UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

_______________


FORM 10-K/A

Amendment No. 1

_______________


(Mark One)


[X]

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


For the Fiscal Year Ended December 31, 2015


[  ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ________ to ________




RADTEK, INC.

(Exact Name of Registrant as Specified in Its Charter)


Nevada

000-54152

27-2039490

(State or Other Jurisdiction of Incorporation or Organization)

(Commission File Number)

(I.R.S. Employer Identification No.)


9900 Corporate Campus Drive, Suite 3000

Louisville, KY 40223

Telephone (502) 657-6005

 (Address of Principal Executive Offices, Zip Code & Telephone Number)



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


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

Common Stock, $0.001 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 Section 15(d) of the Act  

Yes [   ]    No [X]

 

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 [   ]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 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[   ]    No [X]


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.  [   ]

 

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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large Accelerated Filer  [   ]

Accelerated Filer                     [   ]

Non-Accelerated Filer    [   ]

(Do not check if a smaller reporting company)

Smaller Reporting Company   [X]


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes [   ]    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, June 30, 2015. The market value of the registrant’s voting $.001 par value common stock held by non-affiliates of the registrant was approximately $10,118,708.


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 class of common stock, as of March 29, 2016 was 121,507,050 shares of its $.001 par value common stock.


Documents incorporated by reference:  None





2




_________________________


EXPLANATORY NOTE

_________________________


This Amendment No. 1 (this "Amendment") to the Annual Report on Form 10-K of RadTek, Inc. (the "Company") for the year ended December 31, 2015, originally filed with the U.S. Securities and Exchange Commission (the "SEC") on April 27, 2016, (the "Original Filing"), is being filed to update the Financial Statements and the Management Discussion and Analysis sections.


Except as described above, this Amendment does not modify or update the disclosures presented in, or exhibits to, the Original Filing in any way.  This Amendment speaks as of the date of the Original Filing and does not reflect events occurring after the filing of the Original Filing.  Accordingly, this Amendment should be read in conjunction with the Original Filing, as well as any other filings made by the Company with the SEC pursuant to Section 13(a) or 15(d) of Securities Exchange Act of 1934, as amended, subsequent to the filing of the Original Filing.




3




RADTEK, INC.

(Formerly USChina Taiwan, Inc.)


TABLE OF CONTENTS


Part I

        Page  No.

Item 1.

Business

5

Item 1A.

Risk Factors

7

Item 1B.

Unresolved Staff Comments

11

Item 2.

Properties

11

Item 3.

Legal Proceedings

11

Item 4.

Mine Safety Disclosures

11


Part II


Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters

and Issuer Purchases of Equity Securities

11

Item 6.

Selected Financial Data

4

Item 7.

Management’s Discussion and Analysis of Financial Condition and

Results of Operations

14

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

17

Item 8.

Financial Statements and Supplementary Data

17

Item 9.

Changes in and Disagreements with Accountants on Accounting and

Financial Disclosure

8

Item 9A.

Controls and Procedures

18

Item 9B.

Other Information

19


Part III


Item 10.

Directors and Executive Officers

21

Item 11.

Executive Compensation

24

Item 12.

Security Ownership of Certain Beneficial Owners and Management and

Related Stockholder Matters

26

Item 13.

Certain Relationships and Related Transactions

27

Item 14.

Principal Accounting Fees and Services

27


Part IV


Item 15.

Exhibits

28


Signatures

30





4





Part I


CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION


This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. These risks and uncertainties include the following:


·

The availability and adequacy of our cash flow to meet our requirements;


·

Economic, competitive, demographic, business and other conditions in our local and regional markets;


·

Changes or developments in laws, regulations or taxes in our industry;


·

Actions taken or omitted to be taken by third parties including our suppliers and competitors, as well as legislative, regulatory, judicial and other governmental authorities;


·

Competition in our industry;


·

The loss of or failure to obtain any license or permit necessary or desirable in the operation of our business;


·

Changes in our business strategy, capital improvements or development plans;


·

The availability of additional capital to support capital improvements and development; and


·

Other risks identified in this report and in our other filings with the Securities and Exchange Commission or the SEC.


This report should be read completely and with the understanding that actual future results may be materially different from what we expect. The forward-looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.



Use of Term


Except as otherwise indicated by the context, references in this report to “Company”, “RDTK” , “RadTek,” “we”, “us” and “our” are references to RadTek, Inc. All references to “USD” or United States Dollars refer to the legal currency of the United States of America.




5





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.


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.





6




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.


Bankruptcy or Similar Proceedings


There has been no bankruptcy, receivership or similar proceeding.


Patents, Trademarks, Franchises, Concessions, Royalty Agreements, or Labor Contracts


We have no current plans for any registrations such as patents, trademarks, copyrights, franchises, concessions, royalty agreements or labor contracts.  We will assess the need for any copyright, trademark or patent applications on an ongoing basis.


WHERE YOU CAN GET ADDITIONAL INFORMATION


We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy our reports or other filings made with the SEC at the SEC’s Public Reference Room, located at 100 F Street, N.E., Washington, DC 20549. You can obtain information on the operations of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can also access these reports and other filings electronically on the SEC’s web site, www.sec.gov .


Item 1A.  Risk Factors


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


An investment in the Company's common stock involves a high degree of risk. One should carefully consider the following risk factors in evaluating an investment in the Company's common stock. If any of the following risks actually occurs, the Company's business, financial condition, results of operations or cash flow could be materially and adversely affected. In such case, the trading price of the Company's common stock could decline, and one could lose all or part of one's investment. One should also refer to the other information set forth in this report, including the Company's consolidated financial statements and the related notes.


The Accompanying Financial Statements Have Been Prepared Assuming The Company Will Continue As A Going Concern.


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of its assets and the liquidation of its liabilities in the normal course of business.  However, the Company has generated minimal revenues, has accumulated a loss since formation and currently lacks the capital to effectively pursue its business plan.  This raises substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustments that might result from this uncertainty.


We May Continue To Lose Money, And If We Do Not Achieve Profitability, We May Not Be Able To Continue Our Business.


Since our formation, we have generated minimal revenues from operations, and have incurred expenses and losses.  In addition, we expect to continue to incur operating losses for the foreseeable future.  As a result, we will need to generate sufficient revenues to achieve profitability, which may not occur.  Even if we do achieve profitability, we may be unable to sustain or increase profitability on a quarterly or annual basis in the future.  We expect to have quarter-to-quarter fluctuations in revenues, expenses, losses and cash flow, some of which could be significant.  Results of operations will depend upon numerous factors.  Some of these factors, such as market acceptance of our product and competition, are beyond our control.





7




The Company Is Subject To The Risks Inherent In The Creation Of A New Business.


The Company is subject to substantially all the risks inherent in the creation of a new business.  The implementation of our business strategy is still in the development stage.  Our business and operations should be considered to be in the development stage and subject to all of the risks inherent in the establishment of a new business venture. Accordingly, our intended business and operations may not prove to be successful in the near future, if at all.  Any future success that we might enjoy will depend upon many factors, several of which may be beyond our control, or which cannot be predicted at this time, and which could have a material adverse effect upon our financial condition, business prospects, and operations and the value of an investment in the Company.


We May Be Subject To Government Laws And Regulations Particular To Our Operations With Which We May Be Unable To Comply.  


We may not be able to comply with all current and future government regulations which are applicable to our business.  Our business operations are subject to all government regulations normally incident to conducting business (e.g., occupational safety and health acts, workmen's compensation statutes, unemployment insurance legislation, income tax, and social security laws and regulations, environmental laws and regulations, consumer safety laws and regulations, etc.) as well as to governmental laws and regulations applicable to small public companies and their capital formation efforts.  Although we will make every effort to comply with applicable laws and regulations, we can provide no assurance of our ability to do so, nor can we predict the effect of those regulations on our proposed business activities.  Our failure to comply with material regulatory requirements would likely have an adverse effect on our ability to conduct our business and could result in our cessation of active business operations.


Sale and Export and Import of Products To/From a Foreign Country Has Operational Risks That May Not Be Adequately Covered by Insurance.


