. The consolidated balance sheet information as of December 31, 2011 was derived from the audited consolidated financial statements included in the Company&#8217;s Annual Report on Form 10-K. These interim financial statements should be read in conjunction with that report. Certain comparative amounts have been reclassified to conform to the current period's presentation.</font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;">The consolidated financial statements include the accounts of Cybrdi, Inc. and its wholly-owned subsidiaries and joint ventures. All material intercompany balances and transactions have been eliminated.</font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> <b>2. Description of Business</b> </font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;">Cybrdi, Inc. (f/k/a Certron Corporation) (the &#8220;Company&#8221; or &#8220;Cybrdi&#8221;) was incorporated on August 1, 1966, under the laws of the State of California. Until around June 2004, the Company&#8217;s business consisted of the distribution of magnetic media products, primarily blank audio and video cassettes. Due to continuing intense price competition and technological changes in the marketplace for its products, the Company lost its remaining significant customers and disposed of or wrote off its remaining inventory. As a result of these occurrences, the Company concluded that its audio and videotape businesses were no longer viable and some of its product lines were obsolete.</font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;">On February 10, 2005, the Company, through a wholly-owned subsidiary, acquired all the ownership interest in Cybrdi, Inc., a privately held company incorporated in the State of Maryland ("Cybrdi Maryland"). As a result of the ownership interests of the former shareholders of Cybrdi Maryland, for financial statement reporting purposes, the transaction was treated as a reverse acquisition, with Cybrdi Maryland deemed the accounting acquirer and Certron Corporation deemed the accounting acquiree. Historical information of the surviving company is that of Cybrdi Maryland.</font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> Cybrdi Maryland was established in 2001 to acquire an interest in biogenetic products commercialization and related services entities in Asia. On March 5, 2003, Cybrdi Maryland acquired an 80% interest in Shaanxi Chao Ying Biotechnology Co., Ltd. (&#8220;Chaoying Biotech&#8221;), a sino-foreign equity joint venture established in July 2000 in the People's Republic of China (&#8220;PRC&#8221;), through the exchange of 99% of the Company&#8217;s shares to the existing shareholders of Chaoying Biotech. For financial statement reporting purposes, the merger was treated as a reverse acquisition, with Chaoying Biotech deemed the accounting acquirer and Cybrdi Maryland deemed the accounting acquiree. </font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> Chaoying Biotech is a sino-foreign equity joint venture between Shaanxi Chaoying Beauty &amp; Cosmetics Group Co., Ltd. (the "Chinese Partner&#8221;, a PRC corporation) and Immuno-Onco Genomics Inc. (the &#8220;Foreign Partner&#8221;, a USA corporation). The joint venture agreement has a 15 year operating period starting from its formation in July 2000 and it may be extended upon mutual consent. The principal activities of Chaoying Biotech are research, manufacture and sale of various high-quality tissue arrays and the related services in the PRC. </font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;">Most of the Company&#8217;s activities are conducted through Chaoying Biotech. Chaoying Biotech, with its principal operations located in China, aims to take advantage of China's abundant scientific talent, low wage rates, less stringent biogenetic regulation, and the huge genetic population as it introduces its growing list of tissue micro array products.</font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;">On February 10, 2005, the Company completed the merger with Cybrdi Maryland and changed its name to Cybrdi, Inc.</font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;">On July 26 , 2007, Chaoying Biotech entered into an acquisition agreement with its Chinese partner, which is a principal shareholder of the company, Mr. Bai, the Company&#8217;s chief executive officer and a director is also a principal of its Chinese partner.</font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> On July 28,2007, Chaoying Biotech invested RMB15 millions (equivalent to US$1,983,078) to acquire an 83.33% equity ownership of Shandong Chaoying Culture and Entertainment Co., Ltd. (&#8220;SD Chaoying&#8221;) from its Chinese partner. SD Chaoying is a corporation organized in Shandong Province P.R.China. On September 5, 2007, Shandong government had approved this acquisition and the ownership title of SD Chaoying had been transferred to Chaoying Biotech from its Chinese partner. The future business of SD Chaoying will primarily focus on culture and entertainment, including spa activities, cosmetic and personal care, body building, gambling, catering, and lodging, etc. SD Chaoying will have a specific emphasis on casino gambling, which has been approved by Shandong Administration for Civil Affairs. As of December 31, 2009, SD Chaoying had substantially completed the construction of two residential buildings and had recognized revenue from sales of housing for 2009. The main structure of the commercial entertainment center has also been completed, except for the exterior, rooftop, the surrounding supporting projects and the community landscaping, which are expected to be completed in 2013 prior to the commencement of operations by merchant tenants if we can obtain an estimated $2.8 million to complete construction. </font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;">On March 10, 2007 the Company entered into a Sales Agency Agreement with BioMax, Ltd., a reseller located in the United States.</font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> On April 29, 2011, Chaoying Biotech invested $154,732 (equivalent to RMB1 million) to restore the operation of the Institute of Shaanxi Chaoying Clinical Pathology (&#8220;IOSCCP&#8221;), a wholly-owned subsidiary established on July 31, 2003, whose main business includes pathology research and consulting, consulting and diagnostic clinical pathology and pathology-related research and development of new technologies, and basic training in pathology. Its sole shareholder has been Chaoying Biotech. However, Chaoying Biotech withdrew the original investment from IOSCCP in September 2007 as we believed that both internal and external conditions of IOSCCP were not mature at that time. In light of foreseeable benefits and new business opportunities for this entity, we resumed its business and re-invested $154,732 (equivalent to RMB1 million) in it in April 2011. </font> </font> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>3. Going Concern</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred significant losses and has not demonstrated the ability to generate sufficient cash flows from operations to satisfy its liabilities and sustain operations. The Company had an accumulated deficit of $2,854,278 and $2,447,643 as of September 30, 2012 and December 31, 2011, including net losses of $495,915 and $582,400 for the nine months ended September 30, 2012 and 2011, respectively. In addition, current liabilities exceeded current assets by $3,315, 503 and $2,931,175 as of September 30, 2012 and December 31, 2011, respectively. These matters raise substantial doubt about the Company&#8217;s ability to continue as a going concern. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> The Company finances its operations primarily through short-term bank borrowings and advances from related parties and/or officers/shareholders. In order to complete the construction of SD Chaoying cultural and entertainment center, approximately $3.0 million (equivalent to RMB19 million) of capital is expected to be needed. The Company, taking into account the available banking facilities, internal financial resource, and supports from related companies, believes it has sufficient working capital to meet its present obligation for at least the next twelve months. Management is taking actions to address the company's financial condition and deteriorating liquidity position. The following sets forth management&#8217;s plans for dealing with the adverse effects of the conditions: </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> (a) Sale of housing inventories: Proceeds to be received from the sale of the remaining housing of the two completed residential buildings are expected to amount to approximately $0.5 million. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> (b) Rental and management fee revenue from the cultural and entertainment center: Annual rental revenue is estimated to be approximately $0.68 million per year. Management fee revenue will be charged to commercial tenants at 3% of annual gross revenue. As of September 30, 2012, the Company has not commenced collecting rental and management fee revenue for the culture and entertainment center. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> (c) Additional advances from related companies and affiliates: Mr. Bai, our Chief Executive Officer, advanced $83,081 to the Company in the current period to finance operations and the costs to maintain the Company&#8217;s public status in the U.S. In addition, Shaanxi Chaoying Beauty &amp; Cosmetics Group, which is also an affiliate, is anticipated to provide up to approximately $790,000 (equivalent to RMB5 million) of capital to support operations. Shaanxi Chaoying Beauty &amp; Cosmetics Group advanced $12,640 for the nine-month period ended September 30, 2012 to the Company to finance its operations. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company may require additional funds and may seek to raise such funds though public and private financings or from other sources. There is no assurance that management&#8217;s plans will be realized or the additional financing will be available at all or that, if available, such financing will be obtainable on terms favorable to the Company or that any additional financing will not be dilutive. The consolidated financial statements do not include any adjustments that might result from the outcome of those uncertainties.</p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>4. Use of Estimates:</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.</p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>5. Revenue Recognition</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Revenue represents the invoiced value of goods sold recognized upon the delivery of goods to customers and service income is recognized when services are provided. Deferred revenue represents the undelivered portion of invoiced value of goods sold to customers. Sales transactions not meeting all the conditions of the full accrual method are accounted for using the deposit method of accounting. Under the deposit method, all costs are capitalized as incurred, and payments received from the buyer are recorded as customer deposits.