Emarine Global (EMRN) 10-Q 2008 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2008

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

For the transition period from _______________ to _______________.

Commission file number: 000-49933

Joytoto USA, Inc.

(Exact name of registrant as specified in its charter)

Nevada (State or other jurisdiction of incorporation or organization)	95-4886472 (I.R.S. Employer Identification No.)
3000 Scott Boulevard, Suite 206 Santa Clara, CA (Address of principal executive offices)	95054 (Zip Code)

Registrant’s telephone number, including area code (408) 970-8050

(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 xNo o

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

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)	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 oNo x  

Applicable only to issuers involved in bankruptcy proceedings during the preceding five years:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes oNo o

Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of June 30, 2008, there were 153,612,510 shares of common stock, par value $0.001, issued and outstanding ..

JOYTOTO USA, INC.  

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
ITEM 1	Financial Statements	3
ITEM 2	Managements Discussion and Analysis of Financial Condition and Results of Operations.	8
ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	12
ITEM 4T	Controls and Procedures	12
PART II – OTHER INFORMATION
ITEM 1	Legal Proceedings	14
ITEM 1A	Risk Factors	14
ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	14
ITEM 3	Defaults Upon Senior Securities	14
ITEM 4	Submission of Matters to a Vote of Security Holders	14
ITEM 5	Other Information	14
ITEM 6	Exhibits	14

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PART I – FINANCIAL INFORMATION

This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on management’s beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the heading “Management’s Discussion and Analysis of Financial Condition or Plan of Operation.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider” or similar expressions are used.

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions. Our future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.

ITEM 1 Financial Statements

Consolidated Balance Sheets

Consolidated Statements of Operations (Unaudited)

Consolidated Statements of Cash Flows (Unaudited)

Notes to Consolidated Financial Statements (Unaudited)

3

JOYTOTO USA, INC.

CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2008			2007
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash		28,767			-
Prepaid expenses		7,278			3,527
Total current assets		36,045			3,527
Property and equipment, net of accumulated depreciation of $6,924 and $9,001		15,750			19,904
Other assets
License Agreements, net of accumulated amortization of $1,952,364 and $1,081,548		14,530,636			15,401,452
Goodwill		52,912			52,912
Other receivable		10,000			-
Deposits		203,090			3,072
Total other assets		14,796,638			15,457,436
Total Assets	$	14,848,433		$	15,480,867
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank overdraft	$	-		$	1,695
Accrued expenses and accounts payable		565,687			205,303
Due to affiliate		194,056			105,061
Loans payable to related parties		15,000			-
Loans payable		-			50,000
Other payable		5,168			-
Total Current Liabilities		779,911			362,059
Stockholders' Equity
Common stock, authorized 300,000,000 shares; par value $0.001; 153,612,510 issued and outstanding at June 30, 2008 and December 31,2007, respectively		153,613			153,613
Additional paid-in-capital		78,376,368			65,876,368
Accumulated deficit		(64,461,459	)		(50,911,173	)
Total Stockholders’ Equity		14,068,522			15,118,808
Total Liabilities and Stockholders’ Equity	$	14,848,433		$	15,480,867

See accompanying notes to consolidated financial statements.

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JOYTOTO USA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

		For the 6 months ended June 30,						For the 3 months ended June 30,
		2008			2007			2008			2007
REVENUES		$	732,239		$	-		$	732,239		$	-
COST OF GOODS SOLD			667,142			-			667,142			-
NET PROFIT			65,097			-			65,097			-
GENERAL EXPENSES
Selling, general and administrative			12,740,412			96,472			6,286,844			96,472
Depreciation			4,154			1,652			2,077			1,652
Amortization			870,817			190,969			435,408			190,969
Total Costs and Expenses			13,615,383			289,093			6,724,329			289,093
NET LOSS		$	(13,550,286	)	$	289,093		$	(6,659,232	)	$	289,093
NET LOSS PER COMMON
SHARE (Basic and Diluted)		$	(0.09	)	$	(0.02	)	$	(0.04	)	$	(0.02	)
WEIGHTED AVERAGE SHARES
OUTSTANDING			153,612,510			17,361,211			153,612,510			1,000

See accompanying notes to consolidated financial statements.

