UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





Form
10-K





x
            ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
the fiscal year ended December 31, 2008





OR





o
            TRANSITION
      REPORT UNDER 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





Securities
registered pursuant to Section 12(b) of the Act:





Title
      of each class
            
            Name
      of each exchange on which registeredNone
            
            None





Securities
registered pursuant to Section 12(g) of the Act:





Common
Stock, par value $0.001


(Title of
class)





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes o No x





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act. Yes x No o





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 if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. o





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





Large
      accelerated filer o
            Accelerated
      filer oNon-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 Act). Yes o   No x





Aggregate
market value of the voting stock held by non-affiliates: $115,949 as based on
last reported sales price of such stock. The voting stock held by non-affiliates
on that date consisted of 1,288,333 shares of common stock.





Applicable
Only to Registrants 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 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 Registrants





Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date. As of March 31, 2009, there were
5,121,689 shares of common stock, par value $0.001, issued and
outstanding.





Documents
Incorporated by Reference





List
hereunder the following documents if incorporated by reference and the Part of
the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to rule 424(b) or
(c) of the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980). None.













Pollex, Inc .





TABLE OF
CONTENTS





PART
      IITEM
      1 - BUSINESS
            2ITEM
      1A - RISK FACTORS
            5ITEM
      1B - UNRESOLVED STAFF COMMENTS
            7ITEM
      2 - PROPERTIES
            7ITEM
      3 - LEGAL PROCEEDINGS
            7ITEM
      4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
            8PART
      IIITEM
      5 - MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDERMATTERS
      AND ISSUER PURCHASES OF EQUITY SECURITIES
            8ITEM
      6 - SELECTED FINANCIAL DATA
            9ITEM
      7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS
      OF OPERATION
            9ITEM
      7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK
            12ITEM
      8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
            F-1ITEM
      9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING ANDFINANCIAL
      DISCLOSURE
            13ITEM
      9A - CONTROLS AND PROCEDURES
            13ITEM
      9A(T) - CONTROLS AND PROCEDURESITEM
      9B - OTHER INFORMATION
            13PART
      IIIITEM
      10 - DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNACE
            14ITEM
      11 - EXECUTIVE COMPENSATION
            15ITEM
      12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
      AND
      RELATED STOCKHOLDER MATTERS
            18ITEM
      13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORINDEPENDENCE
            19ITEM
      14 - PRINCIPAL ACCOUNTING FEES AND SERVICES
            19PART
      IVITEM
      15 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES
            20










PART
I





Explanatory
Note





This
Annual 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
possible or assumed future results of operations of the Company 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. The Company's 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 - BUSINESS





Business Overview





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 3,833,333 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 and JTI 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 sub-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, we have operated at a loss for the year of 2008. 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.




2




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. Joytoto Korea
has transferred all of its MP3 products business as described in the Exclusive
Distributorship Agreement to fulfill all new purchase orders for such products.
We have entered into direct contractual relationships with Joytoto Korea’s
primary customers.




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 effect a reverse split on a one for thirty basis and to change
our name to Pollex, Inc., thus resulting in our symbol change to “PLLX”,
effective October 24, 2008.  Share and per share information in this
filing give effect to this reverse split.




Products
and Services





Our
operations are organized into two business segments: Consumer Electronics and
Online Games. Neither of our business segments has generated any
revenues.





Consumer
Electronics





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 has completed all purchase orders existing or
pending as of the date of the Exclusive Distributorship Agreement. In addition,
JTI has fulfilled additional purchase orders. We have entered into direct
contractual relationships with Joytoto Korea’s primary customers.





In
September 2006, Joytoto Korea entered into an agreement with Best Buy Co., Inc.
(“Best Buy”) to develop and manufacture an MP3 player to be sold under Best
Buy’s in-house brand, Insignia. To date, Joytoto Korea has developed three
models of the Insignia MP3 player for Best Buy. Product features of the top of
the line Insignia Pilot include:





·
            8GB
      internal flash storage;·
            Built-in
      Bluetooth wireless audio that enables users to listen to music with
      compatible Bluetooth headphones;·
            2.4"
      high-resolution LCD color display with wide viewing
  angles;·
            Built-in
      digital FM tuner;·
            Secure
      digital card expansion slot for additional memory
  capacity;·
            High-speed
      USB 2.0 interface; and·
            PC
      and Mac compatible.





Retail
prices for the Insignia Pilot line range from $179 for the 8 GB model to $139
for the 4 GB model. Prices for the Insignia Sport line range from $119 for the 4
GB model to $89 for the 2 GB model.





In
February 2007, Joytoto Korea also entered into an OEM agreement to develop and
manufacture 200,000 units of the IRiver X20 multi-media device for South Korean
consumer electronics firm Reigncom. Product features of the X-20
include:





·
            8GB
      internal flash storage holds MP3 files, photos and
  videos;·
            QVGA
      Color LCD with dynamic GUI (2.2 inch TFT-LCD);·
            Music:
      22 hours/Video: 6 hours;·
            Built-in
      SD-Card Slot;·
            Firmware
      upgradeable; and·
            USB
      2.0 interface, Ultra Fast Data
Transfer.




3




As of
December 31, 2007, Joytoto Korea had timely fulfilled its obligations under the
Reigncom OEM agreement, but did not utilize our services because this agreement
was already pending at the time we entered into our exclusive distributorship
agreement with Joytoto Korea.




In
addition to the relationships with Best Buy and Reigncom, we are actively
seeking partnerships with other leading retailers and consumer electronics
brands globally. We intend to expand our product offerings to include Bluetooth
devices and other digital multimedia peripherals.





As a
virtual OEM, we believe we benefit from a cost structure that does not include
the overhead costs of manufacturing facilities and related personnel.
Furthermore, we carry little inventory and are not responsible for returned
goods. Joytoto Korea’s main contract manufacturing partner has built devices for
Sandisk, Samsung, and Napster. The manufacturer currently delivers between
30,000 and 50,000 MP3 players to Joytoto Korea per month, with the ability to
scale production on short notice.





Unlike
retailers, whose core competency revolves around purchasing and reselling
finished goods, Joytoto Korea’s value-added services include product development
and supply chain management. Serving their customers as a supply channel
partner, Joytoto Korea offers a wide spectrum of products and a broad range of
services and solutions, including materials planning, design services,
programming and assembly services.





As of
December 31, 2008, we generated revenue of $732,239 through JTI.





Online
Games





Through
our sub-subsidiary, JAI, we plan to operate an online game service in North
America.





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 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. A national appraisal firm, valued the online game license at more than
$36,000,000.





Of the
Licensors games, JAI is licensed to operate the MMORPG(Massively Multiplayer
Online Role-Playing Game), “The Great Merchant” in the United States. The game
is currently in translation development and is planning to be in open beta
service by the second quarter of 2009.





Customers
and Suppliers





Our
target customers are value-added resellers (“VARs”) that sell consumer
electronics worldwide. Best Buy and Reigncom, with which our controlling parent
company, Joytoto Korea, has current agreements, or recently had agreements, are
examples of VAR’s. In addition to our intent to take over Joytoto Korea’s
relationships with Best Buy and Reigncom, we are actively seeking to develop
partnerships with other leading retailers and consumer electronics brands
globally.




Company
has contacted various multimedia and product companies in the Asia region for
outsourcing. The ultimate goal would be to provide our VARs with value quality
and competitive consumer electronics.





Competition





Our
business is extremely competitive, particularly with respect to prices, and, in
certain instances, product availability. In addition, the market for the
products we develop is subject to rapid technological change. We intend to
compete with numerous OEM’s, many of which have significantly greater financial,
technical, and marketing resources than we do.





Employees





We have
five employees, all of which are full time.




4





ITEM 1A - RISK FACTORS





As a
smaller reporting company we are not required to provide a statement of risk
factors. However, since our operations are fairly new to us we believe this
information may be valuable to our shareholders for this filing. We reserve the
right to not provide risk factors in our future filings. Our primary risk
factors and other considerations include:





We
have a limited operating history and limited historical financial information
upon which you may evaluate our performance.





We are in
our early stages of development and face risks associated with a new company in
a growth industry. We may not successfully address these risks and uncertainties
or successfully implement our operating strategies. If we fail to do so, it
could materially harm our business to the point of having to cease operations
and could impair the value of our common stock to the point investors may lose
their entire investment. Even if we accomplish these objectives, we may not
generate positive cash flows or the profits we anticipate in the
future.





If we are unable
to maintain relationships with our suppliers, our business could be materially
adversely affected.





Substantially
all of our products are going to be manufactured by Joytoto Korea’s contract
manufacturing partner. To the extent that manufacturer is unwilling to do
business with us, or to continue to do business with us once we enter into
formal agreements with it, our business could be materially adversely affected.
In addition, to the extent that the manufacturer modifies the terms of any
contract it may enter into with us (including, without limitation, the terms
regarding price, rights of return, or other terms that are favorable to us), or
extend lead times, limit supplies due to capacity constraints, or other factors,
there could be a material adverse effect on our business.





JTI has
taken over the contractual arrangements from Joytoto Korea. Currently there is
only one customer with which business is being conducted. If we are unable
continue this contractual arrangement, or future ones, either due to an
inability to or if we lose these customer accounts before they generate any
revenue over our losses, our business would substantially suffer.





We operate in a
competitive industry and continue to be under the pressure of eroding gross
profit margins, which could have a material adverse effect on our
business.





The
market for the products we intend to develop is very competitive and subject to
rapid technological change. The prices for our intended products tend to
decrease over their life cycle, which can result in decreased gross profit
margins for us. There is also substantial and continuing pressure from customers
to reduce their total cost for products. We expend substantial amounts on the
value creation services required to remain competitive, retain existing
business, and gain new customers, and we must evaluate the expense of those
efforts against the impact of price and margin reductions. Further, our margins
will be lower in certain geographic markets and certain parts of our business
than in others. For example, the products we intend to sell in the Asian markets
tend to have lower profit margins than in the United States. If we are unable to
effectively compete in our industry or are unable to maintain acceptable gross
profit margins, our business could be materially adversely
affected.





Products
developed by us may be found to be defective and, as a result, warranty and/or
product liability claims may be asserted against us, which may have a material
adverse effect on the company.





We may
face claims for damages as a result of defects or failures in the products we
intend to develop, or which Joytoto Korea has developed for value-added
resellers. Our ability to avoid liabilities, including consequential damages,
may be limited as a result of differing factors, such as the inability to
exclude such damages due to the laws of some of the countries where we do
business. Our business could be materially adversely affected as a result of a
significant quality or performance issue in the products developed by us, if we
are required to pay for the damages that result.





Our
share ownership is concentrated.





Joytoto
Co. Ltd., a Korean company, beneficially owns approximately 42.3% of our voting
shares (including shares owned by its wholly-owned subsidiary, Joyon
Entertainment Co., Ltd.). As a result, this stockholder can exert significant
influence over all matters requiring stockholder approval, including the
election and removal of directors, any merger, consolidation or sale of all or
substantially all of assets, as well as any charter amendment and other matters
requiring stockholder approval. In addition, this stockholder may dictate the
day to day management of the business. This concentration of ownership may delay
or prevent a change in control and may have a negative impact on the market
price of our common stock by discouraging third party investors. In addition,
the interests of this stockholder may not always coincide with the interests of
our other stockholders.





Our non-U.S.
locations may represent a significant portion of our sales, and consequently, we
may be exposed to risks associated with operating internationally.





As a
result of our intended foreign sales and locations, and our relationships with
foreign suppliers and potential foreign customers, our operations may be subject
to a variety of risks that are specific to international operations, including
the following:




5




·
            import
      and export regulations that could erode profit margins or restrict
      exports;·
            the
      burden and cost of compliance with foreign laws, treaties, and technical
      standards and changes in those regulations;·
            potential
      restrictions on transfers of funds;·
            foreign
      currency fluctuations;·
            import
      and export duties and value-added taxes;·
            transportation
      delays and interruptions;·
            uncertainties
      arising from local business practices and cultural considerations;
      and·
            potential
      military conflicts and political
risks.





While we
intend to adopt measures to reduce the potential impact of losses resulting from
the risks of doing business abroad, we cannot ensure that such measures will be
adequate.




When we make
acquisitions, we may not be able to successfully integrate them or attain the
anticipated benefits.




We intend
to acquire other businesses that are synergistic with ours. If we are
unsuccessful in integrating our acquisitions, or if integration is more
difficult than anticipated, we may experience disruptions that could have a
material adverse effect on our business. In addition, we may not realize all of
the anticipated benefits from our acquisitions, which could result in an
impairment of goodwill or other intangible assets.




If we fail to
maintain an effective system of internal controls or discover material
weaknesses in our internal controls over financial reporting, we may not be able
to report our financial results accurately or timely or detect fraud, which
could have a material adverse effect on our
business.