</p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>6. Reverse Merger</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> On February 10, 2005, (the "Closing Date") the Company closed on an Agreement and Plan of Merger (the "Agreement") among Certron Corporation (&#8220;Certron&#8221;), a California corporation, Certron Acquisition Corp., a Maryland corporation and a wholly-owned subsidiary of Certron ("Acquisition Sub"), and Cybrdi, Inc., a Maryland corporation (&#8220;Cybrdi &#8211; Maryland&#8221;) relating to the acquisition by Certron of all of the issued and outstanding capital stock of Cybrdi -Maryland in exchange for shares of common stock of Certron that will aggregate approximately 93.8% of the issued and outstanding common stock of Certron. Pursuant to the terms of the Agreement, at the Closing Date (a) Acquisition Sub has been merged with and into Cybrdi - Maryland, with Cybrdi - Maryland being the surviving corporation, (b) the common stock of Cybrdi-Maryland has been cancelled and converted into the right to receive shares of the common stock of Certron at an exchange ratio of 1.566641609 per share. This resulted in the issuance of 47,328,263 shares of the Certron&#8217;s common stock, and (c) each share of the common stock of Acquisition Sub has been converted in to and become one share of the common stock of Cybrdi-Maryland. The share exchange has been accounted for as a reverse merger under the purchase method of accounting. Accordingly, Cybrdi, Inc. will be treated as the continuing entity for accounting purposes and the historical financial statements presented will be those of Cybrdi, Inc. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> In connection with the Agreement, on February 10, 2005, the Company amended its articles of incorporation to authorize the issuance of 150 million shares of common stock no par value and 500,000 shares of preferred stock, $1.00 par value per share, none of which are issued or outstanding. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Concurrent with the filing of the Articles of Merger, all of the Company then existing officers and directors tendered their resignation and Yanbiao Bai was appointed as its Chairman of the Board of Directors. Mr. Bai then nominated the balance of the Board of Directors.</p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>7. Income Taxes</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to the differences between the basis of assets and liabilities for financial and income tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes also are recognized for operating losses that are available to offset future income taxes.</p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>8. Contingencies</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Currently we are involved in disputes, litigation and other legal proceedings. We prosecute and defend these matters aggressively. However, there are many uncertainties associated with any litigation, and we cannot assure you that these actions or other third party claims against us will be resolved without costly litigation and/or substantial settlement charges. We record a charge equal to at least the minimum estimated liability for a loss contingency when both of the following conditions are met: (i) information available prior to issuance of the financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements and (ii) the range of loss can be reasonably estimated. However, the actual liability in any such disputes or litigation may be materially different from our estimates, which could result in the need to record additional costs.</p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>9. Recent Accounting Pronouncements</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.</p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> <b>1. Interim Financial Statements</b> </font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;">The unaudited consolidated financial statements of Cybrdi Inc. and subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and pursuant to the requirements for reporting on Form 10-Q. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. However, the information included in these interim financial statements reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for the fair presentation of the consolidated financial position and the consolidated results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full year. The consolidated balance sheet information as of December 31, 2011 was derived from the audited consolidated financial statements included in the Company&#8217;s Annual Report on Form 10-K. These interim financial statements should be read in conjunction with that report. Certain comparative amounts have been reclassified to conform to the current period's presentation.</font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;">The consolidated financial statements include the accounts of Cybrdi, Inc. and its wholly-owned subsidiaries and joint ventures. All material intercompany balances and transactions have been eliminated.</font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> <b>2. Description of Business</b> </font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;">Cybrdi, Inc. (f/k/a Certron Corporation) (the &#8220;Company&#8221; or &#8220;Cybrdi&#8221;) was incorporated on August 1, 1966, under the laws of the State of California. Until around June 2004, the Company&#8217;s business consisted of the distribution of magnetic media products, primarily blank audio and video cassettes. Due to continuing intense price competition and technological changes in the marketplace for its products, the Company lost its remaining significant customers and disposed of or wrote off its remaining inventory. As a result of these occurrences, the Company concluded that its audio and videotape businesses were no longer viable and some of its product lines were obsolete.</font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;">On February 10, 2005, the Company, through a wholly-owned subsidiary, acquired all the ownership interest in Cybrdi, Inc., a privately held company incorporated in the State of Maryland ("Cybrdi Maryland"). As a result of the ownership interests of the former shareholders of Cybrdi Maryland, for financial statement reporting purposes, the transaction was treated as a reverse acquisition, with Cybrdi Maryland deemed the accounting acquirer and Certron Corporation deemed the accounting acquiree. Historical information of the surviving company is that of Cybrdi Maryland.</font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> Cybrdi Maryland was established in 2001 to acquire an interest in biogenetic products commercialization and related services entities in Asia. On March 5, 2003, Cybrdi Maryland acquired an 80% interest in Shaanxi Chao Ying Biotechnology Co., Ltd. (&#8220;Chaoying Biotech&#8221;), a sino-foreign equity joint venture established in July 2000 in the People's Republic of China (&#8220;PRC&#8221;), through the exchange of 99% of the Company&#8217;s shares to the existing shareholders of Chaoying Biotech. For financial statement reporting purposes, the merger was treated as a reverse acquisition, with Chaoying Biotech deemed the accounting acquirer and Cybrdi Maryland deemed the accounting acquiree. </font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> Chaoying Biotech is a sino-foreign equity joint venture between Shaanxi Chaoying Beauty &amp; Cosmetics Group Co., Ltd. (the "Chinese Partner&#8221;, a PRC corporation) and Immuno-Onco Genomics Inc. (the &#8220;Foreign Partner&#8221;, a USA corporation). The joint venture agreement has a 15 year operating period starting from its formation in July 2000 and it may be extended upon mutual consent. The principal activities of Chaoying Biotech are research, manufacture and sale of various high-quality tissue arrays and the related services in the PRC. </font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;">Most of the Company&#8217;s activities are conducted through Chaoying Biotech. Chaoying Biotech, with its principal operations located in China, aims to take advantage of China's abundant scientific talent, low wage rates, less stringent biogenetic regulation, and the huge genetic population as it introduces its growing list of tissue micro array products.</font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;">On February 10, 2005, the Company completed the merger with Cybrdi Maryland and changed its name to Cybrdi, Inc.</font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;">On July 26 , 2007, Chaoying Biotech entered into an acquisition agreement with its Chinese partner, which is a principal shareholder of the company, Mr. Bai, the Company&#8217;s chief executive officer and a director is also a principal of its Chinese partner.</font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> On July 28,2007, Chaoying Biotech invested RMB15 millions (equivalent to US$1,983,078) to acquire an 83.33% equity ownership of Shandong Chaoying Culture and Entertainment Co., Ltd. (&#8220;SD Chaoying&#8221;) from its Chinese partner. SD Chaoying is a corporation organized in Shandong Province P.R.China. On September 5, 2007, Shandong government had approved this acquisition and the ownership title of SD Chaoying had been transferred to Chaoying Biotech from its Chinese partner. The future business of SD Chaoying will primarily focus on culture and entertainment, including spa activities, cosmetic and personal care, body building, gambling, catering, and lodging, etc. SD Chaoying will have a specific emphasis on casino gambling, which has been approved by Shandong Administration for Civil Affairs. As of December 31, 2009, SD Chaoying had substantially completed the construction of two residential buildings and had recognized revenue from sales of housing for 2009. The main structure of the commercial entertainment center has also been completed, except for the exterior, rooftop, the surrounding supporting projects and the community landscaping, which are expected to be completed in 2013 prior to the commencement of operations by merchant tenants if we can obtain an estimated $2.8 million to complete construction. </font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;">On March 10, 2007 the Company entered into a Sales Agency Agreement with BioMax, Ltd., a reseller located in the United States.</font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> On April 29, 2011, Chaoying Biotech invested $154,732 (equivalent to RMB1 million) to restore the operation of the Institute of Shaanxi Chaoying Clinical Pathology (&#8220;IOSCCP&#8221;), a wholly-owned subsidiary established on July 31, 2003, whose main business includes pathology research and consulting, consulting and diagnostic clinical pathology and pathology-related research and development of new technologies, and basic training in pathology. Its sole shareholder has been Chaoying Biotech. However, Chaoying Biotech withdrew the original investment from IOSCCP in September 2007 as we believed that both internal and external conditions of IOSCCP were not mature at that time. In light of foreseeable benefits and new business opportunities for this entity, we resumed its business and re-invested $154,732 (equivalent to RMB1 million) in it in April 2011. </font> </font> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>3. Going Concern</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred significant losses and has not demonstrated the ability to generate sufficient cash flows from operations to satisfy its liabilities and sustain operations. The Company had an accumulated deficit of $2,854,278 and $2,447,643 as of September 30, 2012 and December 31, 2011, including net losses of $495,915 and $582,400 for the nine months ended September 30, 2012 and 2011, respectively. In addition, current liabilities exceeded current assets by $3,315, 503 and $2,931,175 as of September 30, 2012 and December 31, 2011, respectively. These matters raise substantial doubt about the Company&#8217;s ability to continue as a going concern. