Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 31, 2021 | Jun. 30, 2020 | |
Document and Entity Information | |||
Entity Registrant Name | Omnitek Engineering Corp. | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001404804 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 21,600,189 | ||
Entity Public Float | $ 647,334 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity File Number | 000-53955 | ||
Entity Incorporation, State Country Code | CA | ||
Entity Address, Address Line One | 1333 Keystone Way, Suite 101 | ||
Entity Address, City or Town | Vista | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92081 | ||
City Area Code | 760 | ||
Local Phone Number | 591-0089 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash | $ 60,729 | $ 20,236 |
Accounts receivable, net | 9,455 | 7,462 |
Accounts receivable - related parties | 17,345 | 16,712 |
Inventories, net | 821,866 | 1,022,365 |
Contract assets | 13,221 | 13,221 |
Deposits | 38,610 | 2,501 |
Total Current Assets | 961,226 | 1,082,497 |
PROPERTY & EQUIPMENT, net | 1,266 | 1,809 |
OTHER ASSETS | ||
Other noncurrent assets | 14,280 | 30,425 |
Total Other Assets | 14,280 | 30,425 |
TOTAL ASSETS | 976,772 | 1,114,731 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 468,839 | 409,020 |
Accrued management compensation | 595,158 | 706,830 |
Accounts payable - related parties | 121,527 | 134,077 |
Notes payable - related parties, current portion | 15,000 | 27,000 |
Notes payable | 0 | 15,000 |
Contract liabilities | 75,000 | 75,000 |
Customer deposits | 276,381 | 163,681 |
Current portion, long-term debt | 69,551 | 0 |
Total Current Liabilities | 1,621,456 | 1,530,608 |
LONG-TERM LIABILITIES | ||
Loans payable - SBA, net of current portion | 229,449 | 0 |
Notes payable - related parties, net of current portion | 0 | 15,000 |
Total Liabilities | 1,850,905 | 1,545,608 |
STOCKHOLDERS' DEFICIT | ||
Common stock, 125,000,000 shares authorized; no par value; 21,600,189 and 21,339,865 shares, respectively issued and outstanding | 8,578,210 | 8,527,210 |
Common stock subscribed | 0 | 20,000 |
Additional paid-in capital | 12,013,298 | 11,997,842 |
Accumulated deficit | (21,465,641) | (20,975,929) |
Total Stockholders' Deficit | (874,133) | (430,877) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 976,772 | $ 1,114,731 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common Stock, par or stated value | $ 0 | $ 0 |
Common Stock, shares authorized | 125,000,000 | 125,000,000 |
Common Stock, shares issued | 21,600,189 | 21,339,865 |
Common Stock, shares outstanding | 21,600,189 | 21,339,865 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
REVENUES | $ 875,997 | $ 951,323 |
REVENUES, related parties | 0 | 13,086 |
Total Revenues | 875,997 | 964,409 |
COST OF GOODS SOLD | 519,527 | 554,101 |
INVENTORY RESERVE ADJUSTMENT | 69,417 | 242,846 |
Total Cost of Goods Sold | 588,944 | 796,947 |
GROSS MARGIN | 287,053 | 167,462 |
OPERATING EXPENSES | ||
General and administrative | 671,672 | 759,606 |
Research and development | 82,052 | 106,916 |
Depreciation and amortization | 543 | 567 |
Total Operating Expenses | 754,267 | 867,089 |
LOSS FROM OPERATIONS | (467,214) | (699,627) |
OTHER EXPENSE | ||
Other expense | (1,840) | 0 |
Interest expense | (19,858) | (19,995) |
Total Other Expense | (21,698) | (19,995) |
LOSS BEFORE INCOME TAXES | (488,912) | (719,622) |
INCOME TAX EXPENSE | 800 | 800 |
NET LOSS | $ (489,712) | $ (720,422) |
BASIC AND DILUTED LOSS PER SHARE | $ (0.02) | $ (0.04) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 21,461,492 | 20,574,038 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
OPERATING ACTIVITIES | ||
Net loss | $ (489,712) | $ (720,422) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization and depreciation expense | 543 | 567 |
Options and warrants granted | 15,456 | 49,786 |
Inventory reserve | 69,417 | 242,846 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,993) | 5,980 |
Accounts receivable-related parties | (633) | (10,046) |
Deposits | (19,965) | 3,311 |
Inventory | 131,082 | 94,467 |
Contract assets | 0 | (449) |
Accounts payable and accrued expenses | (105,506) | 46,656 |
Customer deposits | 112,700 | 23,343 |
Accounts payable-related parties | (12,550) | (11,094) |
Contract liabilities | 0 | (9,496) |
Accrued management compensation | 53,654 | 200,727 |
Net Cash Used in Operating Activities | (247,507) | (83,824) |
INVESTING ACTIVITIES | ||
Net Cash Used in Investing Activities | 0 | 0 |
FINANCING ACTIVITIES | ||
Payments on convertible notes payable | (15,000) | (60,000) |
Proceeds from common stock subscription | 31,000 | 20,000 |
Proceeds from sale of common stock | 0 | 75,000 |
Proceeds from sale of option to purchase common stock | 0 | 25,000 |
Proceeds from long - term debt | 299,000 | 0 |