An
effective internal control environment is necessary for us to produce reliable
financial reports and is an important part of our effort to prevent financial
fraud. We are required to periodically evaluate the effectiveness of the design
and operation of our internal controls over financial reporting. Based on these
evaluations, we may conclude that enhancements, modifications or changes to
internal controls are necessary or desirable. While management evaluates the
effectiveness of our internal controls on a regular basis, these controls may
not always be effective. There are inherent limitations on the effectiveness of
internal controls, including collusion, management override, and failure of
human judgment. In addition, control procedures are designed to reduce rather
than eliminate business risks. If we fail to maintain an effective system of
internal controls, or if management or our independent registered public
accounting firm discovers material weaknesses in our internal controls, we may
be unable to produce reliable financial reports or prevent fraud, which could
have a material adverse effect on our business. In addition, we may be subject
to sanctions or investigation by regulatory authorities, such as the SEC. Any
such actions could result in an adverse reaction in the financial markets due to
a loss of confidence in the reliability of our financial statements, which could
cause the market price of our common stock to decline or limit our access to
capital.




We
will rely on third-party suppliers and manufacturers to provide raw materials
for and to produce our products, and we will have limited control over these
suppliers and manufacturers and may not be able to obtain quality products on a
timely basis or in sufficient quantity.




Substantially
all of our products will be manufactured by unaffiliated manufacturers. We may
not have any long-term contracts with our suppliers or manufacturing sources,
and we expect to compete with other companies for raw materials, production and
import quota capacity.




There can
be no assurance that there will not be a significant disruption in the supply of
raw materials from our intended sources or, in the event of a disruption, that
we would be able to locate alternative suppliers of materials of comparable
quality at an acceptable price, or at all. In addition, we cannot be certain
that our unaffiliated manufacturers will be able to fill our orders in a timely
manner. If we experience significant increased demand, or need to replace an
existing manufacturer, there can be no assurance that additional supplies of raw
materials or additional manufacturing capacity will be available when required
on terms that are acceptable to us, or at all, or that any supplier or
manufacturer would allocate sufficient capacity to us in order to meet our
requirements. In addition, even if we are able to expand existing or find new
manufacturing or raw material sources, we may encounter delays in production and
added costs as a result of the time it takes to train our suppliers and
manufacturers in our methods, products and quality control standards. Any
delays, interruption or increased costs in the supply of raw materials or
manufacture of our products could have an adverse effect on our ability to meet
retail customer and consumer demand for our products and result in lower
revenues and net income both in the short and long-term.




In
addition, there can be no assurance that our suppliers and manufacturers will
continue to provide raw materials and to manufacture products that are
consistent with our standards. We may receive shipments of product that fail to
conform to our quality control standards. In that event, unless we are able to
obtain replacement products in a timely manner, we risk the loss of revenues
resulting from the inability to sell those products and related increased
administrative and shipping costs. In addition, because we do not control our
manufacturers, products that fail to meet our standards or other unauthorized
products could end up in the marketplace without our knowledge, which could harm
our reputation in the marketplace.




6




The Chinese
government could change its policies toward, or even nationalize, private
enterprise, which could harm our operations.




The
majority of our manufacturing will be conducted in China. Accordingly, our
business, financial condition, results of operations and prospects are affected
significantly by economic, political and legal developments in China. Over the
past several years, the Chinese government has pursued economic reform policies,
including the encouragement of private economic activities and decentralization
of economic regulation. The Chinese government may not continue to pursue these
policies or may significantly alter them to our detriment from time to time
without notice. Changes in policies by the Chinese government resulting in
changes in laws or regulations, our interpretation of laws or regulations, or
the imposition of confiscatory taxation, restrictions on currency conversion or
imports and sources of supply could materially and adversely affect our business
and operating results.




Our
common stock may be affected by limited trading volume and may fluctuate
significantly.





There has
been a limited public market for our common stock and there can be no assurance
an active trading market for our common stock will develop. This could adversely
affect our shareholders’ ability to sell our common stock in short time periods
or possibly at all. Our common stock has experienced and is likely to experience
significant price and volume fluctuations that could adversely affect the market
price of our common stock without regard to our operating performance. Our stock
price could fluctuate significantly in the future based upon any number of
factors such as: general stock market trends; announcements of developments
related to our business; fluctuations in our operating results; announcements of
technological innovations, new products or enhancements by us or our
competitors; general conditions in the markets we serve; general conditions in
the U.S. economy; developments in patents or other intellectual property rights;
the performance of our eligible portfolio companies; and developments in our
relationships with our customers and suppliers. Substantial fluctuations in our
stock price could significantly reduce the price of our stock.




Our
common stock is traded on the "Over-the-Counter Bulletin Board," which may make
it more difficult for investors to resell their shares due to suitability
requirements.





Our
common stock is currently traded on the Over the Counter Bulletin Board (OTCBB)
where we expect it to remain in the foreseeable future. Broker-dealers often
decline to trade in OTCBB stocks given the market for such securities are often
limited, the stocks are more volatile, and the risk to investors is greater.
These factors may reduce the potential market for our common stock by reducing
the number of potential investors. This may make it more difficult for investors
in our common stock to sell shares to third parties or to otherwise dispose of
their shares. This could cause our stock price to decline.




There
is substantial doubt about our ability to continue as a going
concern.





Our
independent registered public accounting firm has issued an opinion on our
consolidated financial statements that states that the consolidated financial
statements were prepared assuming we will continue as a going concern and
further states that our net losses of $36,212,363 and $50,821,559 in 2008 and
2007 and accumulated deficit of $87,123,536 at December 31, 2008
raise substantial doubt about our ability to continue as a going concern. Our
plans concerning these matters include raising capital through the equity
markets to fund future operations and generating revenue through our license
agreements.  Additionally, even we do raise sufficient capital to
support our operating expenses and generate adequate revenues, there can be no
assurances that the revenue will be sufficient to enable us to develop business
to a level where it will generate profits and cash flows from
operations.





ITEM 1B - UNRESOLVED STAFF
COMMENTS





This Item
is not applicable to us as we are not an accelerated filer, a large accelerated
filer, or a well-seasoned issuer; however, we have not received written comments
from the Commission staff regarding our periodic or current reports under the
Securities Exchange Act of 1934 within the last 180 days before the end of our
last fiscal year that have not been resolved.




ITEM 2 - PROPERTIES





Joytoto
America, Inc., a wholly-owned subsidiary of Joyon Entertainment, Inc., leases
approximately 1,800 square feet of office space in Santa Clara, California, for
$3,072 per month pursuant to the terms of a one (1) year lease agreement
commencing March 1, 2008 and ending February 28, 2009.





ITEM 3 - LEGAL
PROCEEDINGS




Consumer Protection
Corporation v. Neo-Tech News, a fictitiously named Defendant whose true legal
identity is not known by Plaintiff, Joytoto USA, Inc., Joyon Entertainment,
Inc., ABC Defendants 1-50, United States District Court for the District of
Arizona, Case No. 08-1953-PHX-JAT





Plaintiff commenced this action on or
about September 24, 2008, by the filing of a Complaint.  Plaintiff
asserts claims arising from an alleged unsolicited facsimile concerning the
Company.  Plaintiff alleges that the Company paid Neo-Tech News to
broadcast the facsimile to Plaintiff as well as other members of the proposed
class.  Based upon these allegations, Plaintiff asserts claims for
violations of the Telephone Consumer Protection Act, declaratory judgment, civil
conspiracy, and aiding and abetting.  Plaintiff seeks class
certification, injunctive relief, damages in accordance with the Telephone
Consumer Protection Act, costs, attorneys’ fees, and costs.




7




On
December 8, 2008, the Company filed a motion to dismiss the
Complaint.  On January 5, 2009, Plaintiff filed its response in
opposition to the motion to dismiss.  On January 14, 2009, the Company
filed its reply to the response.  The court has yet to rule on the
motion to dismiss.  The Company denies the material allegations in the
Complaint and intends to vigorously defend this action.




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 3,833,333 shares of our Common Stock voted in favor of the
Actions.  Our Board of Directors approved the Actions on September 12,
2008.




PART
II





ITEM 5 - MARKET FOR REGISTRANT’S
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES





Market
Information





Our
common stock is currently quoted on the OTC Bulletin Board.  Our trading
symbol was changed to PLLX effective October 24, 2008.





The
following table sets forth the high and low bid information for each quarter
within the two most recent fiscal years, plus the first quarter of 2008, as
provided by the Nasdaq Stock Markets, Inc. The information reflects prices
between dealers, and does not include retail markup, markdown, or commission,
and may not represent actual transactions.




Fiscal
      Year
              Ended
            
            
            
            Bid
      PricesDecember
      31,
            
            Period
            
            High
            
            
            Low2007
            
            First
      Quarter
            
            $
            2.33
            
            
            $
            0.35Second
      Quarter
            
            $
            2.46
            
            
            $
            0.21Third
      Quarter
            
            $
            0.22
            
            
            $
            0.06Fourth
      Quarter
            
            $
            2.00
            
            
            $
            0.002008
            
            First
      Quarter
            
            $
            0.95
            
            
            $
            0.30Second
      Quarter
            
            $
            0.68
            
            
            $
            0.30Third
      Quarter
            
            $
            9.90
            
            
            $
            0.285Fourth
      Quarter
            
            $
            0.51
            
            
            $
            0.04





The
Securities Enforcement and Penny Stock Reform Act of 1990 requires additional
disclosure relating to the market for penny stocks in connection with trades in
any stock defined as a penny stock. The Commission has adopted regulations that
generally define a penny stock to be any equity security that has a market price
of less than $5.00 per share, subject to a few exceptions which we do not meet.
Unless an exception is available, the regulations require the delivery, prior to
any transaction involving a penny stock, of a disclosure schedule explaining the
penny stock market and the risks associated therewith.





There are
currently warrants outstanding to acquire an aggregate of 700,000 shares of our
common stock at an exercise price of $3.00 per share which were issued to the
holders of our Junior Convertible Debentures as part of the acquisition of JEI.
There are also currently warrants outstanding to acquire an aggregate of 246,666
shares of our common stock at an exercise price of $10.50 per share which were
issued to three consultants as part of the acquisition of JEI.





8


The
number of holders of record of shares of our common stock is 32.





There
have been no cash dividends declared on our common stock. Dividends are declared
at the sole discretion of our Board of Directors.





ITEM
6 - SELECTED FINANCIAL DATA





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





ITEM 7 - MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION





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 Annual Report on Form 10-K 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.





Results of Operations




Introduction





Our
business is conducted through our two sub-subsidiaries, Joytoto America and
Joytoto Technologies. Both were acquired by Joyon Entertainment, Inc., in the
second quarter of 2007, and both were formed in the third quarter of 2006, and
thus we have no operations, other than some simple formation activities, for
comparison purposes in prior periods. We have revenue of $732,239 for second
quarter of 2008. There can be no assurance, however, that we will achieve all or
any part of our anticipated revenue goals..




Year
ended December 31, 2008 compared to the Year ended December 31,
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 year ended December
31, 2008 and for the year ended December 31, 2008 are as follows:




Year
      Ended December 31,
              2007
            
            
            Year
      Ended December 31,
              2008Revenue
            
            $
            -
            
            
            $
            732,239Cost
      of goods sold
            
            
            -
            
            
            
            667,142Selling,
      general and administrative
            
            
            49,753,967
            
            
            
            25,489,864Impairment
      of license agreements
            
            
            -
            
            
            
            9,095,226Depreciation
            
            
            5,806
            
            
            
            8,309Amortization
            
            
            1,061,786
            
            
            
            1,460,630Allowance
      for bad debts
            
            
            -
            
            
            
            200,000Research
      and development
            
            
            -
            
            
            
            15,426Total
      costs and expenses
            
            
            50,820,776
            
            
            
            36,936,597Net
      Loss
            
            $
            (50,821,559
            )
            
            $
            (36,212,363
            )




9


Revenue





Total
revenue for the year ended December 31, 2008 was $732,239, compared to $-0- for
the year ended December 31, 2007.  The increase of $732,239 was
primarily due to revenue generated from a sale by JTI to Best Buy that occurred
in the 2nd quarter
of 2008 under the Exclusive Distributorship Agreement with Joytoto
Korea.





Selling, General and
Administrative





General
and Administrative expenses for the year ended December 31, 2008 was $25,489,864
compared to $49,753,184.  The decrease of $24,263,320 or 48% was
primarily due to a decrease in stock based compensation in 2008, from
$49,412,367 in 2007 to $25,000,000 in 2008.  The additional stock
based compensation in 2007 related to the 946,667 warrants issued in 2007 for
the acquisition of JEI and for consulting services.  The value of
these warrants was $39,245,700.  The Company also issued common stock
valued at $6,000,000 to consultants in 2007.  These decreases in stock
based compensation in 2008 were offset by an increase in the value of the shares
earned by Management under their employment contracts, which increased from
$4,166,667 in 2007 to $25,000,000 in 2008.





