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)
|
Large
accelerated filer
o
|
Accelerated
filer
x
|
Non-accelerated
filer
o
|
September
30,
|
December
31,
|
||||||
2007
|
2006
|
||||||
(Unaudited)
|
|||||||
CURRENT
ASSETS
|
|||||||
Cash
|
$
|
5,221
|
$
|
10,163
|
|||
Accounts
receivable
|
66,074
|
56,012
|
|||||
Total
Current Assets
|
$
|
71,295
|
$
|
66,175
|
|||
EQUIPMENT,
net of accumulated depreciation
|
|||||||
of
$34,726 and $21,520
|
52,276
|
30,030
|
|||||
INTANGIBLE
ASSETS
|
|||||||
Covenant
not to compete, net of amortization
|
|||||||
of
$461,990 and $339,053
|
29,760
|
152,697
|
|||||
Total
Assets
|
$
|
153,331
|
$
|
248,902
|
|||
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
CURRENT
LIABILITIES
|
|||||||
Bank
overdraft
|
$
|
48,123
|
-
|
||||
Accounts
Payable
|
42,644
|
$
|
125,207
|
||||
Notes
payable to an individual, unsecured
|
-
|
893
|
|||||
Accounts
payable to related parties
|
126,003
|
1,389
|
|||||
Current
portion of long-term debt
|
660,107
|
584,618
|
|||||
Accrued
expenses
|
974,253
|
692,585
|
|||||
Total
Current Liabilities
|
$
|
1,851,130
|
1,404,692
|
||||
LONG-TERM
DEBT
|
|||||||
Loans
payable, net of current portion
|
93,303
|
86,750
|
|||||
STOCKHOLDERS'
DEFICIT
|
|||||||
Preferred
stock, par value $0.001 authorized
|
|||||||
10,000,000
shares, none issued and outstanding
|
|||||||
Common
stock authorized 300,000,000
|
|||||||
Shares:
par value $0.001: issued
|
|||||||
and
outstanding 175,218,044
|
|||||||
shares
at September 30, 2007 and December 31, 2006
|
175,218
|
175,218
|
|||||
Additional
paid-in capital
|
13,773,172
|
13,773,172
|
|||||
Accumulated
deficit
|
(15,739,492
|
)
|
(15,190,930
|
)
|
|||
Total
Stockholders' Deficit
|
(1,791,102
|
)
|
(1,242,540
|
)
|
|||
Total
Liabilities and Stockholders' Deficit
|
$
|
153,331
|
$
|
248,902
|
For
the Three Months
Ended
September 30,
|
For
the Nine Months
Ended
September 30,
|
||||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||
(Restated)
|
(Restated)
|
||||||||||||
NET
SALES
|
$
|
482,558
|
$
|
405,058
|
$
|
1,423,508
|
$
|
1,234,706
|
|||||
COSTS
AND EXPENSES
|
|||||||||||||
Compensation
and benefits
|
270,092
|
180,517
|
686,268
|
509,060
|
|||||||||
Professional
and consulting fees
|
96,241
|
75,851
|
335,412
|
322,845
|
|||||||||
Depreciation
and amortization
|
45,670
|
43,687
|
136,143
|
131,061
|
|||||||||
Lot
lease expense
|
109,783
|
108,615
|
345,207
|
331,530
|
|||||||||
Interest
expense
|
16,623
|
102,916
|
46,918
|
775,419
|
|||||||||
Rent
expense
|
6,667
|
5,334
|
24,351
|
18,965
|
|||||||||
Other
operating expenses
|
131,007
|
166,865
|
397,771
|
455,697
|
|||||||||
Total
Costs and Expenses
|
676,083
|
683,785
|
1,972,070
|
2,544,577
|
|||||||||
LOSS
BEFORE PROVISION
|
|||||||||||||
FOR
INCOME TAXES
|
$ | (193,525 | ) |
$
|
(278,727
|
)
|
$
|
(548,562
|
)
|
$
|
(1,309,871
|
)
|
|
PROVISION
FOR INCOME TAXES
|
-
|
-
|
-
|
-
|
|||||||||
NET
LOSS
|
$
|
(193,525
|
)
|
$
|
(278,727
|
)
|
$
|
(548,562
|
)
|
$
|
(1,309,871
|
)
|
|
NET
LOSS PER COMMON SHARE
|
|||||||||||||
(BASIC
AND DILUTED)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
|
WEIGHTED
AVERAGE COMMON
|
|||||||||||||
SHARES
OUTSTANDING
|
175,218,044
|
175,218,044
|
175,218,044
|
175,218,044
|
For
the Nine Months Ended
September
30,
|
|||||||
2007
|
2006
|
||||||
(Restated)
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|||||||
Net
loss
|
$
|
(548,562
|
)
|
$
|
(1,309,871
|
)
|
|
Adjustments
to reconcile net loss to cash used
|
|||||||
in
operating activities:
|
|||||||
Depreciation
and amortization
|
136,143
|
131,061
|
|||||
Amortization
of prepaid consulting fees
|
-
|
67,500
|
|||||
Stock
and warrants issued for services
|
|||||||
Beneficial
conversion feature
|
-
|
740,140
|
|||||
