OMPHALOS, CORP - Quarter Report: 2008 September (Form 10-Q)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2008

o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT FOR THE TRANSITION PERIOD FROM __________ TO __________ COMMISSION FILE NUMBER ___000-32341_____________

OMPHALOS, CORP.

(Exact name of registrant as specified in its charter)

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

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

Luchu Taoyuan County

Taiwan

(Address of principal executive offices, Zip Code)

011-8863-322-9658

(Registrant’s telephone number, including area code)

Soyodo Group Holdings, Inc.

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

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

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

Large accelerated filer o		Accelerated filer࿠ o
Non-accelerated filero		Smaller reporting company x

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

The number of shares of registrant’s common stock outstanding, as of October 1, 2008 was 30,063,759.

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements		3
Item 2. Management’s Discussion and Analysis or Plan of Operation		14
Item 3. Quantitative and Qualitative Disclosures About Market Risk		19
Item 4. Controls and Procedures		19

PART II - OTHER INFORMATION

Item 1. Legal Proceedings		19
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		19
Item 3. Defaults Upon Senior Securities		19
Item 4. Submission of Matters to a Vote of Security Holders		19
Item 5. Other Information		20
Item 6. Exhibits		20

SIGNATURES		22

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

CONTENTS

	Page

Condensed Consolidated Balance Sheets	4 - 5

Condensed Consolidated Statements of Operations	6

Condensed Consolidated Statements of Cash Flows	7

Notes to Consolidated Financial Statements	8- 13

OMPHALOS, CORP.

(FORMERLY SOYODO GROUP HOLDINGS, INC.)

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,		December 31,
	2008		2007
	(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	4,717,031	$	2,783,243
Accounts receivable, net		2,193,940		3,892,353
Inventory, net		1,305,155		657,788
Prepaid and other current assets		95,234		132,508
Due from shareholders		111,293		-
Total current assets		8,422,653		7,465,892

Leasehold Improvements and Equipment, net		10,236		13,808


Intangible assets, net		38,536		29,946
Deposits		25,338		-
Long-term investments		-		1,100,704

Total Assets	$	8,496,763	$	8,610,350

OMPHALOS, CORP.

(FORMERLY SOYODO GROUP HOLDINGS, INC.)

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,		December 31,
	2008		2007
	(Unaudited)
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable	$	3,435,948	$	3,940,816
Accrued salaries and bonus		43,583		42,081
Accured expenses		38,921		180,841
Total current liabilities		3,518,452		4,163,738

Shareholders' Equity
Common stock, $0.0001 par value, 120,000,000 shares
authorized, 27,332,092 and 30,063,759 shares issued
and outstanding as of December 31, 2007 and
September 30, 2008, respectively		3,007		2,733
Additional paid-in capital		47,523		47,267
Other comprehensive income		195,485		211,407
Retained earnings		4,732,296		4,185,205
Total shareholders' equity		4,978,311		4,446,612

Total Liabilities and Shareholders' Equity	$	8,496,763	$	8,610,350

OMPHALOS, CORP.

(FORMERLY SOYODO GROUP HOLDINGS, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Nine Months Ended September 30, 2008 and 2007

(Unaudited)

	Nine Months Ended						Three Months Ended
	September 30, 2008			September 30, 2007			September 30, 2008		September 30, 2007

Operating revenue:
Sales of goods, net	$	7,683,195		$	7,820,401		$	2,342,067	$	2,907,249
Other operating revenue		3,222			376,398			-		378,925
Total operating revenue		7,686,417			8,196,799			2,342,067		3,286,174

Operating costs:
Cost of sales		5,359,518			5,161,989			1,649,526		1,897,694

Gross Profit		2,326,899			3,034,810			692,541		1,388,480

Selling, general and
administrative expenses		1,393,784			1,330,919			495,396		468,093

Income from operations		933,115			1,703,891			197,145		920,387

Other income (expense)
Interest income		16,934			139,044			6,344		23,476
Gain (loss) on foreign
currency exchange		(222,080	)		(111,706	)		211,331		(132,520	)
Gain on investment		-			57,179			-		18,756
Miscellaneous income		840			2,980			840		125
Total other income (expense)		(204,306	)		87,497			218,515		(90,163	)

Income before provision
for income taxes		728,809			1,791,388			415,660		830,224

Provision for income taxes		-			-			-		-

Net Income	$	728,809		$	1,791,388		$	415,660	$	830,224

Weighted average number of common stock:
Basic and Diluted		29,714,823			27,332,092			30,063,759		27,332,092

Net income (loss) per share:
Basic and Diluted		0.02			0.07			0.01		0.03

OMPHALOS, CORP.

