UNITED STATES
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 June 30, 2011

[ ] 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)

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)

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

Copies to:
Marc Ross, Esq.
Andrew Smith, Esq.
Sichenzia Ross Friedman Ference LLP
61 Broadway, 32^nd Floor
New York, New York 10006
Phone: (212) 930-9700
Fax: (212) 930-9725

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 [ ]

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.

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 registrant’s common stock outstanding, as of August 1, 2011 was 30,063,759.

TABLE OF CONTENTS

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

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See accompanying Notes to Condensed Consolidated Financial Statements

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See accompanying Notes to Condensed Consolidated Financial Statements

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See accompanying Notes to Condensed Consolidated Financial Statements

F-3

See accompanying Notes to Condensed Consolidated Financial Statements

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OMPHALOS, CORP.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011

Basis of Presentation— The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial reporting and in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements contained in this report reflect all adjustments that are normal and recurring in nature and considered necessary for a fair presentation of the financial position and the results of operations for the interim periods presented. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The results of operations for the interim period are not necessarily indicative of the results expected for the full year. These unaudited, condensed consolidated financial statements, footnote disclosures and other information should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

Organization — Omphalos Corp. was incorporated as Soyodo Group Holdings, Inc. (the “Soyodo”) under the laws of Delaware in March 2003. On February 5, 2008, Soyodo acquired the outstanding shares of Omphalos Corp. Omphalos Corp. (the “Omphalos BVI) was incorporated on October 30, 2001 under the laws of the British Virgin Islands. For accounting purposes, the acquisition was treated as a recapitalization of Omphalos BVI. Omphalos BVI owns 100% of Omphalos Corp. (Taiwan), All Fine Technology Co., Ltd. (Taiwan), and All Fine Technology Co., Ltd. (B.V.I.). Omphalos Corp. (Taiwan) and 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. 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.

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

Basis of Consolidation— The consolidated financial statements include the accounts of Omphalos Corp. and its wholly owned subsidiaries. All significant intercompany accounts and transactions are eliminated.

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.

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Cash and Cash Equivalents— 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.

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 $540,505 and $535,525 at June 30, 2011 and December 31, 2010, respectively.

Intangible Assets —Include cost of patent applications that are deferred and charged to operations over their useful lives. The accumulated amortization is $4,397 and $3,912 at June 30, 2011 and December 31, 2010, respectively. Annual amortization expense of such intangible assets is expected to be $930 per year for the next five years.

Foreign-currency Transactions — Foreign-currency transactions are recorded in New Taiwan dollar (“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 dollar, 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 Company financial statements are presented in the U.S. dollar ($), which is the Company’s reporting currency, while its functional currency is New Taiwan dollar (“NTD”). Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements of income. Monetary assets and liabilities denominated in foreign currency are translated at the functional currency rate of exchange ruling at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the statements of income.

In accordance with ASC 830, Foreign Currency Matters, the Company translates the assets and liabilities into U.S. dollar ($) using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from NTD into U.S. dollar are recorded in stockholders’ equity as part of accumulated other comprehensive income.

Recently Issued Accounting Pronouncements — In June 2011, the FASB issued ASU Update No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. The amendments to the Codification in this ASU will require companies to present the components of net income and other comprehensive income either as one continuous statement or as two consecutive statements. It eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. The standard does not change the items which must be reported in other comprehensive income, how such items are measured or when they must be reclassified to net income. This standard is effective for interim and annual periods beginning after December 15, 2011. Because this ASU impacts presentation only, it will have no effect on our financial condition, results of operations or cash flows.

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

     Cautionary Note Regarding Forward-Looking Statements

     This Quarterly Report on 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-K for the year ended December 31, 2010.

     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.

Results of Operations

     Three Months Ended June 30, 2011 Compared to the Three Months Ended June 30, 2010

     Net sales for the three months ended June 30, 2011 were $162,424 as compared to $299,233 for the three months ended June 30, 2010. This represents a decrease of $136,809 or approximately 45.72% comparing the two periods. The decrease in net sales is primarily the result of a decrease in demand for end products due to poor economic conditions.

     Cost of sales decreased by $35,413 or approximately 17.76%, to $164,024 for the three months ended June 30, 2011 as compared to $199,437 for the three months ended June 30, 2010. Gross profit for the three months ended June 30, 2011 was ($1,600), compared to $99,796 for the same period in 2010. Gross profit (loss) as a percentage of net sales was (1%) in the second quarter of 2011, compared to 33% in the same period in 2010. The lower gross profit rate in the second quarter of 2011 was primarily due to the in sales of old models at discounted prices.

     For the three months ended June 30, 2011, selling, general and administrative expenses totaled $185,091. This was a decrease of $30,009 or approximately 13.95% as compared to $215,100 for the same period in 2010. The decrease in selling, general and administrative expenses is primarily the result of the decrease in commission, professional fees, rent, salary and travel expenses.