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JOYTOTO USA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	For the 6 months ended June 30,
	2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(13,550,286	)	$	(289,093	)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation and amortization		874,970			192,621
Stock based compensation		12,500,000			-
Changes in assets and liabilities:
(Increase) decrease in prepaid expenses		(3,751	)		1,369
(Increase) decrease in other receivable		(10,000	)		(11,500	)
(Increase) decrease in deposits		(200,018	)		-
Increase (decrease) in accrued expenses		360,384			48,565
Increase (decrease) in other payable		5,168			-
Increase (decrease) in due to affiliate		88,995			20,000
Net cash used in operating activities		65,462			(38,038	)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash acquired in acquisition		-			48,210
Net cash provided by investing activities		-			48,210
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment loan		(50,000	)
Loan proceeds		15,000			-
Bank overdraft		(1,695	)		-
Net cash provided by financing activities		(36,695	)		-
Net increase in cash		28,767			-
CASH AT BEGINNING OF PERIOD		-			-
CASH AT END OF PERIOD	$	28,767		$	10,172
SUPPLEMENTAL CASH FLOW DISCLOSURES
Non-Cash Items:
Acquisition of Joytoto America, Inc.
Cash		-			(48,210	)
Prepaid expenses		-			(1,817	)
Property and equipment		-			(26,828	)
Accumulated depreciation		-			1,118
License agreement		-			(400,000	)
Accumulated amortization		-			19,762
Goodwill		-			(52,912	)
Deposits		-			(3,072	)
Accrued expenses		-			11,959
Common stock		-			1
Additional paid-in-capital		-			499,999
Issuance of stock to acquire license agreements		-			16,083,000

See accompanying notes to financial statements.

6

JOYTOTO USA, INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2008

NOTE A – BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. 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, all adjustments (consisting of normal recurring accruals) considered necessary in order to make the financial statements not misleading have been included. Results for the three and six months ended June 30, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008. For further information, refer to the financial statements and footnotes thereto included in the Joytoto USA, Inc., amended annual report on Form 10-KSB/A for the year ended December 31, 2007.

NOTE B – GOING CONCERN

As shown in the accompanying financial statements, the Company has an accumulated deficit of $64,461,459 as of June 30, 2008. Management’s plans include the raising of capital through the equity markets to fund future operations, seeking additional acquisitions, and the generating of revenue through its business. Failure to raise adequate capital and generate adequate sales revenues could result in the Company having to curtail or cease operations. Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenue will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. However, the accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

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ITEM 2   Managements Discussion and Analysis of Financial Condition and Results of Operations.

Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

Although the forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

Overview

Joytoto USA, Inc., formerly BioStem, Inc. (the “Company,” “we,” and “us”) was incorporated on November 2, 2001, in the State of Nevada, as Web Views Corporation. In June 2003, we acquired 100% of the issued and outstanding shares of Cascade Mountain Mining Corp., pursuant to an exchange agreement. As a result of the acquisition and the change in focus of our business, on June 17, 2003, we changed our name from Web Views Corporation to Cascade Mountain Mining Company, Inc.

On January 7, 2005, we changed our name from Cascade Mountain Mining Company, Inc. to National Parking Systems, Inc., in anticipation of an exchange agreement entered into on January 13, 2005, whereby we acquired 100% of the issued and outstanding shares of ABS Holding Company, Inc., a Nevada corporation and BH Holding Company, Inc., a Nevada corporation.

On November 18, 2005, we changed our name from National Parking Systems, Inc. to BioStem, Inc. in contemplation of the closing of an Agreement and Plan of Merger we had entered into with Cryobanks International, Inc., a stem cell company. Due to the failure of Cryobanks to satisfy certain conditions of the closing of such Agreement, we terminated the Agreement in September 2007, and sought a new acquisition.

On October 12, 2007, we entered into a Stock Exchange Agreement with Joytoto Co., Ltd., a Korean company (“Joytoto Korea”) , and Joyon Entertainment Co., Ltd, a Korean company, to purchase 100% of the issued and outstanding capital stock of Joyon Entertainment, Inc., a Delaware corporation (“JEI”), in exchange for 115,000,000 shares of our common stock (after giving effect to a one-for-forty reverse split of our common stock) as well as the divestment of our two subsidiaries, BH Holding Company, Inc. and ABS Holding Company, Inc. Effective on October 31, 2007, our name was changed to Joytoto USA, Inc. and our common stock commenced trading under the new symbol “JYTO”.