(FORMERLY SOYODO GROUP HOLDINGS, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2008 and 2007

(Unaudited)

	September 30, 2008			September 30, 2007
Cash flows from operating activities
Net income	$	728,809		$	1,791,388
Adjustments to reconcile net income to net cash provided by		.			.
operating activities:
Amortization and depreciation		4,254			9,974
Loss due to inventory value decline		3,383			-
Loss (gain) on sale of property		(3,222	)		2,527
Foreign currency exchange loss		222,080			111,706
Changes in assets and liabilities:
Decrease (Increase) in accounts receivable		1,803,556			(1,427,222	)
Decrease (Increase) in inventory		(666,322	)		292,997
Decrease (Increase) in prepaid and other assets		13,878			(29,432	)
Increase (Decrease) in accounts payable		(567,980	)		1,227,765
(Decrease) in accrued expenses		(147,980	)		(987,826	)
Net cash provided by operating activities		1,390,456			991,877

Cash flows from investing activities
Capital contribution		-			96,598
Redemption of investments		1,152,574			374,390
Purchase of equipment		-			(7,698	)
Payments of patent registration		(8,950	)		(3,185	)
Proceeds received from disposition of equipment		3,222			115,026
Distributions to shareholders for reorganization		-			(303,100	)
Net cash provided by investing activities		1,146,846			272,031

Cash flows from financing activities
Dividend distribution		(229,576	)		-
Loans to shareholders		(115,264	)		(4,609,566	)
Net cash used in financing activities		(344,840	)		(4,609,566	)

Effect of exchange rate changes on cash and cash equivalents		(258,674	)		(104,629	)

Net increase (decrease) in cash and cash equivalents		1,933,788			(3,450,287	)

Cash and cash equivalents
Beginning		2,783,243			9,124,178
Ending	$	4,717,031		$	5,673,891

Supplemental disclosure of cash flows
Cash paid during the period for:
Interest expense	$	-		$	-
Income tax	$	-		$	-

OMPHALOS, CORP.

(FORMERLY SOYODO GROUP HOLDINGS, INC.)

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2008

1.	ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation— The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and generally accepted accounting principles for interim financial reporting. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for fair presentation have been included. Operating results for the nine-month period ended September 30, 2008 are not necessarily indicative of the results that may be expected for the year ended December 31, 2008.

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

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

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

1.	ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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

Omphalos Corp. (B.V.I.) was incorporated on October 30, 2001 under the laws of the British Virgin Islands. Omphalos Corp. (Taiwan) was incorporated on February 13, 1991 under the laws of Republic of China. All Fine Technology Co., Ltd. (Taiwan) was incorporated on March 23, 2004 under the laws of Republic of China. All Fine Technology Co., Ltd. (B.V.I.) was incorporated on February 2, 2005 under the laws of the British Virgin Islands. These companies were under common control and owned by same shareholders. On July 4, 2007, Omphalos Corp. (BVI) acquired Omphalos Corp. (Taiwan) and All Fine Technology Co. Ltd. (Taiwan) by paying $334,215 in cash to the shareholders. On October 19, 2007 Omphalos Corp. (BVI) completed the purchase of All Fine Technology Co. Ltd. (BVI) by paying $2,095,230 in cash to the shareholders. Omphalos Corp. (B.V.I) became the 100% shareholder of the other three entities. Omphalos Corp. (B.V.I.) and its subsidiaries supplies a wide range of equipments and parts including reflow soldering ovens and automated optical inspection machines for printed circuit board (PCB) manufacturers in Taiwan and China. Collectively Omphalos, Corp. (formerly Soyodo Group Holdings Inc.) and these four corporations are referred to herein as the "Company".

