Emarine Global (EMRN) 10-Q 2008 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2008

o TRANSITION 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

Pollex, 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

Joytoto USA, Inc.

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x No 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
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

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 o No 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 November 10, 2008, there were 5,120,417shares of common stock, par value $0.001, issued and outstanding ..

POLLEX, INC.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
ITEM 1	FINANCIAL STATEMENTS	4
ITEM 2	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	8
ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	12
ITEM 4	CONTROLS AND PROCEDURES	12
PART II - OTHER INFORMATION
ITEM 1	LEGAL PROCEEDINGS	13
ITEM 1A	RISK FACTORS	13
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	13
ITEM 3	DEFAULTS UPON SENIOR SECURITIES	13
ITEM 4	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	13
ITEM 5	OTHER INFORMATION	14
ITEM 6	EXHIBITS	14

2

PART I - FINANCIAL INFORMATION

Effective on October 24, 2008, the transaction described in Item 4 of this Quarterly Report was completed, and as a result, our name was changed to Pollex, Inc. and our common stock commenced trading under the new symbol “PLLX.”

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.

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ITEM 1   Financial Statements

POLLEX, INC.
(formerly Joytoto USA, Inc.)
CONSOLIDATED BALANCE SHEETS
	September 30,			December 31,
	2008			2007
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	7,517		$	-
Prepaid expenses		6,837			3,527
Total current assets		14,354			3,527
Property and equipment, net of accumulated
depreciation of $13,156 and $9,001		13,672			19,904
Other assets
License Agreements, net of accumulated
amortization of $2,387,773 and $1,081,548		5,000,000			15,401,452
Goodwill		52,912			52,912
Other receivable		-			-
Deposits		203,090			3,072
Total other assets		5,256,002			15,457,436
Total Assets	$	5,284,028		$	15,480,867
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank overdraft	$	-		$	1,695
Accrued expenses and accounts payable		572,071			205,303
Due to affiliate		194,056			105,061
Loans payable to related parties		58,400			-
Loans payable		-			50,000
Other payable		5,200			-
Total Current Liabilities		829,727			362,059
Stockholders' Equity
Common stock, authorized 300,000,000 shares;
par value $0.001; 5,120,417 issued and outstanding
at September 30, 2008 and December 31,2007, respectively		5,120			5,120
Additional paid-in-capital		84,774,861			66,024,861
Accumulated deficit		(80,325,680	)		(50,911,173	)
Total Stockholders’ Equity		4,454,301			15,118,808
Total Liabilities and Stockholders’ Equity	$	5,284,028		$	15,480,867

See accompanying notes to consolidated financial statements.

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POLLEX, INC.

(formerly Joytoto USA, Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	For the three months ended						For the nine months ended
	September 30,						September 30,
	2008			2007			2008			2007
REVENUES	$	-		$	-		$	732,239		$	-
COST OF GOODS SOLD		-			-			667,142			-
NET PROFIT		-			-			65,097			-
GENERAL EXPENSES
Selling, general and administrative		6,331,509			-			19,071,920			96,472
Impairment of license agreements		9,095,227			-			9,095,227			-
Depreciation		2,078			2,078			6,232			4,847
Amortization		435,408			435,408			1,306,225			646,139
Total Costs and Expenses		15,864,222			437,486			29,479,604			747,458
NET LOSS	$	(15,864,222	)	$	(437,486	)	$	(29,414,507	)	$	(747,458	)
NET LOSS PER COMMON
SHARE (Basic and Diluted)	$	(3.10	)	$	(0.76	)	$	(5.74	)	$	(1.29	)
WEIGHTED AVERAGE SHARES
OUTSTANDING		5,120,417			578,707			5,120,417			578,707

See accompanying notes to consolidated financial statements.

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POLLEX, INC.

(formerly Joytoto USA, Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

		For the nine months ended
		September 30,
		2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(29,414,507	)	$	(747,458	)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation and amortization		1,312,457			650,986
Impairment of license agreements		9,095,227			-
Stock based compensation		18,750,000			-
Changes in assets and liabilities:
(Increase) decrease in prepaid expenses		(3,310	)		1,369
(Increase) decrease in other receivable		-			(11,500	)
(Increase) decrease in deposits		(200,018	)		-
Increase (decrease) in accrued expenses		366,768			48,565
Increase (decrease) in other payable		5,200			-
Increase (decrease) in due to affiliate		88,995			20,000
Net cash used in operating activities		812			(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 of loan		(50,000	)		-
Loan proceeds		58,400			-
Bank overdraft		(1,695	)		-
Net cash provided by financing activities		6,705			-
Net increase in cash		7,517			10,172
CASH AT BEGINNING OF PERIOD		-			-
CASH AT END OF PERIOD	$	7,517		$	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 consolidated financial statements.