We are a majority owned subsidiary of Joytoto Korea. We have one wholly-owned subsidiary, JEI, and two sub-subsidiaries, Joytoto Technologies, Inc., a Nevada corporation (“JTI”) and Joytoto America, Inc., a California corporation (“JAI”), both of which are wholly-owned subsidiaries of JEI.

On October 31, 2007, we divested our two subsidiaries and acquired Joyon Entertainment, Inc., and its two wholly-owned subsidiaries, Joytoto America, Inc. and Joytoto Technologies, Inc. The discussion below concerns the business operations of our new subsidiaries, which are engaged in the business of providing online gaming services and MP3 and other technical products.

Our business is conducted through our two wholly-owned subsidiaries, Joytoto Technologies and Joytoto America. Both were acquired by Joyon Entertainment, Inc., in the second quarter of 2007.  Both entities were formed in the third quarter of 2006.  We generated revenue of $732,239 in the second quarter through Joytoto Technologies. Even though we had revenue from the second quarter of 2008 and we will have revenues continuously, we will continue to operate at a loss until at least the fourth quarter of 2008. There can be no assurance, however, that we will achieve all or any part of our anticipated revenue goals. All of our revenue goals are based on our MP3 products business, but we are planning to open an online game portal at the beginning of next year. The online game business operated Joytoto America will be a cash cow business model for us.

On February 20, 2008, we entered into an Agreement to Manufacture, Supply and Market with Hyundai RFmon Corp. (“Hyundai”), a United States distributor of electronic products. Pursuant to this agreement, upon receipt of an initial purchase order from Hyundai of a minimum of $10 million, the Company will manufacture, market and supply to Hyundai various electronic and digital products, including, but not limited to, ATM machines, DVD download dispensers and smart teller machines. This agreement will remain in effect until December 31, 2012.

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Through our sub-subsidiary, JTI, we are a virtual, original equipment manufacturer (“OEM”) of consumer electronics for retailers located throughout the world. Effective on June 11, 2007, JTI entered into an Exclusive Distributorship Agreement with Joytoto Korea, whereby JTI was appointed as the exclusive worldwide distributor of Joytoto Korea’s MP3 products and other consumer electronic devices. Joytoto Korea will complete all purchase orders existing or pending as of the date of the Exclusive Distributorship Agreement. It is anticipated that Joytoto Korea will transfer to JTI all of its MP3 products business as described in the Exclusive Distributorship Agreement at such time as we are able to fulfill all new purchase orders for such products. We hope to enter into direct contractual relationships with Joytoto Korea’s primary customers at that time.

On April 18, 2007, JAI entered into a Master License Agreement with Joytoto Korea, and Joyon Entertainment Co., Ltd., a Korean company (collectively, the “Licensors”), whereby JAI acquired an exclusive license to operate an online game service, using four online video games developed by the Licensors, in the United States, for a period of ten years . In addition, JAI has the option to enter into an exclusive license to provide an additional twenty online video games through its online game service.

Three months ended June 30, 2008 compared to three months ended June 30, 2007

Revenues, Expenses and Loss from Operations

Our revenues, selling, general and administrative expenses, depreciation, amortization, total costs and expenses, and net loss for the three months ended June 30, 2008 and for the three months ended June 30, 2007 are as follows:

	Three Months Ended June 30, 2008			Three Months Ended June 30 2007
Revenue	$	732,239		$	0-
Cost of goods sold		667,142			-
Net profit		65,097			-
Selling, general and administrative		6,286,844			96,472-
Depreciation		2,077			1,652-
Amortization		435,408			190,969-
Total costs and expenses		6,724,329			289,093-
Net Loss	$	(6,659,232	)		289,093-

For the three months ended June 30, 2008 we had revenue in the amount of $732,239 For the three months ended June 30, 2008 our general and administrative expenses was $6,286,844. General and administrative expenses primarily consists of $6,250,000 in stock based compensation due to the shares granted to our executive officers under their employment agreements. Depreciation was due to the purchase of computers and other office furniture and equipment. Amortization is derived from the value assigned to the securities and other consideration issued for our license and distribution agreements, based on their estimated useful life.