Basis of Consolidation / Combination — The aforementioned stock exchange transaction made Omphalos Corp. (B.V.I.) a wholly owned subsidiary of Soyodo after issuing 81,996,275 shares of Soyodo's common stock and resulted in the shareholders of Omphalos (B.V.I.) obtaining a majority voting interest in Soyodo. Accounting principles generally accepted in the United States require an assessment of which entity is considered the accounting acquirer when an exchange of stock occurs regardless of the legal form of the acquisition. The factors to consider include which entity's shareholders will own the majority of the voting common stock after the acquisition and the composition of the governing body and the management of the company after the acquisition. Omphalos was determined to be the acquirer for accounting purposes. Additionally, when an acquisition takes place between a company with minimal or no operations (a shell company) and an operating company, the transaction is treated as a recapitalization rather than a business combination. As Soyodo is considered to be a shell company, the transaction was treated as a recapitalization of Omphalos Corp. (B.V.I.).

For the period ended September 30, 2007, the financial statements include the combined accounts of All Fine Technology Co., Ltd.(B.V.I.) and Omphalos Corp. (B.V.I.) and its subsidiaries- Omphalos Corp. (Taiwan) and All Fine Technology Co., Ltd. (Taiwan). There companies were under common control and ownership. On October 19, 2007 Omphalos Corp. (BVI) completed the purchase of All Fine Technology Co. Ltd. (BVI) and Omphlaos Corp. (B.V.I.) becomes the sole owner of all of the outstanding shares of Omphalos Corp. (Taiwan), All Fine Technology Co., Ltd. (Taiwan), and All Fine Technology Co., Ltd. (B.V.I.). For the period ended September 30, 2008, the consolidated financial statements include the accounts of Omphalos Corp. (B.V.I.) and its wholly owned subsidiaries. All significant intercompany accounts and transactions are eliminated.

1.	ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 from those estimates.

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

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

Inventory — Inventory is carried at the lower of cost or market. Cost is determined by using the specific identification method. The Company periodically reviews the age and turnover of its inventory to determine whether any inventory has become obsolete or has declined in value, and charges to operations for known and anticipated inventory obsolescence. Inventory consists substantially of finished goods and is net of an allowance for slow-moving inventory of $193,853 and $188,503 at September 30, 2008 and December 31, 2007, respectively.

Intangible Assets —Include cost of patent applications that are deferred and charged to operations over their useful lives. The accumulated amortization is $1,655 and $1,259 at September 30, 2008 and December 31, 2007, respectively. Annual amortization expense of such intangible assets is expected to be $575 per year for the next five years.

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

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

1.	ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

As of September 30, 2008 and December 31, 2007 the exchange rates between the NTD and the USD ($) were NTD1=$0.03111. and NTD1=$0.03077, respectively The weighted-average rates of exchange between NTD and USD were NTD1=$0.03222 and NTD1=$0.03031 for the nine months ended September 30, 2008 and September 30, 2007, respectively. Total translation adjustment recognized as of September 30, 2008 and December 31, 2007 is $195,485 and $211,407, respectively.

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

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

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

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

During March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (SFAS No. 161). SFAS No. 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. SFAS No. 161 also improves transparency about the location and amounts of derivative instruments in an entity’s financial statements; how derivative instruments and related hedged items are accounted for under Statement 133; and how derivative instruments and related hedged items affect its financial position, financial performance, and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company is currently assessing the impact of SFAS No. 161.

1.	ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently Issued Accounting Pronouncements (Continued)— SFAS 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section 411, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles.” It is only effective for nongovernmental entities; therefore, the GAAP hierarchy will remain in SAS 69 for state and local governmental entities and federal governmental entities. The Company does not expect SFAS 162 to have a material effect on its consolidated financial statements.

2.	RELATED-PARTY TRANSACTIONS

Operating Leases---The Company leases its facility from a shareholder under an operating lease agreement which expires on December 31, 2008. The monthly base rent is approximately $2,200. Rent expense under this lease agreement amounted to approximately $19,800 and $19,800 for the nine-month periods ended September 30, 2008 and 2007, respectively.

Advances to / from Shareholders – The advances to or from shareholders are non-interest bearing and without fixed terms of repayment.