Impairment of license
agreements





Depreciation
increased to $9,095,226 for the year ended December 31, 2008 from $0 for the
year ended December 31, 2007.  This impairment was recognized based
upon Management’s review of its license agreements in 2008.  The
deteriorating market for consumer goods in the US resulted in the Company
reducing its initial cash flow projections and a resulting impairment
loss.





Depreciation





Depreciation
increased to $8,309 for the year ended December 31, 2008 from $5,806 for the
year ended December 31, 2007.  The increase of $2,503 or 43% was
primarily due to the fact that the Company’s fixed assets were acquired in 2007
and thus not depreciated for the entire fiscal year.





Amortization





Amortization
increased to $1,460,630 for the year ended December 31, 2008 from $1,061,786 for
the year ended December 31, 2007.  The increase of $398,844 or 38% was
primarily due to the fact that the Company’s intangible assets were acquired in
2007 and thus not amortized for the entire fiscal year.




Allowance for bad
debts





At
December 31, 2008, an allowance for potential uncollectibility of $200,000 was
established against a Deposit made with a supplier in Korea.  The
Company initially deposited $400,000, of which $200,000 was
returned.  The Company has demanded payment from the supplier and
filed suit in Korea to recover this remaining amount.  The Company has
also obtained the right to collect receivables of this supplier to be used to
pay off the deposit.  Since ultimate collectibility of this amount is
not certain, the Company has established this allowance.




Net Loss





Our Net
Loss for the year ended December 31, 2008 was $36,212,363 compared to
$50,821,559 for the year ended December 31, 2007.  This decrease of
$14,609,196 or 29% was primarily attributable to the decrease in stock based
compensation of $24,412,367 offset by the increase in the impairment of the
license agreements of $9,095,226.





Liquidity
and Capital Resources




Introduction





Our
primary assets are the two online game license agreements and the Exclusive
Distributorship Agreement. We have not begun to generate revenue from the two
online game license agreements, and as a result we have very few current assets.
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.





10


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.





Sources and Uses of
Cash





Operations





For the
year ended December 31, 2008, we had a net loss from of
$36,212,363.  This was offset by depreciation and amortization
of  $1,468,939, stock based compensation of $25,000,000,  an
impairment on the Company’s license agreements of $9,095,226, a decrease in
prepaid expenses of $3,527, an increase in deposits of $18, an increase in
accrued expenses of $319,648 and an increase in amounts due to affiliates of
$88,995, for total cash used in operating activities of $236,046.





For the
year ended December 31, 2007, we had a net loss of ($50,821,559). This was
offset by depreciation and amortization of $1,067,592, stock based compensation
of $49,412,367, a increase in prepaid expenses of $1,710, an increase in accrued
expenses of $138,344, and an increase in the amount due to an affiliate (Joytoto
Korea) of $105,061, for total cash used in our operating activities of
$99,905.





Our
revenue for the year ended December 31, 2008 was $732,239 .We had no revenues
for the year ended December 31, 2007, and thus generated no cash from
operations.





Investments





For the
year ended December 31, 2007, we increased our cash by $48,210 as a result of
the acquisition of Joytoto America and Joytoto Technologies.





Financing





For the
year ended December 31, 2008, our cash flows from financing activities totaled
$244,705, from $296,400 in loan proceeds offset by and the repayment of $50,000
in loans and $1,695 from our bank overdraft account.





For the
year ended December 31, 2007, our cash flows from financing activities totaled
$51,695, from $50,000 in loan proceeds and $1,695 from our bank overdraft
account.





Critical
Accounting Policies





The
discussion and analysis of the Company’s financial condition and results of
operations are based upon its 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 the Company to
make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses. In consultation with its Board of Directors,
the Company has identified the following accounting policies that it believes
are key to an understanding of its financial statements. These are important
accounting policies that require management’s most difficult, subjective
judgments.




Valuation of License
Agreements





The
company accounts 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. The company periodically evaluates 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 the Company issued Joyon Korea
thirty million (30,000,000) common shares as consideration. Prior to the
acquisition of the Master License Agreement the Company had an independent
business valuation performed whereby the Company’s 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 the Company
had an independent business valuation performed whereby the Company’s 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.




11




C.  
License agreements are comprised of the following:




December
      31,
            
            Estimated2008
            
            
            2007
            
            Useful
      LifePang
      Pang License
            
            $
            279,373
            
            
            $
            400,000
            
            3
      yearsNorth
      American Master License
            
            
            2,419,444
            
            
            
            5,397,000
            
            10
      yearsExclusive
      Distributorship
            
            
            4,688,957
            
            
            
            10,686,000
            
            10
      years7,387,774
            
            
            
            16,483,000Less:
      accumulated amortization
            
            
            (2,542,178
            )
            
            
            (1,081,548
            )$
            4,845,596
            
            
            $
            15,401,452




Revenue
Recognition





The
Company recognizes revenue from the sale of products and services in accordance
with Securities and Exchange Commission Staff Accounting Bulletin No. 104
“Revenue Recognition in Financial Statements” (“SAB No.
104”).  Revenues are recognized when all of the following criteria
have been met: persuasive evidence for an arrangement exists; delivery has
occurred or services have been rendered; the fee is fixed or determinable; and
collectibility is reasonably assured.





Equipment and
Depreciation





Equipment
is stated at cost and is depreciated using the straight line method over the
estimated useful lives of the respective assets. Routine maintenance, repairs
and replacement costs are expensed as incurred and improvements that extend the
useful life of the assets are capitalized.  When equipment is sold or
otherwise disposed of, the cost and related accumulated depreciation are
eliminated from the accounts and any resulting gain or loss is recognized in
operations.





Stock-Based
Compensation





The
Company accounts for employee stock based compensation and stock issued for
services using the fair value method. The Company accounts for stock issued for
services using the fair value method. In accordance with Emerging Issues Task
Force (“EITF”) 96-18, the measurement date of shares issued for services is the
date at which the counterparty’s performance is complete.





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
7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





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




12





ITEM 8 - FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA





POLLEX,
INC. AND SUBSIDIARY
  (FORMERLY
JOYTOTO USA, INC.)
 AUDITED
FINANCIAL STATEMENTS
 FOR THE
YEARS ENDED DECEMBER 31, 2008 AND 2007
  
  CONTENTS
              PageReport of
      Independent Registered Public Accounting Firm
              F-1Consolidated Balance
      Sheets
              F-2Consolidated
      Statements of Operations
              F-3Consolidated
      Statements of Cash Flows
              F-4Consolidated
      Statement of Stockholders’ Equity
              F-6Notes to
      Consolidated Financial Statements
              F-7
  
  MEYLER
& COMPANY, LLC
 CERTIFIED
PUBLIC ACCOUNTANTS
 ONE ARIN
PARK
 1715
HIGHWAY 35
 MIDDLETOWN,
NJ 07748
    Report of
Independent Registered Public Accounting Firm
 
 
 To the
Board of Directors
 Pollex,
Inc.
 Santa
Clara, CA
 
 We have
audited the accompanying consolidated balance sheets of Pollex, Inc. as of
December 31, 2008 and 2007 and the related consolidated statements of
operations, stockholders’ deficit, and cash flows for each of the years in the
two-year period ended December 31, 2008.  These consolidated financial
statements are the responsibility of the Company’s management.  Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting.  Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances but not for the purpose of
expressing an opinion on the effectiveness of the company’s internal control
over financial reporting.  Accordingly, we express no such opinion. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.
 
 In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Pollex, Inc. as of December
31, 2008 and 2007, and the results of its operations and its cash flows for
each of the years in the two-year period ended December 31, 2008, in conformity
with accounting principles generally accepted in the United States of
America.
 
 The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern.  As discussed in Note B
to the consolidated financial statements, the Company incurred net losses of
$36,212,363 and $50,821,559 in 2008 and 2007 and had an accumulated
deficit of $87,123,536 at December 31, 2008.  These
conditions raise substantial doubt about its ability to continue as a going
concern.  Management’s plans regarding these matters are also
described in Note B.  The consolidated financial statements do not
include any adjustments that may result from the outcome of this
uncertainty.
   /s/ Meyler &
      Company, LLC
  
 Middletown,
NJ
 April 10,
2009
  F-1
  Pollex,
Inc. and Subsidiary
 (Formerly
Joytoto USA, Inc.)
  CONSOLIDATED
BALANCE SHEETS
 December
      31,2008
              
              
              2007ASSETSCURRENT
      ASSETSCash
              
              $
              8,659
              
              
              $
              -Prepaid
      expenses
              
              
              -
              
              
              
              3,527Total
      current assets
              
              
              8,659
              
              
              
              3,527Property
      and equipment, net of accumulated depreciation of$15,233 and
      $6,924
              
              
              11,595
              
              
              
              19,904Other
      assetsLicense
      Agreements, net of accumulated amortization of$2,542,178 and
      $1,081,548
              
              
              4,845,596
              
              
              
              15,401,452Goodwill
              
              
              52,912
              
              
              
              52,912Deposits,
      less allowance for potential uncollectibility of$200,000 and
      $0.
              
              
              3,090
              
              
              
              3,072Total
      other assets
              
              
              4,901,598
              
              
              
              15,457,436Total
      Assets
              
              $
              4,921,852
              
              
              $
              15,480,867LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESBank
      overdraft
              
              $
              -
              
              
              $
              1,695Accrued
      expenses and accounts payable
              
              
              524,951
              
              
              
              205,303Due
      to affiliate
              
              
              194,056
              
              
              
              105,061Loans
      payable
              
              
              296,400
              
              
              
              50,000Total
      Current Liabilities
              
              
              1,015,407
              
              
              
              362,059Stockholders'
      EquityPreferred
      stock, authorized 10,000,000; par value $0.001; noneissued and
      outstanding
              
              
              -
              
              
              
              -Common
      stock, authorized 300,000,000 shares; par value $0.001;5,120,417 issued and
      outstanding
              
              
              5,120
              
              
              
              5,120Additional
      paid-in-capital
              
              
              91,024,861
              
              
              
              66,024,861Accumulated
      deficit
              
              
              (87,123,536
              )
              
              
              (50,911,173
              )Total
      Stockholders’ Equity
              
              
              3,906,445
              
              
              
              15,118,808Total
      Liabilities and Stockholders’ Equity
              
              $
              4,921,852
              
              
              $
              15,480,867
  See
accompanying notes to consolidated financial statements.
  F-2
  Pollex,
Inc. and Subsidiary
 (formerly
Joytoto USA, Inc.)
  CONSOLIDATED
STATEMENTS OF OPERATIONS
 For
      the years endedDecember
      31,2008
                
                
                2007REVENUES
                
                $
                732,239
                
                
                $
                -COSTS
      AND EXPENSESCost
      of goods sold
                
                
                667,142
                
                
                
                -Selling,
      general and administrative
                
                
                25,489,864
                
                
                
                49,753,184Impairment
      of license agreements
                
                
                9,095,226
                
                
                
                -Amortization
                
                
                1,460,630
                
                
                
                1,061,786Depreciation
                
                
                8,309
                
                
                
                5,806Allowance
      for bad debts
                
                
                200,000
                
                
                
                -Research
      and development
                
                
                15,426
                
                
                
                -Total
      Costs and Expenses
                
                
                36,936,597
                
                
                
                50,820,776OPERATING
      LOSS
                
                
                (36,204,358
                )
                
                
                (50,820,776
                )OTHER
      EXPENSEInterest
      expense
                
                
                (6,346
                )
                
                
                (783
                )Total
      Other Expense
                
                
                (6,346
                )
                
                
                (783
                )LOSS
      BEFORE INCOME TAXES
                
                
                (36,210,704
                )
                
                
                (50,821,559
                )PROVISION
      FOR INCOME TAXES
                
                
                (1,659
                )
                
                
                -NET
      LOSS
                
                
                (36,212,363
                )
                
                
                (50,821,559
                )NET
      LOSS PER COMMONSHARE
      (Basic and Diluted)
                
                $
                (7.07
                )
                
                $
                (22.69
                )WEIGHTED
      AVERAGE SHARESOUTSTANDING
                
                
                5,120,417
                
                
                
                2,239,535
  See
accompanying notes to consolidated financial statements.
  F-3
 
 Pollex,
Inc. and Subsidiary
 (formerly
Joytoto USA, Inc.)
  CONSOLIDATED
STATEMENTS OF CASH FLOWS
 For
      the years endedDecember
      31,2008
                
                
                2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
                
                $
                (36,212,363
                )
                
                $
                (50,821,559
                )Adjustments
      to reconcile net loss to net cashused in operating
      activities:Depreciation
      and amortization
                