Proceeds from (payments on) notes payable - related party | (27,000) | 27,000 |
Net Cash Provided by Financing Activities | 288,000 | 87,000 |
NET CHANGE IN CASH | 40,493 | 3,176 |
CASH AT BEGINNING OF YEAR | 20,236 | 3,176 |
CASH AT END OF YEAR | 60,729 | 20,236 |
CASH PAID FOR: | ||
Interest | 17,104 | 24,187 |
Income taxes | 800 | 800 |
NON CASH INVESTING AND FINANCING ACTIVITIES | ||
Common stock issued for stock subscription | 51,000 | 0 |
Conversion of Convertible Note Payable | $ 0 | $ 25,000 |
Statements of Stockholders' Def
Statements of Stockholders' Deficit - USD ($) | Common Stock | Common Stock Subscribed | Additional Paid-In Capital | Accumulated Deficit | Total |
Stockholders' Equity, beginning of period, Value at Dec. 31, 2018 | $ 8,427,210 | $ 11,923,056 | $ (20,255,507) | $ 94,759 | |
Stockholders' Equity, beginning of period, Shares at Dec. 31, 2018 | 20,420,402 | ||||
Value of options and warrants issued for services | 49,786 | 49,786 | |||
Conversion of note payable, Value | $ 25,000 | 25,000 | |||
Conversion of note payable, Shares | 500,000 | ||||
Deposit - stock purchase agreement | 20,000 | 20,000 | |||
Sale of common stock, Value | $ 75,000 | 75,000 | |||
Sale of common stock, Shares | 419,463 | ||||
Sale of option to purchase common stock | 25,000 | 25,000 | |||
Net loss | (720,422) | (720,422) | |||
Stockholders' Equity, end of period, Value at Dec. 31, 2019 | $ 8,527,210 | 20,000 | 11,997,842 | (20,975,929) | (430,877) |
Stockholders' Equity, end of period, Shares at Dec. 31, 2019 | 21,339,865 | ||||
Value of options and warrants issued for services | 15,456 | 15,456 | |||
Deposit - stock purchase agreement | 31,000 | 31,000 | |||
Common stock issued for subscription, Value | $ 51,000 | (51,000) | |||
Common stock issued for subscription, Shares | 260,324 | ||||
Net loss | (489,712) | (489,712) | |||
Stockholders' Equity, end of period, Value at Dec. 31, 2020 | $ 8,578,210 | $ 12,013,298 | $ (21,465,641) | $ (874,133) | |
Stockholders' Equity, end of period, Shares at Dec. 31, 2020 | 21,600,189 |
Note 1- Organization and Busine
Note 1- Organization and Business Activity | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 1- Organization and Business Activity | NOTE 1 – ORGANIZATION AND BUSINESS ACTIVITY Omnitek Engineering, Corp. (“Omnitek” or “the Company”) was incorporated on October 9, 2001 under the laws of the State of California. Omnitek develops and sells a proprietary technology to convert diesel engines to an alternative fuel, new natural gas engines, and complementary products. Omnitek products are available for stationary applications and the global transportation markets, which includes light commercial vehicles, minibuses, heavy-duty trucks, municipal buses, as well as rail and marine applications. The technology can be applied for compressed natural gas (“CNG”), liquefied natural gas (“LNG”), or renewable natural gas (“Biogas” or “RNG”), as well as liquid petroleum gas (“Propane” or “LPG”). Omnitek began operations on October 10, 2001, and was a spin-off from Nology Engineering, Inc. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 2 - Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Accounting Methods The Company's financial statements are prepared using the accrual method of accounting. The Company has elected a December 31, year-end. b. Use of Estimates in Preparing Financial Statements 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. Actual results could differ from those estimates. The Company also regularly evaluates estimates and assumptions related to deferred income tax asset valuation allowances, inventory valuation allowances, allowance for doubtful receivables and valuations of equity-based payments. c. Cash and Cash Equivalents For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. d. Accounts Receivable Trade receivables are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. Allowance for doubtful accounts for the years ended December 31, 2020 and 2019 was $15,000 and $15,000, respectively. Additionally, bad debt expense for the years ended December 31, 2020 and 2019 was $-0- and $-0-, respectively. e. Inventories Inventories are stated at the lower of cost or market, cost determined on an average cost basis. Market value for raw materials is based on replacement costs. Inventory costs include material, labor and manufacturing overhead. The Company reviews inventories on hand at least annually and records provisions for estimated excess, slow moving and obsolete inventory, as well as inventory with a carrying value in excess of net realizable value. The regular and systematic inventory valuation reviews include a current assessment of future product demand, historical experience and product expiration. f. Long-Lived Assets The Company assesses