SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 ( d ) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 ( d ) OF THE EXCHANGE ACT

For the transition period from ____________ to____________

Commission File No. 000-54152  

RadTek, Inc.

(Exact name of Registrant as specified in its charter)

Indicate by check mark whether the Registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) 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 [X] No [ ]

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

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

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date: May 15, 2015 – 121,336,800 shares of common stock.

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RADTEK, INC.

FORM 10-Q

TABLE OF CONTENTS

PART 1 – FINANCIAL INFORMATION

PART II – OTHER INFORMATION

Table of Contents

PART I

Item 1. Financial Statements

The Financial Statements of the Registrant required to be filed with this 10-Q Quarterly Report were prepared by management and commence below, together with related notes. In the opinion of management, the Financial Statements fairly present the financial condition of the Registrant.

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RADTEK CO., LTD.

Condensed Consolidated Balance Sheets

As of March 31, 2015 and December 31, 2014

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

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 RADTEK CO., LTD.

Condensed Consolidated Statement of Operations (Unaudited)

For the Three Months Ended March 31, 2015 and 2014

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

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RADTEK CO., LTD.

Condensed Statement of Cash Flows (Unaudited)

For the Three Months Ended March 31, 2015 and 2014

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

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RadTek, Inc.

Consolidated Notes to the Financial Statements

March 31, 2015 (Unaudited)

Note 1 – Nature of Business

(a) Description of Business

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

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

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

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

On November 26, 2013, the Company entered into a definitive agreement with RadTek, Co. Ltd.’s shareholders.   Pursuant to the agreement, the Company purchased all of the outstanding securities of the RadTek, Co. Ltd. (1,900,000) in exchange for 1,900,000 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 1,900,000 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 1,107,500 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.

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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.

(b) Basis of Presentation and Going Concern Considerations

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.  Operating results for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2015.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

These consolidated financial statements present the financial condition, and results of operations and cash flows of the operating companies.

The Company’s financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.  The Company has experienced recurring losses over the past years which have resulted in stockholders’ accumulated deficits of approximately $2,259 thousand and a working capital deficit of approximately $893 thousand at March 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 – Investment

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

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Note 3 – Intangibles

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

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 March 31, 2015.

Amortization expenses for the three months ended March 31, 2015 and the years ended December 31, 2014 were $1,511and $6,316, respectively.

Note 4 – Short-term Borrowings

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

Note 5– 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 March 31, 2015 and December 31, 2014 were $456,371 and $440,817 respectively.

Note 6 – 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.

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Note 7 – 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.

Note 8 – Significant contracts

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

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

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

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

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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 127,500,000KRW ($115,909) for the three months ended March 31, 2015.

The contract was made on March 16, 2015. The Company and KTExpress Co. LTD (hereafter KTExpress) has come to a contract for delivery of Industrial Network System Integration for Freights (hereafter the “Project”). The total contract amount is approximately 500,000,000KRW ($458,000). The company and KT Express set the Project in 3 steps. 1st step is designing and customizing of the network system, control program, and processor. 2nd step is manufacturing of control program. The last step is installation and delivery of the network devices and the program.

Note 9 – Investment Agreement and Marketing Agreement

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

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

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

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.

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Note 10 – 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.

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.

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Item 2.  Management’s Discussions and Analysis of Financial Condition and Results of Operations.

Forward-looking Statements

Statements made in this Quarterly Report which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and our business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words “may,” “would,” “could,” “should,” “expects,” “projects,” “anticipates,” “believes,” “estimates,” “plans,” “intends,” “targets” or similar expressions.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, general economic or industry conditions, nationally and/or in the communities in which we may conduct business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our current or potential business and related matters.

Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.

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 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 Quarterly 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.

Results of Operations

For the three months ended March 31, 2015, we earned net revenues of $245,775.  Our cost of sales was $51,319, resulting in a gross profit of $194,456.  We had depreciation and amortization expenses of $1,511 and selling and administrative expenses of $91,019.  We had net interest expenses of $1,707, a loss due to foreign exchange transactions of $2,118.  As a result, we had net income of $98,101.  We had a foreign currency translation adjustment of $7,469.  As a result, we had comprehensive income of $105,570 for the three months ended March 31, 2015.