                
                1,468,939
                
                
                
                1,067,592Stock
      based compensation
                
                
                25,000,000
                
                
                
                49,412,367Impairment
      of license agreements
                
                
                9,095,226
                
                
                
                -Changes
      in assets and liabilities:(Increase)
      decrease in prepaid expenses
                
                
                3,527
                
                
                
                (1,710
                )Increase
      in deposits
                
                
                (18
                )
                
                
                -Increase
      in accrued expenses
                
                
                319,648
                
                
                
                138,344Increase
      in due to affiliate
                
                
                88,995
                
                
                
                105,061Net
      cash used in operating activities
                
                
                (236,046
                )
                
                
                (99,905
                )CASH
      FLOWS FROM INVESTING ACTIVITIESCash
      acquired in acquisition
                
                
                -
                
                
                
                48,210Net
      cash provided by investing activities
                
                
                -
                
                
                
                48,210CASH
      FLOWS FROM FINANCING ACTIVITIESLoan
      proceeds
                
                
                296,400
                
                
                
                50,000Repayment
      of loan
                
                
                (50,000
                )
                
                
                -Bank
      overdraft
                
                
                (1,695
                )
                
                
                1,695Net
      cash provided by financing activities
                
                
                244,705
                
                
                
                51,695NET
      INCREASE IN CASH
                
                
                8,659
                
                
                
                -CASH
      AT BEGINNING OF PERIOD
                
                
                -
                
                
                
                -CASH
      AT END OF PERIOD
                
                $
                8,659
                
                
                $
                -
  See
accompanying notes to consolidated financial statements.
  F-4
  Pollex, Inc. and Subsidiary
 (formerly
Joytoto USA, Inc.)
  CONSOLIDATED
STATEMENTS OF CASH FLOWS
  For
      the years endedDecember
      31,2008
                
                
                2007SUPPLEMENTAL
      CASH FLOW DISCLOSURESCash
      paid for:Interest
                
                
                -
                
                
                
                -Taxes
                
                
                1,659
                
                
                
                -Non-Cash
      Items:Acquisition
      of Joytoto America, Inc.Cash
                
                
                -
                
                
                
                (48,210
                )Prepaid
      expenses
                
                
                -
                
                
                
                (1,817
                )Property
      and equipment
                
                
                -
                
                
                
                (26,828
                )Accumulated
      depreciation
                
                
                -
                
                
                
                1,118License
      agreement
                
                
                -
                
                
                
                (400,000
                )Accumulated
      amortization
                
                
                
                
                
                
                19,762Goodwill
                
                
                -
                
                
                
                (52,912
                )Deposits
                
                
                -
                
                
                
                (3,072
                )Accrued
      expenses
                
                
                -
                
                
                
                11,959Common
      stock
                
                
                -
                
                
                
                1Additional
      paid-in-capital
                
                
                -
                
                
                
                499,999Issuance
      of stock to acquire license agreements
                
                
                -
                
                
                
                16,083,000
 See
accompanying notes to consolidated financial statements.
  F-5
 Pollex, Inc. and Subsidiary
 (formerly
Joytoto USA, Inc.)
  CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY
 For the
Period January 1, 2006 to December 31, 2008
 
 Additional
                
                
                
                
                
                TotalCommon
      Stock
                
                
                Paid
      in
                
                
                Accumulated
                
                
                Stockholders'Shares
                
                
                Amount
                
                
                Capital
                
                
                Deficit
                
                
                EquityBalance,
      December 31, 2005
                
                
                146,015
                
                
                $
                146
                
                
                $
                12,608,456
                
                
                $
                (13,139,391
                )
                
                $
                (530,789
                )Beneficial
      conversion feature
                
                
                -
                
                
                
                -
                
                
                
                1,339,788
                
                
                
                -
                
                
                
                1,339,788Net
      loss for the year ended December 31, 2006
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (2,051,539
                )
                
                
                (2,051,539
                )Balance,
      December 31, 2006
                
                
                146,015
                
                
                
                146
                
                
                
                13,948,244
                
                
                
                (15,190,930
                )
                
                
                (1,242,540
                )Transactions
      relating to Biostem, Inc.:Cancellation
      of consultant shares
                
                
                (1,250
                )
                
                
                (1
                )
                
                
                (89,999
                )
                
                
                90,000
                
                
                
                -Cancellation
      of management shares
                
                
                (108,333
                )
                
                
                (108
                )
                
                
                108
                
                
                
                -
                
                
                
                -Spinout
      of assets of subsidiaries
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                1,105,790
                
                
                
                1,105,790Junior
      debenture conversion
                
                
                578,333
                
                
                
                578
                
                
                
                86,172
                
                
                
                -
                
                
                
                86,750Share
      issuances to induce conversion
                
                
                538,985
                
                
                
                539
                
                
                
                24,253,785
                
                
                
                (24,254,324
                )
                
                
                -Balance
      prior to reverse merger
                
                
                1,153,750
                
                
                
                1,154
                
                
                
                38,198,310
                
                
                
                (38,249,464
                )
                
                
                (50,000
                )Joyon
      Entertainment, Inc. equity
                
                
                -
                
                
                
                65,001
                
                
                
                16,518,000
                
                
                
                (5,001
                )
                
                
                16,578,000Reverse
      merger
                
                
                -
                
                
                
                (65,001
                )
                
                
                65,001
                
                
                
                -
                
                
                
                -Shares
      issued to Joytoto Co. Ltd.
                
                
                3,833,334
                
                
                
                3,833
                
                
                
                (3,833
                )
                
                
                -
                
                
                
                -Capitalization
      of prior losses
                
                
                -
                
                
                
                -
                
                
                
                (38,164,851
                )
                
                
                38,164,851
                
                
                
                -Balance
      subsequent to reverse merger
                
                
                4,987,084
                
                
                
                4,987
                
                
                
                16,612,627
                
                
                
                (89,614
                )
                
                
                16,528,000Shares
      issued to consultants
                
                
                133,333
                
                
                
                133
                
                
                
                5,999,867
                
                
                
                -
                
                
                
                6,000,000Warrants
      issued
                
                
                -
                
                
                
                -
                
                
                
                39,245,700
                
                
                
                -
                
                
                
                39,245,700Stock
      based compensation
                
                
                -
                
                
                
                -
                
                
                
                4,166,667
                
                
                
                -
                
                
                
                4,166,667Net
      loss for the year ended December 31, 2007
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (50,821,559
                )
                
                
                (50,821,559
                )Balance,
      December 31, 2007
                
                
                5,120,417
                
                
                
                5,120
                
                
                
                66,024,861
                
                
                
                (50,911,173
                )
                
                
                15,118,808Stock
      based compensation
                
                
                -
                
                
                
                -
                
                
                
                25,000,000
                
                
                
                -
                
                
                
                25,000,000Net
      loss for the year ended December 31, 2008
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (36,212,363
                )
                
                
                (36,212,363
                )Balance,
      December 31, 2008
                
                
                5,120,417
                
                
                $
                5,120
                
                
                $
                91,024,861
                
                
                $
                (87,123,536
                )
                
                $
                3,906,445
  See
accompanying notes to consolidated financial statements.
 F-6
 POLLEX,
INC. AND SUBSIDIARY
  (FORMERLY
JOYTOTO USA, INC.)
  NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 December
31, 2008
 
 
 NOTE
A – ORGANIZATION AND DESCRIPTION OF BUSINESS
 
 Pollex,
Inc. provides online gaming services and MP3 and other technical products
through its wholly-owned subsidiary, Joyon Entertainment, Inc.
(“JEI”).
 
 JEI was
incorporated on December 6, 2006 under the laws of the State of Delaware. JEI
manages the business of its two wholly-owned subsidiaries, Joytoto America, Inc
(“JAI”), and Joytoto Technologies, Inc (“JTI”).
 
 JAI was
formed on July 7, 2006 under the laws of the State of California.  JAI
is engaged in the business of providing online games via the
internet.  It was acquired by JEI on April 18, 2007 for 5,000,000
shares of JEI’s common stock.
 
 JTI was
formed on September 1, 2006 under the laws of the State of
Nevada.  JTI’s business is to engage in the sales and distribution of
MP3 and other technical devices.  It was acquired by JEI on June 11,
2007 for $1.00 prior to acquiring a license agreement.  JTI had no
assets or liabilities prior to its acquisition by JEI and to date, has had no
operating activity.
 
 NOTE
B – GOING CONCERN
 
 As
indicated in the accompanying consolidated financial statements, the Company
incurred net losses of $36,212,363 and $50,821,559 for the years ended December
31, 2008 and 2007 and has an accumulated deficit of $87,123,536 at December 31,
2008. Management’s plans include raising capital through the equity markets to
fund future operations and generating revenue through its license
agreements.  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
consolidated 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 consolidated 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.
 
 See also
Note H as to exclusive license agreements.
 
 NOTE C –
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Consolidated Financial
Statements
 
 The
consolidated financial statements include the accounts of Pollex, Inc. and its
wholly owned subsidiary.  All significant intercompany balances and
transactions have been eliminated in consolidation.
 
 Use of
Estimates
 
 The
preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those
estimates.
  F-7
  POLLEX,
INC. AND SUBSIDIARY
  (FORMERLY
JOYTOTO USA, INC.)
  NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 December
31, 2008
 
 
 NOTE C –
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  Cash
Equivalents
 
 The
Company considers all highly-liquid investments with an original maturity of
three months or less to be cash equivalents. There were no cash equivalents at
December 31, 2008 or 2007.
 
 Equipment and
Depreciation
 
 Equipment
is stated at cost and is depreciated using the straight line method over the
estimated useful lives of the respective assets. Routine maintenance, repairs
and replacement costs are expensed as incurred and improvements that extend the
useful life of the assets are capitalized.  When equipment is sold or
otherwise disposed of, the cost and related accumulated depreciation are
eliminated from the accounts and any resulting gain or loss is recognized in
operations.
 
 Revenue
Recognition
 
 The
Company recognizes revenue from the sale of products and services in accordance
with Securities and Exchange Commission Staff Accounting Bulletin No. 104
“Revenue Recognition in Financial Statements” (“SAB No.
104”).  Revenues are recognized when all of the following criteria
have been met: persuasive evidence for an arrangement exists; delivery has
occurred or services have been rendered; the fee is fixed or determinable; and
collectibility is reasonably assured.
 
 Intangible Assets, Goodwill
and License Agreements
 
 The
company accounts 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 are
amortized over their useful lives ranging from 3 to 10 years.  The
company periodically evaluates the reasonableness of the useful lives of these
intangible assets.
 
 In order
to test goodwill and other intangible assets with indefinite lives for
impairment under SFAS 142, a determination of the fair value of the Company’s
reporting units for its goodwill valuation and its other intangible assets with
indefinite lives is required and is based upon, among other things, estimates of
future operating performance of the reporting unit being
valued.  Changes in market conditions, among other factors may have an
impact on these estimates.
 
 F-8
  POLLEX,
INC. AND SUBSIDIARY
 
 (FORMERLY
JOYTOTO USA, INC.)
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 December
31, 2008
 
 
 NOTE C –
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Intangible Assets, Goodwill
and License Agreements (Continued)
 
 The
Company reviews long-lived assets, including intangibles with definite useful
lives, for impairment whenever events or changes in circumstances indicate the
carrying amount of an asset may not be recoverable.  Recoverability of
assets to be held and used is measured by a comparison of the carrying amount of
an asset to future undiscounted net cash flows expected to be generated by the
asset.  If such assets are considered to be impaired, the impairment
to be recognized is measured by the amount by which the carrying amount of the
assets exceeds the fair value of the assets.
 
 See also
Note H as to exclusive license agreements.
 
 Advertising
Expense
 
 Advertising
expenses are included in Selling, general and administrative expenses in the
Statement of Operations and are expensed as incurred.  The Company incurred
$2,285 and $0 in advertising expenses for the years ended December 31, 2008 and
2007, respectively.
  Fair Values of Financial
Instruments
 
 The
Company uses financial instruments in the normal course of business. The
carrying values of accrued expenses and accounts payable, due to affiliate and
loans payable approximate their fair value due to the short-term maturities of
these assets and liabilities.
 
 Income
Taxes
 
 The
Company accounts for income taxes in accordance with SFAS No. 109, “Accounting
for Income Taxes.”  Under the assets and liability method of SFAS 109,
deferred tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases.  Deferred tax assets and liabilities are measured using enacted
tax rates in effect for the year in which those temporary differences are
expected to be recovered or settled.
 
 Net Loss Per Common
Share
 
 The
Company computes per share amounts in accordance with SFAS No. 128, “Earnings
per Share.” SFAS per share (“EPS”) requires presentation of basic and diluted
EPS. Basic EPS is computed by dividing the income (loss) available to Common
Stockholders by the weighted-average number of common shares outstanding for the
period. Diluted EPS is based on the weighted-average number of shares of common
stock and common stock equivalents outstanding during the periods. There are no
potential dilutive common shares at December 31, 2007.
 