the recoverability of its long-lived assets annually and whenever circumstances would indicate that there may be an impairment. The Company compares the estimated undiscounted future cash flows to the carrying value of the long-lived assets to determine if an impairment has occurred. In the event that an impairment has occurred, the Company will recognize the impairment immediately. No impairment expense was recognized as of December 31, 2020 or 2019. g. Property and Equipment Property and equipment are recorded at cost. Depreciation and amortization are calculated on the straight-line method over the shorter of the lease term or the estimated useful lives of the assets ranging from three to five years. h. Revenue Recognition In general, revenue is recognized when control of the promised goods is transferred to our customers, in an amount that reflects the consideration to which we expect to be entitled in exchange for the goods or services. In order to achieve that core principle, a five-step approach is applied: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue allocated to each performance obligation when we satisfy the performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. We recognize revenue on various products and services as follows: Products Contracts Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to a customer and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of Omnitek’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. Performance Obligations Satisfied Over Time Revenues for Omnitek’s long-term contracts that satisfy the criteria for over time recognition (formerly known as percentage-of-completion method) is recognized as the work progresses. The majority of the revenue is derived from long-term engine development agreements that typically span between 12 to 24 months. Omnitek’s long-term contracts will continue to be recognized over time because our typical contract is for a customized asset with no alternative use and generally the Company has a right to payment for work completed to date. Under the new revenue standard, the cost-to-cost measure of progress continues to best depict the transfer of control of assets to the customer, which occurs as the Company incurs costs. Contract costs include labor and material. Revenue from products and services transferred to customers over time accounted for 0% and 5% of revenue for the years ended December 31, 2020 and 2019, respectively. Performance Obligations Satisfied at a Point in Time Revenue from product sales is recognized at a point in time. These sales predominantly contain a single delivery element and revenue is recognized at a single point in time when ownership, risk and rewards transfer Upon fulfilment of the performance obligation, the customer is provided an invoice demonstrating transfer of control to the customer. Revenue from goods and services transferred to customers at a point in time accounted for 100% and 95% of revenue for the years ended December 31, 2020 and 2019, respectively. Assurance-type warranties are the only warranties provided by the Company and, as such, Omnitek does not recognize revenue on warranty-related work. Omnitek generally provides a one-year warranty for products that it sells. Warranty claims historically have been insignificant. Pre-contract costs are generally not incurred by the Company. Contract Estimates Accounting for long-term contracts involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, Omnitek estimates the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognizes that profit over the life of the contract. Variable Consideration The transaction price for contracts may include variable consideration, which includes increases to transaction price for approved and unapproved change orders, claims and incentives, and reductions to transaction price for liquidated damages. Variable consideration historically has been insignificant. Disaggregation of Revenue The following table presents Omnitek’s revenues disaggregated by region and product type: December 31, December 31, 2020 2019 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 606,629 - 606,629 $ 450,986 - 450,986 International 269,368 - 269,368 468,949 44,474 513,423 $ 875,997 - 875,997 $ 919,935 44,474 964,409 Filters 324,961 - 324,961 561,560 - 561,560 Components 551,036 - 551,036 358,375 - 358,375 Engineering Services - - - - 44,474 44,474 $ 875,997 - 875,997 $ 919,935 44,474 964,409 i. Cost of Goods Sold The Company includes product costs (i.e. material, direct labor and overhead costs), shipping and handling expense, production-related depreciation expense and product license agreement expense in cost of goods sold. j. Research and Development The Company expenses the costs of researching and developing its products during