Six months ended June 30, 2008 compared to six months ended June 30, 2007

Revenues, Expenses and Loss from Operations

Our revenues, selling, general and administrative expenses, depreciation, amortization, total costs and expenses, and net loss for the six months ended June 30, 2008 and for the six months ended June 30, 2007 are as follows:

	Six Months Ended June 30, 2008			Six Months Ended June 30, 2007
Revenue	$	732,239		$	0-
Cost of goods sold		667,142			-
Net profit		65,097			-
Selling, general and administrative		12,740,412			96,472-
Depreciation		4,154			1,652-
Amortization		870,817			190,969-
Total costs and expenses		13,615,383			289,093-
Net Loss	$	(13,550,286	)		289,093-

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For the six months ended June 30, 2008 and for the period of our inception thru June 30, 2008 we have had revenue of the $732,239. For the six months ended June 30, 2008 our general and administrative expenses was $12,740,412.  General and adminstrative expenses primarily  consists of $12,500,000 in stock based compensation due to the shares granted to our executive officers under their agreements. Depreciation was due to the purchase of computers and other office furniture and equipment. Amortization is derived from the value assigned to the securities and other consideration issued for our license and distribution agreements, based on their estimated useful life

Net Loss

Even though we have generated $732,239 during the second quarter from selling MP3 players to BestBuy, our net loss is $(13,550,286) because we didn’t generate revenues before the second quarter since the consummation of our merger on October 31, 2007.

Liquidity and Capital Resources

Introduction

Our primary assets consist of the two online game license agreements and our Exclusive MP3 Distributorship Agreement. As of June 30, 2008, we began to generate revenue through the Exclusive Distributorship Agreement.  We have very few assets since we have begun operations from October 31, 2007. Our cash requirements have been relatively small up to this point, but as a result of the acquisition of JEI and the fact that we are now a public, reporting company, we anticipate that our cash needs will increase dramatically. We anticipate satisfying these cash needs through the sale of our common stock until we not only begin to generate revenue, but until we can generate enough revenue to sustain our operations. 

	As of June 30, 2008		As of December 31, 2007		Change
Cash and cash equivalents	$	28,767	$	-	$	28,767
Prepaid expenses		7,278		3,527		3,751
Total current assets		36,045		3,527		32,518
Property and equipment, net of accumulated depreciation		15,750		19,904		(4,154	)
License Agreements, net of accumulated amortization of $1,952,364 and $9,001		14,530,636		15,401,452		(870,816	)
Goodwill		52,912		52,912		-
Other receivable		10,000		-		10,000
Deposits		203,090		3,072		200,018
Total Assets		14,848,433		15,480,867		(632,434	)
Bank overdraft		-		1,695		(1,695	)
Accrued expenses and accounts payable		565,687		205,303		360,384
Due to affiliate		194,056		105,061		88,995
Loans payable to related parties		15,000		-		15,000
Loans payable		-		50,000		(50,000	)
Other payable		5,168		-		5,168
Total current liabilities	$	779,911	$	362,059	$	417,852

Cash Requirements

As stated above, we anticipate that our cash requirements will increase substantially as a result of the fact that we are now a public, reporting company and as we begin to increase operations to generate revenue from our license and distributorship agreements. We need construction cost of the online game portal and material cost of manufacturing consumer items because we are planning to provide online game service in the US and to manufacture consumer electronics goods such as our MP3 player.

Sources and Uses of Cash

Operations

For the six months ended June 30, 2008, we had a net loss from operations of ($13,550,286). This was offset by depreciation and amortization of $874,970 stock based compensation of $12,500,000, an increase in prepaid expenses of $3,751, an increase in deposits of $200,018, an increase in accrued expenses of $360,384 an increase in other payables of $5,168, and an increase in the amount due to an affiliate (Joytoto Korea) of $88,995, for total cash used in our operating activities of $65,462.

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Investments

We had no cash provided by investments for the six months ended June 30, 2008.

Financing

Our cash flows from financing activities totaled $36,695, from $35,000 in net loan proceeds offset by ($1,695) from repayment of our bank overdraft account.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. In consultation with our Board of Directors, we have identified the following accounting policies that we believe are key to an understanding of our financial statements. These are important accounting policies that require management’s most difficult, subjective judgments.