 Stock-Based
Compensation
 
 The
Company accounts for employee stock based compensation and stock issued for
services using the fair value method.
 
 F-9
 
 
 POLLEX,
INC. AND SUBSIDIARY
 
 (FORMERLY
JOYTOTO USA, INC.)
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 December
31, 2008
 
 
 NOTE C –
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Stock-Based Compensation
(Continued)
 
 The
Company accounts for stock issued for services using the fair value method. In
accordance with Emerging Issues Task Force (“EITF”) 96-18, the measurement date
of shares issued for services is the date at which the counterparty’s
performance is complete.
  Development Stage
Company
  The
Company was a development stage company as defined by SFAS No. 7.  The
Company was dedicating substantially all of its efforts to establishing its
online gaming services and MP3 business.  In 2008, the Company ceased
to be a development stage company as it began operating and generating revenues
from its MP3 business.
  Recent Accounting
Pronouncements
  In
September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
("SFAS No. 157"). SFAS No. 157 establishes a common definition for
fair value to be applied to US GAAP guidance requiring the use of fair
value, establishes a framework for measuring fair value, and expands the
disclosure about such fair value measurements.  The application of
SFAS No. 157 as it relates to financial assets and financial liabilities is
effective for fiscal years beginning after November 15, 2007, and interim
periods within those fiscal years.  On February 12, 2008, the
FASB issued FSP FAS 157-2, "Effective Date of FASB Statement No. 157,"
which delays the effective date of SFAS No. 157 for all nonfinancial assets
and nonfinancial liabilities, except those that are recognized or disclosed at
fair value in the financial statements on at least an annual basis, to fiscal
years beginning after November 15, 2008, and interim periods within those
fiscal years.  The Company's adoption of SFAS No. 157 on
February 3, 2008 for all financial assets and liabilities and any other
assets and liabilities that are recognized or disclosed at fair value on a
recurring basis did not impact the Company's consolidated financial
statements.  The provisions of SFAS No. 157 are to be applied
prospectively as of the beginning of the fiscal year in which it is applied,
with any transition adjustment recognized as a cumulative effect adjustment to
the opening balance of retained earnings.  The Company does not
anticipate that the adoption of SFAS No. 157 for nonfinancial assets and
liabilities measured at fair value on a non-recurring basis will have a material
impact on its financial position and results of operations.
  In
February, 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities (“SFAS 159”).  SFAS 159 allows
entities to measure at fair value many financial instruments and certain other
assets and liabilities that are not otherwise required to be measured at fair
value.  SFAS 159 is effective for fiscal years beginning after November 15,
2007.  The Company adopted SFAS 159 on January 1, 2008.  Adoption of
SFAS 157 did not have a material impact on the Company results of operations,
cash flows or financial position.
  In
December 2007, the FASB issued SFAS No. 141R, Business Combinations.
 This standard establishes principles and requirements for how an acquirer
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and non-controlling interest in the acquiree
and the goodwill acquired.  This statement also establishes disclosure
requirements which will enable users to evaluate the nature and financial
effects of the business combination.  SFAS No. 141R is effective for
acquisitions made after November 30, 2009.  The Company is currently
evaluating the potential impact, if any, that the adoption of SFAS No. 141R will
have on its consolidated financial statements.
  F-10
  POLLEX,
INC. AND SUBSIDIARY
 
 (FORMERLY
JOYTOTO USA, INC.)
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 December
31, 2008
 
 
 NOTE C –
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Recent Accounting
Pronouncements (Continued)
  In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements.  This standard outlines the
accounting and reporting for ownership interest in a subsidiary held by parties
other than the parent.  SFAS No. 160 is effective for the first quarter of
2010.  The Company is currently evaluating the potential impact, if any,
the adoption of SFAS No. 160 will have on its consolidated financial
statements.
  In May
2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
Accounting Principles." SFAS No. 162 identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles. SFAS No.
162 became effective in November 2008. Its adoption is not expected to have a
material impact on the Company's consolidated financial statements.
 
 NOTE
D – STOCK EXCHANGE AGREEMENT
 
 On
October 12, 2007, the Company 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 JEI, in exchange for 3,833,333 shares of common
stock (after giving effect to a one-for-forty and one-for-thirty reverse splits)
as well as the divestment of the Company’s two subsidiaries, BH Holding Company,
Inc. and ABS Holding Company, Inc.
 
 In order
to complete the acquisition of JEI, the Company was also required to secure a
release of the Company from the holders of our Senior Secured Convertible
Debentures, and effect the conversion of our Junior Convertible Secured
Debentures.  Accordingly, the Company entered into an Agreement to
Purchase Subsidiaries and Cancel Shares held by Marc Ebersole (the former CEO
and Director), Christine Ebersole (then a Director and employee), and Scott
Schweber (then a Director), as well as the holders of the Company’s Senior
Secured Convertible Debentures and Junior Convertible Debentures (the
“Subsidiary Purchase Agreement”).  Under the terms of the Subsidiary
Purchase Agreement, Marc Ebersole, Christine Ebersole and Scott Schweber (the
“Management Shareholders”) released the Company from all claims they may have
had against the Company and its lenders, and tendered to the Company a total of
108,333 shares of common stock for cancellation.  Our Senior Secured
Debenture Holder released the Company from its obligations under the Senior
Debenture, and such obligations will remain obligations of the two former
subsidiaries, BH Holding Company, Inc. and ABS Holding Company,
Inc.  The holders of the Junior Convertible Debentures, which were
convertible into 578,333 shares of common stock, converted their debentures into
(i) 578,333 shares of common stock, (ii) were issued an additional 538,985
shares of common stock, and (iii) were issued warrants to purchase 700,000
shares of common stock at an exercise price of $3.00 per share (all amounts
reflect issuances after giving effect to the above mentioned reverse stock
splits). Finally, we transferred 100% of the outstanding capital stock of the
two operating subsidiaries, BH Holding Company, Inc. and ABS Holding Company,
Inc. to the Management Shareholders and the holders of the Junior Convertible
Debentures.
  F-11
  POLLEX,
INC. AND SUBSIDIARY
 
 (FORMERLY
JOYTOTO USA, INC.)
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 December
31, 2008
 
 
 NOTE
D – STOCK EXCHANGE AGREEMENT (CONTINUED)
 
 The
following summarizes the assets and liabilities and the operations of the spun
out subsidiaries prior to the spin off on October 31, 2007:
 
 Assets
              
              $
              106,540Liabilities
              
              
              1,212,330Revenues
              
              $
              1,720,826Costs
      and expenses
              
              
              2,397,394$
              (676,568
              )
 
 As a
result of the above transactions, Joytoto Co. Ltd., a Korean company,
beneficially owns approximately 75% of the Company’s voting shares (including
shares owned by its wholly-owned subsidiary, JEI). As a result, this stockholder
can exert significant influence over all matters requiring stockholder approval,
including the election and removal of directors, any merger, consolidation or
sale of all or substantially all of assets, as well as any charter amendment and
other matters requiring stockholder approval.
 
 NOTE E –
ACQUISITION OF JOYTOTO AMERICA, INC.
 
 On April
18, 2007, JEI entered into a Share Exchange Agreement with Joytoto Co., Ltd., a
Korean corporation, pursuant to which the Company agreed to acquire the
outstanding capital stock of JAI from Joytoto Co., Ltd., in exchange for
5,000,000 shares of JEI’s common stock.  The JAI shares constitute
100% of JAI’s issued and outstanding shares.
 
 In
connection with the share exchange agreement, the Company valued the 5,000,000
shares issued at $0.10 per share.
 
 The fair
value of the net assets acquired at April 18, 2007 is as follows:
 
 Cash
              
              $
              48,210Prepaid
      expenses
              
              
              1,817Fixed
      assets
              
              
              25,710License
      agreement
              
              
              380,238Deposits
              
              
              3,072Liabilities
      assumed
              
              
              (11,959
              )447,088Purchase
      price
              
              
              500,000Goodwill
              
              $
              52,912
 
 No
Pro-forma Statement of Operations is presented since the company has had no
operating history.
 
 NOTE
G – FIXED ASSETS
 
 Fixed
Assets are comprised of the following:
  F-12
  POLLEX,
INC. AND SUBSIDIARY
 
 (FORMERLY
JOYTOTO USA, INC.)
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 December
31, 2008
 
 
 NOTE
G – FIXED ASSETS (CONTINUED)
 
 December
      31,
              
              Estimated2008
              
              
              2007
              
              Useful
      LifeComputers
              
              $
              23,500
              
              
              $
              23,500
              
              3
      yearsFurniture
      and equipment
              
              
              3,328
              
              
              
              3,328
              
              7
      years26,828
              
              
              
              26,828Less:
      accumulated depreciation
              
              
              (15,233
              )
              
              
              (6,924
              )$
              11,595
              
              
              $
              19,904
 
 NOTE
H – LICENSE AGREEMENTS
 
 On
February 23, 2007, JAI entered into a license agreement with Joytoto Korea, for
one game, Pang Pang Terrible, for consideration of $400,000.  The
license is for the United States of America territory and is for a term of 3
years.  The agreement provides for a 30% of net sales royalty fee
payable to the licensor.  Net sales are defined as gross sales less
15%.
 
 On April
18, 2007, JAI entered into an exclusive North American Master License Agreement
with Joytoto Korea and Joyon Korea.  The license gives JAI the
exclusive right to the use and commercialization of 4 game titles immediately,
and the right to acquire no less than 20 additional game title licenses for no
additional consideration.  Each game license provides for a 25% of net
sales royalty fee payable to the licensor.  Net sales are defined as
gross sales less 15%.  The term of the agreement is 10 years and
allows for two 5 year extensions for additional consideration of
$10,000.  Upon execution of the Master License Agreement, JEI issued
Joyon Korea 30,000,000 common shares as consideration.  Prior to the
acquisition of the Master License Agreement, JEI had an independent business
valuation performed whereby the Company’s enterprise value was calculated to be
$0.1799 per share.  Accordingly, the shares issued for the license
were valued at this amount.
 
 On June
11, 2007, JTI entered into an Exclusive Distributorship Agreement with Joytoto
Korea.  The agreement provides that JTI has the worldwide, exclusive
right to distribute, market, promote and sell Joytoto Korea’s current and future
model MP3 player devices.  As consideration for the Exclusive
Distributorship Agreement, JEI issued Joytoto Korea 30,000,000 common
shares.  Prior to the acquisition of the Exclusive Distributorship
Agreement the Company had an independent business valuation performed whereby
the Company’s enterprise value was calculated to be $0.3562 per
share.  Accordingly, the shares issued for the license agreement were
valued at this amount.
 
 At
December 31, 2007, the Company tested these assets for impairment due to the
lack of sales and lack of funds raised. As part of this test, management
computed the future net cash flows expected to be generated by these assets and
compared these amounts to the carrying value of the assets.  As the
expected future net cash flows exceeded the carrying values of the assets,
Management concluded that there was no impairment of the assets.  The
net cash flows were computed based upon Management’s best assessment of the
future cash flows of the license agreements. Management’s conclusion also
contemplated the ability to raise sufficient funds for operations.
 
 At
September 30, 2008, the Company reviewed its license agreements for impairment
due to the deteriorating market for consumer goods in the US.  At that
time, 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 was $5,000,000. As such, an impairment charge of $9,095,227
was recorded to reduce the carrying amount of the license agreements to this
amount.  The Company reviewed its license agreements for impairment
again at December 31, 2008 and determined that no further impairment
occurred.
  F-13
  POLLEX,
INC. AND SUBSIDIARY
 
 (FORMERLY
JOYTOTO USA, INC.)
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 December
31, 2008
 
 
 NOTE
H – LICENSE AGREEMENTS (CONTINUED)
  The
license agreements are comprised of the following:
  December
      31,
              
              Estimated2008
              
              
              2007
              
              Useful
      LifePang
      Pang License
              
              $
              279,373
              
              
              $
              400,000
              
              3
      yearsNorth
      American Master License
              
              
              2,419,444
              
              
              
              5,397,000
              
              10
      yearsExclusive
      Distributorship
              
              
              4,688,957
              
              
              
              10,686,000
              
              10
      years7,387,774
              
              
              
              16,483,000Less:
      accumulated amortization
              
              
              (2,542,178
              )
              
              
              (1,081,548
              )$
              4,845,596
              
              
              $
              15,401,452
  Estimated
amortization for the five succeeding years is as follows:
 
 2009
              
              $
              617,6222010
              
              
              577,3602011
              
              
              570,2552012
              
              
              570,2552013
              
              
              570,255$
              2,905,747
 
 NOTE
I – DUE TO AFFILIATE
 
 Certain
expenses have been paid on behalf of the Company by Joytoto Korea. The Company
has recognized the expenses and corresponding payable to Joytoto Korea as due to
affiliate. The advances are non-interest bearing and have no specific repayment
date.
 