the period incurred. During the years ended December 31, 2020 and 2019, the Company incurred research and development expenses of $82,052 and $106,916, respectively. k. Advertising The Company follows the policy of charging the costs of advertising to expense as incurred. During the years ended December 31, 2020 and 2019, the Company expensed $-0- and $-0-, respectively. l. Provision for Income Taxes The Company accounts for income taxes in accordance with Accounting Standards Codification Topic 740, Income Taxes ("Topic 740"), which requires the recognition of deferred tax liabilities and assets at currently enacted tax rates for the expected future tax consequences of events that have been included in the financial statements or tax returns. A valuation allowance is recognized to reduce the net deferred tax asset to an amount that is more likely than not to be realized. Topic 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company's financial statements. Topic 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of December 31, 2020, the Company had no accrued interest or penalties related to uncertain tax positions. The Company files an income tax return in the U.S. federal jurisdiction and the state of California. With few exceptions, the Company is no longer subject to U.S. federal, state, and local, or non-U.S. income tax examinations by tax authorities for years before 2012. m. Basic and Diluted Loss Per Share The computation of basic earnings per share of common stock is based on the weighted average number of shares outstanding during the periods presented. The computation of fully diluted earnings per share includes common stock equivalents outstanding at the balance sheet date. The Company had 2,882,223 and 2,672,223 stock options and warrants that would have been included in the fully diluted earnings per share as of December 31, 2020 and 2019, respectively. However, the common stock equivalents were not included in the loss per share computation because they are anti-dilutive. n. Fair Value Measurements The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: Level 1 – Quoted prices in active markets for identical assets or liabilities; Level 2 – Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and Level 3 – Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. o. Stock-based Compensation The Company recognizes compensation expense for stock-based awards expected to vest on a straight-line basis over the requisite service period of the award based on their grant date fair value. The Company estimates the fair value of stock options using a Black-Scholes option pricing model which requires management to make estimates for certain assumptions regarding risk-free interest rate, expected life of options, expected volatility of stock and expected dividend yield of stock. p. Concentration of Risks Customers During the year ended December 31, 2020, eight customers accounted for approximately 80% of sales. During the year ended December 31, 2019, seven customers accounted for approximately 74% of sales. Suppliers During the year ended December 31, 2020, eight suppliers accounted for 71 % of products purchased. During the year ended December 31, 2019, five suppliers accounted for 86% of products purchased. q. Liquidity and Going Concern Historically, the Company has incurred net losses and negative cash flows from operations. As of December 31, 2020, the Company had an accumulated deficit of $21,465,641 and total stockholders’ deficit of ($874,133). At December 31, 2020, the Company had current assets of $961,226 including cash of $60,729, and current liabilities of $1,621,456, resulting in negative working capital of $660,230. For 2020, the Company reported a net loss of $489,712 and net cash used by operating activities of $247,507. Management believes that based on its operating plan, the projected sales for 2021, combined with funds available from its working capital will be sufficient to fund operations for the next twelve months from the date these financial statements were issued. However, there can be no assurance that operations and operating cash flows will continue at the current levels or improve in the near future. Whether, and when, the Company can attain profitability and positive cash flows from operations is uncertain. The Company is also uncertain whether it can raise additional capital. These uncertainties cast significant doubt upon the Company’s ability to continue as a going concern. Our financial statements have been prepared on a going concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of operations. The financial statements do not include any adjustments relating to the recoverability or classification of recorded asset amounts or the amounts or classification of liabilities should we be unable to continue as a going concern. r. Recent Accounting Pronouncements The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements. |
