Radtek Inc (OTC:RDTK)

Condensed Consolidated Statement of Operations (Unaudited)

For the Three Months Ended March 31, 2015 and 2014

Management Discussion and Analysis

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.

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.

ITEM 1.01: Entry into a Material Definitive Agreement

On April 28, 2015, the registrant’s subsidiary, RadTek Co., Ltd. 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 registrant will raise $2 million for the purposes of establishing the new corporation and registering the shares with FINRA. The registrant 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 registrant, 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.

The registrant and C&D are each obliged to produce all paperwork related to this agreement upon demand.

The registrant has the authority to review and refuse any contracts entered into between C&D and any third party if that contract will affect the agreement.

Should there be any false reports or should either party be found guilty of illegal activity, the agreement can be terminated by any non-guilty party and that party can claim for compensation of damage incurred by the guilty party. This agreement may be terminated if either party does not follow the terms of the agreement. If either party wishes to terminate the agreement due to noncompliance, then written notice must be provided at least one month prior to the termination. The agreement may be terminated if both parties agree to the impossibility of their mutual purposes.

The registrant may terminate the agreement if any patent, license, trademark, registered service mark, or any marketing or technical support cannot be commercialized, if any of the information related to the new business from C&D is false, or if it is impossible to perform due to any legal conflict related to the authority of C&D.

C&D may terminate the agreement if the registrant fails to raise the funds for the new business or if the registrant fails to perform under the agreement without specific reason.

RADTEK, INC.

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

Management Discussion and Analysis

Results of Operations.

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

Condensed Consolidated Statement of Operations

For the Three and Nine Months Ended September 30, 2014 and 2013

Management Discussion and Analysis

For the three months ended September 30, 2014, we earned net revenues of $866,373.  Our cost of sales was $762,037, resulting in a gross profit of $104,336.  We had depreciation and amortization expenses of $1,618, selling and administrative expenses of $125,889, and bad debt expenses of $524,226.  We had net interest expense of $1,592, a loss on foreign exchange transactions of $989, and other income of $4,395.  As a result, we had net loss of $545,583 for the three months ended September 30, 2014.  We had a foreign currency translation adjustment of $53,554, and as a result had a comprehensive loss of $492,029.

Comparatively, for the three months ended September 30, 2013, we earned net revenues of $1,287,770.  Our cost of sales was $945,559, resulting in a gross profit of $342,211.  We had depreciation and amortization expenses of $2,021 and selling and administrative expenses of $85,303.  We paid interest expenses of $2,017.  We had a loss on foreign exchange transactions of $23,055.  We have other income of $3,067.  As a result, we had net income of $232,882 for the three months ended September 30, 2013.  We had a decrease of $6,351 as a result of the foreign currency translation adjustment, resulting in comprehensive income of $226,531.

The increase in net loss of $778,465 between the three months ended September 30, 2014 compared to the same period ended September 30, 2013 was the result of decreased operations.  We were unable to attract many new customers, and as a result, our gross profit decreased by 237,875, or 69.5%.  We experienced a bad debt expense of $524,226, and as a result, there was a $802,284 difference between the loss from operations for the three months ended September 30, 2014 compared to the three months ended September 30, 2013.

For the nine months ended September 30, 2014, we earned net revenues of $1,107,739.  Our cost of sales was $928,054, resulting in gross profit of $179,685.  We paid depreciation and amortization expenses of $4,789, consulting fees of $435,736, selling and administrative expenses of $720,180, and bad debt expense of $524,226.  We paid interest expense of $4,933.  We had a gain on foreign exchange transactions of $14,586 and other income of $1.  As a result, we had net loss of $1,495,592 for the nine months ended September 30, 2014.  We had an increase of $14,006 as a result of foreign currency translation adjustments, resulting in a comprehensive loss of $1,481,586.

Comparatively, for the nine months ended September 30, 2013, we earned net revenues of $2,013,300.  Our cost of sales was $1,273,576, resulting in gross profit of $739,724.  We paid depreciation and amortization expenses of $6,088 and selling and administrative expenses of $325,002.  We paid interest expense of $5,995.  We had a gain on foreign exchange transaction of $1,282 and other income of $5,807.  As a result, we had net income of $409,728 for the nine months ended September 30, 2013.  We had an increase of $96,169 due to foreign currency translation adjustments, resulting in a comprehensive income of $505,897.