We can give no assurance that we will be adequately insured against all risks or that any policies we own at the time a loss occurs will adequately cover any losses.  Furthermore, in the future we may not be able to obtain adequate insurance coverage at reasonable rates.  We may also be subject to claims by customers involving disputes or situations that are beyond our control including but not necessarily limited to, manufacturing defects, delivery delays or failures, or unauthorized disclosures of our customers’ personal information by third parties.  There is also, because of our planned business model as an internet based retailer, the possibility of fraudulent claims or other illicit activities involving our transactions.  Any of these potentialities may give rise to a loss to our Company for which we are not insured, or not adequately insured.


We have issued common shares under the 2014 Stock Option Plan in the past.  If we continue to grant employees share options or other share-based compensation in the future, our net income per share could be negatively affected.

 

If we are forced to pay employees or business cooperators with stock, or stock options for services already performed, we may substantially reduce the value of each share.

 

Our chief executive officer controls the registrant, which could result in a lack of independence needed on certain issues and decisions, which could impact shareholders.

 

Our chief executive officer, Dr. Kim currently owns approximately 58% of the outstanding common stock, remaining in control of the registrant.  He will be able to exert significant influence, or even authority, over matters requiring approval by our security holders, including the election of all of our directors, control our operations, and inhibit your ability to change the registrant's operations.  Accordingly, our shareholders will not have sufficient votes to cause the removal of Dr. Kim in his function as officer and director.

 

As a result, we lack independent directors, independent board committees and an independent audit committee financial expert. There can be no assurance that Dr. Kim will be completely independent in the decisions he makes as our principal stockholder that will ensure protection of the rights of other stockholders who purchase our securities in this offering.

 

Operations outside the United States may be affected by different local politics, business and cultural factors, different regulatory requirements and prohibitions between jurisdictions.




8




 

Operations outside the United States may be affected by different local business and cultural factors, different regulatory requirements and prohibitions between jurisdictions, including the Foreign Corrupt Practices Act and local laws prohibiting corrupt payments; and changes in regulatory requirements for financing activities.


Our main operations are in the Republic of Korea (South Korea).  As a result, we may lose money based on the conversion between U.S. dollars and South Korean wons.


In recent years, the currency of the Republic of Korea has been considered to be stable. South Korean Wons, have fluctuated against the U.S. Dollar in the past.  In the future due to the uncertainty of the exchange rate fluctuation and the fact that our potential revenue will be generated from the South Korean Won, any depreciation against U.S. dollars will hurt our revenues and profits in the future.


Our revenues are currently dependent on several major, established clients.  Should we lose the business of any of these clients, our revenues may be greatly affected.


We have currently sold and installed 30 food inspection system units with 18 different clients in South Korea and Malaysia.  Should we lose any of these clients, we will lose a substantial amount of our revenues.  While we are constantly seeking out new clients, there is no guarantee that we will be able to contract with any new clients to make up for any loses caused by losing any of our current clients.


Most of the registrant’s operations are carried out in the Republic of Korea.  As a result, our operations are subject to various political, economic, and other risks and uncertainties.


Our main operations are in the Republic of Korea.  Our operations are subject to various political, economic, and other risks and uncertainties inherent to the country.  Among other risks, the registrant’s operations are subject to the risks of political conditions and governmental regulations.  If there are any changes to government regulations that affect our ability to operate, we may face significant losses.


We do not have sufficient accounting staff with knowledge or expertise in U.S. GAAP.  As a result, we may conclude that our internal control over financial reporting is not effective.


Although our officers have gained experience in preparing our financials using the U.S. GAAP procedures during our SEC registration statement and other filing preparations, they have no formal training in financial accounting and the disclosures of a public company.  As a result, we are reliant upon outside review to ensure that our financial reporting meets all applicable standards.  Since our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting in accordance with the accounting principles generally accepted in the United States of America, we may have to conclude that our internal control is not effective due to management’s lack of knowledge.


Any Failure To Maintain Adequate Insurance Coverage Could Subject Us To Significant Losses Of Income.


We do not currently carry any liability, business interruption or other insurance, and therefore, we have no protection against any general, commercial and/or liability claims or any other losses that may negatively impact our ability to generate revenues in the future.  Any claims against us or uninsured losses by us will likely have a material adverse effect on our financial condition.  There can be no assurance that we will be able to obtain insurance on reasonable terms, or at all, at any time in the future.


The Company’s Ability To Expand Its Operations Will Depend Upon The Company’s Ability To Raise Additional Financing As Well As To Generate Income.


Developing our business will require additional capital in the future.  To meet our capital needs, we expect to rely on our cash flow from operations and, potentially, third-party financing.  Third-party financing may not, however, be available on terms favorable to us, or at all.  Our ability to obtain additional third party funding will be subject to various factors, including market conditions, our operating performance, lender sentiment and our ability to incur additional debt or conduct additional offerings of our equity or debt securities.  These factors may make the timing, amount, terms and conditions of additional financings unattractive.  Our inability to raise capital could impede our growth.





9




Investors May Lose Their Entire Investment If RadTek, Inc., Fails To Implement Its Business Plan.


The Company expects to face substantial risks, uncertainties, expenses and difficulties because it is a development stage company.  RadTek, was formed in Nevada on December 18, 2009.  RadTek’s prospects must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies in their early stages of development.  The Company cannot guarantee that it will be successful in implementing and carrying out its business plan and accomplishing its objectives.


The Costs To Meet Our Reporting And Other Requirements As A Public Company Subject To The Exchange Act Of 1934 Will Be Substantial.


We are subject to the reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”), as such, we will incur ongoing expenses associated with professional fees for accounting, legal and other related expenses for periodic and annual reports, proxy statements and other reporting and disclosure requirements under the Exchange Act.  We estimate that these accounting, legal and other professional costs could be $15,000 or more per year for the next few years, and will be higher if our business volume and activity increases.


We May Have Difficulty Attracting And Retaining Management And Outside Independent Members to Our Board Of Directors.


Directors and officers of publicly reporting companies are increasingly concerned with the extent of their personal exposure to lawsuits and shareholder claims, as well as governmental and creditor claims which may be made against them, particularly in view of recent changes in laws imposing additional duties, obligations and liabilities on management and directors.  Due to these perceived risks, directors and officers are also becoming increasingly concerned with the availability of directors’ and officers’ liability insurance to pay on a timely basis the costs incurred in defending such claims.  We currently do not carry directors’ and officers’ liability insurance.  If we are unable to provide sufficient directors’ and officers’ liability insurance at affordable rates or at all, it may become increasingly more difficult to attract and retain qualified officers and directors to manage the business and affairs of the Company.


We may lose potential independent board members and management candidates to other companies that have better directors’ and officers’ liability insurance to insure them from liability, or to companies that have greater revenues or have received greater funding to date, which can offer more lucrative compensation packages.  The fees of directors are also rising in response to their increased duties, obligations and liabilities, as well as increased exposure to such risks.  As a company with a limited operating history and limited resources, we will have a more difficult time attracting and retaining management and outside independent directors than a more established company due to these enhanced duties, obligations and liabilities.


If We Fail To Remain Current On Our Reporting Requirements It Will Limit The Ability Of Stockholders To Sell Their Securities In The Secondary Market.


Companies trading on inter-dealer quotation systems must be reporting issuers under Section 12 or 15(d) of the Exchange Act, and must be current in their reports under Section 13 of the Exchange Act, in order to maintain price quotation privileges on such systems.  If we fail to remain current on our reporting requirements, our stock may no longer be quoted on any quotation system.  As a result, the market liquidity for our securities could be adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.


Our Common Stock May Be Considered a “Penny Stock” And Be Subject To The “Penny Stock” Rules Of The Securities Exchange Commission.


Our common stock may be subject to the “penny stock” rules adopted under Section 15(g) of the Exchange Act. The penny stock rules generally apply to companies whose common stock is not listed on The NASDAQ Stock Market or other national securities exchange and trades at less than $5.00 per share, other than companies that have had average revenue of at least $6,000,000 for the last three years or that have tangible net worth of at least $5,000,000 ($2,000,000 if the company has been operating for three or more years). These rules require, among other things, that brokers who trade penny stock to persons other than “established customers” complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers




10




have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If we remain subject to the penny stock rules for any significant period, it could have an adverse effect on the market for our securities. If our securities are subject to the penny stock rules, investors will find it more difficult to dispose of our securities.