Change
in operating assets and liabilities:
|
|||||||
Accounts
receivable
|
(5,277
|
)
|
(12,065
|
)
|
|||
Accounts
payable
|
(82,564
|
)
|
83,465
|
||||
Accrued
expenses
|
281,669
|
233,017
|
|||||
Net
cash (used in) operating activities
|
(218,591
|
)
|
(66,753
|
)
|
|||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
Purchase
of fixed assets
|
(35,452
|
)
|
(1,550
|
)
|
|||
Net
cash (used in) investing activities
|
(35,452
|
)
|
(1,550
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Loan
from officer
|
126,002
|
11,589
|
|||||
Payments
on notes payable to related parties
|
(1,389
|
)
|
-
|
||||
Bank
overdraft
|
48,123
|
-
|
|||||
Proceeds
from note payable
|
13,508
|
-
|
|||||
Proceeds
from credit advances
|
5,000
|
-
|
|||||
Proceeds
from senior debenture
|
106,000
|
80,000
|
|||||
Payments
on debt
|
(43,357
|
)
|
(29,475
|
)
|
|||
Loan
to individual
|
(4,786
|
)
|
|||||
Net
cash provided by financing activities
|
249,101
|
62,114
|
|||||
DECREASE
IN CASH
|
(4,942
|
)
|
(6,189
|
)
|
|||
CASH
(OVERDRAFT), BEGINNING OF PERIOD
|
10,163
|
(5,356
|
)
|
||||
CASH
(OVERDRAFT), END OF PERIOD
|
$
|
5,221
|
$
|
(11,545
|
)
|
For
the Three Months Ended
|
|
For
the Nine Months Ended
|
|||||||||||
September
30, 2006
|
September
30, 2006
|
||||||||||||
|
As
|
As
|
As
|
As
|
|||||||||
Reported
|
Restated
|
Reported
|
Restated
|
||||||||||
Additional
Paid-in Capital
|
$
|
13,082,797
|
$
|
13,173,524
|
$
|
12,433,384
|
$
|
13,173,524
|
|||||
Accumulated
Deficit
|
(13,709,124
|
)
|
(14,449,264
|
)
|
(13,709,124
|
)
|
(14,449,264
|
)
|
|||||
Interest
Expense
|
12,189
|
102,916
|
35,279
|
775,419
|
|||||||||
Net
Loss
|
(188,000
|
)
|
(278,727
|
)
|
(569,731
|
)
|
(1,309,871
|
)
|
|||||
Loss
Per Share
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
1. |
Cancellation
of 1,500,000 shares of the Company’s common stock to a consultant in
2005.
|
2. |
Spin
out of the assets and liabilities of ABS Holding Company, Inc. and
BH
Holding Company, Inc. to a private company in consideration of 130,000,000
shares of the Company’s common stock held by
management.
|
3. |
Conversion
of Junior Debentures into 694,000,000 shares of the Company’s common
stock.
|
4. |
Issuance
of 646,781,960 shares (pre-split) of the Company’s common stock at the
pre-reverse split market price of $0.04 per share to induce the Junior
Debenture Holders to convert the debentures.
|
5. |
To
give effect to the 1:40 reverse split approved by the Board of Directors
on October 31, 2007.
|
6. |
To
give effect to the reverse merger with Joytoto USA on October 31,
2007.
|
7. |
In
connection with the merger agreement, the Company issued 4,000,000
shares
of the Company’s common stock as a transaction fee at the post-reverse
split market price of $1.50 per share. Additionally, 4,000,000 warrants
to
acquire the Company’s common stock at $0.35 per share (post split) were
issued to these consultants. The warrants vest immediately and are
exercisable over a 7 year period.
|
8. |
The
Company entered into a two-year consulting agreement with London
Finance
Group commencing October 1, 2007. Under the consulting agreement,
the
Company is to pay London Finance Group a monthly retainer of $20,000,
payable on the first day of the month beginning November 1, 2007.
Additionally, the Company issued 3,400,000 warrants to acquire the
Company’s common stock at $0.35 per share (post split) to London Finance
Group. London Finance Group subsequently assigned 1,000,000 warrants
to
former management of the Company. These warrants vest immediately
and are
exercisable over a 7 year period.
|
9. |
The
Company issued 21,000,000 warrants to acquire the Company’s common stock
at $0.10 per share (post split) to the former Junior Debenture Holders.
