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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, 2014

 OR


[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from     to


Commission file number: 000-54152


RADTEK, INC.

(Exact name of registrant in its charter)


Nevada

 

27-2039490

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification)


9900 Corporate Campus Drive, Suite 3000, Louisville, KY 40223

(Address of principal executive offices, including zip code)


Registrant's Telephone number, including area code:  (502) 657-6005



Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  Common Stock, $.001 par value


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


Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act

Yes [  ] No [x]




1



Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.406 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes [X] No [ ]


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the part 90 days.

Yes [x] No [  ]


Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained hereof, and will not be contained, to will 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.  [  ]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  


Large accelerated filer   [  ]

 

Accelerated filer                     [  ]

Non-accelerated filer     [  ]

 

Smaller Reporting Company  [x]


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]


State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. The market value of the registrant’s voting $.001 par value common stock held by non-affiliates of the registrant was approximately $4,935,955.


Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. The number of shares outstanding of the registrant's only class of common stock, as of April 7, 2015 was 121,336,800 shares of its $.001 par value common stock.


No documents are incorporated into the text by reference.




2




Radtek, Inc.

Form 10-K

For the Fiscal Year Ended December 31, 2014

Table of Contents


 

 

Page

Part I

 

 

Item 1.  Business

 

4

Item 1A. Risk Factors

 

5

Item 1B.  Unresolved Staff Comments

 

5

Item 2.  Properties

 

5

Item 3.  Legal Proceedings

 

6

Item 4.  Mine Safety Disclosures

 

6

 

 

 

Part II

 

 

Item 5.  Market for Registrant's Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities

 

7

Item 6.  Selected Financial Data

 

8

Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations

 

8

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk

 

11

Item 8.  Financial Statements and Supplementary Data

 

12

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

29

Item 9A.  Controls and Procedures

 

29

Item 9B.  Other Information

 

30

 

 

 

Part III

 

 

Item 10.  Directors, Executive Officers and Corporate Governance

 

31

Item 11.  Executive Compensation

 

34

Item 12.  Securities Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

35

Item 13.  Certain Relationships and Related Transactions, and Director Independence

 

36

Item 14.  Principal Accounting Fees and Services

 

36

 

 

 

Part IV

 

 

Item 15.  Exhibits and Financial Statement Schedules

 

38

Signatures

 

40




3




PART I


ITEM 1.   BUSINESS


The registrant was originally incorporated in Nevada on December 18, 2009, for the purpose of providing management consulting services to small and medium sized private companies in Taiwan that want to look for business partners, agencies, financing resources, or to become public through an IPO or reverse merger in the United States or Canada.


The registrant was a subsidiary of USChina Channel Inc., and spun off on March 15, 2010.  As of March 18, 2013, the registrant changed its name to RadTek, Inc.


On November 26, 2013, the registrant acquired RadTek, Co. Ltd. RadTek, Co., Ltd. was incorporated under the laws of Republic of Korea in May 2001, and is engaged in developing and marketing radiation-imaging system and equipment that employ digital radiography technology. The systems offered are primarily in the line of radiation scanning and related engineering services for users in various fields such as biotechnology, medical, product quality control, and security system. The specific product line includes food inspection systems, X-ray diagnosis related systems, baggage and container inspection systems, and radiation safety engineering. As the market in this field is dominated by high-priced systems for large users, the registrant aims to focus on the niche market of small users by offering low-cost models.


Operations:

The registrant develops and markets radiation-imaging systems and equipment that employs digital radiography technology.  The systems offered are primarily radiation scanning and related engineering services for users in fields such as biotech, medical, product quality control, and security.


The registrant’s main business focuses on the Food Inspection System, the Portable X-ray Scan System, and the Container Inspection System.


-

The Food Inspection System will be sold to producers and distributors of agricultural, marine and livestock products.


-

The Portable X-ray Scan System will be sold to security companies, non-destruction test companies, government institutions and veterinary hospitals.  


-

The Container Inspection System will be sold to security companies and transportation companies to search for dangerous objects inside shipping containers and packages without requiring them to be opened.




4



We take orders from our clients for customized products in terms of size and power.  These products are made specifically for our client’s needs.  Additionally, we provide service and maintenance for all the products that we sell.  As the market in this field is dominated by high-priced systems for large users, we focus on the niche market of small users by offering low-cost models.


Competition:

The industry is currently experiencing a limited degree of competition with regard to availability, price, service, quality and location.  There are well-established market leaders that are nationally and internationally recognized and which possess substantially greater financial resources and marketing personnel than us.  There are also a small number of local or regional vendors.  It is also likely that other competitors will emerge in the near future.  There is no assurance that we will compete successfully with other established products.  We shall compete on the basis of availability, price, service, quality and location once we secure product lines for distribution.


Marketing Strategy:

The registrant’s general marketing strategy is to provide products and services for established clients.  We manufacture key components such as semiconductor radiation sensors, radiation detector modules, X-ray sources, and related imaging software.  We customize our products and services according to our customer’s needs.


We intend to offer our products and services at various locations through the United States and internationally.  We will employ a marketing director who will be primarily responsible for exploiting the opportunities created through promotion.


Employees:

The registrant currently employs six full time employees and four part time employees.


ITEM 1A.  RISK FACTORS


Not applicable to a smaller reporting company.



ITEM 1B.  UNRESOLVED STAFF COMMENTS


Not applicable.


ITEM 2.  PROPERTIES


The registrant’s executive offices, which consist of 1,000 square feet, are located at 9900 Corporate Campus Dr, Suite 3000, Louisville, KY 40223. We currently use office space shared with PEG Inc. and have not entered into a lease for this office at this time. The space provided has no monthly fees at this time.




5



The registrant also has offices in Korea.  These offices consist of approximately 5,000 square feet.  They are located at 3F Taejoon B/D, 341-2 Jangdae-dong, Yuseong-gu Daejeon, Republic of Korea.  We pay $1,000 per month.


ITEM 3.  LEGAL PROCEEDINGS.


We are not aware of any litigation pending or threatened by or against Radtek, Inc.


ITEM 4.  MINE SAFETY DISCLOSURES.


Not applicable




6



PART II


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


    Item 5(a)


a)  Market Information.  Our common stock, par value $0.001, is listed on the OTCQB under the symbol RDTK.


The following table sets forth the range of high and low bid quotations for our common stock.  The quotations represent inter-dealer prices without retail markup, markdown or commission, and may not necessarily represent actual transactions.  These quotations are adjusted following a 50 for 1 stock split effective March 10, 2014.


Quarter Ended

 

High Bid

 

Low Bid

3/31/14

 

0.10

 

0.07

6/30/14

 

0.11

 

0.09

9/30/14

 

0.11

 

0.06

12/31/14

 

0.25

 

0.10

 

 

 

 

 

3/31/13

 

0.02

 

0.02

6/30/13

 

0.02

 

0.02

9/30/13

 

0.04

 

0.02

12/30/13

 

0.04

 

0.03


b)  Holders.  At April 7, 2015, there were approximately 17 shareholders of the registrant.


c)  Dividends.  Holders of our common stock are entitled to receive such dividends as may be declared by our board of directors.  No dividends on our common stock have ever been paid, and we do not anticipate that dividends will be paid on our common stock in the foreseeable future.


d)  Securities authorized for issuance under equity compensation plans.  No securities are authorized for issuance by the registrant under equity compensation plans.


e)  Performance graph.  Not applicable.


f)  Sale of unregistered securities.  