Future sales of our common stock could put downward selling pressure on our common stock, and adversely affect the per share price. There is a risk that this downward pressure may make it impossible for an investor to sell shares of common stock at any reasonable price, if at all.


Future sales of substantial amounts of our common stock in the public market or the perception that such sales could occur, could put downward selling pressure on our common stock and adversely affect its market price.


We do not anticipate paying dividends in the foreseeable future.

  

We do not anticipate paying dividends on our common stock in the foreseeable future, but plan rather to retain earnings, if any, for the operation, growth and expansion of our business. Because the Company does not anticipate paying cash dividends in the foreseeable future which may lower expected returns for investors, and as such our stockholders will not be able to receive a return on their investment unless they sell their shares of common stock.


Item 1B.  Unresolved Staff Comments


None.


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.


The registrant also has offices in South 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 a monthly lease fee of $1,000.


We do not have any investments or interests in any real estate. We do not invest in real estate mortgages, nor do we invest in securities of, or interests in, persons primarily engaged in real estate activities.


Item 3.  Legal Proceedings


We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.


Item 4.  Mine Safety Disclosures


Not Applicable.


Part II


Item 5.  Market for Common Equity and Related Stockholder Matters


Our common stock is currently quoted on the OTC Markets. Our common stock has been quoted on the OTC Markets since April 13, 2011, trading under the symbol “UCHN.”  On April 10, 2013 our symbol was changed to “RDTK” to reflect our Company’s change of business. Because we are quoted on the OTC Markets, our securities may be less liquid, receive less coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.


The following table sets forth the high and low bid prices for our Common Stock per quarter as reported by the OTC Markets for the past two years based on our fiscal year end December 31. These prices represent quotations between




11




dealers without adjustment for retail mark-up, markdown or commission and may not represent actual transactions.  


2014 FISCAL YEAR

 

High

 

Low

First Quarter

 

$0.10

 

$0.07

Second Quarter

 

$0.11

 

$0.09

Third Quarter

 

$0.11

 

$0.06

Fourth Quarter

 

$0.25

 

$0.10

 

 

 

 

 

2015 FISCAL Year

 

High

 

Low

First Quarter

 

$0.243

 

$0.188

Second Quarter

 

$0.206

 

$0.19

Third Quarter

 

$0.209

 

$0.08

Fourth Quarter

 

$0.175

 

$0.04


The stock transfer agent for our securities is Interwest Transfer Co., Inc., 1981 Murray Holladay Road, Suite 100, Salt Lake City, UT 84117.


Record Holders


As of December 31, 2015, there were 121,507,050 shares of the registrant’s $0.001 par value common stock issued and outstanding and were owned by approximately 21 holders of record, based on information provided by our transfer agent.


Penny Stock Regulation


Shares of our common stock will probably be subject to rules adopted by the SEC that regulate broker-dealer practices in connection with transactions in “penny stocks”. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in those securities is provided by the exchange or system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the SEC, which contains the following:


·

a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

·

a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to violation to such duties or other requirements of securities’ laws;

·

a brief, clear, narrative description of a dealer market, including "bid" and "ask” prices for penny stocks and the significance of the spread between the "bid" and "ask" price;

·

a toll-free telephone number for inquiries on disciplinary actions;

·

definitions of significant terms in the disclosure document or in the conduct of trading in penny stocks; and,

·

such other information and is in such form (including language, type, size and format), as the SEC shall require by rule or regulation.


Prior to effecting any transaction in penny stock, the broker-dealer also must provide the customer the following:


·

the bid and offer quotations for the penny stock;

·

the compensation of the broker-dealer and its salesperson in the transaction;

·

the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and

·

monthly account statements showing the market value of each penny stock held in the customer's account.


In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a




12




written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for a stock that becomes subject to the penny stock rules. Holders of shares of our common stock may have difficulty selling those shares because our common stock will probably be subject to the penny stock rules.


Description of Registrant’s Securities


We have authorized capital stock consisting of 1,990,000,000 shares of common stock, $0.001 par value per share (“Common Stock”), and 10,000,000 shares of preferred stock, $0.001 par value per share (“Preferred Stock”).


Equity Compensation Plans


On January 14, 2014, the Company registered on Form S-8, the 2014 Stock Awards Plan, under which the Company is authorized to issue up to twenty million (20,000,000, after stock split) shares of the Company’s common stock to the Company’s employees, executives and consultants.


Warrants, Options and Convertible Securities


We do not have any outstanding warrants, options or convertible securities.


Recent Sales of Unregistered Securities:


None.


Repurchase of Equity Securities:


None.


Dividends


We have never declared or paid any cash dividends on our common stock. For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock. Any future determination to pay dividends will be at the discretion of the Board of Directors and will be dependent upon then existing conditions, including our financial condition and results of operations, capital requirements, contractual restrictions, business prospects, and other factors that the board of directors considers relevant.


Section Rule 15(g) of the Securities Exchange Act of 1934


The Company's shares are covered by Section 15(g) of the Securities Exchange Act of 1934, as amended that imposes additional sales practice requirements on broker/dealers who sell such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). For transactions covered by the Rule, the broker/dealer must make a special suitability determination for the purchase and have received the purchaser's written agreement to the transaction prior to the sale. Consequently, the Rule may affect the ability of broker/dealers to sell our securities and also may affect your ability to sell your shares in the secondary market.


Section 15(g) also imposes additional sales practice requirements on broker/dealers who sell penny securities. These rules require a one page summary of certain essential items. The items include the risk of investing in penny stocks in both public offerings and secondary marketing; terms important to in understanding of the function of the penny stock market, such as "bid" and "offer" quotes, a dealers "spread" and broker/dealer compensation; the broker/dealer compensation, the broker/dealers duties to its customers, including the disclosures required by any other penny stock disclosure rules; the customers rights and remedies in causes of fraud in penny stock transactions; and, FINRA's toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons.


Securities authorized for issuance under equity compensation plans





13




We do not have any equity compensation plans and accordingly we have no securities authorized for issuance there under.


Purchases of Equity Securities by the Issuer and Affiliated Purchasers


We did not purchase any of our shares of common stock or other securities during the year ended December 31, 2015.


Item 6.  Selected Financial Data


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


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


This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. You should read this report completely and with the understanding that actual future results may be materially different from what we expect. The forward looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.


Working Capital


 

December 31, 2015

$

December 31, 2014

$

Cash

78,301 

213,247

Current Assets   

1,341,809

1,120,784

Current Liabilities

3,037,053

2,121,635

Working Capital (Deficit)

(1,695,244)

(1,000,851)



Cash Flows


 

 

December 31, 2015

$

December 31, 2014

$

Cash Flows from (used in) Operating Activities

 

(231,717)

(295,864)

Cash Flows from (used in) Investing Activities

 

(600,988)

Cash Flows from (used in) Financing Activities

 

587,307

351,519

Net Increase (decrease) in Cash During Period

 

(245,398)

55,655


Plan of Operation

 

Our plan of operation for the next 12 months is to: (i) Expand our customer base in industries in which we may have an interest, to include X-Ray technology and construction consultation services related to x-ray technology facilities; (ii) Continue reconfiguring our business plans for engaging in the business of our selected industry; and (iii) to expand our contract capacity while completing our expansion of operations through funding and/or our announced acquisition of a going concern engaged in the industry selected.

 

Other than standard operations associated with business operations mentioned in subsequent events, during the next 12 months, one of our only foreseeable cash requirements, which may be advanced by our management or principal stockholders as loans to us, will relate to maintaining our good standing or the payment of expenses associated with




14




legal, accounting and other fees related to our compliance with the Exchange Act requirements of being a reporting issuer and reviewing or investigating any potential acquisition or business combination candidate. With our business and industry in which our operations have commenced, and other potential acquisitions have not been identified and any prospective acquisition or business combination candidate as of the date of this Annual Report, it is impossible to predict the amount of any such costs or required advances. Any such loan will be on terms no less favorable to us than would have been made available to us from a commercial lender in an arm's length transaction.

 

Result of Operations for the Year Ended December 31, 2015 Compared to Year Ended December 31, 2014.


