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RADTEK, INC - 10-K/A - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(Edgar Glimpses Via Acquire Media NewsEdge) Trends and Uncertainties. Demand for the registrant's products are dependent on general economic conditions, which are cyclical in nature. Because a major portion of our activities are the receipt of revenues from our services and products, our business operations may be adversely affected by competitors and prolonged recessionary periods. There are no other known trends, events or uncertainties that have, or are reasonably likely to have, a material impact on our short term or long term liquidity. Sources of liquidity will come from the sale of our products and services. There are no material commitments for capital expenditure at this time. There are no trends, events or uncertainties that have had or are reasonably expected to have a material impact on the net sales or revenues or income from continuing operations. There are no significant elements of income or loss that do not arise from the registrant's continuing operations. There are no other known causes for any material changes from period to period in one or more line items of our financial statements. We currently have operations planned through December 31, 2014. Capital and Source of Liquidity. We have $106,908 in cash and cash equivalents as of December 31, 2013. We believe that our cash on hand and cash generated from operations will be sufficient to conduct operations through December 31, 2014. For the year ended December 31, 2013, we spent $28,428 on the acquisition of available-for-sale security. We also spent $15,763 for acquisition on investment, and received $100 from acquisition. As a result, we had net cash used in investing activities of $44,091 for the year ended December 31, 2013. For the year ended December 31, 2012, we spent $352,000 for acquisition on investment. As a result, we had net cash used in investing activities of $352,000 for the year ended December 31, 2012. For the year ended December 31, 2013, we received $282,646 from the issuance of common stock. We spent $33,915 on borrowings from related parties, and repaid $39,359 on the repayment of short-term borrowing. As a result, we had net cash provided by financing activities of $209,372. 8 For the year ended December 31, 2012, we received $44,139 as proceeds from short-term borrowings and $28,127 as proceeds from borrowing from related parties. As a result, we had net cash provided by financing activities of $72,266 for the year ended December 31, 2012. Our long-term liquidity is dependent on the continuation of operations and receipt of revenues. 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. Critical Accounting Policies The following accounting policies are considered critical by our management. These and other accounting policies require that estimates be made based on assumptions and judgment, which affect revenues, expenses, assets, liabilities and disclosure of contingencies in our financial statements. These estimates and assumptions are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. However, actual results may differ from these estimates under different and/or future circumstances. 9 Revenue Recognition The registrant follows guidelines of ASC Topic 605 "Revenue Recognition" for revenue recognition. The registrant recognizes revenue when revenue is realized or realizable and earned. Revenue is realized or realizable and earned when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the price to the buyer is fixed or determinable; and collectability is reasonably assured. The registrant recognizes revenue from the sale of radiation sealing construction under the completed contract method accounted for as one element. Revenue from research services recognized as service are rendered and billed each month under a term service agreement. Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation is provided using the straight-line method over the estimated useful lives of the related assets: Repairs and maintenance are expensed as incurred. Expenditures that increase the value or productive capacity of assets are capitalized. When property and equipment are retired, sold, or otherwise disposed of, the asset's carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Stock-Based Compensation We record stock based compensation in accordance with FASB ASC 718, Stock Compensation. ASC 718 requires that the cost resulting from all share-based transactions be recorded in the financial statements and establishes fair value as the measurement objective in accounting for share-based payment arrangements and requires all entities to apply a fair-value-based measurement in accounting for share-based payment transactions with employees. The Statement also establishes fair value as the measurement objective for transactions in which an entity acquires goods or services from non-employees in share-based payment transactions. Recent Pronouncements We do not believe any recently issued accounting standards will have a material impact on our financial statements. |