Not applicable


    Item 5(b)  Use of Proceeds.  Not applicable.




7



    Item 5(c)  Purchases of Equity Securities by the issuer and affiliated purchasers.  


During 2014 and 2013 we repurchased no shares of our common stock.


ITEM 6.  SELECTED FINANCIAL DATA


Not applicable to a smaller reporting company.


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Trends and Uncertainties.  Demand for the registrant's products are dependent on general economic conditions, which are cyclical in nature. Because a major portion of our activities are the receipt of revenues from our services and products, our business operations may be adversely affected by competitors and prolonged recessionary periods.

 

There are no other known trends, events or uncertainties that have, or are reasonably likely to have, a material impact on our short term or long term liquidity. Sources of liquidity will come from the sale of our products and services. There are no material commitments for capital expenditure at this time. There are no trends, events or uncertainties that have had or are reasonably expected to have a material impact on the net sales or revenues or income from continuing operations. There are no significant elements of income or loss that do not arise from the registrant’s continuing operations. There are no other known causes for any material changes from period to period in one or more line items of our financial statements.

 

We currently have operations planned through December 31, 2015.


Capital and Source of Liquidity.  We have $213,247 in cash and cash equivalents as of December 31, 2014.  We believe that our cash on hand and cash generated from operations will be sufficient to conduct operations through December 31, 2015.


For the year ended December 31, 2014, we had a net loss of $1,765,577.  We had the following adjustments to reconcile net loss to net cash used in operating activities: we had an increase of $6,316 due to depreciation and amortization, an increase of $7,518 due to severance benefits, and an increase of $880,000 due to stock issued for services.  We had the following changes in assets and liabilities: we had an increase of $46,453 due to accounts receivable, a decrease of $1,513 due to inventory, a decrease of $339,267 due to prepaid expenses and other assets, an increase of $198,354 due to accounts and other payables, an increase of $761,490 due to advance payment on contracts, and a decrease of $89,638 due to other current liabilities.  As a result, we had net cash used in operating activities of $295,864 for the year ended December 31, 2014.




8



For the year ended December 31, 2013, we had net income of $523,371.  We had the following adjustments to reconcile net loss to net cash used in operating activities: we had an increase of $11,372 due to depreciation and amortization, an increase of $24,252 due to severance benefits, and a increase of $22,580 due to loss on investment valuation.  We had the following changes in assets and liabilities, net of the effect of acquisitions: we had an increase of $10,258 due to accounts receivable, an increase of $11,551 due to inventory, a decrease of $494,947 due to prepaid expenses and other assets, a decrease of $74,050 due to accounts and other payable, a decrease of $146,507 due to advance payments on contracts, and an increase of $81,689 due to other current liabilities.  As a result, we had net cash used in operating activities of $30,431 for the year ended December 31, 2013.


For the year ended December 31, 2014, we did not pursue any investing activities.


For the year ended December 31, 2013, we spent $28,428 on the acquisition of available-for-sale security.  We also spent $15,763 for acquisition on investment, and received $100 from acquisition.  As a result, we had net cash used in investing activities of $44,091 for the year ended December 31, 2013.


For the year ended December 31, 2014, we received $160,000 as proceeds from a related party loan and $191,519 as an advance from related parties.  As a result, we had net cash provided by financing activities of $351,519 for the year ended December 31, 2014.


For the year ended December 31, 2013, we received $282,646 from the issuance of common stock.  We spent $33,915 on advance from related parties, and repaid $39,359 on the repayment of short-term borrowing.  As a result, we had net cash provided by financing activities of $209,372 for the year ended December 31, 2013.


Our long-term liquidity is dependent on the continuation of operations and receipt of revenues.


Results of Operations.


For the year ended December 31, 2014, we earned net revenues of $1,104,710.  Our cost of sales was $1,003,675, resulting in a gross profit of $101,035.  We paid depreciation and amortization expenses of $6,316 and selling and administrative expenses of $1,867,568.  We paid net interest expenses of $8,456 and earned net other income of $36,593.  We had a foreign exchange transaction loss of $20,864.  As a result, we had net income of $1,765,577 for the year ended December 31, 2014.  We had a foreign currency translation adjustment of $54,872 and a gain on investment of $3,513.  As a result, we had a comprehensive loss of $1,707,192 for the year ended December 31, 2014.




9



Comparatively, for the year ended December 31, 2013, we earned net revenues of $2,549,372.  Our cost of sales was $1,573,541, resulting in a gross profit of $975,831.  We paid depreciation and amortization expenses of $11,372, and selling and administrative expenses of $421,094.  We paid $6,916 in interest expenses and $22,580 as a loss on investment valuation.  We gained $3,399 from foreign exchange transactions, and received $6,103 from other income.  After foreign currency translation adjustments of $25,006, we had comprehensive income of $548,377 for the year ended December 31, 2013.


The $2,255,569 difference in comprehensive income during the year ended December 31, 2014 is due to a decrease in actual revenues received by RadTek, Co., Ltd. in Korea.  In addition, our selling and administrative expenses increased by $1,446,474 during the year ended December 31, 2014 due to stock compensation of $880,000 and bad debt expenses of $592,747.  


Plan of Operation.  The registrant may experience problems, delays, expenses and difficulties, many of which are beyond the registrant’s control.  These include, but are not limited to, unanticipated problems relating to additional costs and expenses that may exceed current estimates and competition.


Critical Accounting Policies


The following accounting policies are considered critical by our management.  These and other accounting policies require that estimates be made based on assumptions and judgment, which affect revenues, expenses, assets, liabilities and disclosure of contingencies in our financial statements.  These estimates and assumptions are based on historical experience and on various other factors that are believed to be reasonable under the circumstances.  However, actual results may differ from these estimates under different and/or future circumstances.


Revenue Recognition


The registrant follows guidelines of ASC Topic 605 “Revenue Recognition” for revenue recognition. The registrant recognizes revenue when revenue is realized or realizable and earned. Revenue is realized or realizable and earned when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the price to the buyer is fixed or determinable; and collectability is reasonably assured.


The registrant recognizes revenue from the sale of radiation sealing construction under the completed contract method accounted for as one element.


Revenue from research services recognized as service are rendered and billed each month under a term service agreement.




10



Property and Equipment


Property and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation is provided using the straight-line method over the estimated useful lives of the related assets:


Repairs and maintenance are expensed as incurred. Expenditures that increase the value or productive capacity of assets are capitalized. When property and equipment are retired, sold, or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations.


Stock-Based Compensation


We record stock based compensation in accordance with FASB ASC 718, Stock Compensation. ASC 718 requires that the cost resulting from all share-based transactions be recorded in the financial statements and establishes fair value as the measurement objective in accounting for share-based payment arrangements and requires all entities to apply a fair-value-based measurement in accounting for share-based payment transactions with employees. The Statement also establishes fair value as the measurement objective for transactions in which an entity acquires goods or services from non-employees in share-based payment transactions.


Recent Pronouncements


We do not believe any recently issued accounting standards will have a material impact on our financial statements.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Not applicable



11



ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


Radtek, Inc.