 NOTE
J – LOAN PAYABLE
 
 On
September 26, 2007 the Company signed a promissory note with a principal amount
of $50,000.  The term of the promissory note is one year and bears
interest at an annual rate of 6%.  The note may be repaid at any time
prior to its due date without a prepayment penalty, however if any amount of the
principal plus accrued interest remains unpaid after the note’s due date then
the annual rate of interest increases to 10% per annum.  This amount
was repaid in 2008.
 
 During
2008, the Company signed promissory notes with two individuals totaling
$296,400.  The terms of the promissory notes are one year and bears
interest at an annual rate of 6%.  The notes may be repaid at any time
prior to its due date without a prepayment penalty, however if any amount of the
principal plus accrued interest remains unpaid after the note’s due date then
the annual rate of interest increases to 10% per annum.
  F-14
 
 POLLEX,
INC. AND SUBSIDIARY
 
 (FORMERLY
JOYTOTO USA, INC.)
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 December
31, 2008
 
 
 NOTE K –
STOCKHOLDERS’ EQUITY
 
 The
Company’s Articles of Incorporation were amended on October 31, 2007 to change
the name of the Company from Biostem, Inc. to Joytoto USA,
Inc.  Additionally, a 1 to 40 reverse stock split was
effected.  Effective October 24, 2008, the Company’s Articles of
Incorporation were amended to change the name of the Company to Pollex,
Inc.  Additionally, a 1 to 30 reverse stock split was effected and the
Company changed its authorized 10,000,000 shares of Preferred Stock to
10,000,000 shares of “Blank Check” Preferred Stock.  The consolidated
financial statements give effect to these transactions.
 
 In
connection with the JEI acquisition, the Company’s consulting agreement with
Vijay Alimchandami, dba Financial Systems International was rescinded and 1,250
shares (post splits) of the Company’s common stock were cancelled.
 
 Pursuant
to the Subsidiary Purchase Agreement, 108,333 shares (post splits) of the
Company’s common stock were cancelled by the Company’s management and net
liabilities of $1,105,790 were spun out to the former Management Shareholders
and the holders of the Junior Convertible Debentures.
 
 In
connection with the Subsidiary Purchase Agreement, the Company’s Junior
Convertible Debenture holders converted their debentures into 578,333 shares
(post splits) of the Company’s common stock.
 
 As an
inducement to convert the Junior Convertible Debentures, 538,985 shares (post
splits) of the Company’s common stock were issued to the debenture holders at
$45.00 per share.
 
 On
October 31, 2007 the Company acquired Joyon Entertainment, Inc. in exchange for
3,833,333 shares (post splits) of common stock.
 
 In
connection with the acquisition of JEI, the company issued 133,333 shares (post
split) of its common stock to consultants on October 31, 2007. The shares were
valued at $45.00 per share, the closing price of the Company’s common stock on
that day. Accordingly, stock for services in the amount of $6,000,000 was
recorded in selling, general and administrative expense.
 
 NOTE
L - INCOME TAXES
 
 The
Company files a consolidated income tax return on a calendar year
basis.  At December 31, 2008, the Company had an unused net operating
loss carryforward of approximately $3,126,078 for income tax purposes, which
expires at various dates imposed by the rules and regulations of the Internal
Revenue Service.  This net operating loss carryforward may result in
future income tax benefits of approximately $938,000; however because
realization is uncertain at this time, a valuation reserve in the same amount
has been established.  Deferred income taxes reflect the net effects
of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income tax
purposes.
  Significant
components of the Company’s deferred tax liabilities and assets as of December
31, 2008 and 2007 are as follows:
  F-
 F-15
  POLLEX,
INC. AND SUBSIDIARY
 
 (FORMERLY
JOYTOTO USA, INC.)
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 December
31, 2008
 
 
 NOTE
L - INCOME TAXES (CONTINUED)
 
 December
      31,2008
              
              
              2007Deferred
      tax liabilities
              
              $
              -
              
              
              $
              -Deferred
      tax asset-Net
      operating loss carryforward
              
              
              937,000
              
              
              
              424,000Valuation
      allowance
              
              
              (937,000
              )
              
              
              (424,000
              )Net
      deferred tax asset
              
              
              -
              
              
              
              -
 
 NOTE
M – WARRANTS
 
 In
connection with the acquisition of JEI, 700,000 warrants with an exercise of
$3.00 were issued to the debenture holders. The warrants were valued at $42.78
per warrant or $29,943,900. The warrants vested immediately and expire October
31, 2014. The warrants were valued using a Black-Scholes valuation model and
were recorded in selling, general and administrative expense.
 
 In
connection with the acquisition of JEI, the company issued 133,333 warrants with
an exercise price of $37.71 to consultants on October 31, 2007.  The
warrants were valued at $37.71 per warrant or $5,028,000. The warrants vested
immediately and expire October 31, 2014. The warrants were valued using a Black-
Scholes valuation model and were recorded in selling, general and administrative
expense.
 
 The
Company entered into a consulting agreement with London Finance Group, Ltd.
(“LFG”) on October 12, 2007 with an effective date of October 1, 2007 and is for
a period of two years.  In connection with this agreement, the Company
gave LFG warrants to purchase 113,333 shares of common stock at an exercise
price of $10.50 per share. The warrants vested immediately and expire October
31, 2014.  The value of the warrants was determined to be $37.71 per
warrant or $4,273,800 using a Black-Scholes valuation
model.  Accordingly, this amount was recorded in selling, general and
administrative expense.
 
 The
following are the assumptions used in determining the above fair values using
the Black-Scholes option pricing model:
 
 Expected
      life
              
              7
      yearsRisk
      free rate
              
              4.20%Volatility
              
              43.50%Dividend
      yield
              
              0%
 
 F-16
  POLLEX,
INC. AND SUBSIDIARY
 
 (FORMERLY
JOYTOTO USA, INC.)
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 December
31, 2008
 
 
 NOTE
M – WARRANTS (CONTINUED)
    Shares
              
              
              Weighted
                Average
                Grant
      Date
                Fair
      ValueOutstanding,
      January 1, 2007
              
              
              946,667
              
              
              $
              41.46Granted
              
              
              -
              
              
              
              -Forfeited
              
              
              -
              
              
              
              -Expired
              
              
              -
              
              
              
              -Exercised
              
              
              -
              
              
              
              -Outstanding,
      December 31, 2007
              
              
              946,667
              
              
              $
              41.46Granted
              
              
              -
              
              
              
              -Forfeited
              
              
              -
              
              
              
              -Expired
              
              
              -
              
              
              
              -Exercised
              
              
              -
              
              
              
              -Outstanding,
      December 31, 2008
              
              
              946,667
              
              
              $
              41.46
 
 The
weighted average remaining contractual life and exercise price of the warrants
outstanding and exercisable at December 31, 2008 was 5.84 years and $4.95,
respectively.  The intrinsic value of the warrants outstanding and
exercisable at December 31, 2008 was $0 as the stock price exceeded the exercise
price.
 
 The
weighted average remaining contractual life and exercise price of the warrants
outstanding and exercisable at December 31, 2007 was 6.84 years and $4.95,
respectively.  The intrinsic value of the warrants outstanding and
exercisable at December 31, 2007 was $11,782,000.
 
 All above
amounts are adjusted for the reverse stock splits.
 
 NOTE
N – RENT EXPENSE
 
 The
Company currently is leasing office facilities in Santa Clara, California. The
lease commenced on March 1, 2007 and is for a term of one year.  The
lease was renewed on March 1, 2008.  The Company’s rent payments are
$1,536 per month.
 
 The
Company is leasing an apartment in Santa Clara, California for use of its
President.  The lease is for a term of one year commencing November 1,
2007 and ending October 31, 2008, and is now operating under a month to month
lease.  The lease payments are $2,415 per month.
 
 The
Company singed a lease in October 2006 to lease an automobile for the former CEO
of its subsidiary.  The vehicle was returned and the lease ended
September 23, 2008.  The lease payments were $817 per
month.
 
 Rent
expense for the years ended December 31, 2008 and 2007 was $61,387 and $18,124,
respectively.
 
 F-17
 
 POLLEX,
INC. AND SUBSIDIARY
 
 (FORMERLY
JOYTOTO USA, INC.)
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 December
31, 2008
 
 
 NOTE O –
CONSULTING AGREEMENT
 
 The
Company, on January 5, 2005, entered into a 2 year consulting agreement with
London for services relating to mergers, acquisitions, and the establishment of
investment banking relationships.  Under the terms of the consulting
arrangement, the Company is to a) pay a non-refundable retainer of $5,000 per
month, b) issue 100,000 shares (post splits) of the Company’s common stock to be
registered as promptly as possible but no later than the date the Company files
its first registration statement, c) pay a fee of 10% of the consideration paid
for any acquisition or sale by the Company and d) reimburse London for
reasonable travel expenses.  Additionally, the Company would issue to
London a warrant to purchase up to 133,333 shares of the Company’s common stock
at an exercise price of $0.75 per share (post splits).  The common
stock issuable upon exercise will be registered at the Company’s expense. The
warrants vest immediately.
 
 On
November 23, 2005, the Company amended the London agreement to reduce the number
of warrants to be issued from 133,333 shares to 50,000 shares (post splits), and
increased the exercise price of those warrants from $0.025 to $30.00 per share
(post splits).
 
 As part
of the JEI acquisition, these warrants were cancelled. Additionally, the fee was
increased to $20,000 per month and the expiration date extended to January 31,
2009.  As of December 31, 2007, the Company has accrued $40,000 as
consulting expense related to this agreement. $20,000 in consulting fees were
waived as part of the JEI acquisition.
 
 On June
1, 2008, London waived its current and future monthly cash consulting
fees.
 
 NOTE P –
EMPLOYMENT CONTRACTS
 
 Through
its subsidiary, JEI, the Company has employment agreements with all three of the
Company’s executives.  These employment agreements are all dated
October 31, 2007.
 
 Under the
employment agreement, Seong Yong Cho will serve as President and Chief Executive
Officer, Seong Sam Cho will serve as Chief Financial Officer, and Doo Ho Choi
will serve as Chief Operating Officer.  The employment agreements run
through October 31, 2010, unless terminated earlier.  In exchange for
their services, each of the three executives will receive $12,000 per annum,
which will increase to $60,000 per annum starting April 1, 2009.  They
will be eligible for a bonus, not to exceed one half of annual compensation, if
approved by JEI’s Board of Directors.
 
 Seong
Yong Cho and Seong Sam Cho were each issued 700,000 shares (post splits) and Doo
Ho Choi was issued 266,667 shares (post splits) under their employment
agreements.  However, those shares are subject to a repurchase right
by the Company over the next 36 months beginning November 1, 2007, at a purchase
price of $0.03 per share (post splits).  The repurchase right expires
as to 1/36th of the shares for every month the executives are
employed.  Therefore, if each of the executives remains employed over
the next 36 months, they will each own the shares free and clear of the
Company’s repurchase right.  These shares are also subject to a one
year lock-up period during which they cannot be sold or otherwise transferred
without restrictive legend.
 
 F-18
  POLLEX,
INC. AND SUBSIDIARY
 
 (FORMERLY
JOYTOTO USA, INC.)
 
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 December
31, 2008
 
 
 NOTE P –
EMPLOYMENT CONTRACTS (CONTINUED)
 
  2009
              
              $
              20,816,6652010
              
              
              20,816,665$
              41,633,330
 
 NOTE Q –
SALES CONCENTRATION
 
 The
revenues in 2008 represent one sale to Best Buy under the Company’s Exclusive
Distributorship Agreement.
 
 NOTE R –
ALLOWANCE FOR POTENTIAL UNCOLLECTIBILITY
 
 At
December 31, 2008, an allowance for potential uncollectibility of $200,000 was
established against a Deposit made with a supplier in Korea.  The
Company initially deposited $400,000, of which $200,000 was
returned.  The Company has demanded payment from the supplier and
filed suit in Korea to recover this remaining amount.  The Company has
also obtained the right to collect receivables of this supplier to be used to
pay off the deposit.  Since ultimate collectibility of this amount is
not certain, the Company has established this allowance.




F-19




ITEM 9 - CHANGES IN AND DISAGREEMENTS
WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE





There are
no events required to be disclosed under the Item.