For the year ended December 31, 2015, we recorded net revenues of $459,929.  Our cost of sales was $243,628, resulting in a gross profit of $216,301.  We incurred depreciation and amortization expenses of $5,879, bad debt of $600,988 and incurred selling and administrative expenses of $393,573.  We incurred a loss of $(14,222) due to interest expenses, incurred a loss of $(34,307) due to foreign exchange transactions, and incurred a loss on derivative liability of $1,747.  As a result, we recorded a net loss of $834,679.  We had a positive foreign currency translation adjustment of $105,517 and loss on investment of $7,795, resulting in a loss of comprehensive income of $736,957 for the year ended December 31, 2015.


Comparatively, for the year ended December 31, 2014, we recorded net revenues of $1,104,710.  Our cost of sales was $1,003,675, resulting in a gross profit of $101,035.  We incurred depreciation and amortization expenses of $6,316, bad debt of 610,115 and incurred selling and administrative expenses of $1,257,453.  We incurred a loss of $8,456 due to interest expenses, recorded a loss of $20,865 due to foreign exchange transactions and other income of $36,593.  As a result, we recorded net loss of $1,765,577.  We had a positive foreign currency translation adjustment of $54,872, resulting in comprehensive loss of $1,710,705 for the year ended December 31, 2014.


The decrease in net loss of $973,748 between the year ended December 31, 2015 compared to the same period ended December 31, 2014 was the result of severely decreased operating expenses, decreased revenues and decreased cost of sales.  Our net revenues decreased by $644,781, or 58%, and our cost of sales decreased by $760,047, or 76%.  Our operating expenses decreased by $873,444 or 47% as a result of decreased sales, and administrative expenses and due to us not paying any consulting fees during the year ended December 31, 2015.


Liquidity and Capital Resources


For the year ended December 31, 2015, we had net loss of $834,679.  We had the following adjustments to reconcile net loss to net cash used in the operating activities: $5,879 for depreciation and amortization, $600,988 for bad debt, $10,596 for severance benefits, $5,000 for a convertible note for services and a debt discount of $5,000.  We had the following changes in assets and liabilities of operating: increase of $122,046 in accounts receivable, increase of $1,337 in inventory, increase of $232,588 in the prepaid expenses and other assets, an increase of $47,348 in accounts payable and other payables and increase of $279,171 in the advance receipts on contracts.  We had increases of $2,950 in accrued liabilities and other liabilities.  As a result, we had net cash used in operating activities of $(231,717) for the year ended December 31, 2015.


For the year ended December 31, 2014, we had net loss of $1,765,577.  We had the following adjustments to reconcile net loss to net cash used in the operating activities: $6,316 for depreciation and amortization, $7,518 for severance benefits, $880,000 for stock based compensation, and bad debt of $610,115.  We had the following changes in assets and liabilities of operating: decreases of $46,453 in accounts receivable, increase of $1,337 in inventory, increase of $949,382 in the prepaid expenses and other assets, increase of $198,354 in accounts payable and other payables and $761,490 in the advance receipts on contracts.  We had decreases of $(89,638) in accrued liabilities and other liabilities.  As a result, we had net cash used in operating activities of $(295,864) for the year ended December 31, 2014.


For the year ended December 31, 2015, we had loans receivable of $600,988, resulting in net cash used in investing activities of $600,988 for the period.


We did not pursue any investing activities during the year ended December 31, 2014.


For the year ended December 31, 2015, we issued common stock for $13,359, repaid $60,000 for a loan from a related party, received $454,711 as an advance from related parties, and received $179,237 proceeds from short-term borrowings.  As a result, we had net cash provided by financing activities of $587,307 for the period.





15




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


We had cash or cash equivalents of $78,301 and $213,247 on hand at December 31, 2015 and at December 31, 2014, respectively.  If additional funds are required in connection with our present planned business operations or for Exchange Act filings or other expenses, such funds may be advanced by management or principal stockholders.


Going Concern


We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.


Future Financings


We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and Development activities.


Off-Balance Sheet Arrangements


We have no significant off-balance sheet arrangements that have or 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 are material to stockholders.


Critical Accounting Policies


Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.


We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.


Recently Issued Accounting Pronouncements


The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.


Contractual Obligations


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


Item 7A.  Quantitative and Qualitative Disclosures about Market Risk


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.







16








Item 8.  Financial Statements and Supplemental Data



RADTEK, INC.

(Formerly USChina Taiwan, Inc.)


Index to Financial Statements


Table of Contents

 

Page

 

 

 

Report of Independent Registered Public Accounting Firm

 

F-2

Balance Sheets as of December 31, 2015 and 2014

 

F-3

Statements of Operations for the Years Ended December 31, 2015 and 2014

 

F-4

Statement of Changes in Stockholders’ Equity (Deficit) for the Years Ended December 31, 2015 and 2014

 

F-5

Statements of Cash Flows for the Years Ended December 31, 2015 and 2014

 

F-6

Notes to Financial Statements

 

F-7





17




PLS CPA, A Professional Corp.

 

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

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, 2015 and 2014 and the related consolidated statements of operations, 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 positions of RadTek, Inc. as of December 31, 2015 and 2014, and the result of its operations and its cash flows 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 27, 2016, except as to notes 18 which are as of August 22, 2016


San Diego, CA. 92111

















F-1





RADTEK, INC.

(Formerly USChina Taiwan, Inc.)

 CONSOLIDATED BALANCE SHEETS

as of December 31, 2015 and 2014

 

 

 

 

 

 

 

2015

(restated)

 

2014

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

78,301

 

$

213,247

Accounts receivable, net

 

 

128,341

 

 

6,295

Prepaid expenses and other assets

 

 

1,132,317

 

 

899,729

Inventories

 

 

2,850

 

 

1,513

Total Current assets

 

 

1,341,809

 

 

1,120,784

 

 

 

 

 

 

 

 

 

 

 

 

Investment

 

 

-

 

 

8,311

Property and equipment, net

 

 

-

 

 

-

Intangible assets

 

 

77,163

 

 

88,325

Security deposits

 

 

28,157

 

 

27,293

 

 

 

 

 

 

 

 

105,320

 

 

123,929

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

1,447,129

 

$

1,244,713

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts and other payable

 

$

403,258

 

$

355,910

Short-term borrowings

 

 

315,700

 

 

136,463

Loan from related party

 

 

100,000

 

 

160,000

Advances from related party

 

 

895,528

 

 

440,817

Advance payments on contracts

 

 

1,304,222

 

 

1,025,051

Convertible Note

 

 

5,000

 

 

-

Derivative Liability

 

 

7,001

 

 

-

Other current liabilities

 

 

6,344

 

 

3,394

 

 

 

 

 

 

 

 

3,037,053

 

 

2,121,635

Non-current liabilities:

 

 

 

 

 

 

Accrued severance benefits, net

 

 

43,279

 

 

32,683

 

 

 

 

 

 

 

 

43,279

 

 

32,683

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

3,080,332

 

 

2,154,318

 

 

 

 

 

 

 

 

 

 

 

 

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: 121,507,050 and 121,336,800 shares

 

 

 

 

 

 

 

 

as of December 31, 2015 and 2014, respectively

 

 

176,882

 

 

176,712

Additional paid-in capital

 

 

1,651,700

 

 

1,638,511

Treasury Stock (55,375,000 shares)

 

 

(375,053)

 

 

(375,053)

Accumulated other comprehensive loss

 

 

105,130

 

 

7,408

Accumulated deficits

 

 

(3,191,862)

 

 

(2,357,183)

Total equity

 

 

(1,633,203)

 

 

(909,605)

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and equity

 

$

1,447,129

 

$

1,244,713



The accompanying notes are an integral part of these financial statements.


  RADTEK INC.

(Formerly USChina Taiwan, Inc.)