Index to the Financial Statements


 

 

Page

Report of Independent Registered Public Accounting Firm

 

13

 

 

 

Consolidated Balance Sheets as of December 31, 2014 and 2013

 

14

 

 

 

Consolidated Statements of Incomes for the years ended December 31, 2014 and 2013

 

15

 

 

 

Consolidated Statement of Changes in Stockholders' Deficit for the years ended December 31, 2014 and 2013

 

16

 

 

 

Statements of Cash Flows for the years ended December 31, 2014 and 2013

 

17

 

 

 

Notes to Financial Statements

 

19




12




PLS CPA, A Professional Corporation

t 4725 MERCURY STREET SUITE 210 t SAN DIEGO t CALIFORNIA 92111t

t TELEPHONE (858)722-5953 t FAX (858) 761-0341  t FAX (858) 764-5480

t E-MAIL changgpark@gmail.com t


Report of Independent Registered Public Accounting Firm



To the Board of Directors and Stockholders

RadTek, Inc.


We have audited the accompanying consolidated balance sheets of RadTek, Inc. (the “Company”) as of December 31, 2014 and 2013 and the related consolidated statements of income, changes in shareholders’ deficit and cash flow for the years then ended. 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 audit 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.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.  


In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of RadTek, Inc. as of December 31, 2014 and 2013, and the result of its operation and its cash flow for the years then ended in conformity with U.S. generally accepted accounting principles.


The consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the consolidated financial statements, the Company’s recurring losses over past years and working capital deficits raise substantial doubt about its ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.




/s/PLS CPA

____________________

PLS CPA, A Professional Corporation


April 7, 2015

San Diego, CA. 92111





13



RADTEK, INC.

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2014 and 2013

 

 

 

 

 

2014

2013

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

$

213,247

$

106,908

Accounts receivable, net

 

6,295

 

52,748

Prepaid expenses and other assets

 

899,729

 

560,462

Inventories

 

1,513

 

-

Total Current assets

 

1,120,784

 

720,118

 

 

 

 

 

 

 

 

 

Investment

 

8,311

 

4,998

Property and equipment, net

 

-

 

-

Intangible assets

 

88,325

 

98,303

Security deposits

 

27,293

 

28,428

 

 

 

 

 

 

123,929

 

131,729

 

 

 

 

 

 

 

 

 

Total assets

$

1,244,713

$

851,847

 

 

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts and other payable

$

355,910

$

157,556

Short-term borrowings

 

136,463

 

145,648

Loan from related party

 

160,000

 

-

Advances from related party

 

440,817

 

249,298

Advance payments on contracts

 

1,025,051

 

263,561

Other current liabilities

 

3,394

 

93,032

 

 

 

 

 

 

2,121,635

 

909,095

Non-current liabilities:

 

 

 

 

Accrued severance benefits, net

 

32,683

 

25,165

 

 

 

 

 

 

32,683

 

25,165

 

 

 

 

 

 

 

 

 

Total liabilities

 

2,154,318

 

934,260

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

Preferred Stock:

 

 

 

 

 

Authorized: 10,000,000 shares, $0.001 par value

 

 

 

 

 

 

Issued and outstanding shares: 0

 

 

 

 

Common stock;

 

 

 

 

 

 

Authorized: 1,990,000,000 shares, $0.001 par value

 

 

 

 

 

 

Issued and outstanding: 121,336,800 and 101,336,800 shares

 

 

 

 

 

 

as of December 31, 2014 and 2013, respectively

 

176,712

 

156,712

Additional paid-in capital

 

1,638,511

 

778,511

Treasury Stock (55,375,000 shares)

 

(375,053)

 

(375,053)

Accumulated other comprehensive loss

 

7,408

 

(50,977)

Accumulated deficits

 

(2,357,183)

 

(591,606)

 

 

 

 

 

 

 

 

 

Total equity

 

(909,605)

 

(82,413)

 

 

 

 

 

 

 

 

 

Total liabilities and equity

$

1,244,713

$

851,847


See the notes to the consolidated financial statements.



14



RADTEK, INC.

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013


 

 

 

 

 

December 31, 2014

December 31, 2013

Net revenues

$

1,104,710

$

2,549,372

 

 

 

 

 

 

 

 

 

Cost of sales

 

1,003,675

 

1,573,541

 

 

 

 

 

 

 

 

 

Gross profit

 

101,035

 

975,831

 

 

 

 

 

 

 

 

 

Operating expenses :

 

 

 

 

Depreciation and Amortization

 

6,316

 

11,372

Selling and administrative expenses

 

1,867,568

 

421,094

 

 

 

 

 

 

 

 

 

Total Operating expenses

 

1,873,884

 

432,466

 

 

 

 

 

 

 

 

 

Gain(Loss) from operations

 

(1,772,849)

 

543,365

 

 

 

 

 

 

 

 

 

Other income(expenses) :

 

 

 

 

Interest expense, net

 

(8,456)

 

(6,916)

Loss on investment valuation

 

-

 

(22,580)

Foreign exchange transaction gain (loss)

 

(20,865)

 

3,399

Other income, net

 

36,593

 

6,103

 

 

 

 

 

 

7,272

 

(19,994)

Income for the year before tax

 

(1,765,577)

 

523,371

Provision for income tax

 

-

 

-

Net income

 

(1,765,577)

 

523,371

 

 

 

 

 

 

 

 

 

Other Comprehensive income (loss)

 

 

 

 

 

Foreign currency translation adjustments

 

54,872

 

25,006

 

Gain on investment

 

3,513

 

-

 

 

 

 

 

 

 

 

 

Comprehensive income (loss)

$

(1,707,192)

$

548,377

 

 

 

 

 

 

 

 

 

Net income (loss) per common share-basic and diluted

$

(0.01)

$

0.01

 

 

 

 

 

 

 

 

 

Weighted average number of common stock outstanding

 

120,624,471

 

70,621,350


See the notes to the consolidated financial statements.




15



RADTEK, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013


 

Common Stock

Common Stock Amounts

Additional Paid-in Capital

Treasury Stock

Accumulated Other Comprehensive Loss

Accumulated Deficit

Total

 

 

 

 

 

 

 

 

Balance, December 31, 2012

65,000,000

$65,000

$638,164

$              -

$(75,983)

$(1,114,977)

$(487,796)

 

 

 

 

 

 

 

 

Treasury Stock

 

 

 

(375,053)

 

 

(375,053)

Stock issuance for cash

30,000,000

30,000

252,646

 

 

 

282,646

Recapitalization

61,711,800

61,712

(112,299)

 

 

 

(50,587)

Net income

 

 

 

 

 

523,371

523,371

Foreign currency translation adjustment

 

 

 

 

25,006

 

25,006

Balance, December 31, 2013

156,711,800

$156,712

$778,511

$(375,053)

$(50,977)

$  (591,606)

$(82,413)

 

 

 

 

 

 

 

 

Stock issuance for services

20,000,000

20,000

860,000

 

 

 

880,000

Foreign currency translation adjustment

 

 

 

 

54,872

 

54,872

Gain on investment

 

 

 

 

3,513

 

3,513

Net loss

 

 

 

 

 

(1,765,577)

(1,765,577)

Balance, December 31, 2014

176,711,800

$176,712

$1,638,511

$(375,053)

$   7,408

$(2,357,183)

$(909,605)


On January 15, 2014, the Company effectuated a forward split of common stock at 50 to 1.  All shares amounts have been retroactively adjusted for all periods presented.