ITEM
9A - CONTROLS AND PROCEDURES





We
conducted an evaluation, with the participation of our Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of
our disclosure controls and procedures, as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange
Act, as of December 31, 2008, to ensure that information required to be
disclosed by us in the reports filed or submitted by us under the Exchange Act
is recorded, processed, summarized and reported, within the time periods
specified in the Securities Exchange Commission's rules and forms, including to
ensure that information required to be disclosed by us in the reports filed or
submitted by us under the Exchange Act is accumulated and communicated to our
management, including our principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure. Based on that evaluation, our Chief
Executive Officer and Chief Financial Officer have concluded that as of December
31, 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 consolidated 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. 2) 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 that have caused management to conclude that, as of December
31, 2008, our disclosure controls and procedures were not effective at the
reasonable assurance level:





1.  
We do not have formalized documentation related to our internal control policies
and procedures; however, there are informal policies and procedures that cover
the recording and reporting of financial transactions. Written documentation of
key internal controls over financial reporting is a requirement of Section 404
of the Sarbanes-Oxley Act and will be applicable to us for the year ending
December 31, 2008. 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 do not have sufficient personnel working on our accounting functions to
ensure we can timely file our quarterly and annual reports, as indicated by the
filing of this annual report after the original due date (but within the
extension period). Management evaluated the impact of our lack of internal
accounting personnel to ensure we can timely file our required quarterly and
annual reports 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 seek additional internal accounting
personnel.





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 .





ITEM 9B - OTHER INFORMATION





There are
no events required to be disclosed by the Item.





13





PART III





ITEM 10 - DIRECTORS, EXECUTIVE
OFFICERS AND CORPORATE GOVERNACE





Directors
and Executive Officers





The
following table sets forth the names and ages of our current directors and
executive officers, the principal offices and positions held by each person, and
the date such person became a director or executive officer. Our executive
officers are elected annually by the Board of Directors. The directors serve one
year terms until their successors are elected. The executive officers serve
terms of one year or until their death, resignation or removal by the Board of
Directors. Unless described below, there are no family relationships among any
of the directors and officers.





Name
            
            Age
            
            Position(s)Seong
      Yong Cho
            
            41
            
            Chief
      Executive Officer, President,and
      Director (2007)Seong
      Sam Cho
            
            44
            
            Chief
      Financial Officer, Secretary,and
      Director (2007)Doo
      Ho Choi
            
            44
            
            Chief
      Operating Officer and Director
(2007)





Seong Yong Cho (Michael Cho) ,
41, has been the Chief Executive Officer and a Director since the acquisition of
JEI on October 31, 2007. He has served as the Chief Executive Officer of Joyon
Entertainment Co., Ltd. since December 1999 and has been a director of Joytoto
Co., Ltd. since December 2005. He served as the CEO of Joytoto Co., Ltd. from
December 2005 to November 2006, and has been the COO of Joytoto Co., Ltd. since
then.




Prior
to joining Joyon, Mr. Cho was a director of Sam Electronics from 1988 to 1996
and the CEO of Korea Licensing from September 1996 to March 2002. He has
provided consulting services related to game development for
EA/Accolade/Inforgrams, Samsung, SSangyong, Diamond Ads and other companies
since 1988. In recognition of his services, he received the prize of the
Ministry of Information and Communications for the Software Industry Development
on December 2000 and the prize of the Prime Minister for the Software Industry
Development on December 2001.





Seong
Yong Cho and Seong Sam Cho are brothers.





Seong Sam Cho (Sam Cho) , 44,
has been the Chief Financial Officer, Secretary, and a Director since the
acquisition of JEI on October 31, 2007. He has been the CEO of Joytoto Co., Ltd.
since December 2006, and has been a director of Joytoto Co. Ltd. since December
2005. He served as the COO of Joytoto Co., Ltd. from December 2005 to November
2006. He has been the Chairman of the Board of Joyon Entertainment Co. Ltd.,
which is a subsidiary of Joytoto Co., since December 1999. Mr. Cho lectures on
digital content and culture at the faculty of Sookmyung Women's University as a
professor. He also participates actively as a member of the committee for
Ministry of Information & Communication and Ministry of Culture &
Tourism of the Korean government. Mr. Cho is a subcommittee member of the
Federation of Korean Industries and Mirae Forum division of the game department.
He has been engaged in the IT industry for approximately 20 years. He founded
Sam Electronics Co., Ltd. in 1988. He received the prize of the Ministry of
Information and Communication for the Software Industry Development on December
2001.





Doo Ho Choi (David Choi) , 44,
has been the Chief Operating Officer and a Director since the acquisition of JEI
on October 31, 2007. He has been the internal auditor of Joytoto Co., Ltd. since
December 2005. Prior to joining Joytoto Co., Ltd., Mr. Choi was a director of
Imine Co., Ltd. and was responsible for their global business division. He was
involved with an electronic government business in Vietnam. He took office as
the CEO and CTO until April 2002 after he established Webtrol Interactive Co.,
Ltd. in March 2000, and he developed a remote control system through the
Internet for industrial boilers. He served as the CEO and CTO of Nextware
Corporation until June 1999 after he established Nextware Corporation in August
1997, and he developed a three-dimensional graphic system and ran a distribution
business for computer systems. Since June 1985, he served in the Korean army as
an officer and an official in the field of communication and security until
August 1994. He has worked in the information and communication field for 22
years.





Other
Directorships





None of
our officers and directors are directors of any company with a class of
securities registered pursuant to section 12 of the Exchange Act or subject to
the requirements of section 15(d) of such Act or any company registered as an
investment company under the Investment Company Act of 1940.





14


Audit
Committee





We do not
currently have an audit committee financial expert.




Compliance with Section
16(a) of the Securities Exchange Act of 1934




Section
16(a) of the Securities Exchange Act of 1934 requires the Company’s directors
and executive officers and persons who own more than ten percent of a registered
class of the Company’s equity securities to file with the SEC initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Officers, directors and greater than ten percent
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file.  To the best of the Company’s
knowledge, officers, directors and greater than 10% shareholders have been in
compliance with Section 16(a) of the Securities Exchange Act of 1934 for the
year ended December 31, 2008.





Board Meetings and
Committees





During
the fiscal year ended December 31, 2008, the Board of Directors met on a regular
basis and took written action on numerous other occasions. All the members of
the Board attended the meetings. The written actions were by unanimous
consent





Code of
Ethics





We have
not adopted a written code of ethics, primarily because we believe and
understand that our officers and directors adhere to and follow ethical
standards without the necessity of a written policy.





ITEM 11 - EXECUTIVE
COMPENSATION





Executive
Officers and Directors





The
following tables set forth certain information about compensation paid, earned
or accrued for services by (i) our Chief Executive Officer and (ii) all other
executive officers who earned in excess of $100,000 in the fiscal year ended
December 31, 2007 (“Named Executive Officers”):





Name
      and
              Principal
      Position
            
            Year
            
            Salary
              ($)
            
            Bonus
              ($)
            
            Stock
              Awards
              ($)*
            
            Option
      Awards
              ($)*
            
            Non-Equity
              Incentive
      Plan Compensation ($)
            
            Nonqualified
      Deferred Compensation ($)
            
            All
      Other
              Compensation
              ($)
            
            Total
              ($)Seong
      Yong Cho
            
            
            2007
            
            
            14,000
      (1
            )
            
            -
            
            
            -
      (2
            )
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            14,000
      (1
            )Chief
      Executive Officer, President, and Director
            
            
            2008
            
            
            24,000
            
            
            00
            
            
            
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            24,000Seong
      Sam Cho
            
            
            2007
            
            
            -
            
            
            -
            
            
            -
      (2
            )
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Chief
      Financial Officer, Secretary, and Director
            
            
            2008
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0Doo
      Ho Choi
            
            
            2007
            
            
            -
            
            
            -
            
            
            -
      (3
            )
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Chief
      Operating Officer and Director
            
            
            2008
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0




*
            Based
      upon the aggregate grant date fair value calculated in accordance with the
      Financial Accounting Standards Board (“FASB”) Statement of Financial
      Accounting Standard (“FAS”) No. 123R, Share Based Payment. Our policy and
      assumptions made in valuation of share based payments are contained in
      Note C to our December 31, 2007 financial statements. The monies shown in
      the “option awards” column is the total calculated value for each
      individual.




15




(1)
            This
      amount was not paid and has been accrued on our financial
      statements.(2)
            Seong
      Yong Cho and Seong Sam Cho were each granted a total of 700,000 shares of
      our common stock from Joytoto Co., Ltd. and Joyon Entertainment Co., Ltd.
      (which was subsequently subject to the reverse split on a 1 for 30 basis,
      effective October 24, 2008), under their employment agreements. However,
      those shares are subject to a repurchase right by the Company over the
      next thirty six (36) months beginning November 1, 2007, at a purchase
      price of $0.001 per share. Such repurchase right expires as to 1/36 th
      of the shares for every month the employee is employed by the Company in
      their current capacity. Therefore, if the employee remains employed with
      us over the next thirty six (36) months, they will each own the shares
      free and clear of our repurchase right. These shares are also subject to a
      one year lock-up period during which they cannot be sold or otherwise
      transferred without restrictive legend. As of December 31, 2008, the
      repurchase right of the Company expired as to 272,222 shares for each
      employee. At our closing price of $0.06 on December 31, 2008, those shares
      would be valued at $16,333.33. However, because the shares are subject to
      a lock-up period we have not assigned this value to the
      shares.





(3)
            Doo
      Ho Choi was granted a total of 266,666 shares of our common stock from
      Joytoto Co., Ltd. and Joyon Entertainment Co., Ltd., under his employment
      agreement. However, those shares are subject to a repurchase right by the
      Company over the next thirty six (36) months beginning November 1, 2007,
      at a purchase price of $0.001 per share. Such repurchase right expires as
      to 1/36 th
      of the shares for every month the employee is employed by the Company in
      his current capacity. Therefore, if the employee remains employed with us
      over the next thirty six (36) months, he will own the shares free and
      clear of our repurchase right. These shares are also subject to a one year
      lock-up period during which they cannot be sold or otherwise transferred
      without restrictive legend. As of December 31, 2008, the repurchase right
      of the Company expired as to 103,703 shares. At our closing price of $0.06
      on December 31, 2008, those shares would be valued at $6,222.21. However,
      because the shares are subject to a lock-up period we have not assigned
      this value to the shares.  Mr. Choi’s shares were subsequently
      subject to the reverse split on a 1 for 30 basis, effective October 24,
      2008.





Employment
Contracts





Through
our subsidiary, Joyon Entertainment, Inc., we have employment agreements with
all three of our executives. These employment agreements are all dated October
31, 2007.




Under the
employment agreement with Seong Yong Cho he will serve as our President and
Chief Executive Officer. His employment agreement runs through October 31, 2010,
unless terminated earlier. In exchange for his services Seong Yong Cho will
receive $12,000 per annum, which will increase to $60,000 per annum starting
April 1, 2009. He will be eligible for a bonus, not to exceed one half the
annual compensation, if approved by JEI’s Board of Directors. Seong Yong Cho was
granted a total of 700,000 shares of our common stock from Joytoto Co., Ltd. and
Joyon Entertainment Co., Ltd., under his employment agreement. However, those
shares are subject to a repurchase right by the Company over the next thirty six
(36) months beginning November 1, 2007, at a purchase price of $0.001 per share.
The repurchase right expires as to 1/36 th of the
shares for every month the employee is employed by us as President and Chief
Executive Officer. Therefore, if Seong Yong Cho remains employed with us over
the next thirty six (36) months, he will each own the shares free and clear of
our repurchase right. These shares are also subject to a one year lock-up period
during which they cannot be sold or otherwise transferred without restrictive
legend.




Under the
employment agreement with Seong Sam Cho he will serve as our Chief Financial
Officer. His employment agreement runs through October 31, 2010, unless
terminated earlier. In exchange for his services Seong Sam Cho will receive
$12,000 per annum, which will increase to $60,000 per annum starting April 1,
2009. He will be eligible for a bonus, not to exceed one half the annual
compensation, if approved by JEI’s Board of Directors. Seong Sam Cho was granted
a total of 700,000 shares of our common stock from Joytoto Co., Ltd. and Joyon
Entertainment Co., Ltd., under his employment agreement. However, those shares
are subject to a repurchase right by the Company over the next thirty six (36)
months beginning November 1, 2007, at a purchase price of $0.001 per share. The
repurchase right expires as to 1/36 th of the
shares for every month the employee is employed by us as Chief Financial
Officer. Therefore, if Seong Sam Cho remains employed with us over the next
thirty six (36) months, he will each own the shares free and clear of our
repurchase right. These shares are also subject to a one year lock-up period
during which they cannot be sold or otherwise transferred without restrictive
legend.