These warrants vest immediately and are exercisable over a 7 year
period.
|
10. |
The
fair values of the above $0.35 and $0.10 warrants were computed to
be
$1.26 and $1.43, respectively, using the Black-Scholes model using
the
following criteria.
|
a. |
Expected
life
7
years
|
b. |
Risk
free
rate
4.20%
|
c. |
Volatility
43.50%
|
d. |
Dividend
yield
0.00%
|
11. |
No
pro-forma profit and loss information is presented since the acquired
company has had no operating results other than start-up expenditures
and
license amortization.
|
3
Months Ended September 30, 2007
|
3
Months Ended September 30, 2006
|
Percentage
Change
|
3
Months Ended
June
30, 2007
|
||||||||||
Net
Sales
|
$
|
482,558
|
$
|
405,058
|
19.1
|
%
|
$
|
459,078
|
|||||
Total
Costs and Expenses
|
676,083
|
683,785
|
(1.1
|
%)
|
632,232
|
||||||||
Net
Loss
|
$
|
(193,525
|
)
|
$
|
(278,727
|
)
|
(30.6
|
%)
|
$
|
(173,154
|
)
|
3
Months
Ended
September
30,
2007
|
3
Months
Ended
September
30, 2006
|
3
Months
Ended
June
30,
2007
|
||||||||
Compensation
and Benefits
|
$
|
270,092
|
$
|
180,517
|
$
|
206,533
|
||||
Professional
and Consulting
Fees
|
96,241
|
75,851
|
78,428
|
|||||||
Depreciation
and Amortization
|
45,670
|
43,687
|
46,747
|
|||||||
Lot
Lease Expense
|
109,783
|
108,615
|
119,041
|
|||||||
Interest
Expense
|
16,623
|
102,916
|
15,928
|
|||||||
Rent
Expense
|
6,667
|
5,334
|
13,499
|
|||||||
Other
Operating Expenses
|
131,007
|
166,865
|
152,056
|
9
Months Ended
September
30,
2007
|
9
Months
Ended
September
30,
2006
|
Percentage
Change
|
||||||||
Net
Sales
|
$
|
1,423,508
|
$
|
1,234,706
|
15.3
|
%
|
||||
Total
Costs and Expenses
|
1,972,070
|
2,544,577
|
(22.5
|
%)
|
||||||
Net
Loss
|
$
|
(548,562
|
)
|
$
|
(1,309,871
|
)
|
(58.1
|
%)
|
9
Months
Ended
September
30,
2007
|
9
Months
Ended
September
30, 2006
|
Percentage
Change
|
||||||||
Compensation
and Benefits
|
$
|
686,268
|
$
|
509,060
|
$
|
34.8
|
%
|
|||
Professional
and Consulting
Fees
|
335,412
|
322,845
|
3.9
|
%
|
||||||
Depreciation
and Amortization
|
136,143
|
131,061
|
3.9
|
%
|
||||||
Lot
Lease Expense
|
345,207
|
331,530
|
4.1
|
%
|
||||||
Interest
Expense
|
46,918
|
775,419
|
(93.9
|
%)
|
||||||
Rent
Expense
|
24,351
|
18,965
|
28.4
|
%
|
||||||
Other
Operating Expenses
|
397,771
|
455,697
|
(12.7
|
%)
|
Sept
30,
|
December
31,
|
June
30,
|
||||||||
2007
|
2006
|
2007
|
||||||||
Cash
|
$
|
5,221
|
$
|
10,163
|
$
|
4,654
|
||||
Accounts
receivable
|
66,074
|
56,012
|
51,444
|
|||||||
Total
current assets
|
71,295
|
66,175
|
56,098
|
|||||||
Total
assets
|
153,331
|
248,902
|
183,804
|
|||||||
Total
current liabilities
|
1,851,130
|
1,404,692
|
1,686,846
|
|||||||
Total
liabilities
|
1,944,433
|
1,491,442
|
1,781,381
|
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
|
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
|
|
|
||
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.
|
Joytoto
USA, Inc.
|
|
Dated:
November
13, 2007
|
/s/ Seong Yong Cho |
By:
Seong
Yong Cho
|
|
Its:
President
|
1.
|
I
have reviewed this Quarterly Report on Form 10-Q of Joytoto USA,
Inc.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
|
4.
|
The
registrant’s other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant
and have:
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant‘s internal control
over financial reporting.
|
Dated:
November 13, 2007
|
||
/s/
Seong Yong Cho
|
||
By:
|
Seong
Yong Cho
|
|
President
|
1.
|
I
have reviewed this Quarterly Report on Form 10-Q of Joytoto USA,
Inc.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
|
4.
|
The
registrant’s other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant
and have:
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(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
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(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant‘s internal control
over financial reporting
.
|
Dated:
November 13, 2007
|
||
/s/
Seong Sam Cho
|
||
By:
|
Seong
Sam Cho
|
|
Chief
Financial Officer
|
Dated:
November 13, 2007
|
/s/ Seong Yong Cho |
By:
Seong Yong Cho
|
|
Its:
President
|
Dated:
November 13, 2007
|
/s/ Seong Sam Cho |
By:
Seong Sam Cho
|
|
Its:
Chief Financial Officer
|