See the notes to the consolidated financial statements.



16



RADTEK, INC.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013


 

2014

2013

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

Net income (loss)

$

(1,765,577)

$

523,371

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

    Depreciation and amortization

 

6,316

 

11,372

    Severance benefits

 

7,518

 

24,252

    Loss on investment valuation

 

-

 

22,580

    Stock issuance for services

 

880,000

 

-

Change in assets and liabilities, net of the effect of acquisitions:

 

 

 

 

    Accounts receivable

 

46,453

 

10,258

    Inventory

 

(1,513)

 

11,551

     Prepaid expenses and other assets

 

(339,267)

 

(494,947)

    Accounts and other payable

 

198,354

 

(74,050)

    Advance payments on contracts

 

761,490

 

(146,507)

    Other current liabilities

 

(89,638)

 

81,689

Net cash provided by (used in) operating activities

 

(295,864)

 

(30,431)

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

    Acquisition on available-for-sale-security

 

-

 

(28,428)

    Acquisition on investment

 

-

 

(15,763)

    Cash acquired from acquisition

 

-

 

100

Net cash used in investing activities

 

-

 

(44,091)

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

    Common stock issuance

 

-

 

282,646

    Proceeds from short-term borrowings

 

-

 

-

    Proceeds from loan from related party

 

160,000

 

 

    Advance from related parties

 

191,519

 

(33,915)

    Repayment of short-term borrowing

 

-

 

(39,359)

Net cash provided by financing activities

 

351,519

 

209,372

 

 

 

 

 

Net decrease in cash and cash equivalent

 

55,655

 

134,850

Effect of exchange rate changes

 

50,684

 

(36,281)

Cash and cash equivalent at beginning of year

 

106,908

 

8,339

 

 

 

 

 

Cash and cash equivalent at end of year

$

213,247

$

106,908




17



RADTEK, INC.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013


(Continued from previous page)


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

 

Cash paid for interest

$

8,456

$

6,564

Cash paid for taxes

$

-

$

-

 

 

 

 

 

Significant non-cash investing and financing activities:

 

 

 

 

    Prepaid expenses increased due to acquisition

$

-

$

632

    Accounts payable increased due to acquisition

 

-

 

1,366

    Treasury stock increased due to acquisition

 

-

 

375,053

 

$

-

$

377,051


See the notes to the consolidated financial statements.



18



Radtek, Inc.

Consolidated Notes to Financial Statements

December 31, 2014 and 2013


Note 1 – Nature of Business


(a) Description of Business


RadTek, Inc. (Formerly USChina Taiwan, Inc.) (the “Company”) was incorporated in Nevada on December 18, 2009, under the laws of the State of Nevada, for the purpose of providing management consulting services to the small or median sized private companies in the Taiwan that want to look for business partners, or agencies, or financing resources, or to become public through IPO or reverse merger in the United States, or Canada.

 

The Company was a subsidiary of USChina Channel Inc., and spun off on March 15, 2010. As of March 18, 2013 the company filed with the Nevada Secretary of State and subsequently with the SEC and FINRA for a name change to RadTek, Inc., change to the Articles of Incorporation. With this the ticker of the company also changed to RDTK and created a class of preferred stock with 10,000,000 shares issuable. No preferred shares have been issued to date.


On November 26, 2013, the Company acquired RadTek, Co. Ltd. RadTek, Co., Ltd. was incorporated under the laws of Republic of Korea in May 2001, and is engaged in developing and marketing radiation-imaging system and equipment that employ digital radiography technology. The systems offered are primarily in the line of radiation scanning and related engineering services for users in various fields such as biotechnology, medical, product quality control, and security system. The specific product line includes food inspection systems, X-ray diagnosis related systems, baggage and container inspection systems, and radiation safety engineering. As the market in this field is dominated by high-priced systems for large users, the Company aims to focus on the niche market of small users by offering low-cost models.


On December 31, 2012, RadTek, Co., Ltd. entered into an agreement to acquire a company (a Nevada corporation) listed on “Over-the-Counter” Market of the United States. This transaction was completed in February 2013, and has resulted in the acquisition of 89.6% of the outstanding voting shares of the listed company at the consideration of $367,000 including transaction expenses. All amounts recorded as treasury stock in consolidated balance sheet as of December 31, 2013.


On November 26, 2013, the Company entered into a definitive agreement with RadTek, Co. Ltd.’s shareholders.   Pursuant to the agreement, the Company purchased all of the outstanding securities of the RadTek, Co. Ltd. (1,900,000) in exchange for 95,000,000 common shares of the Company.  RadTek Co. Ltd. shall be a wholly owned subsidiary of the Company. RadTek, Co. Ltd. is treated as the “accounting acquirer” in the accompanying financial statements. In the transaction, the Company issued 95,000,000 common shares to the shareholders of RadTek, Co. Ltd.; such shares represented , immediately following the transaction, 94% of the outstanding shares of the Company(excluding treasury stock of 55,375,000 shares).  The transaction was accounted for as a “reverse merger” and a reverse recapitalization and the issuances of common stock were recorded as a reclassification between paid-in-capital and par value of Common Stock.




19



On January 15, 2014, the Board of Directors approved to increase authorized common shares from 60,000,000 common shares, par value $0.001 to 1,990,000,000 common shares, par value $0.001 per common shares and to effectuate a forward split of RadTek’s common stock at an exchange ratio of 50 for 1 so that each outstanding common share before the forward split shall represent 50 common shares after the forward split. All share amounts have been retroactively adjusted for all periods presented.


(b) Going Concern Considerations

 

The Company’s financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.  The Company has experienced recurring losses over the past years which have resulted in stockholders’ accumulated deficits of approximately $2,357 thousand and a working capital deficit of approximately $1,001 thousand at December 31 2014.  These conditions raise uncertainty about the Company’s ability to continue as a going concern.

 

The Company’s ability to continue as a going concern is contingent upon its ability to secure additional financing, increase sales of its products and attain profitable operations. It is the intent of management to continue to raise additional capital to sustain operations and to pursue acquisitions of operating companies in order to generate future profits for the Company. However, there can be no assurance that the Company will be able to secure such additional funds or obtain such on terms satisfactory to the Company, if at all.

 

The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.

 


Note 2 – Significant Accounting Policies


The Company follows accounting principles generally accepted in the United States of America in the preparation of its financial statements. The following summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. These accounting policies conform to the U.S. GAAP, and have been consistently applied. The financial statements and notes are representations of the Company’s management, who is responsible for their integrity and objectivity.


(a)

Basis of Accounting


The Company's consolidated financial statements are prepared using the accrual method of accounting. These consolidated statements include the accounts of the Company and its subsidiary RadTek, Co. Ltd. a Korean Corporation.  All significant intercompany transactions and balances have been eliminated. The Company has elected a December 31 year-end.


(b) Use of Estimates and Assumptions


The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.