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> The Company finances its operations primarily through short-term bank borrowings and advances from related parties and/or officers/shareholders. In order to complete the construction of SD Chaoying cultural and entertainment center, approximately $3.0 million (equivalent to RMB19 million) of capital is expected to be needed. The Company, taking into account the available banking facilities, internal financial resource, and supports from related companies, believes it has sufficient working capital to meet its present obligation for at least the next twelve months. Management is taking actions to address the company's financial condition and deteriorating liquidity position. The following sets forth management&#8217;s plans for dealing with the adverse effects of the conditions: </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> (a) Sale of housing inventories: Proceeds to be received from the sale of the remaining housing of the two completed residential buildings are expected to amount to approximately $0.5 million. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> (b) Rental and management fee revenue from the cultural and entertainment center: Annual rental revenue is estimated to be approximately $0.68 million per year. Management fee revenue will be charged to commercial tenants at 3% of annual gross revenue. As of September 30, 2012, the Company has not commenced collecting rental and management fee revenue for the culture and entertainment center. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> (c) Additional advances from related companies and affiliates: Mr. Bai, our Chief Executive Officer, advanced $83,081 to the Company in the current period to finance operations and the costs to maintain the Company&#8217;s public status in the U.S. In addition, Shaanxi Chaoying Beauty &amp; Cosmetics Group, which is also an affiliate, is anticipated to provide up to approximately $790,000 (equivalent to RMB5 million) of capital to support operations. Shaanxi Chaoying Beauty &amp; Cosmetics Group advanced $12,640 for the nine-month period ended September 30, 2012 to the Company to finance its operations. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company may require additional funds and may seek to raise such funds though public and private financings or from other sources. There is no assurance that management&#8217;s plans will be realized or the additional financing will be available at all or that, if available, such financing will be obtainable on terms favorable to the Company or that any additional financing will not be dilutive. The consolidated financial statements do not include any adjustments that might result from the outcome of those uncertainties.</p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>4. Use of Estimates:</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.</p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>5. Revenue Recognition</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Revenue represents the invoiced value of goods sold recognized upon the delivery of goods to customers and service income is recognized when services are provided. Deferred revenue represents the undelivered portion of invoiced value of goods sold to customers. Sales transactions not meeting all the conditions of the full accrual method are accounted for using the deposit method of accounting. Under the deposit method, all costs are capitalized as incurred, and payments received from the buyer are recorded as customer deposits.</p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>6. Reverse Merger</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> On February 10, 2005, (the "Closing Date") the Company closed on an Agreement and Plan of Merger (the "Agreement") among Certron Corporation (&#8220;Certron&#8221;), a California corporation, Certron Acquisition Corp., a Maryland corporation and a wholly-owned subsidiary of Certron ("Acquisition Sub"), and Cybrdi, Inc., a Maryland corporation (&#8220;Cybrdi &#8211; Maryland&#8221;) relating to the acquisition by Certron of all of the issued and outstanding capital stock of Cybrdi -Maryland in exchange for shares of common stock of Certron that will aggregate approximately 93.8% of the issued and outstanding common stock of Certron. Pursuant to the terms of the Agreement, at the Closing Date (a) Acquisition Sub has been merged with and into Cybrdi - Maryland, with Cybrdi - Maryland being the surviving corporation, (b) the common stock of Cybrdi-Maryland has been cancelled and converted into the right to receive shares of the common stock of Certron at an exchange ratio of 1.566641609 per share. This resulted in the issuance of 47,328,263 shares of the Certron&#8217;s common stock, and (c) each share of the common stock of Acquisition Sub has been converted in to and become one share of the common stock of Cybrdi-Maryland. The share exchange has been accounted for as a reverse merger under the purchase method of accounting. Accordingly, Cybrdi, Inc. will be treated as the continuing entity for accounting purposes and the historical financial statements presented will be those of Cybrdi, Inc. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> In connection with the Agreement, on February 10, 2005, the Company amended its articles of incorporation to authorize the issuance of 150 million shares of common stock no par value and 500,000 shares of preferred stock, $1.00 par value per share, none of which are issued or outstanding. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Concurrent with the filing of the Articles of Merger, all of the Company then existing officers and directors tendered their resignation and Yanbiao Bai was appointed as its Chairman of the Board of Directors. Mr. Bai then nominated the balance of the Board of Directors.</p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>7. Income Taxes</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to the differences between the basis of assets and liabilities for financial and income tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes also are recognized for operating losses that are available to offset future income taxes.</p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>8. Contingencies</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Currently we are involved in disputes, litigation and other legal proceedings. We prosecute and defend these matters aggressively. However, there are many uncertainties associated with any litigation, and we cannot assure you that these actions or other third party claims against us will be resolved without costly litigation and/or substantial settlement charges. We record a charge equal to at least the minimum estimated liability for a loss contingency when both of the following conditions are met: (i) information available prior to issuance of the financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements and (ii) the range of loss can be reasonably estimated. However, the actual liability in any such disputes or litigation may be materially different from our estimates, which could result in the need to record additional costs.</p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>9. Recent Accounting Pronouncements</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.</p> 0.8 0.99 15 15 1983078 0.8332 2800000 154732 1000000 154732 1000000 2854278 2447643 495915 582400 3315 2931175 3000000 19000000 500000 680000 0.03 83081 790000 5000000 12640 0.938 1.566641609 47328263 150000000 500000 1 <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>NOTE B &#8211; ASSETS</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> The September 30, 2012 consolidated balance sheet included total current assets of $1,613,882 and non-current assets of $8,770,917. Of these amounts, $488,243 in cash and equivalents is planned for funding current operations and for future business expansion. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">Other current assets also included accounts receivable, inventories, due from related companies, other receivables and prepaid expenses, and advance to suppliers. Inventories are mainly finished goods. Other components of inventories include raw materials, finished goods, and housing inventories. Inventories are stated at the lower of cost or market. Cost of raw materials is determined on the basis of first in first out method (&#8220;FIFO&#8221;). Finished goods are determined on the weighted average basis and are comprised of direct materials, direct labor, and an appropriate proportion of overhead.</p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> The other primary assets included in current assets are loans to an unaffiliated company, QuanYe Security Co., Ltd (&#8220;QuanYe&#8221;), an unrelated People&#8217;s Republic of China (&#8220;PRC&#8221;) registered company located in Xian PRC. QuanYe is engaged in the pawnshop business and their primary business is offering alternative financing to small, local companies. According to the loan agreement, QuanYe had received loans from Chaoying Biotech for a total amount of RMB 29.3 Million (equivalent to $4,652,640) since January 2006. A remaining balance of RMB7.3 million (equivalent to $1,159,190) was extended to and expired on March 24, 2008. As of September 30, 2012 and December 31, 2011, the principal balance and interest receivable for this loan had been reduced to $0, net of allowance of $95,468 and $182,214 for doubtful principal balance and interest receivable, respectively. The interest rate for these loans initially was initially 8% per year, and subsequently reduced to 5% since October 9, 2006. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> Included in non-current assets are property, plant and equipment, construction-in-progress and intangible assets. Property, plant and equipment mainly consist of building, office equipments, motor vehicles, leasehold improvement, software-website, and machinery used for product manufacturing located in the People&#8217;s Republic of China (&#8220;PRC&#8221;). Depreciation on property, plant and equipment is computed using the straight-line method over the estimated useful life of the assets. The majority of the assets have estimated useful lives of 10 years. Building and office equipment have estimated useful lives of 20 and 5 years, respectively. The &#8220;construction in progress&#8221; in the amount of $6,854,861 mainly consisted of land under development and construction of the entertainment, culture, and casino facility in Shandong Province, which will be transferred to fixed assets in SD Chaoying when construction is completed. As of September 30, 2012, construction-in-progress of $4.33 million and land use rights of $3.19 million of SD Chaoying were collateralized under a short-term loan from Changle Rural Credit Union. For the $3.19 million land use rights, $2.52 million was classified under construction-in-progress for the commercial property and the remaining $0.67 million was classified under intangible assets subject to amortization. Intangible assets included a tissue chip patent at Chaoying Biotech and $0.67 million of land use rights being put in operation for the partial completed commercial property at SD Chaoying. Effective January 1, 2002, with the adoption of the accounting guidance for Goodwill and Other Intangible Assets, intangible assets with a definite life are amortized on a straight-line basis. The patent is being amortized over its estimated life of 10 years. The land use rights classified in intangible asset is being amortized over its estimated life of 36.9 years through the maturity of the land use rights for commercial use on November 6, 2047. </p> 1613882 8770917 488243 29300000 4652640 7300000 1159190 0 95468 182214 0.08 0.05 10 20 5 6854861 4330000 3190000 3190000 2520000 670000 670000 10 36.9 <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> <b>NOTE C - LIABILITIES</b> </font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> As of September 30, 2012, the balance sheet included total liabilities of $5,778,652, which consisted of current liabilities of $4,929,385 and construction