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POLLEX, INC.

(formerly Joytoto USA, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

September 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 nine months ended September 30, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008.

NOTE B – GOING CONCERN

As shown in the accompanying financial statements, the Company has an accumulated deficit of $80,325,680 as of September 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.

NOTE C – REVERSE STOCK SPLIT

On September 12, 2008, a majority of our shareholders voted in favor of certain actions to be taken, which were made effective on October 24, 2008.  The shareholders approved an amendment to our Articles of Incorporation, changing our name to Pollex, Inc.; an amendment to our Articles of Incorporation effecting a reverse stock split of all of the outstanding shares of our Common Stock on a 1 for 30 basis; and an amendment to our Articles of Incorporation to change our currently authorized Preferred Stock to “Blank Check” Preferred Stock (the “Actions”).  A definitive information statement on Schedule 14C was filed with the SEC on September 25, 2008 and mailed to our shareholders on or about October 1, 2008.  Shareholders holding 115,000,000 shares of our Common Stock voted in favor of the Actions.  Our Board of Directors approved the Actions on September 12, 2008.

The consolidated financial statements have been retroactively revised to reflect the effect of the reverse stock split.

NOTE D – IMPAIRMENT OF LICENSE AGREEMENTS

At September 30, 2008, the Company reviewed its license agreements for impairment due to the deteriorating market for consumer goods in the US. Therefore the Company reviewed and adjusted its discounted cash flow projections. As a result of this assessment, the Company determined that the value of its license agreements were $5,000,000. As such, an impairment charge of $9,095,227 was recorded to reduce the carrying amount of the license agreements to fair value.

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ITEM 2   Management’s 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

Pollex, Inc., formerly 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(“Joyon Korea”), 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 JEI., and its two wholly-owned subsidiaries, JAI andJTI 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, JTI and JAI. Both were acquired by JEI, 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 of 2008 through JTI. Even though we had revenue from the second quarter of 2008 and we expect to 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 by JAI 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 Korea (collectively, the “Licensors”), whereby JAI acquired an exclusive license to operate an online game service, using four online 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 games through its online game service.

On October 21, 2008, we filed a Certificate of Amendment to our Articles of Incorporation to change our name to Pollex, Inc., thus resulting in our symbol change to “PLLX”, effective October 24, 2008.

Results of Operations for the Three Months Ended September 30, 2008 and 2007

Introduction

We did not have net sales in the three months ended September 30, 2008 or September 30, 2007. Our net sales for the third quarter of 2008 were 100% less than the second quarter of 2008, which were $ 65,097. Our net sales decreased during the third quarter of 2008 primarily because no orders were generated and new products are still in development.

Net Sales, Total Costs and Expenses, and Net Loss

Our net sales, total costs and expenses, and net loss for the three months ended September 30, 2008, as compared to the three months ended September 30, 2007, are as follows:

	3 Months Ended September 30, 2007			3 Months Ended September 30, 2008			Percentage Change
Net Sales	$	0		$	0			-
Total Costs and Expenses		437,486			15,864,222			3,526	%
Net Loss	$	(437,486	)	$	(15,864,222	)		3,526	%

Total costs and expenses were $15,864,222 for the third quarter of 2008, a 3,526% increase compared to $437,486 for the third quarter of 2007. This increase for the third quarter of 2008 versus 2007 was due to the impairment of the Company's license agreements of $9,095,227 and stock based compensation of $6,250,000 due to the shares granted to our executive officers under their agreements.

9

Results of Operations for the Nine Months Ended September 30, 2008 and 2007

Introduction

Our net sales for the first nine months of 2008 were 100% greater than the first nine months of 2007, at $65,097 compared to $0. This increase was due to orders in the second quarter of 2008. 