20




The Company’s significant estimates and assumptions include the fair value of financial instruments, valuation of deferred tax assets and allowance for doubtful accounts. Actual results may ultimately differ from estimates, although management does not believe such changes will materially affect the financial statements in any individual year.


(c) Operation in Foreign Country


Substantially, all of the Company’s operations are carried out in the Republic of Korea. The Company’s operations are subject to various political, economic, and other risks and uncertainties inherent in the country in which the Company operates. Among other risks, the Company’s operations are subject to the risks of political conditions and governmental regulations.


(d) Foreign Currency Translation and Transaction


The financial position and results of operations of the Company are measured using the foreign local currency as the functional currency. Revenues and expenses have been translated into U.S. dollars at average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting translation gain and loss adjustments are recorded directly as a separate component of shareholders' equity.


Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.


(e) Cash and Cash Equivalents


Cash includes currency, checks issued by others, other currency equivalents, current deposits and passbook deposits held by financial institutions. For financial statement purposes, all highly liquid debt instruments with insignificant interest rate risk and maturity of three months or less when purchased are considered to be cash equivalent. Cash equivalents consist primarily of cash deposits in money market funds that are available for withdrawal without restriction.


(f) Accounts Receivable


Trade accounts receivable are presented at face value less allowance for doubtful accounts. The allowance for doubtful accounts is the Company’s best estimate of probable credit losses in the existing accounts receivable. The Company determines the allowance based on Company’s historical experience and review of specifically identified accounts and aging data. The Company reviews its allowance for doubtful accounts periodically. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

 

(g) Inventory


Inventories, consisting of raw materials and finished goods, are stated at lower of cost or market where cost is computed on a first in, first out basis.




21



(h) Property and Equipment


Property and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation is provided using the straight-line method over the estimated useful lives of the related assets:


Repairs and maintenance are expensed as incurred. Expenditures that increase the value or productive capacity of assets are capitalized. When property and equipment are retired, sold, or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations.


(i) Impairment of Long-Lived Assets


The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When the sum of the undiscounted future net cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount, an impairment loss would be measured based on the discounted cash flows compared to the carrying amount. No impairment charge has been recorded in any of the periods presented.


(j) Intangible Assets Other Than Goodwill


The Company follows guidelines of FASB Accounting Standards Codification (“ASC”) Topic 350 “Intangibles – Goodwill and Other” with regards to accounting and reporting of intangible assets other than goodwill. Intangible assets that have finite lives are amortized over the period during which the asset is expected to contribute directly or indirectly to future cash flows of the entity. Intangible assets that have finite lives are evaluated for impairment when events and circumstances warrant. Intangible assets that have indefinite lives are not amortized. They are evaluated for impairment annually and on an interim basis as events and circumstances warrant by comparing the fair value of the intangibles asset with its carrying amount.


(k) Accrued Severance Benefits


Employees with at least one year of service are entitled to receive a lump-sum payment upon termination of their employment with the Company based on their length of service and rate of pay at the time of termination. Accrued severance benefits represent the amount which would be payable assuming all eligible employees were to terminate their employment as of the balance sheet date.


(l) Research and Development


Research and development costs are expensed as incurred. Research and development expenses consist primarily of salaries and related personnel costs and subcontract fees.


(m) Revenue Recognition


The Company follows guidelines of ASC Topic 605 “Revenue Recognition” for revenue recognition. The Company recognizes revenue when revenue is realized or realizable and earned. Revenue is realized or realizable and earned when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the price to the buyer is fixed or determinable; and collectability is reasonably assured.



22




The Company recognizes revenue from the sale of radiation sealing construction under the completed contract method accounted for as one element.


Revenue from research services recognized as service are rendered and billed each month under a term service agreement.


(n) Fair Value of Financial Instruments


The Company follows ASC Topic 820 “Fair Value Measurements and Disclosures” to measure the fair value of its financial instruments and to make disclosures about fair value of its financial instruments. Topic 820 requires the categorization of the fair value of financial instruments into three broad levels which form a hierarchy.


Level 1

Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2

Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3

Pricing inputs that are generally observable inputs and not corroborated by market data.


The Company follows this hierarchy for its financial instruments. The classifications are based on the lowest level of input that is significant to the fair value measurement.


The carrying amounts of the Company’s financial assets and liabilities, such as cash equivalents, accounts receivable, prepaid expenses, and accrued expenses approximate their fair values because of the short maturity of these instruments.


(o) Net Income (Loss) per Share


Net income (loss) per common share is computed pursuant to ASC Topic 260 “Earnings per Share.” Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through stock options and warrants.


There were no potentially outstanding dilutive common shares for the periods ended December 31, 2014 and, 2013


(p) Related Parties


The Company follows ASC Topic 850 “Related Party Disclosures” for the identification of related parties and disclosure of related party transactions.




23



(q) Commitment and Contingencies


The Company follows subtopic ASC Topic 450 “Contingencies” to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such an assessment inherently involves an exercise of judgment. As of December 31, 2014, management is not aware of any such contingencies that would have a material adverse effect on the Company’s financial position or results of operations.


(r) Recent Accounting Pronouncements


Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.


Note 3 – Inventories


Inventories consist of the following as of December 31, 2014 and 2013:


 

 

2014

2013

Raw materials

$          1,513           

$             -

Finished goods

     -

-

Total

$          1,513

$             -


Note 4 – Property and Equipment


The Company’s property and equipment consists of the following as of December 31, 2014 and 2013:


 

2014

2013

Equipment and fixture

$    78,705

$    78,705

Automobile

23,675

23,675

 

102,380

102,380

Accumulated depreciation

(102,380)

(102,380)

 

 

 

Net property and equipment

$              -

$              -


Depreciation expenses for the years ended December 31, 2014 and 2013 were $nil and $5,298, respectively.


Note 5 – Investment


The Company invested W30,000,000 (about US$28,000) in KTEX Ltd. in 2012. The Company has ownership of 3% of KTEX. The Company recognized loss on investment of $22,580 in 2013. The company recorded gain of $3,513 as comprehensive income in 2014.




24



Note 6 – Intangibles


The Company’s intangible assets are composed of the following as of December 31, 2014 and 2012:


 

2014

2013

Patents

$  13,023

$  13,564

Technical rights

109,044

113,581

 

122,067

127,145

Accumulated amortization

(33,742)

(28,842)

 

 

 

Intangible assets, net

$   88,325

$   98,303


Direct costs incurred in obtaining patents and technical rights are capitalized. These patents and rights are subject to amortization as their lives are statutorily limited in South Korea, typically over the period of twenty years. Accordingly, they are being amortized over the statutory lives. Management considered recoverability of the balances of these assets and determined that no adjustment was necessary as of December 31, 2014.


Amortization expenses for the years ended December 31, 2014 and 2013 were $6,316 and $6,075, respectively.


Note 7 – Short-term Borrowings


Short term borrowings consist of the following as of December 31, 2014 and 2013:



 

2014

2013

Note payable to a bank at interest rate of 4.39%. The line matures in November 2015.

$  136,463

$  145,648

Total short-term borrowings

$  136,463

$  145,648


Note 8– Advances from Related Party


The Company, on an as need basis, borrows funds from a shareholder. The borrowings are unsecured and payments are made at the Company’s discretion. The borrowings are non-interest rate.  Total borrowing as of December 31, 2014 and 2013 were $440,817 and $249,298 respectively.