3.	OTHER COMPREHENSIVE INCOME

Balances of related after-tax components comprising accumulated other comprehensive income (loss), included in stockholders' equity, at September 30, 2008 and December 31, 2007 are as follows:

	Foreign Currency Translation Adjustment			Accumulated Other Comprehensive Income

Balance at December 31, 2007	$	211,407		$	211,407
Change for the period		(15,922	)	$	(15,922	)

Balance at September 30, 2008	$	195,485		$	195,485

4.	COMMON STOCK

Effective April, 15, 2008, Soyodo Group Holdings, Inc. filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of Delaware, to effect a one (1) for three (3) reverse split of the issued and outstanding common shares of Soyodo whereby every three shares of common stock held were exchanged for one share of common stock. As a result, the issued and outstanding shares of common stock were reduced from 90,191,275 prior to the reverse split to approximately 30,063,759 following the reverse stock split. The authorized capital remained at 120,000,000 shares of common stock and any shareholder who beneficially owned a fractional share of common stock after the reverse stock split had their fractional share rounded up to the nearest whole share.

All references in the accompanying financial statements to the number of shares outstanding, per share amounts of the Company’s common stock have been adjusted to reflect the effect of the stock reverse split. Shareholders’ equity reflects the stock reverse split by reclassifying from “Common Stock” to “Additional Paid-in Capital” an amount equal to the par value of the decreased shares arising from the reverse split.

*****

Item 2. Management’s Discussion and Analysis or Plan of Operation.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report of Form 10-Q, including this discussion and analysis by management, contains or incorporates forward-looking statements. All statements other than statements of historical fact made in report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Our actual results may differ significantly from management’s expectations. The potential risks and uncertainties that could cause our actual results to differ materially from those expressed or implied herein are set forth in our Annual Report on Form 10-KSB for the year ended December 31, 2007.

The following discussion and analysis should be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.

Overview

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

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

On February 5, 2008, we entered into and completed the transactions contemplated under a Share Exchange Agreement (the “Exchange Agreement”) with each of the shareholders (the “Shareholders”) of Omphalos Corp., a British Virgin Islands corporation (“Omphalos BVI”) pursuant to which we purchased from the Shareholders all issued and outstanding shares of Omphalos BVI’s common stock in consideration for the issuance of an aggregate of 81,996,275 shares of Soyodo common stock (the "Share Exchange").

The Share Exchange resulted in a change in control of Soyodo with the Shareholders owning 81,996,275 shares of common stock of the Company out of a total of 90,191,275 issued and outstanding shares after giving effect to the Share Exchange. Also, the Shareholders were elected directors of the Company, subject to Soyodo’s disclosure obligations under the Securities Exchange Act of 1934, as amended, and appointed as its executive officers. As a result of the Exchange Agreement, (i) Omphalos BVI became a wholly-owned subsidiary of Soyodo and (ii) Soyodo succeeded to the business of Omphalos BVI as its sole business.

Effective April, 15, 2008, Soyodo filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of Delaware, to effect a one (1) for three (3) reverse split of the issued and outstanding common shares of Soyodo whereby every three shares of common stock held were exchanged for one share of common stock. As a result, the issued and outstanding shares of common stock were reduced from 90,191,276 prior to the reverse split to approximately 30,063,759 following the reverse stock split. The authorized capital remained at 120,000,000 shares of common stock and any shareholder who beneficially owned a fractional share of common stock after the reverse stock split had their fractional share rounded up to the nearest whole share.

Effective April 18, 2008 Soyodo entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Omphalos, Inc., a Nevada corporation. Pursuant to the Merger Agreement, Soyodo was merged with and into the surviving corporation, and effectively changed its name to Omphalos, Corp.. As of April 30, 2008, our common stock is listed on the Over-The-Counter Bulletin Board under the symbol “OMPS”.

Results of Operations

Three Months and Nine Months Ended September 30, 2008 Compared to tbe Three Months and Nine Months Ended September 30, 2007

Three Months Ended September 30, 2008 Compared to the Three Months Ended September 30, 2007

Net Revenues for the three months ended September 30, 2008 were $2,342,067 as compared to $3,286,174 for the three months ended September 30, 2007. This represents a decrease of $944,107 or 28.7% comparing the two periods. The decrease related primarily to a decrease in product sales of $565,182 which was due primarily to a decrease in demand for end products. The decrease was also attributable to a gain from lawsuit settlement of $376,398 and gain on disposal of assets of $2,527 in the three months ended September 30, 2007.