CONSOLIDATED STATEMENTS OF OPERATION

For the years ended December 31, 2015 and 2014

 

 

 

 

 

 

 

 

 

 

(US dollar in units)

 

 

 

 

 

 

 

December 31, 2014

(Restated)

 

December 31, 2013

 

Net revenues

$

459,929

 

$

1,104,710

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

243,628

 

 

1,003,675

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

216,301

 

 

101,035

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

Depreciation and Amortization

 

5,879

 

 

6,316

 

Bad Debt

 

600,988

 

 

610,115

 

Selling and administrative expenses

 

393,573

 

 

1,257,453

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating expenses

 

1,000,440

 

 

1,873,884

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain(Loss) from operations

 

(784,139)

 

 

(1,772,849)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income(expenses):

 

 

 

 

 

 

Interest expense, net

 

(14,222)

 

 

(8,456)

 

Loss on investment valuation

 

                          -   

 

 

                          -   

 

Foreign exchange transaction gain (loss)

 

(34,307)

 

 

(20,865)

 

Derivative expense

 

(254)

 

 

0

 

Loss on derivative liability

 

(1,747)

 

 

0

 

Other income, net

 

(10)

 

 

36,593

 

 

 

 

 

 

 

 

(50,540)

 

 

7,272

 

Income for the year before tax

 

(834,679)

 

 

(1,765,577)

 

Provision for income tax

 

                          -   

 

 

                          -   

 

Net income

 

(834,679)

 

 

(1,765,577)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Comprehensive income (loss)

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

105,517

 

 

54,872

 

 

Gain (loss) on investment

 

(7,795)

 

 

3,513

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income (loss)

$

                (736,957)

 

$

(1,707,192)

 

 

 

 

 

 

 

 

 

 

 

 

 

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

$

                      (0.01)

 

 $

                      (0.01)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common stock outstanding

 

           121,414,305

 

 

           120,624,471

 





F-3





The accompanying notes are an integral part of these financial statements.




F-4







RADTEK, INC.

(Formerly USChina Taiwan, Inc.)

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT

for the years ended December 31, 2015 and 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(US dollar in units)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common

 

Common

 

Additional

 

Treasury

 

Accumulated

 

Accumulated

 

Total

 

 

Stock

 

Stock

 

Paid-in

 

Stock

 

Other

 

Deficit

 

 

 

 

 

 

Amounts

 

Capital

 

 

 

Comprehensive

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss

 

 (Restated)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock issuance for cash

 

             170,250

 

                 170

 

              13,189

 

 

 

 

 

 

 

          13,359

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

                 105,517

 

 

 

        105,517

Loss on investment

 

 

 

 

 

 

 

 

 

                   (7,795)

 

 

 

          (7,795)

Net loss

 

 

 

 

 

 

 

 

 

 

 

           (834,679)

 

      (834,679)

Balance, December 31, 2014

 

     176,882,050

 $

         176,882

 $

         1,651,700

 $

            (375,053)

 $

                 105,130

 $

        (3,191,862)

 $

   (1,633,203)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





The accompanying notes are an integral part of these financial statements.

F-4








RADTEK, INC.

(Formerly USChina Taiwan, Inc.)

STATEMENTS OF CASH FLOWS

For the years ended December 31, 2015 and 2014

(US dollar in units)

 

 

 

 

 

 

 

2015

(Restated)

 

2014

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

Net income (loss)

$

          (834,679)

 

 $  

       (1,765,577)

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

 

 

 

 

 

    Depreciation and amortization

 

               5,879

 

 

               6,316

    Severance benefits

 

             10,596

 

 

               7,518

    Stock issuance for services

 

                    -   

 

 

           880,000

Convertible note for service

 

5,000

 

 

-

Debt discount

 

5,000

 

 

-

Derivative expense

 

254

 

 

-

Loss on derivative liability

 

1,747

 

 

-

    Bad Debt

 

600,988

 

 

610,115

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

 

 

 

 

 

    Accounts receivable

 

          (122,046)

 

 

             46,453

    Inventory

 

              (1,337)

 

 

              (1,513)

     Prepaid expenses and other assets

 

          (232,588)

 

 

          (949,382)

    Accounts and other payable

 

47,348

 

 

           198,354

    Advance payments on contracts

 

           279,171

 

 

           761,490

    Other current liabilities

 

               2,950

 

 

            (89,638)

Net cash provided by (used in) operating activities

 

          (231,717)

 

 

          (295,864)

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

    Loan receivable

 

          (600,988)

 

 

                    -   

    Acquisition on investment

 

                    -   

 

 

                    -   

    Cash acquired from acquisition

 

                    -   

 

 

                    -   

Net cash used in investing activities

 

          (600,988)

 

 

                    -   

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

    Common stock issuance

 

             13,359

 

 

                    -   

    Proceeds from short-term borrowings

 

           179,237

 

 

                    -   

   Proceeds from loan from related party

 

            (60,000)

 

 

           160,000

    Advance from related parties

 

           454,711

 

 

           191,519

    Repayment of short-term borrowing

 

                    -   

 

 

                    -   

Net cash provided by financing activities

 

           587,307

 

 

           351,519

 

 

 

 

 

 

Net decrease in cash and cash equivalent

 

          (245,398)

 

 

             55,655

Effect of exchange rate changes

 

           110,452

 

 

             50,684

Cash and cash equivalent at beginning of year

 

           213,247

 

 

           106,908

 

 

 

 

 

 

Cash and cash equivalent at end of year

$

             78,301

 

 $

           213,247

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

 

 

Cash paid for interest

$

               9,024

 

 $

               8,456

Cash paid for taxes

$

                         -   

 

 $

                         -   

 

 

 

 

 

 

Significant non-cash investing and financing activities:

$

                         -   

 

 $

                         -   



The accompanying notes are an integral part of these financial statements.




F-6





RADTEK, INC.

(Formerly USChina Taiwan, Inc.)

Consolidated Notes to Financial Statements

December 31, 2015 and 2014


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, 2015 and 2014.


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.


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 $3,192 thousand and a working




F-7





capital deficit of approximately $1,695 thousand at December 31, 2015.  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.


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.


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.


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.


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.


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.





F-8





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.


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.

 

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.


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.


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.


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.


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.


Research and Development




F-9






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


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.


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.


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.


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, 2015 and, 2014


Related Parties


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


Commitment and Contingencies





F-10





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, 2015, 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.


Concentrations and Credit Risk

 

Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of accounts receivable.

 

Two customers represented approximately 87% (66% and 21%) of total gross accounts receivable as of December 31, 2015.  

 

Three customers in the year ended December 31, 2015 represented approximately 77% (14%, 19% and 44%) of total revenues for that period.  One customer in the year ended December 31, 2014 represented approximately 76% of total revenues for that period.

  

No other individual customer represented greater than 10% of total revenues in the years ended December 31, 2015 and 2014. No other individual customer balance represented more than 10% of the total gross accounts receivable at December 31, 2015


Reclassification

Certain account totals and other figures from prior year have been reclassified to conform to current period presentation.


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, 2015 and 2014:


 

 

2015

2014

Raw materials

$          2,850           

$             1,513

Finished goods

     -

-

Total

$          2,850

$             1,513


Note 4 – Notes receivable


The Company loaned $292,700 (KRW 349,626,745) to C&D Corporation Co., Ltd. (See Note 9). It is on demand without interest. The Company loaned $226,036. It is initially due on July 28, 2015. The interest is 6% per annum. The company wrote off all outstanding balance as bad debt as of December 31, 2015.


Note 5 – Property and Equipment


The Company’s property and equipment consists of the following as of December 31, 2015 and 2014:


 

2015

2014

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, 2015 and 2014 were $nil and $nil, respectively.


Note 6 – 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 recorded gain of $3,513 as comprehensive income in 2014. The Company recognized loss on investment of $7,975 in 2015. As of December 31, 2015, book value of investment is zero.


Note 7 – Intangibles


The Company’s intangible assets are composed of the following as of December 31, 2015 and 2014:


 

2015

2014

Patents

$        12,213

$        13,023

Technical rights

102,271

109,044

 

114,484

122,067

Accumulated amortization

(37,321)

(33,742)

 

 

 

Intangible assets, net

$       77,163

$       88,325


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, 2015.


Amortization expenses for the years ended December 31, 2015 and 2014 were $5,879 and $6,316, respectively.


Note 8 – Short-term Borrowings


Short term borrowings consist of the following as of December 31, 2015 and 2014:



 

2015

2014

Note payable to a bank at interest rate of 4.39%. The line matures in November 2016. (KRW 150,000,000)

$      127,987

$     136,463

Notes payable to individuals at interest rate of 0% to 7%. The maturity is August 10, 2016 (KRW220,000,000)

187,713

-

Total short-term borrowings

$      315,700

$     136,463


Note 9- Convertible Note


On July 27, 2015, the Company issued a $5,000 Convertible Note for services. The Convertible Not bears interest at 9% without a maturity date. The Noteholder shall have the right to convert any unpaid sums into common stock of the Company at the rate of 50% of the lowest trade reported in the 20 days prior to date of conversion. As at December 31, 2015, the Company has recorded interest of $198.