Note 9 – Loan agreement


On April 1, May1, and July 2, 2014, the Company entered loan agreement of $50,000, $50,000 and $60,000 with related party, respectively. The interest is 2% per annum and repayment date is March 24, 2015. As of December 31, 2014, the Company borrowed $160,000 from related party. As of December 31, 2014, accrued interest of $1,284 has been recorded in accounts and other payable. The Company repaid $160,000 in January 2015.




25



Note 10 – Income Tax


The Company has net operating losses carried forward of $2,357,183 (2013-$591,606) available to offset taxable income in the future years which expire within 20 years (Korea 10 years).


The Company is subject to Korean Corporate Tax at approximate rate of 22% and to United States federal and state income taxes at approximate rate of 35%. The reconciliation of the provision for income taxes to the Company’s income tax expense as reported is as follows:


 

December 31, 2014

December 31, 2013

Net income (loss) before income taxes per financial statements

 

 

  Korea

$   (1,679,089)

$   532,112

  United States

(86,488)

(8,741)

Total

$   (1,765,577)

$   523,371

 

 

 

Provision for taxes

 

 

  Korea

$         -

$         -

  United States

-

-

Total

$         -

$         -

Effective tax rate

-

-


The significant components of deferred income tax assets and liabilities at December

31, 2014 and 2013 are as follows:


 

December 31, 2014

December 31, 2013

Net operating loss carry forward

2,439,255

148,015

Valuation allowance

(2,439,255)

(148,015)

Net

-

-


Note 11 – Common stock


On November 26, 2013, the Company entered into a definitive agreement with RadTek, Co. Ltd.’s shareholders.   Pursuant to the agreement, the Company purchased all of the outstanding securities of the RadTek, Co. Ltd. (1,900,000) in exchange for 95,000,000 common shares of the Company.  


As of December 31, 2013, the Company holds 55,375,000 common shares ($375,053) as treasury stocks recorded as capital adjustment.


On January 15, 2014, the Board of Directors approved to increase authorized common shares from 60,000,000 common shares, par value $0.001 to 1,990,000,000 common shares, par value $0.001 per common shares and to effectuate a forward split of RadTek’s common stock at an exchange ratio of 50 for 1 so that each outstanding common share before the forward split shall represent 50 common shares after the forward split. All share amounts have been retroactively adjusted for all periods presented.


On January 14, 2014, the Company issued 20,000,000 common shares to two employees and three consultants valued at the market close and recorded as $435,736 in selling and administrative expenses and $435,736 in consulting fees, respectively, for an aggregate expense of $871,472.



26




Note 12 – Significant contracts


 The Company has contracted with Korea Research Institute of Ships and Ocean Engineering (KRISO) for delivery of Cargo Inspection System (CIS) X-ray Accelerator which worth $945,447 on February 13, 2014. Under the payment term, 80% before shipment and 20% after the delivery, the Company has received 756,000 USD, the 80%, from KIOST on May 23, 2014. The delivery due date was postponed as request from KRISO. It was delivered but not installed, and the final 20% of the whole payment was billed to KRISO as of November 10, 2014. Final 20% was received by RadTek Inc. on 17th of November, 2014. The installation is scheduled in June 2015.


The Company also got the delivery contract with KRISO for Temperature Control Unit of the X-ray Accelerator, which worth $25,500, on July 21, 2014. On January 21, 2015, KRISO and the Company contracted for CIS Array Detection System which worth $332,956 . The installation of all two items are scheduled in June, 2015.


The Company got sales and delivery contract of its Food Inspection System, which worth 42,900,000 KRW ($38,000) with BIO PORT KOREA INC. on December 4, 2014 and completed the delivery in March 2015.


The Company got sales and delivery contract of its Food Inspection System, which worth 79,000,000 KRW ($70,000) with Hanultari Co., Ltd. on December 8, 2014 and completed the delivery in March 2015.


The Company contracted with SKTelecom for maintenance service of Korea Customs Service’s ‘Cargo Inspection Center II in Busan New Port.’ The contract ends on Dec 31, 2018 and the amount is 762,685,000 KRW ($672,000).


Note 13 – Investment Agreement and Marketing Agreement


On April 22, 2014, the Company entered into an investment agreement and a corresponding registration rights agreement with Dutchess Opportunity Fund, II, LP, a Delaware Limited Partnership.  Under the terms of the investment agreement, Dutchess will invest up to $20,000,000 to purchase the Company’s common shares.  From time to time, the Company may deliver a put notice to Dutchess which states the dollar amount of shares they wish to sell.  This amount shall be equal to up to either 1) 300% of the average daily US market value of the common stock for three trading days prior to the date of the put notice, or 2) $300,000.  


Once a put notice has been delivered to Dutchess, Dutchess will purchase the shares at a price equal to 95% of the lowest daily volume weighted average price of the common stock for the five consecutive trading days following delivery of the put notice.  The closing date for the put notice is at the end of that five day period.  If the Company has not issued the shares at the end of that period, they agree to pay a cumulative late fee for each trading day beyond the closing date.


Dutchess cannot purchase more than 4.99% of the total common shares outstanding as of the closing date.




27



Dutchess is not obligated to purchase any shares unless 1) a registration statement has been declared effective and remains effective and available for the resale of all registerable securities at all times until the closing of each subject put notice; 2) the common stock is listed on a principal trading market and is not suspended from trading; 3) the Company has not breached the terms of the investment agreement or the registration agreement; 4) no injunction has been issued prohibiting the purchase or issuance of the securities; and 5) the issuance of shares will not violate any shareholder approval requirements of the principal trading markets.


The investment agreement terminates when Dutchess has purchased an aggregate of $20,000,000 of the Company’s common stock pursuant to the agreement, upon written notice of the registrant to Dutchess, or on April 22, 2017.


Under the terms of the registration rights agreement, the Company shall register up to 40,000,000 common shares for resale.  No other securities shall be registered under this agreement without the written approval of Dutchess.


Note 14 – Subsequent Event


The Company follows the guidance in ASC Topic 855 “Subsequent Events” for the disclosure of subsequent events. The Company evaluated subsequent events through the date of the financial statements were issued.




28




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


None


ITEM 9A.  CONTROLS AND PROCEDURES


Controls and Procedures.


Evaluation of Disclosure Controls and Procedures:


We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to insure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, or the persons performing similar functions, to allow timely decisions regarding required disclosure.


Under the supervision and with the participation of our CEO and CFO, or the persons performing similar functions, our management has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report. Based on that evaluation, our CEO and CFO, or the persons performing similar functions, concluded that our disclosure controls and procedures were effective as of December 31, 2014.


Management’s Annual Report on Internal Control over Financial Reporting:


Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is the process designed by and under the supervision of our CEO and CFO, or the persons performing similar functions, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external reporting in accordance with accounting principles generally accepted in the United States of America.  Management has evaluated the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control over Financial Reporting – Guidance for Smaller Public Companies.




29



Under the supervision and with the participation of our CEO and CFO, or the persons performing similar functions, our management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2014, and concluded that it is effective.


This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by the registrant’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the registrant to provide only management’s report in this annual report.