Valuation of License Agreements

We account for goodwill and license agreements in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and other Intangible Assets.” Under SFAS 142, goodwill and intangibles with indefinite lives are not amortized; rather they are tested for impairment at least annually.  Intangible assets and license agreements, other than goodwill, with definite lives will be amortized over their useful lives ranging from 3 to 10 years. We periodically evaluate the reasonableness of the useful lives of these intangible assets.  The license agreements were valued on our balance sheet as follows:

A. Upon execution of the Master License Agreement, we issued Joyon Korea thirty million (30,000,000) common shares as consideration. Prior to the acquisition of the Master License Agreement we had an independent business valuation performed whereby our enterprise value was calculated to be $0.1799 per share. Accordingly, the shares issued for the license were valued at $0.1799 per share.

B. Prior to the acquisition of the Exclusive Distributorship Agreement, we had an independent business valuation performed whereby our enterprise value was calculated to be $0.3562 per share. Accordingly, the shares issued for the license agreement were valued at $0.3562 per share.

C. License agreements are comprised of the following:

	June 30, 2008		Estimated Useful Life
Pang Pang License	$	400,000	3 years
North American Master License		5,397,000	10 years
Exclusive Distributorship		10,686,000	10 years
Less: accumulated amortization		1,952,364	1,952,364
	$	14,530,636	14,530,636

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Off-balance Sheet Arrangements

We have no off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is deemed by our management to be material to investors.

ITEM 3Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company we are not required to provide the information required by this Item.

ITEM 4TControls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Pursuant to Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation with the participation of the Company’s management, the Company’s Chief Executive Officer (“CEO”) Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the six months ended June 30, 2008. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of June 30, 2008, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses described below.

In light of the material weaknesses described below, we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 5) or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected. Management has identified the following three material weaknesses which have caused management to conclude that, as of June 30, 2008, our disclosure controls and procedures were not effective at the reasonable assurance level:

1. We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

2. We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

3. We had a significant number of audit adjustments last fiscal year. Audit adjustments are the result of a failure of the internal controls to prevent or detect misstatements of accounting information. The failure could be due to inadequate design of the internal controls or to a misapplication or override of controls. Management evaluated the impact of our significant number of audit adjustments last year and has concluded that the control deficiency that resulted represented a material weakness.

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To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.

Remediation of Material Weaknesses

To remediate the material weaknesses in our disclosure controls and procedures identified above, we have continued to refine our internal procedures to begin to implement segregation of duties and to reduce the number of audit adjustments.

Changes in Internal Control over Financial Reporting

Except as noted above, there were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1Legal Proceedings

There are no material changes to the legal proceedings in our most recent Quarterly Report on Form 10-Q.

In the ordinary course of business, we may be from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.

ITEM 1ARisk Factors

There are no material changes to the risk factors in our most recent Annual Report on Form 10-K.

ITEM 2Unregistered Sales of Equity Securities and Use of Proceeds

There were no unregistered, or any other, sales of equity securities by us during the three month period ended June 30, 2008.

ITEM 3Defaults Upon Senior Securities

There have been no events that are required to be reported under this Item.

ITEM 4Submission of Matters to a Vote of Security Holders

There have been no events that are required to be reported under this Item.

ITEM 5Other Information

ITEM 6Exhibits

3.1 (1)	Articles of Incorporation dated September 20, 2001
3.2 (2)	Articles of Amendment to Articles of Incorporation dated June 17, 2003
3.3 (3)	Certificate of Amendment to Articles of Incorporation dated January 7, 2005

3.4 (5)	Certificate of Amendment to Articles of Incorporation dated November 18, 2005
3.5 (4)	Certificate of Amendment to Articles of Incorporation dated Effective October 31, 2007
3.6 (1)	Bylaws of Web Views Corporation dated November 10, 2001
10.1 (6)	Agreement to Manufacture, Supply and Market, dated February 20, 2008, by and among Hyundai RFmon Corp. and Joytoto USA, Inc.
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1	Chief Executive Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Chief Financial Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1)	Incorporated by reference from our Registration Statement on Form 10SB12G filed with the Commission on July 23, 2002.
(2)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on June 25, 2003.
(3)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on January 7, 2005.
(4)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on November 6, 2007.
(5)	Incorporated by reference from our Quarterly Report on Form 10-Q filed with the Commission on November 14, 2007.
(6)	Incorporated by reference from our Current Report on Form 8-K filed with the Commission on June 4, 2008.

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SIGNATURES

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.

	Joytoto USA, Inc.
Dated: August 19, 2008	/s/ Seong Yong Cho
	By: Seong Yong Cho
	Its: President

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