Debt Disclosure

9 Months Ended

Sep. 30, 2016

Note 4 – Short-term Borrowings

Short term borrowings consist of the following as of September 30, 2016 and December 31, 2015:

	September 30, 2016	December 31, 2015
Note payable to a bank at interest rate of 4.39%. The line matures in November 2016. (KRW 150,000,000)	$ 136,824	$ 127,987
Notes payable to individuals at interest rate of 0% to 7%. The maturity is August 10, 2016 (KRW220,000,000)	200,675	187,713
Total short-term borrowings	$ 337,449	$ 315,700

Note 5- 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. The Company paid off convertible note of $5,000 and accrued interest of $233 on February 12, 2016

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 6 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 nine months ended September 30, 2016

Balance at the beginning, December 31, 2015

$ 7,001

Change in fair value of derivative

7,001

Balance at end of period, September 30, 2016

$ -

Note 7– Advances from Related Party

The Company, 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 September 30, 2016 and December 31, 2015 were $980,025 and $895,528 respectively.

Note 8 – Loan from related parties

As of September 1, 2015, the Company borrowed $100,000 from related party. The interest is 2.5% per annum and repayment date is September 2, 2016. As of September 30, 2016, accrued interest of $2,716 was recorded as other payable. On September 1, 2016, the repayment date is extended to September 1, 2017.

On September 28, 2016, the Company entered loan agreement of up to $250,000 with related party. The Company borrowed $15,000 on September 28, 2016. The interest is 2.5% per annum and repayment date is September 29, 2017.

RadTek, Inc 10-Q