Evaluation of Changes in Internal Control over Financial Reporting:


Under the supervision and with the participation of our CEO and CFO, or those persons performing similar functions, our management has evaluated changes in our internal controls over financial reporting that occurred during the fourth quarter of 2014.  Based on that evaluation, our CEO and CFO, or those persons performing similar functions, did not identify any change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


Important Considerations:


The effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time. Because of these limitations, there can be no assurance that any system of disclosure controls and procedures or internal control over financial reporting will be successful in preventing all errors or fraud or in making all material information known in a timely manner to the appropriate levels of management.


ITEM 9B.  OTHER INFORMATION


None




30




PART III


ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 

Board of Directors.  Our bylaws provide that the number of directors who shall constitute the whole board shall not be less than one.  The shareholders at any annual meeting may determine the number which shall constitute the board and the number so determined shall remain fixed until changed at a subsequent annual meeting.  The directors shall be elected at each annual meeting of the shareholders; however, if any such annual meeting is not held or the directors are not elected thereat, the directors may be elected at any special meeting of shareholders held for that purpose.  All directors shall hold office until their respective successors are elected.


The officers and directors are as follows:


NAME

 

AGE

 

POSITIONS HELD

 

TERM OF OFFICE

Kwang Hyun Kim

 

48

 

President/ CEO, Director, Secretary

 

February 4, 2013 to present


Jae Chan Kim

 

74

 

Treasurer/ CFO/ Controller

 

February 4, 2013 to present

Yong Hyun Chung

 

39

 

Director

 

February 26, 2013 to present


Officer and Director Information:


Mr. Kwang Hyun Kim, 48:

Mr. Kim is the chief executive officer, secretary and director of the registrant.  He currently works as an assistant professor for the Industry-University Cooperation Foundation at Konyang University.  In 2011-12, he was a visiting professor at the University of Michigan in the Nuclear Engineering and Radiological Sciences.  In 2010-11, he was an assistant professor at Joonwon University for Biomedical Engineering. From 2009 to 2011, he was a Director of BAERI (Basic Atomic Energy Research Institute), which is funded by the Ministry of Education and Science. He was also a visiting professor, lecturer and assistant professor at Chosun University. He conducted his post-doctoral work at KAERI (Korean Atomic Energy Research Institute). He was CEO and Director of Research at RadTek in Korea from 2001 to 2004. He was the director of Research Center for Hyundai’s Nuclear Engineering Research Institute from 98 to 2004. Prior to that he was a researcher for Chosun University’s New Technology Research Center for Energy and Environments. He has additional experience as a scientist and was an engineer at MeltTran Co. in Idaho Falls, Idaho. He served in the Korean military as a Researcher for Research Institute of Hannil General Industry Co, Ltd. He has his received his Ph.D. in 2004 from Korea Advanced Institute of Science and Technology (KAIST) in the Department of Nuclear & Quantum Engineering.

 



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Mr. JaeChan Kim, 74:

In addition to being the chief financial officer and controller of the registrant, Mr. Kim is the chief executive officer of RadTek Co., Ltd in their Korean and worldwide operations. He has a background in business development and his experiences include being the general manager of statistics and planning for the Armed Forced Combined Hospital in Kwangju, Korea, a company commander of the Homeland Reserve Forces at the School of Medical & Science at Cheonnam National University, Kwangju, Korea, a director of general affairs and accounting for the Korea Rural Community Corporation and a director of accounting for Sinbaram Travel Agency. He attended Chosun University College of Law in South Korea in 1960 but did not graduate due to military obligations.


Mr Yong Hyun Chung, 39:

Mr. Chung’s background includes a BS in nuclear engineering from KAIST in Taejeon Korea, in 1997. He holds an MS in nuclear engineering with a focus in biomedical science and engineering in 1999 from KAIST. He received a Ph.D. in nuclear and quantum engineering in 2004 from KAIST.

 

His professional experience reaches from 1997 to present with experience as a visiting researcher at the Korean Basic Science Institute. From 1997 to 2002 he was a research assistant in Radiation Detection and Medical Imaging Laboratory at KAIST. From 2002 to 2004 he worked as a visiting researcher in the department of nuclear medicine at Samsung Medical Center in Seoul, Korea. In 2003 to 2004 he was a member of the Crystal Clear Collaboration and in the same term he was a member at OpenGATE Collaboration. From 2004 to 2005 he was a researcher at the Center for Clinical Research at the Samsung Biomedical Research Institute. From 2004 to 2006 he was a postdoctoral researcher at the Crump Institute for Molecular Imaging at the David Geffen School of Medicine at UCLA in Los Angeles. From 2006 to 2010 he was an assistant professor in the Department of Radiological Science at Yonsei University. From 2010 to 2012 he was in general affairs at the Institute of Health Science at Yonsei University. From 2010 to present he has been an associate professor at the Department of Radiological Science at Younsei. He has also been from 2009 to present a Scientific Secretary for IEEE NPSS Seoul Chapter.


He is currently involved in multiple research projects to include designs for in-vivo molecular imaging and non-invasive techniques with gamma cameras, single photo emission computed tomography, position emission tomography, x-ray computed tomography and many others. He has been an expert with multiple publications and experience as presenter for international conferences on the subjects.




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Committees of the Board of Directors


We do not have standing audit, nominating or compensation committees, or committees performing similar functions. Our board of directors believes that it is not necessary to have standing audit, nominating or compensation committees at this time because the functions of such committees are adequately performed by our board of directors.


Section 16(a) Beneficial Ownership Reporting Compliance


Under Section 16(a) of the Securities Exchange Act of 1934, as amended, an officer, director, or greater-than-10% shareholder of the registrant must file a Form 4 reporting the acquisition or disposition of registrant's equity securities with the Securities and Exchange Commission no later than the end of the second business day after the day the transaction occurred unless certain exceptions apply.  Transactions not reported on Form 4 must be reported on Form 5 within 45 days after the end of the registrant's fiscal year.  Such persons must also file initial reports of ownership on Form 3 upon becoming an officer, director, or greater-than-10% shareholder.  To our knowledge, based solely on a review of the copies of these reports furnished to it, the officers, directors, and greater than 10% beneficial owners complied with all applicable Section 16(a) filing requirements during 2014.


Code of Ethics Policy


During March 15, 2010, we adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions.


Corporate Governance


There have been no changes in any state law or other procedures by which security holders may recommend nominees to our board of directors.  In addition to having no nominating committee for this purpose, we currently have no specific audit committee and no audit committee financial expert.  Based on the fact that our current business affairs are simple, any such committees are excessive and beyond the scope of our business and needs.


Indemnification


Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant as provided in the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.




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In the event that a claim for indemnification against such liabilities, other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding, is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.


INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THE REGISTRANT FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE AGAINST PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION AND IS THEREFORE UNENFORCEABLE.


ITEM 11. EXECUTIVE COMPENSATION


The following table set forth certain information as to the compensation paid to our executive officers for the years of 2014 and 2013.