F-12





The embedded conversion option qualifies for derivative accounting and bifurcation under ASC 815-15 Derivatives and Hedging . The initial fair value of the conversion feature of $5,254 resulted in a discount to the note payable of $5,000 and the remaining $254 was recognized as derivative expense.


Note 10 Derivative Liabilities


The embedded conversion option of the Company’s convertible debenture contains a conversion feature that qualifies for embedded derivative classification. The fair value of these liabilities will be re-measured at the end of every reporting period and the change in fair value will be reported in the statement of operations as a gain or loss on derivative liabilities.


The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities:


        For the year Ended

December 31, 2015


Balance at the beginning of period

Fair value of new derivative liabilities (embedded conversion option)

$ –

5,254

Change in fair value of derivative

1,747

Balance at end of period

$ 7,001


The Company uses Level 3 inputs for its valuation methodology for the embedded conversion option liabilities as their fair values were determined by using the Black-Scholes option pricing model based on various assumptions. The model incorporates the price of a share of the Company’s common stock, volatility, risk free rate, dividend rate and estimated life. Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations:


 

Expected Volatility

Risk-Free Interest Rate

Expected Dividend Yield

Expected Life (in years)

At Issuance

25.56%

0.15%

0%

0.50

At December 31, 2015

96.48%

0.14%

0%

0.07


Note 11– 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, 2015 and 2014 were $895,528and $440,817 respectively.


Note 12 – 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.


The Company entered loan agreement of $380,000 with ADQD Inc. on August 12, 2015. The interest was 0% and it was fully repaid to the Company on August 31, 2015. As of September 1, 2015, the Company borrowed $100,000 from ADQD Inc. The interest is 2.5% per annum and repayment date is September 2, 2016. As of December 31, 2015, accrued interest of $822 was recorded as other payable.


Note 13 – Income Tax





F-13





The Company has net operating losses carried forward of $3,184,003 (2013 - $2,357,183) 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, 2015

December 31, 2014


Net income (loss) before income taxes per financial statements

 

 

     Korea

           $                      (739,971)

$                 (1,679,089)

     United States

(73,871)

(86,488)

Total

           $                      (813,842)

$                 (1,765,577)

 

 

 

Provision for taxes

 

 

     Korea

$                                    -

$                                  -

     United States

-

-

Total

$                                    -

$                                  -

Effective tax rate

-

-


The significant components of deferred income tax assets and liabilities at December 31, 2015 and 2014 are as follows:


 

December 31, 2015

December 31, 2014

Net operating loss carry forward

751,635

559,685

Valuation allowance

(751,635)

(559,685)

Net

-

-


Note 14 – 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.


On July 7 and August 21, 2015, the Company issued 129,250 and 41,000 common shares at $0.1931 and $0.1805 respectively to Dutchess Opportunity Fund referred to the investment agreement made on April 22, 2014. The Company paid stock issuance cost of $17,000 and $2,000, respectively and deducted from additional paid in capital. (See Note 10)


Note 15 – 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




F-14





payment term, 80% before shipment and 20% after the delivery, the Company has received 756,000 USD, the 80%, from KRISO 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 will be completed in April 2016. 1-year warranty starts after the installation.


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 schedule of all two items has been postponed until due of KRISO’s construction, and it is expected in April, 2016.


The Company received $1,304 thousand and paid $1,132 thousand regarding KRISO project and recorded those amounts as other current asset and advance payments on contracts as of December 31, 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). The Company recognized revenue of KRW234,000,000 ($207,000) for the year ended December 31, 2015. Due to the contract condition with SKTelecom, the Company must have had a service contract with linear accelerators manufacturer, Varian Medical Systems. The service contract with Varian Medical Systems started from June 1, 2015 and it ends until May 31, 2019 or it expires if the Company decides not to continue managing the container inspection center. The Company agreed to make quarterly payment of $10,590 to Varian Medical Systems.


On April 28, 2015, the Company entered into an agreement with C&D Co. Ltd., a South Korean company, for the purposes of creating a new corporation.  The new corporation will be an Internet Protocol television platform establishment and equipment delivery service.  Under the agreement, the Company will raise $2 million for the purposes of establishing the new corporation and registering the shares with FINRA.  The Company will then transfer all related resources to the new corporation after its establishment.  C&D will provide use of its patents, licenses, trademarks and registered service marks to the Company, as well as its products, marketing support, and technical support.  Once the new corporation has been established, all of the patents, licenses, trademarks, and registered service marks will be transferred to the new corporation.


Vietnam Multimedia Corporation (VTC), RadTek co., Ltd. and Giltz Capital Finance AG Group has made Memorandum of Agreement on May 27, 2015. The parties have agreed on supplying IPTV service and set-top boxes in Vietnam. In order to perform the business, the parties will establish a Joint Venture Company (JVC) in Vietnam and they will make 50 million USD investment in the business.


On April 6, 2015, RadTek Co., Ltd. has signed a Memorandum of Agreement (MOA) with C&D Corporation Co., Ltd. in purpose of a business which is supplying IPTV platform installation and devices to domestic and international customers. RadTek’s duty in the contract is to promote investment for the fund problems of the business while C&D supplies required devices and service by providing IPTV related technical licenses and exclusivities. RadTek has loaned to Daeyoung Lim who is CEO of C&D and the loan is limited to use only for the company normalization.

 

Note 16 – 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




F-15





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.

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.


Under this investment agreement, the Company issued 129,250 and 41,000 common shares at $0.1931 and $0.1805, respectively, On July 7 and August 21, 2015


Note 17 – 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.


Note 18 – Restatement


The accompanying audited consolidated financial statements as of December 31, 2015, along with the Report of Independent Registered Public Accounting Firm dated April 27, 2016, have been restated as of August 22, 2016.


The journal entry for restatement is the following;

DR) Selling and Administrative expenses

     12,355

 

   Cr) Prepaid expense

        8,825

 

 

 

         Other payable

        3,530



Restatement of consolidated balance sheet:


 

 

 

 

 

 

 

 

 

Adjustment

 

 

 

 

 

 

 

 

 

2015(Original)

Dr)

Dr)

2015 (Restated)

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

78,301

 

 

78,301

Accounts receivable, net

 

 

128,341

 

 

128,341

Prepaid expenses and other assets

 

 

1,141,142

 

8,825

1,132,317

Inventories

 

 

2,850

 

 

2,850

Total Current assets

 

 

1,350,634

 

 

1,341,809

 

 

 

 

 

 

 

 

 

 

 

 

Investment

 

 

-

 

 

-

Property and equipment, net

 

 

-

 

 

-

Intangible assets

 

 

77,163

 

 

77,163

Security deposits

 

 

28,157

 

 

28,157

 

 

 

 

 

 

 

 

105,320

 

 

105,320

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

1,455,954

 

 

1,447,129

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts and other payable

 

$

399,728

 

3,530

403,258

Short-term borrowings

 

 

315,700

 

 

315,700

Loan from related party

 

 

100,000

 

 

100,000

Advances from related party

 

 

895,528

 

 

895,528

Advance payments on contracts

 

 

1,304,222

 

 

1,304,222

Convertible note

 

 

5,000

 

 

5,000

Derivative liability

 

 

7,001

 

 

7,001

Other current liabilities

 

 

6,344

 

 

6,344

 

 

 

 

 

 

 

 

3,033,523

 

 

3,037,053

Non-current liabilities:

 

 

 

 

 

 

Accrued severance benefits, net

 

 

43,279

 

 

43,279

 

 

 

 

 

 

 

 

43,279

 

 

43,279

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

3,076,802

 

 

3,080,332

 

 

 

 

 

 

 

 

 

 

 

 

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: 121,507,050 and 121,336,800 shares

 

 

 

 

 

 

 

 

as of December 31, 2015 and 2014, respectively

 

 

176,882

 

 

176,882

Additional paid-in capital

 

 

1,651,700

 

 

1,651,700

Treasury Stock (55,375,000 shares)

 

 

(375,053)

 

 

(375,053)

Accumulated other comprehensive loss

 

 

105,130

 

 

105,130

Accumulated deficits

 

 

(3,179,507)

12,355

 

(3,191,862)