payable of $849,267. Included in the current liabilities was a short-term loan of $1,511,584 (equivalent to RMB9.5 million) from Changle Rural Credit Union, which is a bank located in Shandong Province of the PRC. The original term of the loan was from August 25, 2009 to August 24, 2010 with an interest rate of 7.965% per annum. In August 2011, the Company renewed this short-term loan with the same amount of with Changle Rural Credit Union. The term of the renewal loan started from August 31, 2011 with a maturity date of August 20, 2012. The adjustable interest rate is a rate per annum equal to the Prime Rate plus 50% of prime rate. The prime rate is based on six-month-to-one-year loan interest rate released by The People's Bank of China. On September 4, 2012, the Company renewed this short-term loan with the same amount of $1,511,584 (equivalent to RMB9.5 million) with Changle Rural Credit Union. The term of the renewal loan started from September 4, 2012 with a maturity date of September 2, 2013. The interest rate for the short-term loan was 12% per annum as of September 30, 2012. This short-term loan had been secured by the Company&#8217;s land use right and construction-in-progress of SD Chaoying with a book value of $3.19 million (equivalent to RMB 20.03 million) and $4.33 million (equivalent to RMB27.21 million) as of September 30, 2012, respectively. For the $3.19 million land use rights, $2.52 million was classified under construction-in-progress for the commercial property and the remaining $0.67 million was classified under intangible assets subject to amortization. Additionally, there is another short-term loan of $159,114 (equivalent to RMB1.0 million) from Mr. Fengguo Liu, an unrelated party. The short-term loan is due January 12, 2013 with an interest rate at 2% per month. Also included in the current liabilities was $1,839,454 of loans from related companies, including Xi&#8217;an Yanfeng Biotechnology Co., Ltd., Shaanxi Yanfeng Real Estate Co. Ltd, Shaanxi Chaoying Beauty &amp; Cosmetics Group Co., Ltd., and the stockholders who are also the Company's officers. These entities were related to the Company through common ownership and principal officers. These loans are non-interest bearing and have no set repayment terms. </font> </font> </p> 5778652 4929385 849267 1511584 9500000 0.0796 0.5 1511584 9500000 0.12 3190000 4330000 27210000 3190000 2520000 670000 159114 1000000 0.02 1839454 <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> <b>NOTE D &#8211; STOCKHOLDERS&#8217; EQUITY</b> </font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> As a result of the reverse merger (see Note A item 6), the common stock of Cybrdi-Maryland has been cancelled and converted into shares of common stock of Certron at an exchange ratio of 1.566641609 per share. This resulted in the issuance of 47,328,263 shares of Certron&#8217;s common stock to the Cybrdi shareholders. As of September 30, 2012 and December 31, 2011, the Company had 120,225,323 and 120,225,323 shares issued and outstanding, respectively. </font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> As of September 30, 2012, the balance sheet included total equity of $4,606,147, of which $1,091,375 was for non-controlling interest, representing 20% minority interest in Chaoying Biotech and 16.67% minority interest in SD Chaoying. </font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> On January 15, 2010, the Board of Directors adopted resolutions that authorized incentive compensation to key management of the Company for services it has provided to the Company. As set forth in the Board of Directors&#8217; resolution dated January 15, 2010, the incentive compensation shall be paid by the issuance of 12,000,000 shares of common stock of the Company to Mr. Yanbiao Bai, Chief Executive Officer and President of the Company, and 3,300,000 shares of common stock of the Company to Ms. Xue Bu, the former Chief Financial and Operating Officer of the Company. Compensation cost of $306,000 was recorded during the first quarter of 2010 at $0.02 per share, the market price of the Company&#8217;s common stock on January 15, 2010, the grant date. </font> </font> </p> <p align="justify"> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> On June 30, 2011, the Company entered into a written Debt Conversion Agreement with Shaanxi Chaoying Beauty &amp; Cosmetics Group Co., Ltd. (a related party), Shaanxi NuoQi Healthfood Co., Ltd. (a related party), and Mr. Yanbiao Bai, Chairman and CEO of the Company. In the Agreement, the Company agreed to repay a total of $605,723 (RMB3,920,000) debt due to Shaanxi Chaoying Beauty &amp; Cosmetics Group Co., Ltd. by issuing the </font> </font> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;">Company&#8217;s</font> </font> <font style="font-family:times new roman,times,serif;"> <font style="font-size: 10pt;"> common stock. Simultaneously upon the execution of the repayment, Shaanxi Chaoying Beauty &amp; Cosmetics Group Co., Ltd. agreed to transfer to Mr. Yanbiao Bai the number of shares to be issued through the debt repayment. The number of shares transferred to Mr. Yanbiao Bai was further offset by a number of shares equivalent to $169,973 (RMB1,100,000) due by Shaanxi NuoQi Health Food Co., Ltd., a company wholly-controlled by Ms. Xue Bu, the spouse of Mr. Yanbiao Bai and former COO and Director of the Company, to offset its debt due to the Company. The Agreement was approved by the Company&#8217;s Board of Directors on June 30, 2011. As a result of the debt conversion and offset, the number of shares of common stock issued to Mr. Yanbiao Bai was 54,468,756 shares, which was determined based on the closing price of $0.008 per share on June 30, 2011. The share issuance for repayment of debt as agreed upon and approved was executed on August 17, 2011. </font> </font> </p> <p>&#160;</p> 1.566641609 47328263 120225323 120225323 4606147 1091375 0.2 0.1667 12000000 3300000 306000 0.02 605723 3920000 169973 1100000 54468756 0.008 <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>NOTE E &#8211; INCOME TAXES</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> Under the Enterprise Income Tax (&#8220;EIT&#8221;) of the PRC, prior to 2007, Chinese enterprises are generally subject to an income tax at an effective rate of 33% ( 30% statutory income taxes plus 3% local income taxes) on income reported in the statutory financial statements after appropriate tax adjustments, unless the enterprise is located in a specially designated region for which more favorable effective tax rates are applicable. Beginning on January 1, 2008, the new EIT law has replaced the existing laws for Domestic Enterprises (&#8220;DEs&#8221;) and Foreign Invested Enterprises (&#8220;FIEs&#8221;). The new standard EIT rate of 25% will replace the 33% rate previously applicable to both DES and FIEs. The two year tax exemption, six year 50% tax reduction and tax holiday for production-oriented FIEs will be eliminated. According to the Western Developing Plan implemented by the PRC Government, Chaoying Biotech is entitled to a 50% reduction in EIT of preferential policy, but not less than 15%. As a result, Chaoying Biotech&#8217;s effective EIT tax rate has been 15% since 2008. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> The Company&#8217;s income tax expense includes U.S. and PRC income taxes. There were no U.S. current taxes for the nine months ended September 30, 2012 according to net loss incurred in the U.S. entity, which will not be anticipated to have any tax benefit in the future since no revenue is expected to be generated in the U.S as a result of discontinuing the U.S. operating company in Maryland in October 2007. There was $152 and $314 of PRC current income taxes accrued for the three-month and nine- month period ended September 30, 2012 in SD Chaoying, respectively. </p> 0.33 0.3 0.03 0.25 0.33 0.5 0.5 0.15 0.15 152 314 <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>NOTE F &#8211; CONTINGENCIES AND LITIGATION LIABILITIES</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> On June 7, 2011, Weifang Shili Hesin Engineering Equipment Co., Ltd. (the &#8220;Plaintiff&#8221;) filed a complaint against SD Chaoying at the Basic People's Court of Changle County in Shandong Province, China, for alleged damages caused by SD Chaoying for not performing appropriately and completely the obligations in accordance with the agreement signed by both parties on April 28, 2011. Pursuant to the agreement, SD Chaoying agreed to transfer: (1) the rights of development, construction, and land of the #1 and #2 residential buildings for RMB7.6 million, or $1,207,518, and (2) the 12 unsold residential units in the #3 and #4 residential buildings at a price as agreed upon. As of September 30, 2012, the Plaintiff paid $95,468 (equivalent to RMB600,000) deposit as agreed upon, and prepaid $186,182 (equivalent to RMB1,170,114), both of which were recorded as Other Payables under current liabilities. Plaintiff was seeking for the discharge of the original agreement signed, the return of prepayment of $186,182 (equivalent to RMB1,170,114), repayment of the deposit plus 100% penalty, totaling $190,936 (equivalent to RMB1,200,000), and for attorneys&#8217; fees and costs. The Company disputed Plaintiff&#8217;s claim for a land use right certificate of underlying construction base of the #1 and #2 residential buildings, which certificate was inseparable from other part of the land and was not specifically stated in the agreement. The Company also disputed Plaintiff&#8217;s entitlement to the amounts claimed and instructed the Company&#8217;s legal counsel to contest the action, while concurrently pursuing opportunities for reasonable settlement. The case went to trial on July 7, 2011. On November 15, 2011, the Basic People's Court of Changle County pronounced its judgment against Plaintiff and that SD Chaoying had no liability. However, the plaintiff still has a right to appeal the judgment to the Intermediate Court in Weifang City, Shandong Province, China within 15 days after receiving verdict from the court. The verdict was released by the court on March 23, 2012. An appeal was filed on April 6, 2012 by the Plaintiff after the verdict was released. The court session for the appeal was held on May 16, 2012 at Intermediate Court in Weifang City, Shandong Province, China. On July 16, 2012, the Intermediate Court in Weifang City pronounced its judgment against Plaintiff and that SD Chaoying had no liability. The litigation is subject to a final adjudication. The decision is a final adjudication by the courts in China. Hence, the estimated contingent liabilities of approximately $36,942 (or RMB240,000) recorded in other payable as of December 31, 2011 have been reversed in current quarter this year. </p> 7600000 1207518 12 95468 600000 186182 1170114 186182 1170114 1 190936 1200000 36942 240000 EX-101.SCH 7 cydi-20120930.xsd XBRL TAXONOMY EXTENSION SCHEMA 101 - Document - Document and Entity Information link:calculationLink link:presentationLink link:definitionLink 102 - Statement - CONSOLIDATED BALANCE SHEETS link:calculationLink link:presentationLink link:definitionLink 103 - Statement - CONSOLIDATED BALANCE SHEETS (Parenthetical) link:calculationLink link:presentationLink link:definitionLink 104 - Statement - CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) link:calculationLink link:presentationLink link:definitionLink 105 - Statement - CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) link:calculationLink link:presentationLink link:definitionLink 106 - Disclosure - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES link:calculationLink link:presentationLink link:definitionLink 107 - 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STOCKHOLDERS EQUITY
9 Months Ended
Sep. 30, 2012
STOCKHOLDERS EQUITY [Text Block]