Note 3 - Contract Assets And Li
Note 3 - Contract Assets And Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Note 3 - Contract Assets And Liabilities | NOTE 3 – CONTRACT ASSETS AND LIABILITIES Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) on the balance sheet. For Omnitek’s long-term contracts, amounts are generally billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, Omnitek sometimes receives advances or deposits from its customers, before revenue is recognized, resulting in billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities). The table below reconciles the net excess billings to the amounts included in the balance sheets at those dates: December 31, December 31, 2020 2019 Contract assets $ 13,221 $ 13,221 Contract liabilities $ (75,000) $ (75,000) Net amount of contract liabilities in excess of contract assets $ (61,779) $ (61,779) |
Note 4 - Inventories
Note 4 - Inventories | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 4 - Inventories | NOTE 4 – INVENTORIES Inventories are located in Vista, California and at December 31, 2020 and 2019 consisted of the following: December 31, December 31, 2020 2019 Raw materials $ 917,567 $ 935,834 Finished goods 962,608 1,073,623 Work in progress - 1,800 Inventory in transit - - Allowance for obsolete inventory (1,058,309) (988,892) Total $ 821,866 $ 1,022,365 The Company has established an allowance for obsolete inventory. Expense for obsolete inventory was $69,417 and $242,846, for the years ended December 31, 2020 and December 31, 2019, respectively. |
Note 5 - Property and Equipment
Note 5 - Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 5 - Property and Equipment | NOTE 5 – PROPERTY AND EQUIPMENT Property and equipment at December, 2020 and 2019 consisted of the following: December 31, December 31, 2020 2019 Production equipment $ 64,673 $ 64,673 Computers/Office equipment 28,540 28,540 Tooling equipment 12,380 12,380 Leasehold Improvements 42,451 42,451 Less: accumulated depreciation (146,778) (146,235) Total $ 1,266 $ 1,809 Depreciation expense for the years ended December 31, 2020 and 2019 was $543 and $567, respectively. |
Note 6 - Customer Deposits
Note 6 - Customer Deposits | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 6 - Customer Deposits | NOTE 6 – CUSTOMER DEPOSITS The Company may require a customer deposit from domestic and international customers. As of December 31, 2020 and 2019 the Company had customer deposits of $276,381 and $163,681, respectively. |
Note 7 - Notes Payable - Relate
Note 7 - Notes Payable - Related Parties | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Note 7 - Notes Payable - Related Parties | NOTE 7 – NOTES PAYABLE – RELATED PARTIES On September 11, 2019 the Company borrowed $12,000 from a board member. The loan was evidenced by an unsecured promissory note which bears simple interest at the rate of 8% per annum. The principal amount of the note and all accrued interest was due and payable on or before December 11, 2019. Under the terms of a Promissory Note Extension, the principal amount of the note and all accrued interest is due and payable on or before the extended maturity date of June 30, 2020. On April 29, 2020 the balance of this note was paid in full. On May 28, 2019 the Company issued a Working Capital Promissory Note to the Company’s CEO for loans made to the Company during the calendar year 2019. The note has an annual interest rate of 5%, is unsecured and had an original maturity date of December 31, 2019. During 2019 the Company’s CEO made cumulative loans to the Company of $15,000. Under the terms of a Promissory Note Extension, the principal amount of the note and all accrued interest is due and payable on or before the extended maturity date of December 31, 2020. On April 29, 2020 the balance of this note was paid in full. On January 19, 2017 the Company issued a promissory note for $15,000 to a related party. The note has an annual interest rate of 5% and is unsecured. The principal amount of the note and all accrued interest is due and payable on or before January 19, 2021. As of December 31, 2020 and December 31, 2019 Note Payable – Related Party consisted of the following: December 31, December 31, 2020 2019 Note payable, related party, current portion $ 15,000 $ 27,000 Note payable, related party, net of current portion - 15,000 Total $ 15,000 $ 42,000 |
Note 8 - Debt