 

 

 

 

 

 

 

 

 

 

 

 

Total equity

 

 

(1,620,848)

 

 

(1,633,203)

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and equity

 

$

1,455,954

 

 

1,447,129



Restatement of consolidated statement of operation:


 

 

 

 

 

 

 

 

Adjustment

 

 

 

 

 

 

 

 2015 (Original)

Dr

Cr

2015 (Restated)

Net revenues

$

459,929

 

 

459,929

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

243,628

 

 

243,628

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

216,301

 

 

216,301

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

Depreciation and Amortization

 

5,879

 

 

5,879

Bad Debt

 

600,988

 

 

600,988

Selling and administrative expenses

 

381,218

12,355

 

393,573

 

 

 

 

 

 

 

 

 

 

 

Total Operating expenses

 

988,085

 

 

1,000,440

 

 

 

 

 

 

 

 

 

 

 

Gain(Loss) from operations

 

(771,784)

 

 

(784,139)

 

 

 

 

 

 

 

 

 

 

 

Other income(expenses):

 

 

 

 

 

Interest expense, net

 

(14,222)

 

 

(14,222)

Loss on investment valuation

 

                -   

 

 

                  -   

Foreign exchange transaction gain (loss)

 

(34,307)

 

 

(34,307)

Derivative expense

 

(254)

 

 

(254)

Loos on derivative liability

 

(1,747)

 

 

(1,747)

Other income, net

 

(10)

 

 

(10)

 

 

 

 

 

 

 

(50,540)

 

 

(50,540)

Income for the year before tax

 

(822,324)

 

 

(834,679)

Provision for income tax

 

                -   

 

 

                  -   

Net income

 

(822,324)

 

 

(834,679)

 

 

 

 

 

 

 

 

 

 

 

Other Comprehensive income (loss)

 

 

 

 

 

 

Foreign currency translation adjustments

 

105,517

 

 

105,517

 

Gain (loss) on investment

 

(7,795)

 

 

(7,795)

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income (loss)

$

      (724,602)

 

 

        (736,957)

 

 

 

 

 

 

 

 

 

 

 

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

$

            (0.01)

 

 

              (0.01)

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common stock outstanding

 

 121,414,305

 

 

   121,414,305

 

 

 

 

 

 

 

 

 

 

 




 




F-18





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, 2015.


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.


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, 2015, 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 2015.  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




18




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.


Part III


Item 10.  Director and Executive Officer


Identification of Directors and Executive Officers


The following table sets forth the names and ages of our current director and executive officers:


Name and Address of Executive Officer

and/or Director    

Age

Position

Date of Appointment

Dr. Kwanghyun Kim

49

President, CEO, Director, Secretary

Feb 4, 2013

Jae Chan Kim

75

Treasurer, CFO, Controller

Feb 4, 2013

Yong Hyun Chung

40

Director

Feb 26, 2013


The Board of Directors has no nominating, audit or compensation committee at this time.


Background and Business Experience


Dr. Kwanghyun Kim, age 49 – Dr. Kim, has been our Officer and Director since February 4, 2013, where he is responsible for our research operations as well as the marketing of our products. Before that he was a visiting professor at the Konyang University in the Department of Industry, and had been a visiting professor there since, 2012. As a visiting professor, Dr. Kim, lectured classes in Nuclear and Quantum Engineering, his other responsibilities as a visiting professor included conducting his research on Quantum Dots and related technology for the University. He has also been a visiting professor, full time lecturer, assistant professor and professor at multiple universities since 2006, including the Basic Atomic Energy Research Institute (2009 – 2012), Chosun University (2009-2012), and Joonwon University (2010-2011).  Dr. Kim, has also been managing and directing companies and research centers for over a decade. He received his doctorate degree in Nuclear and Quantum Engineering, in 2004. His, experience as a professor, visiting professorships, lecturer, director of research and development and as a researcher stand for his commitment to his academic field, as well as understanding science and technology. Dr. Kim is also currently, the President and Director of ROID Group, Inc., an SEC Reporting company.  His working history and his dedicated enthusiasm to his career made him a logical choice as our Director, and President.


Mr. Jae Chan Kim, age 75 – 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, age 40 – 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




19




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.


Term of Office


Directors are appointed to hold office until the next annual meeting of our stockholders or until a successor is elected and qualified, or until they resign or are removed in accordance with the provisions of the Nevada Revised Statutes. Officers are appointed by our Board of Directors and hold office until removed by the Board.  The Board of Directors has no nominating, auditing or compensation committees.


Identification of Significant Employees


Dr. Kwanghyun Kim is an officer and director of the Company who serves on a full-time basis. Jae Chan Kim is also an officer of the Company and works on a full-time basis. Yong Hyun Chung is a Director of the Company. Other than our officers and directors, we currently have six full time employees and four part-time employees. None of the employees are represented by a labor union for purposes of collective bargaining. The Company considers its relations with the employees to be good.


Family Relationship


We currently do not have any officers or directors of our Company who are related to each other.


Involvement in Certain Legal Proceedings


During the past ten years no director, executive officer, promoter or control person of the Company has been involved in the following:


(1)

A petition under the Federal bankruptcy laws or any state insolvency law which was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

(2)

Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

(3)

Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:




20




i.

Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

ii.

Engaging in any type of business practice; or

iii.

Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

(4)

Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;

(5)

Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

(6)

Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

(7)

Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

i.

Any Federal or State securities or commodities law or regulation; or

ii.

Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

iii.

Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

(8)

Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.


Audit Committee and Audit Committee Financial Expert





21




The Company does not have an audit committee or an audit committee financial expert (as defined in Item 407 of Regulation S-K) serving on its Board of Directors. The current member of the Board of Directors lack sufficient financial expertise for overseeing financial reporting responsibilities. The Company has not yet employed an audit committee financial expert on its Board due to the inability to attract such a person.


The Company intends to establish an audit committee of the Board of Directors, which will consist of independent directors. The audit committee’s duties will be to recommend to the Company’s Board of Directors the engagement of an independent registered public accounting firm to audit the Company’s financial statements and to review the Company’s accounting and auditing principles. The audit committee will review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent registered public accounting firm, including their recommendations to improve the system of accounting and internal controls. The audit committee will at all times be composed exclusively of directors who are, in the opinion of the Company’s Board of Directors, free from any relationship which would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles.


Code of Ethics

 

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.


Compliance with Section 16(a) of the Exchange Act


Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of change in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to us under Rule 16a-3(e) during the year ended December 31, 2015, Forms 5 and any amendments thereto furnished to us with respect to the year ended December 31, 2015, and the representations made by the reporting persons to us, we believe that during the year ended December 31, 2015, our executive officers and directors and all persons who own more than ten percent of a registered class of our equity securities complied with all Section 16(a) filing requirements.


Item 11.  Executive Compensation


Currently, Dr. Kwanghyun Kim, and Jae Chan Kim, our officers, receive compensation for their services during from our business operations. The following table sets forth the compensation paid to our executive officers during the twelve month periods ended December 31, 2015 and 2014:


SUMMARY COMPENSATION TABLE

Name and Principal Position

Year Ended

Salary

Bonus

Stock Awards

Option Awards

Non-Equity Incentive Plan Compensation

Change in Pension Value and Non-Qualified Deferred Compensation Earnings

All Other Compensation

Total

Dr. Kwanghyun Kim, CEO

2015

$Nil

Nil

Nil

Nil

Nil

Nil

Nil

$Nil

2014

$Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Jae Chan Kim, CFO

2015

$7,400

Nil

Nil

Nil

Nil

Nil

Nil

$7,400

2014

$17,500

Nil

Nil

Nil

Nil

Nil

Nil

$17,500

 




Narrative Disclosure to Summary Compensation Table


There are no employment contracts, compensatory plans or arrangements, including payments to be received from the Company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with the Company, or its subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of the Company.


Outstanding Equity Awards at Fiscal Year-End:   Include the following language and chart:


The table below summarizes the outstanding equity awards to our executive officers as of December 31, 2015.