Cost of sales decreased by $248,168 or 13.1%, to $1,649,526 for the three months ended September 30, 2008 as compared to $1,897,694 for the three months ended September 30, 2007. The decrease in cost of sales is primarily the result of a decrease in sales volume.

For the three months ended September 30, 2008, selling, general and administrative expenses totaled $495,396. This was an increase of $27,303 or 5.8% as compared to the same period 2007. The increase is attributable primarily to increases in professional service fees and rent. The increase was partially offset by a decrease in salary expense

For the three months ended September 30, 2008, income from operations decreased to $197,145 as compared to $920,387 for the three months ended September 30, 2007. This represents a decrease of $723,242 or 78.6 % comparing the two periods. The decrease in income from operations for the three months ended September 30, 2008 is primarily the result of a decrease in net sales and an increase in selling, general and administrative expenses.

Other income was $218,515 and $(90,163) for the three months ended September 30, 2008 and 2007, respectively. This was an increase of $308,678, or 342.4%. The main reason for this increase was due to an increase in gain on foreign currency exchange. This increase was partially offset by decreases in interest income and investment gains.

Our net income was $415,660 for the three months ended September 30, 2008 compared to a net income of $830,224 for the three months ended September 30, 2007. The decrease in profitability for the three months ended September 30, 2008 was due to the reasons described above.

Nine Months Ended September 30, 2008 Compared to the Nine Months Ended September 30, 2007

Net revenues for the nine months ended September 30, 2008 were $7,686,417 as compared to 8,196,799 for the nine months ended September 30, 2007. This represents a decrease of $510,382 or 6.2% comparing the two periods. The decrease related primarily to a decrease in product sales of $137,206 which was due primarily to a decrease in demand for end products. The decrease was also attributable to a gain from lawsuit settlement of $376,398 in the nine months ended September 30, 2007. This decrease was partially offset by a gain on disposal of assets of $3,222 for the nine months ended September 30, 2008.

Cost of sales increased by $179,529 or 3.8%, to $5,359,518 for the nine months ended September 30, 2008 as compared to $5,161,989 for the nine months ended September 30, 2007. The increase in cost of sales is primarily the result of an increase in material cost, such as stainless steel.

For the nine months ended September 30, 2008, selling, general and administrative expenses totaled $1,393,784. This was an increase of $62,865 or 4.7% as compared to the same period 2007. The increase in selling, general and administrative expenses is mainly a result of increases in salary and rent expanses. The increase was partially offset by decreases in professional service and research and development expenses.

For the nine months ended September 30, 2008, income from operations decreased to $933,115 as compared to $1,703,891 for the nine months ended September 30, 2007. This represents a decrease of $770,776 or 45.2 % comparing the two periods. The decrease in income from operations for the nine months ended September 30, 2008 is primarily the result of increases in cost of sales, and selling, general and administrative expenses.

Other income was $(204,306) and $87,497 for the nine months ended September 30, 2008 and 2007, respectively. This was a decrease of $(291,803), or 333.5%. The main reason for this decrease was due to an increase in loss on foreign currency exchange, and decreases in interest income and investment gains.

Our net income was $728,809 for the nine months ended September 30, 2008 compared to a net income of $1,791,388 for the nine months ended September 30, 2007. The decrease in profitability for the nine months ended September 30, 2008 was due to the reasons described above.

Liquidity and Capital Resources

Cash and cash equivalents were $4,717,031 at September 30, 2008 and $2,783,243 at December 31, 2007. Our total current assets were $8,422,653 at September 30, 2008 as compared to $7,465,892 at December 31, 2007. Our total current liabilities were $3,518,452 at September 30, 2008 as compared to $4,163,738 at December 31, 2007.

We had working capital at September 30, 2008 of $4,904,201 compared with working capital of $3,302,154 at December 31, 2007. This increase in working capital was primarily due to increases in cash and cash equivalents and inventory, and decreases in accounts payable and accrued expenses.

During the nine months period ended September 30, 2008, net cash provided by operating activities was $1,390,456. Net cash provided by investing activities was $1,146,846, and net cash used in financing activities was $(344,840). Net change in cash and cash equivalents was an increase of $1,933,788.