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Comparatively, for the three months ended March 31, 2014, we earned net revenues of $186,832.  Our cost of sales was $124,628, resulting in a gross profit of $62,204.  We had depreciation and amortization expenses of $1,556, paid consulting fees of $435,736, and had selling and administrative expenses of $516,299.  We paid net interest expenses of $1,957.  We had a loss from foreign exchange transactions of $9,026 and net other losses of $1,791.  As a result, we had net loss of $904,161.  We had a loss of $241 due to foreign currency translation adjustment, resulting in comprehensive loss of $904,402 for the three months ended March 31, 2014.

The increase in comprehensive income of $1,009,972 between the three months ended March 31, 2015 compared to the same period ended March 31, 2014 was the result of severely decreased operating expenses.  Our net revenues increased by $58,943, or 24%, and our cost of sales was reduced by $73,309, or58.8%.  Our operating expenses decreased by $861,061 as a result of decreased selling and administrative expenses and due to us not paying any consulting fees during the three months ended March 31, 2015.

Liquidity and Capital Resources

For the three months ended March 31, 2015, we had net income of $98,101.  We had the following adjustments to reconcile net loss to net cash used in operating activities: $1,511 for depreciation and amortization and $56 due to severance benefits.  We had the following changes in assets and liabilities: a $64,935 increase in accounts receivable, a $1,513 decrease in inventory, a $23,832 decrease due to prepaid expenses and other assets, a $50,753 decrease due to accounts payable, a $113,777 increase due to advance payments on contracts, and a $9,485 decrease due to other current liabilities.  As a result, we had net cash provided by operating activities of $132,587 for the three months ended March 31, 2015.

For the three months ended March 31, 2014, we had net losses of $904,161.  We had the following adjustments to reconcile net loss to net cash used in operating activities: $1,556 due to depreciation and amortization, $880,000 due to stock-based compensation, and $2,994 due to severance benefits.  We had the following changes in assets and liabilities, net of the effect of acquisitions: a $186,820 increase due to accounts receivable, a $366,614 increase due to prepaid expenses and other assets, a $298,370 increase due to accounts payable, a $190,527 increase due to advance payments on contracts, and a $7,232 increase due to other current liabilities.  As a result, we had net cash used in operating activities of $76,916 for the three months ended March 31, 2014.

For the three months ended March 31, 2015 and 2014, we did not pursue any investing activities.

For the three months ended March 31, 2015, we spent $160,000 on the repayment of short-term borrowings.  We received $15,554 from borrowing from related parties.  As a result, we had net cash used in financing activities of $144,446 for the three months ended March 31, 2015.

For the three months ended March 31, 2014, we did not pursue any financing activities.

We had cash or cash equivalents of $208,675 and $213,247 on hand at March 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable for a smaller reporting company.

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Item 4. Controls and Procedures.

During the three months ended March 31, 2015, there were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our chief executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of March 31, 2015.  Based on this evaluation, our chief executive officer and principal financial officers were not able to conclude that the Company’s disclosure controls and procedures are effective to ensure that information required to be included in the Company’s periodic Securities and Exchange Commission filings is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms.  Therefore, under Section 404 of the Sarbannes-Oxley Act of 2002, the Company must conclude that these controls and procedures are not effective.

Off-Balance Sheet Arrangements; Commitments and Contractual Obligations

As of March 31, 2015, we did not have any off-balance sheet arrangements and did not have any commitments or contractual obligations.

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PART II - OTHER INFORMATION

Item 1.   Legal Proceedings

None

Item 1A.  Risk Factors  

Not applicable for smaller reporting companies

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3.   Defaults Upon Senior Securities.

None

Item 4.   Mine Safety Disclosures

Not Applicable

Item 5.   Other Information

None

Item 6.   Exhibits

Exhibit 31* - Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32* - Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS**   XBRL Instance Document

101.SCH**   XBRL Taxonomy Extension Schema Document

101.CAL**   XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF**.  XBRL Taxonomy Extension Definition Linkbase Document

101.LAB**   XBRL Taxonomy Extension Label Linkbase Document

101.PRE**   XBRL Taxonomy Extension Presentation Linkbase Document

*  Filed herewith

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

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SIGNATURES

RADTEK, INC.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized

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