NOTE D – STOCKHOLDERS’ EQUITY

As a result of the reverse merger (see Note A item 6), the common stock of Cybrdi-Maryland has been cancelled and converted into shares of common stock of Certron at an exchange ratio of 1.566641609 per share. This resulted in the issuance of 47,328,263 shares of Certron’s common stock to the Cybrdi shareholders. As of September 30, 2012 and December 31, 2011, the Company had 120,225,323 and 120,225,323 shares issued and outstanding, respectively.

As of September 30, 2012, the balance sheet included total equity of $4,606,147, of which $1,091,375 was for non-controlling interest, representing 20% minority interest in Chaoying Biotech and 16.67% minority interest in SD Chaoying.

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

On June 30, 2011, the Company entered into a written Debt Conversion Agreement with Shaanxi Chaoying Beauty & Cosmetics Group Co., Ltd. (a related party), Shaanxi NuoQi Healthfood Co., Ltd. (a related party), and Mr. Yanbiao Bai, Chairman and CEO of the Company. In the Agreement, the Company agreed to repay a total of $605,723 (RMB3,920,000) debt due to Shaanxi Chaoying Beauty & Cosmetics Group Co., Ltd. by issuing the Company’s common stock. Simultaneously upon the execution of the repayment, Shaanxi Chaoying Beauty & Cosmetics Group Co., Ltd. agreed to transfer to Mr. Yanbiao Bai the number of shares to be issued through the debt repayment. The number of shares transferred to Mr. Yanbiao Bai was further offset by a number of shares equivalent to $169,973 (RMB1,100,000) due by Shaanxi NuoQi Health Food Co., Ltd., a company wholly-controlled by Ms. Xue Bu, the spouse of Mr. Yanbiao Bai and former COO and Director of the Company, to offset its debt due to the Company. The Agreement was approved by the Company’s Board of Directors on June 30, 2011. As a result of the debt conversion and offset, the number of shares of common stock issued to Mr. Yanbiao Bai was 54,468,756 shares, which was determined based on the closing price of $0.008 per share on June 30, 2011. The share issuance for repayment of debt as agreed upon and approved was executed on August 17, 2011.

 

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LIABILITIES
9 Months Ended
Sep. 30, 2012
LIABILITIES [Text Block]

NOTE C - LIABILITIES

As of September 30, 2012, the balance sheet included total liabilities of $5,778,652, which consisted of current liabilities of $4,929,385 and construction payable of $849,267. Included in the current liabilities was a short-term loan of $1,511,584 (equivalent to RMB9.5 million) from Changle Rural Credit Union, which is a bank located in Shandong Province of the PRC. The original term of the loan was from August 25, 2009 to August 24, 2010 with an interest rate of 7.965% per annum. In August 2011, the Company renewed this short-term loan with the same amount of with Changle Rural Credit Union. The term of the renewal loan started from August 31, 2011 with a maturity date of August 20, 2012. The adjustable interest rate is a rate per annum equal to the Prime Rate plus 50% of prime rate. The prime rate is based on six-month-to-one-year loan interest rate released by The People's Bank of China. On September 4, 2012, the Company renewed this short-term loan with the same amount of $1,511,584 (equivalent to RMB9.5 million) with Changle Rural Credit Union. The term of the renewal loan started from September 4, 2012 with a maturity date of September 2, 2013. The interest rate for the short-term loan was 12% per annum as of September 30, 2012. This short-term loan had been secured by the Company’s land use right and construction-in-progress of SD Chaoying with a book value of $3.19 million (equivalent to RMB 20.03 million) and $4.33 million (equivalent to RMB27.21 million) as of September 30, 2012, respectively. For the $3.19 million land use rights, $2.52 million was classified under construction-in-progress for the commercial property and the remaining $0.67 million was classified under intangible assets subject to amortization. Additionally, there is another short-term loan of $159,114 (equivalent to RMB1.0 million) from Mr. Fengguo Liu, an unrelated party. The short-term loan is due January 12, 2013 with an interest rate at 2% per month. Also included in the current liabilities was $1,839,454 of loans from related companies, including Xi’an Yanfeng Biotechnology Co., Ltd., Shaanxi Yanfeng Real Estate Co. Ltd, Shaanxi Chaoying Beauty & Cosmetics Group Co., Ltd., and the stockholders who are also the Company's officers. These entities were related to the Company through common ownership and principal officers. These loans are non-interest bearing and have no set repayment terms.

XML 16 R2.htm IDEA: XBRL DOCUMENT v2.4.0.6
CONSOLIDATED BALANCE SHEETS (USD $)
Sep. 30, 2012
Dec. 31, 2011
CURRENT ASSETS    
Cash and equivalents $ 488,243 $ 781,048
Accounts receivable, net 12,390 0
Inventories 952,395 1,053,038
Due from related companies 85,922 79,442
Other receivables, net and prepaid expenses 71,492 75,089
Advance to suppliers 3,440 832
TOTAL CURRENT ASSETS 1,613,882 1,989,449
PROPERTY, PLANT AND EQUIPMENT, NET 1,222,610 1,310,529
CONSTRUCTION IN PROGRESS 6,854,861 6,829,329
INTANGIBLE ASSETS, NET 693,446 782,215
TOTAL ASSETS 10,384,799 10,911,522
CURRENT LIABILITIES    
Short-term loan 1,670,698 1,668,282
Accounts payable 3,316 4,942
Accrued expenses 737,360 693,436
Deferred revenue 116,957 139,284
Customers deposits 90,117 188,186
Due to related parties 1,839,454 1,850,181
Deferred tax liabilities 10,307 10,293
Other payables 461,176 366,020
TOTAL CURRENT LIABILITIES 4,929,385 4,920,624
CONSTRUCTION PAYABLE 849,267 894,750
TOTAL LIABILITIES 5,778,652 5,815,374
EQUITY    
Preferred Stock, $1.00 per value, 500,000 shares authorized, no shares issued and outstanding 0 0
Common Stock, no par value, 150,000,000 shares authorized, and 120,225,323 and 120,225,323 shares issued and outstanding, respectively 4,313,614 4,313,614
Additional paid-in capital 172,308 172,308
Reserve funds 336,885 336,885
Accumulated deficit (2,854,278) (2,447,643)
Accumulated other comprehensive income 1,546,243 1,540,329
TOTAL STOCKHOLDERS EQUITY 3,514,772 3,915,493
NONCONTROLLING INTEREST 1,091,375 1,180,655
TOTAL EQUITY 4,606,147 5,096,148
TOTAL LIABILITIES AND EQUITY $ 10,384,799 $ 10,911,522
XML 17 R6.htm IDEA: XBRL DOCUMENT v2.4.0.6
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
9 Months Ended
Sep. 30, 2012
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Text Block]

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

1. Interim Financial Statements

The unaudited consolidated financial statements of Cybrdi Inc. and subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and pursuant to the requirements for reporting on Form 10-Q. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. However, the information included in these interim financial statements reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for the fair presentation of the consolidated financial position and the consolidated results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full year. The consolidated balance sheet information as of December 31, 2011 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K. These interim financial statements should be read in conjunction with that report. Certain comparative amounts have been reclassified to conform to the current period's presentation.

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

2. Description of Business

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

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

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

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

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

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

On July 26 , 2007, Chaoying Biotech entered into an acquisition agreement with its Chinese partner, which is a principal shareholder of the company, Mr. Bai, the Company’s chief executive officer and a director is also a principal of its Chinese partner.

On July 28,2007, Chaoying Biotech invested RMB15 millions (equivalent to US$1,983,078) to acquire an 83.33% equity ownership of Shandong Chaoying Culture and Entertainment Co., Ltd. (“SD Chaoying”) from its Chinese partner. SD Chaoying is a corporation organized in Shandong Province P.R.China. On September 5, 2007, Shandong government had approved this acquisition and the ownership title of SD Chaoying had been transferred to Chaoying Biotech from its Chinese partner. The future business of SD Chaoying will primarily focus on culture and entertainment, including spa activities, cosmetic and personal care, body building, gambling, catering, and lodging, etc. SD Chaoying will have a specific emphasis on casino gambling, which has been approved by Shandong Administration for Civil Affairs. As of December 31, 2009, SD Chaoying had substantially completed the construction of two residential buildings and had recognized revenue from sales of housing for 2009. The main structure of the commercial entertainment center has also been completed, except for the exterior, rooftop, the surrounding supporting projects and the community landscaping, which are expected to be completed in 2013 prior to the commencement of operations by merchant tenants if we can obtain an estimated $2.8 million to complete construction.

On March 10, 2007 the Company entered into a Sales Agency Agreement with BioMax, Ltd., a reseller located in the United States.

On April 29, 2011, Chaoying Biotech invested $154,732 (equivalent to RMB1 million) to restore the operation of the Institute of Shaanxi Chaoying Clinical Pathology (“IOSCCP”), a wholly-owned subsidiary established on July 31, 2003, whose main business includes pathology research and consulting, consulting and diagnostic clinical pathology and pathology-related research and development of new technologies, and basic training in pathology. Its sole shareholder has been Chaoying Biotech. However, Chaoying Biotech withdrew the original investment from IOSCCP in September 2007 as we believed that both internal and external conditions of IOSCCP were not mature at that time. In light of foreseeable benefits and new business opportunities for this entity, we resumed its business and re-invested $154,732 (equivalent to RMB1 million) in it in April 2011.

3. Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred significant losses and has not demonstrated the ability to generate sufficient cash flows from operations to satisfy its liabilities and sustain operations. The Company had an accumulated deficit of $2,854,278 and $2,447,643 as of September 30, 2012 and December 31, 2011, including net losses of $495,915 and $582,400 for the nine months ended September 30, 2012 and 2011, respectively. In addition, current liabilities exceeded current assets by $3,315, 503 and $2,931,175 as of September 30, 2012 and December 31, 2011, respectively. These matters raise substantial doubt about the Company’s ability to continue as a going concern.

The Company finances its operations primarily through short-term bank borrowings and advances from related parties and/or officers/shareholders. In order to complete the construction of SD Chaoying cultural and entertainment center, approximately $3.0 million (equivalent to RMB19 million) of capital is expected to be needed. The Company, taking into account the available banking facilities, internal financial resource, and supports from related companies, believes it has sufficient working capital to meet its present obligation for at least the next twelve months. Management is taking actions to address the company's financial condition and deteriorating liquidity position. The following sets forth management’s plans for dealing with the adverse effects of the conditions:

(a) Sale of housing inventories: Proceeds to be received from the sale of the remaining housing of the two completed residential buildings are expected to amount to approximately $0.5 million.

(b) Rental and management fee revenue from the cultural and entertainment center: Annual rental revenue is estimated to be approximately $0.68 million per year. Management fee revenue will be charged to commercial tenants at 3% of annual gross revenue. As of September 30, 2012, the Company has not commenced collecting rental and management fee revenue for the culture and entertainment center.

(c) Additional advances from related companies and affiliates: Mr. Bai, our Chief Executive Officer, advanced $83,081 to the Company in the current period to finance operations and the costs to maintain the Company’s public status in the U.S. In addition, Shaanxi Chaoying Beauty & Cosmetics Group, which is also an affiliate, is anticipated to provide up to approximately $790,000 (equivalent to RMB5 million) of capital to support operations. Shaanxi Chaoying Beauty & Cosmetics Group advanced $12,640 for the nine-month period ended September 30, 2012 to the Company to finance its operations.

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

4. Use of Estimates:

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

5. Revenue Recognition

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

6. Reverse Merger

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

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

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

7. Income Taxes

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

8. Contingencies

Currently we are involved in disputes, litigation and other legal proceedings. We prosecute and defend these matters aggressively. However, there are many uncertainties associated with any litigation, and we cannot assure you that these actions or other third party claims against us will be resolved without costly litigation and/or substantial settlement charges. We record a charge equal to at least the minimum estimated liability for a loss contingency when both of the following conditions are met: (i) information available prior to issuance of the financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements and (ii) the range of loss can be reasonably estimated. However, the actual liability in any such disputes or litigation may be materially different from our estimates, which could result in the need to record additional costs.

9. Recent Accounting Pronouncements

The Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.

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XML 19 R7.htm IDEA: XBRL DOCUMENT v2.4.0.6
ASSETS
9 Months Ended
Sep. 30, 2012
ASSETS [Text Block]

NOTE B – ASSETS

The September 30, 2012 consolidated balance sheet included total current assets of $1,613,882 and non-current assets of $8,770,917. Of these amounts, $488,243 in cash and equivalents is planned for funding current operations and for future business expansion.

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

The other primary assets included in current assets are loans to an unaffiliated company, QuanYe Security Co., Ltd (“QuanYe”), an unrelated People’s Republic of China (“PRC”) registered company located in Xian PRC. QuanYe is engaged in the pawnshop business and their primary business is offering alternative financing to small, local companies. According to the loan agreement, QuanYe had received loans from Chaoying Biotech for a total amount of RMB 29.3 Million (equivalent to $4,652,640) since January 2006. A remaining balance of RMB7.3 million (equivalent to $1,159,190) was extended to and expired on March 24, 2008. As of September 30, 2012 and December 31, 2011, the principal balance and interest receivable for this loan had been reduced to $0, net of allowance of $95,468 and $182,214 for doubtful principal balance and interest receivable, respectively. The interest rate for these loans initially was initially 8% per year, and subsequently reduced to 5% since October 9, 2006.

Included in non-current assets are property, plant and equipment, construction-in-progress and intangible assets. Property, plant and equipment mainly consist of building, office equipments, motor vehicles, leasehold improvement, software-website, and machinery used for product manufacturing located in the People’s Republic of China (“PRC”). Depreciation on property, plant and equipment is computed using the straight-line method over the estimated useful life of the assets. The majority of the assets have estimated useful lives of 10 years. Building and office equipment have estimated useful lives of 20 and 5 years, respectively. The “construction in progress” in the amount of $6,854,861 mainly consisted of land under development and construction of the entertainment, culture, and casino facility in Shandong Province, which will be transferred to fixed assets in SD Chaoying when construction is completed. As of September 30, 2012, construction-in-progress of $4.33 million and land use rights of $3.19 million of SD Chaoying were collateralized under a short-term loan from Changle Rural Credit Union. For the $3.19 million land use rights, $2.52 million was classified under construction-in-progress for the commercial property and the remaining $0.67 million was classified under intangible assets subject to amortization. Intangible assets included a tissue chip patent at Chaoying Biotech and $0.67 million of land use rights being put in operation for the partial completed commercial property at SD Chaoying. Effective January 1, 2002, with the adoption of the accounting guidance for Goodwill and Other Intangible Assets, intangible assets with a definite life are amortized on a straight-line basis. The patent is being amortized over its estimated life of 10 years. The land use rights classified in intangible asset is being amortized over its estimated life of 36.9 years through the maturity of the land use rights for commercial use on November 6, 2047.

XML 20 R3.htm IDEA: XBRL DOCUMENT v2.4.0.6
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
Sep. 30, 2012
Dec. 31, 2011
Preferred Stock, Par Value Per Share $ 1.00 $ 1.00
Preferred Stock, Shares Authorized 500,000 500,000
Common Stock, Shares Authorized 150,000,000 150,000,000
Common Stock, Shares, Issued 120,225,323 120,225,323
Common Stock, Shares, Outstanding 120,225,323 120,225,323
XML 21 R17.htm IDEA: XBRL DOCUMENT v2.4.0.6
INCOME TAXES (Narrative) (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2012
Income Taxes 1   33.00%
Income Taxes 2   30.00%
Income Taxes 3   3.00%
Income Taxes 4   25.00%
Income Taxes 5   33.00%
Income Taxes 6   50.00%
Income Taxes 7   50.00%
Income Taxes 8   15.00%
Income Taxes 9   15.00%
Income Taxes 10 $ 152  
Income Taxes 11   $ 314
XML 22 R1.htm IDEA: XBRL DOCUMENT v2.4.0.6
Document and Entity Information
9 Months Ended
Sep. 30, 2012
Nov. 14, 2012
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Sep. 30, 2012  
Trading Symbol cydi  
Entity Registrant Name Cybrdi, Inc.  
Entity Central Index Key 0000019002  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   120,225,323
Entity Current Reporting Status Yes  
Entity Voluntary Filers No  
Entity Well Known Seasoned Issuer No  
Document Fiscal Year Focus 2012  
Document Fiscal Period Focus Q3  
XML 23 R18.htm IDEA: XBRL DOCUMENT v2.4.0.6
CONTINGENCIES AND LITIGATION LIABILITIES (Narrative) (Details)
9 Months Ended
Sep. 30, 2012
USD ($)
Sep. 30, 2012
CNY
Contingencies And Litigation Liabilities 1   7,600,000
Contingencies And Litigation Liabilities 2 1,207,518  
Contingencies And Litigation Liabilities 3 12 12
Contingencies And Litigation Liabilities 4 95,468  
Contingencies And Litigation Liabilities 5   600,000
Contingencies And Litigation Liabilities 6 186,182  
Contingencies And Litigation Liabilities 7   1,170,114
Contingencies And Litigation Liabilities 8 186,182  
Contingencies And Litigation Liabilities 9   1,170,114
Contingencies And Litigation Liabilities 10 100.00% 100.00%
Contingencies And Litigation Liabilities 11 190,936  
Contingencies And Litigation Liabilities 12   1,200,000
Contingencies And Litigation Liabilities 14 36,942  
Contingencies And Litigation Liabilities 15   240,000
XML 24 R4.htm IDEA: XBRL DOCUMENT v2.4.0.6
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Revenue        
Housing $ 0 $ (6,519) $ 141,953 $ (6,519)
Commercial rental 0 0 0 0
Tissue array products 129,032 153,228 341,596 390,458
Total revenue 129,032 146,709 483,549 383,939
Cost of Sales        
Housing 0 58,625 123,091 58,625
Commercial rental 16,140 16,195 49,235 47,947
Tissue array products 77,895 104,848 222,329 294,172
Total cost of sales 94,035 179,668 394,655 400,744
Gross Profit 34,997 (32,959) 88,894 (16,805)
Operating Expenses:        
Salaries and wages 51,279 45,581 153,839 127,157
Depreciation and amortization 37,264 37,516 112,272 110,509
Professional fees 28,529 14,268 66,264 71,376
Operating tax expenses 3,374 110 30,588 235
(Reversal) Estimated Loss from contingent liabilities (37,910) 36,942 (37,910) 36,942
Selling and distribution expenses 1,370 6,211 4,123 16,422
Other general and administrative expenses 43,931 53,550 98,785 105,187
Bad debt expense 0 23,526 0 92,356
Total Operating Expenses 127,837 217,704 427,961 560,184
Loss from Operations (92,840) (250,663) (339,067) (576,989)
Other Income        
Net interest (expense) income (39,284) 1,328 (131,406) 3,978
Other (expense) income, net (2,567) (6,370) (25,128) (9,389)
Total Other Income, Net (41,851) (5,042) (156,534) (5,411)
Loss before Income Taxes (134,691) (255,705) (495,601) (582,400)
Income Tax Benefit (Expense) (152) 0 (314) 0
Net loss (134,843) (255,705) (495,915) (582,400)
Net loss attributable to the noncontrolling interest (20,955) (61,720) (89,280) (114,889)
Net loss attributable to CYBRDI, INC. AND SUBSIDIARIES $ (113,888) $ (193,985) $ (406,635) $ (467,511)
Net Loss Per Common Share        
Basic and Diluted $ 0.00 $ 0.00 $ 0.00 $ (0.01)
Weighted Average Number of Shares Outstanding        
Basic and Diluted 120,225,323 91,780,528 120,225,323 74,431,221
XML 25 R12.htm IDEA: XBRL DOCUMENT v2.4.0.6
Summary of Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2012
Interim Financial Statements [Policy Text Block]