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity or capital expenditures.

Critical Accounting Policies

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

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

Recently Issued Accounting Pronouncements

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

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

In May 2008, the Financial Accounting Standards Board (FASB) issued Statements of Financial Standards No. 162 (SFAS 162), “The Hierarchy of Generally Accepted Accounting Principles.” SFAS 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles (GAAP) for nongovernmental entities. SFAS 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section 411, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles.” It is only effective for nongovernmental entities; therefore, the GAAP hierarchy will remain in SAS 69 for state and local governmental entities and federal governmental entities. The Company does not expect SFAS 162 to have a material effect on its consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

N/A.

Item 4. Controls and Procedures.

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2008 to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (1) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure; and (2) recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms.

There was no change to our internal controls or in other factors that could affect these controls during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

Item 1. Legal Proceedings.

We are not a party to any pending legal proceeding, nor is our property the subject of a pending legal proceeding, that is not in the ordinary course of business or otherwise material to the financial condition of our business. None of our directors, officers or affiliates is involved in a proceeding adverse to our business or has a material interest adverse to our business.

Item 1A.Risk Factors.

Not Applicable.

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

Not Applicable.

Item 3. Defaults Upon Senior Securities.

Not Applicable.

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

On March 5, 2008, we obtained stockholder consent for an amendment to our certificate of incorporation effectuating a three for one reverse stock split and to effectuate a migratory merger of the Company from Delaware to Nevada. Further information can be found in the Definitive Schedule 14C, filed with the Securities and Exchange Commission on March 24, 2008.

Item 5. Other Information.

Not applicable.

Item 6. Exhibits.

Exhibit
Number		Description
2.1		Share Exchange Agreement dated February 5, 2008, between the Company and the parties set forth on the signature page thereof. (incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on March 14, 2008)

2.2		Agreement and Plan of Merger (incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on April 15, 2008)

3.1		Articles of Amendment to the Articles of Incorporation of the Company (incorporated by reference to the Company's proxy statement on Schedule 14A filed with the Commission on March 5, 2003 (the "Proxy Statement")

3.2		Agreement and Plan of Merger between Quixit, Inc., a Colorado corporation, and TOP Group Corporation (now known as TOP Group Holdings, Inc.), a Delaware corporation (incorporated by reference to the Proxy Statement)

3.3		Certificate of Incorporation of the Company (incorporated by reference to the Proxy Statement)

3.4		By-Laws of the Company (incorporated by reference to the Proxy Statement)

3.5		Restated Certificate of Incorporation of the Company (incorporated by reference to the Company’s proxy statement on Schedule 14C filed with the commission on March 15, 2005 for an increase of authorized shares)

3.6		Restated Certificate of Incorporation of the Company (incorporated by reference to the Company’s proxy statement on Schedule l4C filed with the commission on August 26, 2005 for a name change)

3.7		Restated Certificate of Incorporation of the Company (incorporated by reference to the Company’s proxy statement on Schedule l4C filed with the commission on June 20, 2006 to set the new total authorized shares)

3.8		Certificate of Merger filed with the Secretary of State of Delaware (incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on April 15, 2008)

3.9		Certificate of Merger filed with Secretary of State of Nevada (incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on April 15, 2008)

3.10		Certificate of Amendment to the Articles of Incorporation (incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on April 15, 2008)

10.1		Employment Agreement with Pi-Yun Chu (incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on March 14, 2008)

10.2		Employment Agreement with Shen-Ren Li (incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on March 14, 2008)

10.3		Employment Agreement with Sheng-Peir Yang (incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on March 14, 2008)

31.1		Certification by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.

31.2		Certification by Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.

32.1		Certification by Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code.

32.2		Certification by Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code.

SIGNATURES

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

	OMPHALOS, CORP.

Date: November 12, 2008	By:	/s/ Sheng-Peir Yang
		Sheng-Peir Yang
		Chief Executive Officer, President
		and Chairman of the Board

Date: November 12, 2008	By:	/s/ Chu Pi Yun
		Chu Pi Yun
		Chief Financial Officer, Chief Accounting
		Officer and Director