The increase in net loss of $1,905,320 between the nine months ended September 30, 2014 compared to the same period ended September 30, 2013 was the result of decreased operations.  We were unable to attract many new customers, and as a result our gross profit decreased by $560,039, or 75.7%.  We had increased our total operating expenses by $1,353,841 due to the bad debt of $524,226 and the additional costs incurred in meeting all of our reporting requirements and to pursue our registration statement.

Item 4.02 – Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review

On August 7, 2014, the company was notified by PLS CPA, our independent accountant, that the financial statements for the Form 10-Q for the quarter ended March 31, 2014, as originally filed May 20, 2014, should no longer be relied upon and should be restated.

The restatement of the Condensed Consolidated Balance Sheet includes the reclassification of a) an uncollected invoice issued to a customer on an unfinished contract increased both accounts receivable net and the liability advance receipts on contract; the uncollected amount of $114,917 is reclassified from each account for a net entry of zero and b) an unpaid invoice received from a vendor on an unfinished contract increased unpaid amount of both trade and other payable and prepaid expenses and other assets; the unpaid amount of $190,958 is reclassified from each account for a net entry of zero.

RADTEK, INC

Consolidated Statement of Operations

For the Three and Six Months Ended June 30, 2014 and 2013

Management Discussion and Analysis

For the three months ended June 30, 2014, we earned net revenues of $54,534. Our cost of sales was $41,389, resulting in a gross profit of $13,145. We had depreciation and amortization expenses of $1,615 and selling and administrative expenses of $77,992. We had interest expense of $1,384, a gain on foreign exchange transactions of $24,601, and other loss of $2,603. As a result, we had net loss of $45,848 for the three months ended June 30, 2014.

Comparatively, for the three months ended June 30, 2013, we earned net revenues of $580,879. Our cost of sales was $333,857, resulting in a gross profit of $247,022. We had depreciation and amortization expenses of $2,033 and selling and administrative expenses of $172,544. We paid interest expenses of $1,888. We had a loss on foreign exchange transactions of $507. We have other income of $1,815. As a result, we had net income of $71,865 for the three months ended June 30, 2013.

The increase in net loss of $117,713 between the three months ended June 30, 2014 compared to the same period ended June 30, 2013 was the result of decreased operations. We were unable to attract a lot of new customers, and as a result our gross profit decreased by 233,877, or 94.7%. We were able to reduce our selling and administrative expenses during this time, but no amount of cost cutting will make up for the 94.7% reduction in gross profit for the three months ended June 30, 2014.

RadTek, Inc.

14,800,000 Common Shares on behalf of the Selling Stockholder

At 95% of Our Average Market Price

RADTEK, INC

(Formerly USChina Taiwan Inc.)

Consolidated Statement of Operations

For the Three Months Ended March 31, 2014 and 2013

Management Discussion and Analysis

Results of Operations

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

Comparatively, for the three months ended March 31, 2013, we earned $139,344 in revenues. Our cost of sales was $60,644, resulting in a gross profit of $78,700. We paid depreciation and amortization expenses of $2,872 and selling and administrative expenses of $81,722. We paid interest expenses of $2,131. We had a gain on foreign exchange transactions of $770 and other income of 925. We had a gain of $28,364 due to foreign currency translation adjustments. As a result, we had a comprehensive income of $22,034 for the three months ended March 31, 2013.

The increase of $435,736 between the three months ended March 31, 2014 compared to the same period ended March 31, 2013 was the result of the shares issued under our stock awards plan. Shares with a total value of $435,736 were issued under this plan to consultants, and this amount was recorded as an operating expense. In addition, shares with a total value of $435,736 were issued under this plan to employees, and this amount was recorded as a selling and administrative expense. The Company issued 20,000,000 shares at $0.044 per shares. The difference between $880,000 and $871,472 are due to the effects of currency translation.

RADTEK, INC.

(formerly USChina Taiwan, Inc.)

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

Management Discussion and Analysis

Results of Operations.

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

Comparatively, for the year ended December 31, 2012, we earned net revenues of $336,764.  Our cost of sales was $344,203, resulting in a gross loss of $7,439.  We paid depreciation and amortization expenses of $16,193 and selling and administrative expenses of $295,205.  We paid interest expenses of $7,594.  We gained $3,722 from foreign exchange transactions, and received $5 from other income.  After a loss of $42,560 due to foreign currency translation adjustments, we had net loss of $365,264 for the year ended December 31, 2012.

The $913,641 difference in comprehensive income during the year ended December 31, 2013 is due to actual revenues received by RadTek, Co., Ltd. in Korea. 

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