Net Sales, Total Costs and Expenses, and Net Loss

Our net sales, total costs and expenses and net loss for the nine months ended September 30, 2008, as compared to the nine months ended September 30, 2007 are as follows:

	9 Months Ended September 30, 2007			9 Months Ended September 30, 2008			Percentage Change
Net Sales	$	0		$	65,097			100	%
Total Costs and Expenses		747,458			29,479,604			3,844	%
Net Loss	$	(747,458	)	$	(29,414,507	))		3,835	%

Total costs and expenses were $29,479,604 for the first nine months of 2008, a 3,844% increase compared to $747,458 for the first nine months of 2007. This increase for the first nine months of 2008 versus 2007 was primarily the result of amortization of online game licenses of $1,306,225, the impairment of the Company's license agreements of $9,095,227 and stock based compensation of $18,750,000 due to the shares granted to our executive officers under their agreements.

10

Liquidity and Capital Resources

Introduction

Our cash, accounts receivable, total current assets, total assets, total current liabilities, and total liabilities as of September 30, 2008, as compared to December 31, 2007 and June 30, 2008, were as follows:

	Sept 30,		December 31,
	2008		2007
Cash	$	7,517	-
Total current assets		14,354	3,527
Total assets		5,284,028	15,480,867
Total current liabilities		829,727	362,059
Total liabilities		829,727	362,059

Cash Requirements

Our cash requirements are expected to remain consistent with our historical needs over the next 12 months. Our cash is utilized primarily for marketing, manufacture, payroll, general and administrative expenses, and professional fees associated with being a public, reporting company. We anticipate fulfilling our cash needs primarily through the sale of our common stock or from loans from our officers. We do not anticipate to divert funds to other purposes by any cash flows as a result of operations in the next twelve months for the present.

Sources and Uses of Cash

Operations

Net cash provided by (used in) operating activities for the nine months ended September 30, 2008 and 2007 were $812 and $(38,038), respectively. For the nine months ended September 30, 2008, the net cash used in operations came primarily from the amortization of the Master License Agreement for online games.

Investing

Net cash provided by (used in) investing activities for the nine months ended September 30, 2008 and 2007 were $0 and $0, respectively.

Financing

Net cash provided by (used in) financing activities for the nine months ended September 30, 2008 and 2007 were $6,705 and $0, respectively. For the nine months ended September 30, 2008, the net cash provided by financing activities came primarily from loan proceeds.

Critical Accounting Policies

The following describes the general application of accounting principles that impact our consolidated financial statements.

Our results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to bad debt, inventories, investments, intangible assets, income taxes, financing operations, and contingencies and litigation.

We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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ITEM 3       Quantitative and Qualitative Disclosures About Market Risk

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

ITEM 4T   Controls 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 nine months ended September 30, 2008. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of September 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.

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 1 Legal Proceedings

Consumer Protection Corporation vs. Neo-Tech News, Joytoto USA, Inc., Joyon Entertainment, Inc., ABC Defendants 1-50.

On September 30, 2008 and October 10, 2008, our registered agent was served a summons and complaint for Joytoto USA, Inc. and Joyon Entertainment Inc., respectively, alleging, among other things, the use of a telephone facsimile machine, computer or other device to send an unsolicited facsimile advertisement to a telephone facsimile line violates the TCPA, pursuant to Arizona Revised Statutes §44-1482(c).  This case was brought in the Superior Court in the State of Arizona.

ITEM 1A Risk Factors

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

ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds

None

ITEM 3 Defaults Upon Senior Securities

None.

ITEM 4 Submission of Matters to a Vote of Security Holders

On September 12, 2008, a majority of our shareholders voted in favor of certain actions to be taken, which were made effective on October 24, 2008.  The shareholders approved an amendment to our Articles of Incorporation, changing our name to Pollex, Inc.; an amendment to our Articles of Incorporation effecting a reverse stock split of all of the outstanding shares of our Common Stock on a 1 for 30 basis; and an amendment to our Articles of Incorporation to change our currently authorized Preferred Stock to “Blank Check” Preferred Stock (the “Actions”).  A definitive information statement on Schedule 14C was filed with the SEC on September 25, 2008 and mailed to our shareholders on or about October 1, 2008.  Shareholders holding 115,000,000 shares of our Common Stock voted in favor of the Actions.  Our Board of Directors approved the Actions on September 12, 2008.

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ITEM 5   Other Information

ITEM 6   Exhibits

3.1	Certificate of Amendment to Articles of Incorporation dated October 21, 2008
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.

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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.
Date: November 19, 2008	/s/ Seong Yong Cho
	By:   Seong Yong Cho
	Its:   President

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