Note 8 - Debt | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 8 - Debt | NOTE 8 – DEBT Note payable On December 11, 2019, a convertible note payable matured with an outstanding principal balance of $40,000. The Lender elected to convert $25,000 of the outstanding principal to restricted common stock. Under the terms of the Allonge to Senior Secured Convertible Promissory Note and Agreement, the remaining principal balance of $15,000 is due and payable with an extended maturity date of May 11, 2020. On April 27, 2020 the balance of this note was paid in full. As of December 31, 2020, and December 31, 2019 Note Payable consisted of the following: December 31, December 31, 2020 2019 Notes payable $ - $ 15,000 Total $ - $ 15,000 Loans payable – SBA Economic Injury Disaster Loan On April 21, 2020, the Company obtained a loan (the “SBA EIDL Loan”) under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) adminitstered by the U.S. Small Business Administration. The Company received total proceeds of $199,000 from the SBA EIDL loan. The SBA EIDL Loan is evidenced by a Loan Authorization and Agreement, a Secured Promissory Note (the “Note” and Security Agreement. Interest on the unpaid principal balance of the Note shall accrue at the rate of three and 75/100 percent (3.75%) per annum. Pursuant to the terms of the Note, commencing May 21, 2021 (i.e., twelve (12) months from the Note date), the Company shall make principal and interest payments in the amount of $970 every month, with any unpaid principal and accrued interest due and payable on April 21, 2050. The obligations under the Loan Authorization and Agreement, and the Note shall be secured pursuant to the Security Agreement and a first position lien and security interest in the Collateral (as defined in the Security Agreement). The collateral in which the security interest is granted includes all tangible and intangible personal property, including, but not limited to: (a) inventory, and (b) equipment. Payroll Protection Program On May 28, 2020, the Company received funds pursuant to a Paycheck Protection Program loan (the “SBA PPP Loan”) from Riverview Bank, under recently enacted CARES Act administered by U.S. Small Business Administration. The Company received total proceeds of $100,000 from the SBA PPP Loan. In accordance with the requirements of the CARES Act, the Company will use proceeds from the SBA PPP Loan primarily for payroll costs. The SBA PPP Loan is scheduled to mature on May 22, 2022 and has a 1.00% interest rate and is subject to the terms and conditions applicable to loans adminstered by the SBA under the CARES Act. If certain conditions are met, as provided for under section 1106 of the CARES Act, as amended by the PPP Flexibility Act the loan may be forgiven in its entirety. As of December 31, 2020 and December 31, 2019 Debt consisted of the following: December 31, December 31, 2020 2019 Loan payable – SBA EIDL $ 199,000 $ - Loan payable – SBA PPP $ 100,000 $ - Less current portion (69,551) - Total $ 229,449 $ - |
Note 9 - Commitments
Note 9 - Commitments | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 9 - Commitments | NOTE 9 – COMMITMENTS As of December 31, 2020 and 2019, the Company had outstanding purchase commitments for inventory totaling $151,411 and $152,583, respectively. Of these amounts, the Company had made prepayments of $38,610 as of December 31, 2020 and $18,645 as of December 31, 2019 and had commitments for future cash outlays for inventory totaling $112,801 and $133,938, respectively. Effective September 1, 2019 the Company entered into the Fourth Amendment to the Lease for its facility, reducing the size of the leased space to 21,786 square feet and extending the lease term to August 31, 2020, at which time the lease expired. As of December 31, 2020, no new lease extension has been negotiated. The current lease payment is $14,161 per month, plus common area maintenance expenses (CAM). Under the amended lease, past due rent is payable at monthly installments of $10,000, until such time as the past due rent has been paid in full. The lease is not subject to the right-of-use asset rules under ASU 2016-2 because it qualifies for the short-term lease exception under that pronouncement. As of December 31, 2020 the outstanding balance was $52,529 and the security deposit of $14,280 remained the same. |
Note 10 - Related Party Transac