 

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

OPTION AWARDS

STOCK AWARDS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name










Number of

Securities

Underlying

Unexercised

Options

(#)

Exercisable










Number of

Securities

Underlying

Unexercised

Options

(#)

Unexercisable






Equity

Incentive

Plan

Awards:

Number of

Securities

Underlying

Unexercised

Unearned

Options

(#)













Option

Exercise

Price

($)













Option

Expiration

Date






Number

of

Shares

or Units

of

Stock That

Have

Not

Vested

(#)




Market

Value

of

Shares

or

Units

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 (#)

Dr. Kwanghyun Kim

-

-

-

-

-

-

-

-

-

Jae Chan Kim

-

-

-

-

-

-

-

-

-


Long-Term Incentive Plans


There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers.


Compensation Committee


We currently do not have a compensation committee of the Board of Directors. The Board of Directors as a whole determines executive compensation.


Compensation of Directors


Our directors receive no extra compensation for their service on our Board of Directors.


Item 12.  Security Ownership of Certain Beneficial Owners and Management


The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of December 31, 2015 of: (i) each person (including any group) known to us to own more than five




23




percent (5%) of any class of our voting securities, (ii) our director, and or (iii) our officer. Unless otherwise indicated, the stockholder listed possesses sole voting and investment power with respect to the shares shown.


Name and Address of Beneficial Owner

Title of Class

Amount and Nature
of Beneficial Ownership (1)

Percentage of Common Stock (2)

Dr. Kwanghyun Kim, CEO, Director

9900 Corporate Campus Dr, Suite 3000 c/o PEG, Louisville, KY 40223

 

Common Stock

71,977,250

Direct

59.23%

Jae Chan Kim, CFO, Director

9900 Corporate Campus Dr, Suite 3000 c/o PEG, Louisville, KY 40223

Common Stock

-0-

0%

Yong Hyun Chung, Director

9900 Corporate Campus Dr, Suite 3000 c/o PEG, Louisville, KY 40223

Common Stock

-0-

0%

Officers and/or Directors as a Group

71,977,250  

59.23%

RadTek Co., Ltd.

Common Stock

55,375,000 (3)

45.57%

Holders of More than 5% of Our Common Stock

55,357,000

45.57%


 

1)

The number and percentage of shares beneficially owned is determined under rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within 60 days through the exercise of any stock option or other right. The persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and the information contained in the footnotes to this table

2)

Based on 121,507,050 issued and outstanding shares of common stock as of December 31, 2015, excluding the Company’s Treasury Stock.

3)

55,375,000 are Treasury Stock owned by the Company.


Changes in Control


There are no present arrangements or pledges of the Company’s securities, which may result in a change in control of the Company.


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


Director Independence


For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2).  The OTCBB on which shares of Common Stock are quoted does not have any director independence requirements.  The NASDAQ definition of “Independent Officer” means a person other than an Executive Officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company's Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.




24





According to the NASDAQ definition, Yong Hyun Chung is an independent director because he is not an executive officer of the Company.  


Related Party Transactions


The Company, on an as needed 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 bearing.  Our total borrowing as of December 31, 2015 and 2014 was $895,528 and $440,817 respectively.


Other than the foregoing, neither the director nor executive officer of the Company, nor any person who owned of record or was known to own beneficially more than 5% of the Company’s outstanding shares of its Common Stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year, or in any proposed transaction, which has materially affected or will affect the Company.


With regard to any future related party transaction, we plan to fully disclose any and all related party transactions in the following manor:

 

·

Disclosing such transactions in reports where required;

·

Disclosing in any and all filings with the SEC, where required;

·

Obtaining disinterested directors consent; and

·

Obtaining shareholder consent where required.


Review, Approval or Ratification of Transactions with Related Persons


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


Item 14.  Principal Accounting Fees and Services


 

Year Ended

December 31, 2015

Year Ended

December 31, 2014

Audit fees

$44,000

$46,299

Audit-related fees

$ nil

$ nil

Tax fees

$ nil

$ nil

All other fees

$ nil

$ nil

Total

$44,000

$46,299


Audit Fees


During the fiscal years ended December 31, 2015, we incurred approximately $44,000 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal years ended December 31, 2015.


During the fiscal year ended December 31, 2014, we incurred approximately $46,299 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal year ended December 31, 2014.


Audit-Related Fees


The aggregate fees billed during the fiscal years ended December 31, 2015 and 2014 for assurance and related services by our principal independent accountants that are reasonably related to the performance of the audit or review of our financial statements (and are not reported under Item 9(e)(1) of Schedule 14A was $0 and $0, respectively.




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Tax Fees


The aggregate fees billed during the fiscal years ended December 31, 2015 and 2014, for professional services rendered by our principal accountant tax compliance, tax advice and tax planning were $nil and $nil, respectively.


All Other Fees


The aggregate fees billed during the fiscal years ended December 31, 2015, and 2014 for products and services provided by our principal independent accountants (other than the services reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A was $0 and $0, respectively.


Part IV


Item 15.  Exhibits


(a) Exhibits


Exhibit Number

Description of Exhibit

 

 

Filing

3.1

Articles of Incorporation

 

 

Filed with the SEC on March 17, 2010 as part of our Registration of Securities on Form S-1.

3.1(a)

Certificate of Amendment

 

 

Filed with the SEC on April 12, 2013 as part of our Current Report on Form 8-K.

3.2

Bylaws

 

 

Filed with the SEC on March 17, 2010 as part of our Registration of Securities on Form S-1.

4.1

RadTek, Inc., 2014 Stock Awards Plan, dated January 8, 2014.

 

 

Filed with the SEC on January 14, 2014 as part of our Registration Statement on Form S-8.

4.2

Registration Rights Agreement between the Company and Dutchess Opportunity Fund, II, LP., dated April 22, 2014.

 

 

Filed with the SEC on April 29, 2014 as part of our Registration Statement on Form S-1.

10.01

Investment Agreement between the Company and Dutchess Opportunity Fund, II, LP., dated April 22, 2014.

 

 

Filed with the SEC on April 29, 2014 as part of our Registration Statement on Form S-1.

10.02

Contract between the Company and Joongsun ITC Co., Ltd.

 

 

Filed with the SEC on June 26, 2014 as part of our Registration Statement on Form S-1/A.

10.03

Contract between the Company and Korea Transport Network Express Co., Ltd.

 

 

Filed with the SEC on June 26, 2014 as part of our Registration Statement on Form S-1/A.

10.04

Contract between the Company and Korea Research Institute of Ships and Ocean, which is managed by the Korea Institute of Ocean Science and Technology.

 

 

Filed with the SEC on June 26, 2014 as part of our Registration Statement on Form S-1/A.

10.05

Memorandum of Agreement between the Company and C&D Corporation Co. Ltd., dated April 28, 2015

 

 

Filed with the SEC on May 7, 2015 as part of our Current Report on Form 8-K.

10.06

Loan Agreement by and between the Company and ADQD, Inc., Dated August 12, 2015.

 

 

Filed herewith.

16.01

Letter from Kenne Ruan CPA, Dated June 8, 2013

 

 

Filed with the SEC on August 9, 2013 as part of our Current Report on Form 8-K.

16.02

Letter from Ken and Lee Corporation, CPAs, dated July 28, 2014

 

 

Filed with the SEC on August 8, 2014 as part of our Registration Statement on Form S-1/A.

31.01

Certification of Principal Executive Officer Pursuant to Rule 13a-14

 

 

Filed herewith.

31.02

Certification of Principal Financial Officer Pursuant to Rule 13a-14

 

 

Filed herewith.

32.01

Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act

 

 

Filed herewith.

32.02

Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act

 

 

Filed herewith.

101.INS*

XBRL Instance Document

 

 

Furnished herewith.

101.SCH*

XBRL Taxonomy Extension Schema Document

 

 

Furnished herewith.

101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document

 

 

Furnished herewith.

101.LAB*

XBRL Taxonomy Extension Labels Linkbase Document

 

 

Furnished herewith.

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document

 

 

Furnished herewith.

101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document

 

 

Furnished herewith.


*Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.



Signatures


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


August 24, 2016

RadTek, Inc.



/s/ Dr. Kwanghyun Kim

By: Dr. Kwanghyun Kim

Its: President


/s/ Jae Chan Kim

By: Jae Chan Kim

Its: Chief Financial Officer, Principal Accounting Officer, & Treasurer



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



August 24, 2016

/s/ Dr. Kwanghyun Kim

By: Dr. Kwanghyun Kim

Its: Director


/s/ Yong Hyun Kim

By: Yong Hyun Kim

Its: Director




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