Summary Compensation Table

Name and Principal Position

 

Year

 

Salary

 

Bonus

 

Stock Awards

 

Option Awards

 

Non-Equity Incentive Plan Comp

 

Nonqualified Deferred Comp Earnings

Kwang Hyun Kim

 

2014

 

$0

 

n/a

 

n/a

 

n/a

 

n/a

 

n/a

CEO

 

2013

 

$0

 

n/a

 

n/a

 

n/a

 

n/a

 

n/a


Jae Chan Kim

 

2014

 

$17,500

 

n/a

 

n/a

 

n/a

 

n/a

 

n/a

CFO

 

2013

 

$17,500

 

n/a

 

n/a

 

n/a

 

n/a

 

n/a


OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END


Outstanding Equity Awards

Our directors and officers do not have unexercised options, stock that has not vested, or equity incentive plan awards.


Options

On January 8, 2014, the Company adopted the 2014 Stock Option Plan which provides for the granting of stock options to acquire up to 20,000,000 common shares of the Company to eligible employees, directors and persons affiliated with the Company. On January 14, 2014, the Company issued under the 2014 Stock Option Plan 20,000,000 common shares to two employees and three consultants. Total value received for service rendered was $880,000. No stock options have been granted or exercised by any of the officers or directors since inception.




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Long-Term Incentive Plans and Awards

We do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance at this time.  No individual agreements regarding future payouts under non-stock price-based plans have been made to any executive officer or any director or any employee or consultant; accordingly, no future payouts under non-stock price-based plans or agreements have been granted or entered into or exercised by our officer or director or employees or consultants.


DIRECTOR COMPENSATION FOR 2014


We do not have any standard arrangements by which directors are compensated for any services provided as a director.  No cash has been paid to the directors in their capacity as such.


ITEM 12.  SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS


There are currently 121,336,800 common shares issued and outstanding, and 55,375,000 treasury shares issued and outstanding.  The following table sets forth the number and percentage of common shares owned by:

     (i) each person known to us to beneficially own more than 5% of its outstanding common stock,

    (ii) each director,

   (iii) each named executive officer and significant employee, and

    (iv) all officers and directors as a group.

Name and address

 

Securities Owned

 

Percentage Owned

 

RadTek Co., Ltd.

 

55,375,000

 

31.34%

 


All 5% owners as a group (one owner)

 

55,375,000

 

31.34%

 


Kwang Hyun Kim (1)

 

71,977,250

 

40.73%

 


Jae Chan Kim (1)

 

0

 

0%

 

 

 

 

 

 

 

Yong Hyun Chung (1)

 

0

 

0%

 

 

 

 

 

 

 

All Officers and Directors

  As a Group (Three People)

 

71,977,250

 

40.73%

 


(1) The address for each of the persons listed above is c/o 9900 Corporate Campus Dr, Suite 3000 c/o PEG, Louisville, KY 40223




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


The registrant, on an as need basis, borrows funds from a shareholder. The borrowings are unsecured and payments are made at the registrant’s discretion. The borrowings do not bear an interest rate.  Total borrowing as of December 31, 2014 and 2013 were $440,817 and $249,298 respectively.


Director Independence.  The registrant’s board of directors consists of Kwang Hyun Kim and Yong Hyun Chung. Neither Kim nor Chung are independent as such term is defined by a national securities exchange or an inter-dealer quotation system. During the year ended December 31, 2014, the registrant borrowed $440,817 from Kwang Hyun Kim.  In addition, on April 1, May 1, and July 2, 2014, the registrant entered into loan agreements of $50,000, $50,000 and $60,000, respectively, with a related party.  As of December 31, 2014, the registrant has borrowed $160,000 from this party and has accrued interest of $1,284.  The registrant has repaid $160,000 during January 2015.


ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.


On July 8, 2013, the registrant accepted the resignation of Kenne Ruan, CPA, P.C. as its independent registered public accounting firm. The decision to resign by Ruan was approved by the Board of Directors of the registrant.  On August 6, 2013, the registrant engaged PLS CPA, a Professional Corporation, as its new independent registered public accountant.


Audit Fees.  The fees billed by Kenne Ruan, CPA, P.C. for professional services rendered for auditing the registrant’s annual financial statements for the fiscal year ended March 31, 2013 were $3,000.


We paid aggregate fees and expenses of approximately $46,299 and $34,988 to PLS CPA during 2014 and 2013, respectively, for work completed for our annual audits and quarterly reviews of our financial statements, including travel expenses to Korea for accounting.


Tax Fees. We did not incur any aggregate tax fees and expenses from Kenne Ruan, CPA, P.C. for the year ended December 31, 2013, respectively, for professional services rendered for tax compliance, tax advice, and tax planning.


We did not incur any aggregate tax fees and expenses from PLS CPA for the years ended December 31, 2014 and 2013 for professional services rendered for tax compliance, tax advice, and tax planning.




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All Other Fees. We did not incur any other fees from Kenne Ruan, CPA, P.C. during 2013.


We did not incur any other fees from PLS CPA during 2013 and 2014.


The board of directors, acting as the Audit Committee considered whether, and determined that, the auditor's provision of non-audit services was compatible with maintaining the auditor's independence.  All of the services described above for the years ended December 31, 2014 and 2013 were approved by the board of directors pursuant to its policies and procedures.





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Part IV


ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES


(a)(1)  List of Financial statements included in Part II hereof


Balance Sheets, December 31, 2014 and 2013

Statements of Operations for the years ended December 31, 2014 and 2013

Statements of Stockholders’ Deficit for the years ended December 31, 2014 and 2013

Statements of Cash Flows for the years ended December 31, 2014 and 2013

Notes to the Financial Statements


(a)(2) List of Financial Statement schedules included in Part IV hereof:  None.

(a)(3) Exhibits


The following exhibits are included herewith:


Exhibit No.

      Description

31

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*

XBRL Instance Document

101.SCH*

XBRL Taxonomy Extension Schema Document

101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*

XBRL Taxonomy Extension Label Linkbase Document

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document


*XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.




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Following are a list of exhibits which we previously filed in other reports which we filed with the SEC, including the Exhibit No., description of the exhibit and the identity of the Report where the exhibit was filed.


NO.

DESCRIPTION

FILED WITH

DATE FILED

3.1

Articles of Incorporation

Form S-1

March 17, 2010

3.2

Bylaws

Form S-1

March 17, 2010

3.3

Amendment to the Bylaws

Form S-1/A

June 28, 2010

4.1

2014 Stock Awards Plan

Form S-8

January 14, 2014

5.1

Opinion on Legality

Form S-1

March 17, 2010

10.1

Loan Agreement between USChina Taiwan and Ching-Sang Hong

Form S-1

March 17, 2010

10.2

Business Operation Agreement

Form S-1/A

April 22, 2010

10.3

Stock Purchase Agreement

Form 8-K

February 6, 2013

10.4

Articles of Amendment regarding name change

Form 8-K

April 12, 2013

10.5

Stock Purchase Agreement

Form 8-K

November 26, 2013

14.1

Code of Ethics

Form S-1

March 17, 2010




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SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Radtek, Inc.


/s/ Kwang Hyun Kim

By: Kwang Hyun Kim

President/ CEO

Date:  April 7, 2015


Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


/s/Kwang Hyun Kim

 

CEO/ Director

 

April 7, 2015

 

 

 

 

 

 

 

 

 

 

/s/Jae Chan Kim

 

CFO/ Controller

 

April 7, 2015

 

 

 

 

 

 

 

 

 

 

/s/Yong Hyun Chung

 

Director

 

April 7, 2015

 

 

 

 

 





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