Note 10 - Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 10 - Related Party Transactions | NOTE 10 – RELATED PARTY TRANSACTIONS Accounts Receivable – Related Parties The Company holds a non-controlling interest in various distributors in exchange for use of the Company’s name and logo. As of December 31, 2020, the Company owned a 15% interest in Omnitek Engineering Thailand Co. Ltd. and a 20% interest in Omnitek Peru S.A.C. As of December 31, 2020 and December 31, 2019, the Company was owed $17,345 and $16,712, respectively, by related parties for the purchase of products and services. Accrued Management Expenses During the periods ended December 31, 2020 and December 31, 2019, the Company’s president and former chief financial officer were due amounts for services performed for the Company. As of December 31, 2020 and December 31, 2019 the accrued management fees consisted of the following: December 31, December 31, 2020 2019 Amounts due to the president $ 595,158 $ 541,504 Amounts due to the chief financial officer - 165,326 Total $ 595,158 $ 706,830 Richard Miller, the former chief financial officer, resigned on January 7, 2020 (effective February 7, 2020). Prior amounts due to the former chief financial officer were reclassified to accounts payable and accrued liabilities on the balance sheet at December 31, 2020. |
Note 11 - Stockholders' Equity
Note 11 - Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 11 - Stockholders' Equity | NOTE 11 – STOCKHOLDERS’ EQUITY Common Stock On September 6, 2019 the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with a purchaser wherein the purchaser agreed to buy an aggregate of 3,579,014 restricted shares of common stock of the Company at a price of $0.1788 per share for an aggregate purchase price of $640,000. Subject to the default and penalty provisions in the Purchase Agreement, the sale and purchase of the restricted shares and payment of the purchase price shall be made in 20 tranches as follows: (a) $75,000 payable on or before September 30, 2019 (tranche 1), (b) the balance of the purchase price paid in 18 monthly tranches, at a minimum of $10,000 per month with a total quarterly payment of no less than $90,000, and (c) a final payment of $25,000 on or before April 1, 2021(tranche 20). In accordance with these terms, purchaser paid $75,000 on September 30, 2019 and was issued 419,463 restricted shares of the Company’s restricted common stock. Between October 1, 2019 and December 31, 2019 the purchaser made cumulative payments of $20,000 towards the $90,000 required under the agreement and was therefore in default under the terms of the agreement. In accordance with a provision in the agreement the Company elected to waive the default but assess a $0.03 per share penalty for all future installment payments, increasing the purchase price to $.2033 per share. The $20,000 paid by the purchaser as of December 31, 2019 has been classified as Common Stock Subscribed on the balance sheet. The purchaser made additional deposits totaling $31,000 in January and February 2020. Pursuant to the terms of the agreement, on July 14, 2020 the Company issued 260,324 restricted shares of common stock in exchange for the cumulative deposits of $51,000 made by the purchaser. The agreement was terminated effective July 14, 2020 due to non-performance by the purchaser. Additionally, subject to the payment by the purchaser of the additional sum of $25,000 by September 30, 2019, the Company shall grant to the purchaser, an option to purchase an additional 3,579,014 restricted shares of common stock for an additional $640,000. The $25,000 option purchase price is consideration for the option and shall be non-refundable and shall not be applied to the purchase of any restricted shares. The purchaser may exercise the option within six months of the initial (tranche 1) payment (i.e., September 30, 2019) by paying the initial option tranche exercise payment of $75,000. If the purchaser has not exercised and paid the initial option exercise payment of $75,000 by March 31, 2020 the option to purchase the option shares shall expire and be terminated. The purchaser made a timely payment of $25,000 on September 30, 2019 to purchase the option but did not make the initial option tranche exercise payment of $75,000 by March 31, 2020. Therefore, the option to purchase the option shares has expired. On December 31, 2019 the Company issued 500,000 shares of its restricted common stock in consideration of a capital contribution via the conversion of $25,000 of unpaid principal owing under that certain Convertible Note dated June 11, 2018. Options and Warrants During the years ended December 31, 2020 and 2019, the Company granted 150,000 and 450,000 options for services, respectively. During the years ended December 31, 2020 and 2019, respectively, the Company recognized expense of $15,456 and $49,786 related to options that vested during the years, pursuant to ASC Topic 718. The total remaining amount of compensation expense to be recognized in future periods is $257. No future compensation expense has been calculated for 150,000 options that were granted in 2015 due to the low probability that any of these options will vest before maturity. These options expired on October 1, 2020. On August 3, 2011 the Board of Directors adopted the Omnitek Engineering Corp. 2011 Long-term Incentive Plan (the “2011 Plan”), under which 1,000,000 shares of Company’s