Under the
employment agreement with Doo Ho Choi he will serve as our Chief Operating
Officer. His employment agreement runs through October 31, 2010, unless
terminated earlier. In exchange for his services Doo Ho Choi will receive
$12,000 per annum, which will increase to $60,000 per annum starting April 1,
2009. He will be eligible for a bonus, not to exceed one half the annual
compensation, if approved by JEI’s Board of Directors. Seong Sam Cho was granted
a total of 266,666 shares of our common stock from Joytoto Co., Ltd. and Joyon
Entertainment Co., Ltd., under his employment agreement. However, those shares
are subject to a repurchase right by the Company over the next thirty six (36)
months beginning November 1, 2007, at a purchase price of $0.001 per share. The
repurchase right expires as to 1/36 th of the
shares for every month the employee is employed by us as Chief Operating
Officer. Therefore, if Doo Ho Choi remains employed with us over the next thirty
six (36) months, he will each own the shares free and clear of our repurchase
right. These shares are also subject to a one year lock-up period during which
they cannot be sold or otherwise transferred without restrictive
legend.




16




Other
Compensation





We do not have employment agreements with any of our other
employees.





Director
Compensation





We do not provide any compensation to our
directors for serving as directors.





Outstanding Equity Awards at
Fiscal Year-End





The
following table sets forth certain information concerning outstanding stock
awards held by the Named Executive Officers as of December 31,
2008:




Option
      Awards
            Stock
      AwardsName
            Number
      of Securities Underlying Unexercised Options
              (#)
              Exercisable
            Number
      of
              Securities
              Underlying
      Unexercised
              Options
              (#)
              Unexercisable
            Equity
              Incentive
      Plan Awards:
              Number
      of Securities Underlying Unexercised Uneared
              Options
              (#)
            Option
      Exercise Price
            Option
      Expiration
              Date
            Number
      of Shares or Unites of
              Stock
      That Have Not
              Vested
              (#)
            Market
      Value of
              Shares
      or Unites of
              Stock
      That Have
              Not
      Vested
              ($)
            Equity
      Incentive
              Plan
              Awards:
      Number of Unearned Shares,
              Units
      or Other
              Rights
      That Have Not Vested
              (#)
            Equity
      Incentive
              Plan
              Awards:
      Market or Payout
              Value
      of Unearned Shares,
              Units
      or Other
              Rights
      That Have Not Vested
              ($)Seong Yong Cho
            -
            -
            -
            -
            -
            427,778(1)
            $25,667(1)
            -
            -Seong
      Sam Cho
            -
            -
            -
            -
            -
            427,778(1)
            $25,667(1)
            -
            -Doo
      Ho Choi
            -
            -
            -
            -
            -
            162,963(2)
            $9,778(2)
            -
            -




(1)
            Seong
      Yong Cho and Seong Sam Cho were each granted a total of 700,000 shares of
      our common stock from Joytoto Co., Ltd. and Joyon Entertainment Co., Ltd.,
      under their employment agreements. However, those shares are subject to a
      repurchase right by the Company over the next thirty six (36) months
      beginning November 1, 2007, at a purchase price of $0.001 per share. Such
      repurchase right expires as to 1/36 th
      of the shares for every month the employee is employed by the Company in
      their current capacity. Therefore, if the employee remains employed with
      us over the next thirty six (36) months, they will each own the shares
      free and clear of our repurchase right. We have categorized the shares
      subject to this right of repurchase as unvested. These shares are also
      subject to a one year lock-up period during which they cannot be sold or
      otherwise transferred without restrictive legend. As of December 31, 2008,
      the repurchase right of the Company expired as to 272,222 shares for each
      employee, subsequent to the reverse split. At our closing price of $0.06
      on December 31, 2008, the 427,778 shares still subject to the right of
      repurchase would be valued at $25,667.  All shares of Common
      Stock were subject to a reverse split on a one for thirty basis, effective
      October 24, 2008.




17






(2)
            Doo
      Ho Choi was granted a total of 8,000,000 shares of our common stock from
      Joytoto Co., Ltd. and Joyon Entertainment Co., Ltd., under his employment
      agreement. However, those shares are subject to a repurchase right by the
      Company over the next thirty six (36) months beginning November 1, 2007,
      at a purchase price of $0.001 per share. Such repurchase right expires as
      to 1/36 th
      of the shares for every month the employee is employed by the Company in
      his current capacity. Therefore, if the employee remains employed with us
      over the next thirty six (36) months, he will own the shares free and
      clear of our repurchase right. We have categorized the shares subject to
      this right of repurchase as unvested. These shares are also subject to a
      one year lock-up period during which they cannot be sold or otherwise
      transferred without restrictive legend. As of December 31, 2008, the
      repurchase right of the Company expired as to 103,704 shares, subsequent
      to the reverse split. At our closing price of $0.06 on December 31, 2008,
      the 162,963 still subject to the right of repurchase would be valued at
      $9,778.  All shares of Common Stock were subject to a reverse
      split on a one for thirty basis, effective October 24,
    2008.





ITEM 12 - SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS




The
following table sets forth, as of March 31, 2009, certain information with
respect to the Company’s equity securities owned of record or beneficially by
(i) each Officer and Director of the Company; (ii) each person who owns
beneficially more than 10% of each class of the Company’s outstanding equity
securities; and (iii) all Directors and Executive Officers as a
group.





Title
      of Class
            
            Name
      and Address
              of
      Beneficial Owner (3)
            
            Amount
      and Nature of
              Beneficial
      Ownership
            
            Percent
              of
      Class (1)Common
      Stock
            
            Joytoto
      Co. Ltd. (4)(5)
              3
      FL Sungwoo Bldg
              717-3
      Sooseo-Dong
              Kangnam
      Gu, Seoul, Korea
              135-220
            
            1,166,666
            
            22.8%Common
      Stock
            
            Joyon
      Entertainment Co., Ltd.(4)(5)
              3
      FL Sungwoo Bldg
              717-3
      Sooseo-Dong
              Kangnam
      Gu, Seoul, Korea
              135-220
            
            1,000,000
      (6)
            
            19.5%Common
      Stock
            
            Doo
      Ho Choi (2)(5)
            
            266,666
            
            5.2%Common
      Stock
            
            Seong
      Yong Cho (2)(5)
            
            700,000
            
            13.7%Common
      Stock
            
            Seong
      Sam Cho (2)(5)
            
            700,000
            
            13.7%Common
      Stock
            
            All
      Directors and Officers
              As
      a Group (3 persons)
            
            1,666,666
            
            32.6%




18




(1)
            Unless
      otherwise indicated, based on 5,121,667 shares of common stock issued and
      outstanding following the acquisition of JEI. Shares of common stock
      subject to options or warrants currently exercisable, or exercisable
      within 60 days, are deemed outstanding for purposes of computing the
      percentage of the person holding such options or warrants, but are not
      deemed outstanding for the purposes of computing the percentage of any
      other person.





(2)
            Indicates
      one of our officers or directors. Beneficial ownership by these officers
      does not include shares owned by Joytoto Co., Ltd. or Joyon Entertainment
      Co., Ltd.





(3)
            Unless
      indicated otherwise, the address of the shareholder is c/o Joytoto USA,
      Inc., 3000 Scott Boulevard, Suite 206, Santa Clara, CA
    95054.





(4)
            Joyon
      Entertainment Co., Ltd. is a wholly-owned subsidiary of Joytoto Co. Ltd.,
      and as such, the shares of common stock held by both are attributed to the
      other. Combined, they own 42.3% of our outstanding common
      stock.





(5)
            On
      November 29, 2007, Joytoto Co., Ltd. and Joyon Entertainment Co., Ltd.
      transferred (i) 700,000 shares to Seong Yong Cho (our President and a
      member of our Board of Directors), (ii) 700,000 shares to Seong Sam Cho
      (our CFO and a member of our Board of Directors), and (iii) 266,667 shares
      to Doo Ho Choi (our COO and a member of our Board of Directors), bringing
      the share ownership to 1,166,667 shares owned by Joytoto Co., Ltd., and
      1,000,000 shares owned by Joyo n Entertainment Co., Ltd. The shares issued
      to Seong Yong Cho, Seong Sam Cho and Doo Ho Choi are subject to a
      repurchase right by the Company over the next thirty six (36) months
      beginning November 1, 2007, at a purchase price of $0.001 per share. Such
      repurchase right expires as to 1/36 th
      of the shares for every month the employee is employed by the Company in
      their current capacity. Therefore, if the employee remains employed with
      us over the next thirty six (36) months, they will each own the shares
      free and clear of our repurchase right.  These shares were
      subject to a reverse split on a one for thirty basis on October 24,
      2008.





(6)
            This
      share total was incorrectly reported as 50,000,000 shares (pre split) in
      our Current Report on Form 8-K filed with the Commission on December 14,
      2007.





The
issuer is not aware of any person who owns of record, or is known to own
beneficially, ten percent or more of the outstanding securities of any class of
the issuer, other than as set forth above. There are no classes of stock other
than common stock issued or outstanding.





There are
currently warrants outstanding to acquire an aggregate of 700,000 shares of our
common stock at an exercise price of $3.00 per share which were issued to the
holders of our Junior Convertible Debentures as part of the acquisition of JEI.
There are also currently warrants outstanding to acquire an aggregate of 246,666
shares of our common stock at an exercise price of $10.50 per share which were
issued to three consultants as part of the acquisition of JEI. Other than as set
forth above, none of these parties owns, in the aggregate and including shares
of our common stock that may be acquired upon exercise of their warrants, more
than five percent (5%) of our common stock.





There are
no current arrangements which will result in a change in control.





ITEM 13 - CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE




We do not
have a written policy concerning the review, approval, or ratification of
transactions with related persons.





We do not
have an audit, compensation, or nominating committee, and none of our Directors
are considered independent.





We have
not had a promoter during the last five fiscal years.





ITEM 14 - PRINCIPAL ACCOUNTING FEES
AND SERVICES





Audit
Fees




During
the year ended December 31, 2008, Meyler & Co. billed us $46,850 in fees for
professional services for the audit of our financial statements and review of
financial statements included in our Form 10-Q’s, as applicable. During the
period from December 6, 2006 (inception) to December 31, 2007, Meyler & Co.
billed us $20,000 in fees for professional services for the audit of our
financial statements and review of our financial statements included in our Form
10-Q’s, as applicable.




19




Audit
- Related Fees




During
the year ended December 31, 2008, Meyler & Co. billed us $21,850 relating to
procedures performed in connection with proxy and registration information filed
with the SEC. There were no amounts billed related to any assurance and related
services related to the performance of the audit or review of our financial
statements.





Tax
Fees




During
the year ended December 31, 2008, Meyler & Co. billed us $0 for professional
services for tax preparation. During the period from December 6, 2006
(inception) to December 31, 2008, Meyler & Co. billed us $0 for professional
services for tax preparation.




All
Other Fees




During
the year ended December 31, 2008, Meyler & Co. did not bill us for any other
fees. During the period from December 6, 2006 (inception) to December 31, 2008,
did not bill us for any other fees.





Of the
fees described above for the year ended December 31, 2008, 100% were approved by
either the entire Board of Directors or the Audit Committee. Of the fees
described above for the period from December 6, 2006 (inception) to December 31,
2008, 100% were approved by either the entire Board of Directors or the Audit
Committee. The Audit Committee’s pre-approval policies and procedures were
detailed as to the particular service and the audit committee was informed of
each service and such policies and procedures did not include the delegation of
the audit committee’s responsibilities.





PART
IV




ITEM 15 - EXHIBITS, FINANCIAL
STATEMENT SCHEDULES





(a)(2)   Financial Statement
Schedules





We do not
have any financial statement schedules required to be supplied under this
Item.





(a)(3)   Exhibits





Refer to
(b) below.




(b)   Exhibits10.1
            
            Agreement
      to Manufacture, Supply and Market among Hyundai RFmon Corp and Joytoto
      USA, Inc. dated February 20, 200831.1
            
            Rule
      13a-14(a)/15d-14(a) Certification of Chief Executive
    Officer31.2
            
            Rule
      13a-14(a)/15d-14(a) Certification of Chief Financial
    Officer32.1
            
            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.




20





SIGNATURES





In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.




Pollex,
      Inc.Dated:
      April 15, 2009
            
            /s/
      Seong Yong ChoBy:
            Seong
      Yong ChoPresident,
      Chief ExecutiveOfficer
      and DirectorDated:
      April 15, 2009
            
            /s/
      Seong Sam ChoBy:
            Seong
      Sam ChoChief
      Financial Officer,Secretary
      and Director





In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.





Dated:
      April 15, 2009
            
            /s/
      Seong Yong ChoBy:
            Seong
      Yong ChoPresident,
      Chief ExecutiveOfficer
      and DirectorDated:
      April 15, 2009
            
            /s/
      Seong Sam ChoBy:
            Seong
      Sam ChoChief
      Financial Officer,Secretary
      and DirectorDated:
      April 15, 2009
            
            /s/
      Doo Ho ChoiBy:
            Doo
      Ho Choi,Chief
      Operating Officer andDirector






21