1. Interim Financial Statements

The unaudited consolidated financial statements of Cybrdi Inc. and subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and pursuant to the requirements for reporting on Form 10-Q. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. However, the information included in these interim financial statements reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for the fair presentation of the consolidated financial position and the consolidated results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full year. The consolidated balance sheet information as of December 31, 2011 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K. These interim financial statements should be read in conjunction with that report. Certain comparative amounts have been reclassified to conform to the current period's presentation.

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

Description of Business [Policy Text Block]

2. Description of Business

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

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

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

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

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

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

On July 26 , 2007, Chaoying Biotech entered into an acquisition agreement with its Chinese partner, which is a principal shareholder of the company, Mr. Bai, the Company’s chief executive officer and a director is also a principal of its Chinese partner.

On July 28,2007, Chaoying Biotech invested RMB15 millions (equivalent to US$1,983,078) to acquire an 83.33% equity ownership of Shandong Chaoying Culture and Entertainment Co., Ltd. (“SD Chaoying”) from its Chinese partner. SD Chaoying is a corporation organized in Shandong Province P.R.China. On September 5, 2007, Shandong government had approved this acquisition and the ownership title of SD Chaoying had been transferred to Chaoying Biotech from its Chinese partner. The future business of SD Chaoying will primarily focus on culture and entertainment, including spa activities, cosmetic and personal care, body building, gambling, catering, and lodging, etc. SD Chaoying will have a specific emphasis on casino gambling, which has been approved by Shandong Administration for Civil Affairs. As of December 31, 2009, SD Chaoying had substantially completed the construction of two residential buildings and had recognized revenue from sales of housing for 2009. The main structure of the commercial entertainment center has also been completed, except for the exterior, rooftop, the surrounding supporting projects and the community landscaping, which are expected to be completed in 2013 prior to the commencement of operations by merchant tenants if we can obtain an estimated $2.8 million to complete construction.

On March 10, 2007 the Company entered into a Sales Agency Agreement with BioMax, Ltd., a reseller located in the United States.

On April 29, 2011, Chaoying Biotech invested $154,732 (equivalent to RMB1 million) to restore the operation of the Institute of Shaanxi Chaoying Clinical Pathology (“IOSCCP”), a wholly-owned subsidiary established on July 31, 2003, whose main business includes pathology research and consulting, consulting and diagnostic clinical pathology and pathology-related research and development of new technologies, and basic training in pathology. Its sole shareholder has been Chaoying Biotech. However, Chaoying Biotech withdrew the original investment from IOSCCP in September 2007 as we believed that both internal and external conditions of IOSCCP were not mature at that time. In light of foreseeable benefits and new business opportunities for this entity, we resumed its business and re-invested $154,732 (equivalent to RMB1 million) in it in April 2011.

Going Concern [Policy Text Block]

3. Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred significant losses and has not demonstrated the ability to generate sufficient cash flows from operations to satisfy its liabilities and sustain operations. The Company had an accumulated deficit of $2,854,278 and $2,447,643 as of September 30, 2012 and December 31, 2011, including net losses of $495,915 and $582,400 for the nine months ended September 30, 2012 and 2011, respectively. In addition, current liabilities exceeded current assets by $3,315, 503 and $2,931,175 as of September 30, 2012 and December 31, 2011, respectively. These matters raise substantial doubt about the Company’s ability to continue as a going concern.

The Company finances its operations primarily through short-term bank borrowings and advances from related parties and/or officers/shareholders. In order to complete the construction of SD Chaoying cultural and entertainment center, approximately $3.0 million (equivalent to RMB19 million) of capital is expected to be needed. The Company, taking into account the available banking facilities, internal financial resource, and supports from related companies, believes it has sufficient working capital to meet its present obligation for at least the next twelve months. Management is taking actions to address the company's financial condition and deteriorating liquidity position. The following sets forth management’s plans for dealing with the adverse effects of the conditions:

(a) Sale of housing inventories: Proceeds to be received from the sale of the remaining housing of the two completed residential buildings are expected to amount to approximately $0.5 million.

(b) Rental and management fee revenue from the cultural and entertainment center: Annual rental revenue is estimated to be approximately $0.68 million per year. Management fee revenue will be charged to commercial tenants at 3% of annual gross revenue. As of September 30, 2012, the Company has not commenced collecting rental and management fee revenue for the culture and entertainment center.

(c) Additional advances from related companies and affiliates: Mr. Bai, our Chief Executive Officer, advanced $83,081 to the Company in the current period to finance operations and the costs to maintain the Company’s public status in the U.S. In addition, Shaanxi Chaoying Beauty & Cosmetics Group, which is also an affiliate, is anticipated to provide up to approximately $790,000 (equivalent to RMB5 million) of capital to support operations. Shaanxi Chaoying Beauty & Cosmetics Group advanced $12,640 for the nine-month period ended September 30, 2012 to the Company to finance its operations.

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

Use of Estimates [Policy Text Block]

4. Use of Estimates:

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

Revenue Recognition [Policy Text Block]

5. Revenue Recognition

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

Reverse Merger [Policy Text Block]

6. Reverse Merger

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

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

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

Income Taxes [Policy Text Block]

7. Income Taxes

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

Contingencies [Policy Text Block]

8. Contingencies

Currently we are involved in disputes, litigation and other legal proceedings. We prosecute and defend these matters aggressively. However, there are many uncertainties associated with any litigation, and we cannot assure you that these actions or other third party claims against us will be resolved without costly litigation and/or substantial settlement charges. We record a charge equal to at least the minimum estimated liability for a loss contingency when both of the following conditions are met: (i) information available prior to issuance of the financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements and (ii) the range of loss can be reasonably estimated. However, the actual liability in any such disputes or litigation may be materially different from our estimates, which could result in the need to record additional costs.

Recent Accounting Pronouncements [Policy Text Block]

9. Recent Accounting Pronouncements

The Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.

XML 26 R11.htm IDEA: XBRL DOCUMENT v2.4.0.6
CONTINGENCIES AND LITIGATION LIABILITIES
9 Months Ended
Sep. 30, 2012
CONTINGENCIES AND LITIGATION LIABILITIES [Text Block]

NOTE F – CONTINGENCIES AND LITIGATION LIABILITIES

On June 7, 2011, Weifang Shili Hesin Engineering Equipment Co., Ltd. (the “Plaintiff”) filed a complaint against SD Chaoying at the Basic People's Court of Changle County in Shandong Province, China, for alleged damages caused by SD Chaoying for not performing appropriately and completely the obligations in accordance with the agreement signed by both parties on April 28, 2011. Pursuant to the agreement, SD Chaoying agreed to transfer: (1) the rights of development, construction, and land of the #1 and #2 residential buildings for RMB7.6 million, or $1,207,518, and (2) the 12 unsold residential units in the #3 and #4 residential buildings at a price as agreed upon. As of September 30, 2012, the Plaintiff paid $95,468 (equivalent to RMB600,000) deposit as agreed upon, and prepaid $186,182 (equivalent to RMB1,170,114), both of which were recorded as Other Payables under current liabilities. Plaintiff was seeking for the discharge of the original agreement signed, the return of prepayment of $186,182 (equivalent to RMB1,170,114), repayment of the deposit plus 100% penalty, totaling $190,936 (equivalent to RMB1,200,000), and for attorneys’ fees and costs. The Company disputed Plaintiff’s claim for a land use right certificate of underlying construction base of the #1 and #2 residential buildings, which certificate was inseparable from other part of the land and was not specifically stated in the agreement. The Company also disputed Plaintiff’s entitlement to the amounts claimed and instructed the Company’s legal counsel to contest the action, while concurrently pursuing opportunities for reasonable settlement. The case went to trial on July 7, 2011. On November 15, 2011, the Basic People's Court of Changle County pronounced its judgment against Plaintiff and that SD Chaoying had no liability. However, the plaintiff still has a right to appeal the judgment to the Intermediate Court in Weifang City, Shandong Province, China within 15 days after receiving verdict from the court. The verdict was released by the court on March 23, 2012. An appeal was filed on April 6, 2012 by the Plaintiff after the verdict was released. The court session for the appeal was held on May 16, 2012 at Intermediate Court in Weifang City, Shandong Province, China. On July 16, 2012, the Intermediate Court in Weifang City pronounced its judgment against Plaintiff and that SD Chaoying had no liability. The litigation is subject to a final adjudication. The decision is a final adjudication by the courts in China. Hence, the estimated contingent liabilities of approximately $36,942 (or RMB240,000) recorded in other payable as of December 31, 2011 have been reversed in current quarter this year.