     For the three months ended June 30, 2011, income (loss) from operations increased to ($186,691) as compared to ($115,304) for the three months ended June 30, 2010. This represents an increased loss of $71,386 or approximately 61.91% comparing the two periods. The increase of loss from operations for the three months ended June 30, 2011 is primarily the result of reduced sales volume and lower gross margin, which is partially offset by the reduced operating expenses.

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     Other income (expenses) was ($22,255) and $6,321 for the three months ended June 30, 2011 and 2010, respectively. This represents decreased income of $28,576 or a decrease of approximately 452%. The main reason for this decreased income was a gain (loss) on foreign currency exchange of ($22,289), as compared to gain (loss) of $6,123 for the prior year period.

     Our net income (loss) was ($208,946) for the three months ended June 30, 2011 compared to net income (loss) of ($108,983) for the three months ended June 30, 2010. The increased loss for the three months ended June 30, 2011 was due to the reasons described above.

Six Months Ended June 30, 2011 compared to the Six Months Ended June 30, 2010

     Net sales for the six months ended June 30, 2011 were $405,639 as compared to $766,729 for the six months ended June 30, 2010. This represents a decrease of $361,090 or approximately 47.1% comparing the two periods. The decrease in net sales is primarily the result of a decrease in demand for end products due to poor economic conditions.

     Cost of sales decreased by $280,157 or approximately 48.15%, to $301,662 for the six months ended June 30, 2011 as compared to $581,819 for the six months ended June 30, 2010. Gross profit for the six months ended June 30, 2011 was $103,977, compared to $184,910 for the same period in 2010. Gross profit as a percentage of net sales was 25.63% in the second quarter of 2011, compared to 24.11% in the same period in 2010. The slightly higher gross profit rate in the second quarter of 2011 was primarily due to the increase in sales of new models and parts which is partially offset by the discounted sales of old models.

     For the six months ended June 30, 2011, selling, general and administrative expenses totaled $433,372. This was a decrease of $69,661 or approximately 13.85% as compared to $503,033 the same period in 2010. The decrease in selling, general and administrative expenses is primarily the result of the decrease in commission, professional fees, rent, salary and travel expenses.

     For the six months ended June 30, 2011, loss from operations increased to ($329,395) as compared to ($318,123) for the six months ended June 30, 2010. This represents an increased loss of $11,272 or approximately 3.5% comparing the two periods. The increase of loss from operations for the six months ended June 30, 2011 is primarily the result of reduced sales volume.

     Other income (expenses) was ($4,798) and ($2,488) for the six months ended June 30, 2011 and 2010, respectively. This represents decreased income of $2,310 or a decrease of approximately 92.85% . The main reason for this decreased income was a decrease in interest income to $283, as compared to interest income of $3,166 for the prior year period.

     Our net income (loss) was ($334,193) for the six months ended June 30, 2011 compared to net income (loss) of ($320,611) for the six months ended June 30, 2010. The increased loss for the six months ended June 30, 2011 was due to the reasons described above.

Liquidity and Capital Resources

     Cash and cash equivalents were $1,358,930 at June 30, 2011 and $2,005,838 at December 31, 2010. Our total current assets were $3,593,961 at June 30, 2011 as compared to $4,146,740 at December 31, 2010. Our total current liabilities were $249,632 at June 30, 2011 as compared to $514,274 at December 31, 2010.

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     We had working capital at June 30, 2011 of $3,344,329 compared with working capital of $3,632,466 at December 31, 2010. This decrease in working capital was primarily due to a decrease in cash and cash equivalents and accounts payable and accrued expenses and an increase in accounts receivable.

     During the six months ended June 30, 2011, net cash used in operating activities was $637,355. Increased net cash used in operating activities was mainly due to our net loss of ($334,193), an increase in accounts receivable of approximately $100,000, an increase in inventory of approximately $7,000, a decrease in prepaid and other asset of approximately $64,000, a decrease in accounts payable of approximately $209,000, and a decrease in accrued expenses of approximately $60,000.

     Net cash used in investing activities for the six months ended June 30, 2011 was ($24,080), which was primarily due to the purchase of fixed assets in the prior quarter.

     Net change in cash and cash equivalents was a decrease of $646,908 during the six months ended June 30, 2011.

Inflation

     Our opinion is that inflation has not had a material effect on our operations and is not expected to have any material effect on our operations.

Climate Change

     Our opinion is that neither climate change, nor governmental regulations related to climate change, have had, or are expected to have, any material effect on our operations.

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 June 30, 2011 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.

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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. Removed and Reserved.

Item 5. Other Information.

     Not applicable.

Item 6. Exhibits.

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* Filed herewith. 

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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.

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