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LIABILITIES (Narrative) (Details)
9 Months Ended
Sep. 30, 2012
USD ($)
Sep. 30, 2012
CNY
Liabilities 1 $ 5,778,652  
Liabilities 2 4,929,385  
Liabilities 3 849,267  
Liabilities 4 1,511,584  
Liabilities 5   9,500,000
Liabilities 6 7.96% 7.96%
Liabilities 7 50.00% 50.00%
Liabilities 8 1,511,584  
Liabilities 9   9,500,000
Liabilities 10 12.00% 12.00%
Liabilities 11 3,190,000  
Liabilities 12 4,330,000  
Liabilities 13   27,210,000
Liabilities 14 3,190,000  
Liabilities 15 2,520,000  
Liabilities 16 670,000  
Liabilities 17 159,114  
Liabilities 18   1,000,000
Liabilities 19 2.00% 2.00%
Liabilities 20 $ 1,839,454  
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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details)
9 Months Ended
Sep. 30, 2012
USD ($)
Sep. 30, 2012
CNY
Basis Of Presentation And Summary Of Significant Accounting Policies 1 80.00% 80.00%
Basis Of Presentation And Summary Of Significant Accounting Policies 2 99.00% 99.00%
Basis Of Presentation And Summary Of Significant Accounting Policies 3 15 15
Basis Of Presentation And Summary Of Significant Accounting Policies 4   15
Basis Of Presentation And Summary Of Significant Accounting Policies 5 1,983,078  
Basis Of Presentation And Summary Of Significant Accounting Policies 6 83.32% 83.32%
Basis Of Presentation And Summary Of Significant Accounting Policies 7 2,800,000  
Basis Of Presentation And Summary Of Significant Accounting Policies 8 154,732  
Basis Of Presentation And Summary Of Significant Accounting Policies 9   1,000,000
Basis Of Presentation And Summary Of Significant Accounting Policies 10 154,732  
Basis Of Presentation And Summary Of Significant Accounting Policies 11   1,000,000
Basis Of Presentation And Summary Of Significant Accounting Policies 12 2,854,278  
Basis Of Presentation And Summary Of Significant Accounting Policies 13 2,447,643  
Basis Of Presentation And Summary Of Significant Accounting Policies 14 495,915  
Basis Of Presentation And Summary Of Significant Accounting Policies 15 582,400  
Basis Of Presentation And Summary Of Significant Accounting Policies 16 3,315  
Basis Of Presentation And Summary Of Significant Accounting Policies 18 2,931,175  
Basis Of Presentation And Summary Of Significant Accounting Policies 19 3,000,000  
Basis Of Presentation And Summary Of Significant Accounting Policies 20   19,000,000
Basis Of Presentation And Summary Of Significant Accounting Policies 21 500,000  
Basis Of Presentation And Summary Of Significant Accounting Policies 22 680,000  
Basis Of Presentation And Summary Of Significant Accounting Policies 23 3.00% 3.00%
Basis Of Presentation And Summary Of Significant Accounting Policies 24 83,081  
Basis Of Presentation And Summary Of Significant Accounting Policies 25 790,000  
Basis Of Presentation And Summary Of Significant Accounting Policies 26   5,000,000
Basis Of Presentation And Summary Of Significant Accounting Policies 27 12,640  
Basis Of Presentation And Summary Of Significant Accounting Policies 28 93.80% 93.80%
Basis Of Presentation And Summary Of Significant Accounting Policies 29 1.566641609 1.566641609
Basis Of Presentation And Summary Of Significant Accounting Policies 30 47,328,263 47,328,263
Basis Of Presentation And Summary Of Significant Accounting Policies 31 150,000,000 150,000,000
Basis Of Presentation And Summary Of Significant Accounting Policies 32 500,000 500,000
Basis Of Presentation And Summary Of Significant Accounting Policies 33 $ 1  
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ASSETS (Narrative) (Details)
9 Months Ended
Sep. 30, 2012
USD ($)
Sep. 30, 2012
CNY
Assets 1 $ 1,613,882  
Assets 2 8,770,917  
Assets 3 488,243  
Assets 4   29,300,000
Assets 5 4,652,640  
Assets 6   7,300,000
Assets 7 1,159,190  
Assets 8 0  
Assets 9 95,468  
Assets 10 182,214  
Assets 11 8.00% 8.00%
Assets 12 5.00% 5.00%
Assets 13 10 10
Assets 14 20 20
Assets 15 5 5
Assets 16 6,854,861  
Assets 17 4,330,000  
Assets 18 3,190,000  
Assets 19 3,190,000  
Assets 20 2,520,000  
Assets 21 670,000  
Assets 22 $ 670,000  
Assets 23 10 10
Assets 24 36.9 36.9
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STOCKHOLDERS EQUITY (Narrative) (Details)
9 Months Ended
Sep. 30, 2012
USD ($)
Sep. 30, 2012
CNY
Stockholders Equity 1 1.566641609 1.566641609
Stockholders Equity 2 47,328,263 47,328,263
Stockholders Equity 3 120,225,323 120,225,323
Stockholders Equity 4 120,225,323 120,225,323
Stockholders Equity 5 $ 4,606,147  
Stockholders Equity 6 1,091,375  
Stockholders Equity 7 20.00% 20.00%
Stockholders Equity 8 16.67% 16.67%
Stockholders Equity 9 12,000,000 12,000,000
Stockholders Equity 10 3,300,000 3,300,000
Stockholders Equity 11 306,000  
Stockholders Equity 12 $ 0.02  
Stockholders Equity 13 605,723  
Stockholders Equity 14   3,920,000
Stockholders Equity 15 169,973  
Stockholders Equity 16   1,100,000
Stockholders Equity 17 54,468,756 54,468,756
Stockholders Equity 18 $ 0.008  
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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)
9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES    
Net Loss $ (406,635) $ (467,511)
Adjustments to Reconcile Net Loss to Net Cash Provided by Operating Activities:    
Depreciation and amortization 186,564 204,650
Bad debt expense 0 92,356
(Reversal) Estimated Loss from contingent liabilities (37,910) 36,942
Minority interest (89,280) (114,889)
Changes in Operating Assets and Liabilities:    
Accounts receivable (12,299) (5,064)
Inventories 101,427 56,637
Other receivable and prepaid expenses 242 (11,917)
Accounts payable and other current liabilities 142,364 418,117
Deferred revenue 10,360 86,087
Customer deposits (97,628) 29,344
Net Cash (Used in) Provided by Operating Activities (202,795) 324,752
CASH FLOWS FROM INVESTING ACTIVITIES    
Proceeds from repayments of loan to affiliated companies 0 135,828
Advance for loan to affiliated companies (3,159) 0
Purchase of property, plant, and equipment (8,151) (87,955)
Payments for construction in progress (61,970) (520,285)
Net Cash Used in Investing Activities (73,280) (472,412)
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from loans from related companies 69,502 116,984
Proceeds from shareholders/officers 168,060 163,593
Repayments of loan from shareholders/officers (252,734) 0
Net Cash (Used in) Provided by Financing Activities (15,172) 280,577
NET INCREASE(DECREASE) IN CASH & CASH EQUIVALENTS (291,247) 132,917
EFFECT OF EXCHANGE RATE CHANGE ON CASH & CASH EQUIVALENTS (1,558) 22,975
CASH & CASH EQUIVALENTS, BEGINNING BALANCE 781,048 585,020
CASH & CASH EQUIVALENTS, ENDING BALANCE 488,243 740,912
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION    
Interest paid 106,207 146,921
Income taxes paid $ 853 $ 0
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INCOME TAXES
9 Months Ended
Sep. 30, 2012
INCOME TAXES [Text Block]

NOTE E – INCOME TAXES

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

The Company’s income tax expense includes U.S. and PRC income taxes. There were no U.S. current taxes for the nine months ended September 30, 2012 according to net loss incurred in the U.S. entity, which will not be anticipated to have any tax benefit in the future since no revenue is expected to be generated in the U.S as a result of discontinuing the U.S. operating company in Maryland in October 2007. There was $152 and $314 of PRC current income taxes accrued for the three-month and nine- month period ended September 30, 2012 in SD Chaoying, respectively.

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