Common Stock were reserved for issuance of both Incentive Stock Options to employees only and Non-Qualified Stock Options to employees and consultants at its discretion. As of December 31, 2020, the Company has a total of 75,000 options issued under the plan. On September 11, 2015 the Board of Directors adopted the Omnitek Engineering Corp. 2015 Long Term Incentive Plan (the “2015 Plan”), under which 2,500,000 shares of the Company’s Common Stock were reserved for issuance of both Incentive Stock Options to employees only and Non-Qualified Stock Options to employees and consultants at its discretion. As of December 31, 2020, the Company has a total of 1,915,556 options issued under the plan. In October 2017, the Company’s shareholders approved its 2017 Long-Term Incentive Plan (the “2017 Plan”). Under the 2017 plan, the Company may issue up to 5,000,000 shares of both Incentive Stock Options to employees only and Non-Qualified Stock Options to employees and consultants at its discretion. As of December 31, 2020, the Company has a total of 891,667 options issued under the plan. During the year ended December 31, 2020 and 2019 the Company issued -0- and -0- warrants, respectively. The Company recognizes compensation expense for stock-based awards expected to vest on a straight-line basis over the requisite service period of the award based on their grant date fair value. The Company estimates the fair value of stock options using a Black-Scholes option pricing model which requires management to make estimates for certain assumptions regarding risk-free interest rate, expected life of options, expected volatility of stock and expected dividend yield of stock. When determining expected volatility, the Company considers the historical performance of the Company’s stock, as well as implied volatility. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant, based on the options’ expected term. The expected term of the options is based on the Company’s evaluation of option holders’ exercise patterns and represents the period of time that options are expected to remain unexercised. The Company uses historical data to estimate the timing and amount of forfeitures. The following table presents the assumptions used to estimate the fair values of the stock options granted: December 31, 2020 December 31, 2019 Expected volatility 159% 142% Expected dividends 0% 0% Expected term 7 Years 7 Years Risk-free interest rate 0.60% 2.01% A summary of the status of the options granted at December 31, 2020 and December 31, 2019 and changes during the years then ended is presented below: December 31, December 31, 2020 2019 Weighted-Average Weighted-Average Shares Exercise Price Shares Exercise Price Outstanding at beginning of year 2,940,556 $ 0.25 2,965,556 $ 0.63 Granted 150,000 0.06 450,000 0.08 Exercised - - - - Expired or cancelled (200,000) 0.87 (475,000) 2.49 Outstanding at end of year 2,890,556 0.20 2,940,556 0.25 Exercisable 2,882,223 $ 0.20 2,672,223 $ 0.23 A summary of the status of the options outstanding at December 31, 2020 is presented below: Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life Number Exercisable Weighted-Average Exercise Price $0.01-1.00 2,890,556 3.51 years 2,882,223 $0.20 A summary of the status of the options and warrants outstanding at December 31, 2019 is presented below: Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life Number Exercisable Weighted-Average Exercise Price $0.01 - 1.00 2,890,556 4.18 years 2,622,223 $0.21 $1.01 - 2.00 50,000 0.36 years 50,000 1.13 $0.01 - 2.00 2,940,556 4.12 years 2,672,223 $0.23 |
Note 12 - Income Taxes
Note 12 - Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 12 - Income Taxes | NOTE 12 – INCOME TAXES The provision for income taxes for the year ended December 31, 2020 and 2019 consists of the following: December 31, December 31, Federal 2020 2019 Current $ - $ - Deferred - - State Current $ 800 $ 800 Deferred - - Income tax expense $ 800 $ 800 Net deferred tax assets consist of the following components as of December 31, 2020 and 2019: December 31, December 31, Deferred tax assets: 2020 2019 Net operating loss carryover $ 7,367,497 6,821,469 Research and development carry forward 131,088 131,088 Inventory reserve 253,994 237,334 Allowance for doubtful accounts 3,600 3,600 Warranty allowance 3,068 3,068 Accrued compensation 142,838 169,639 Deferred tax liabilities: Depreciation (39,927) (47,001) Valuation allowance (7,862,158) (7,319,197) Net deferred tax asset $ - - The income tax provision differs from the amount of income tax determined by applying the estimated U.S. federal and state income tax rate of 24% as of December 31, 2020 and December 31, 2019 to pretax income from continuing operations for the year ended December 31, 2020 and 2019 due to the following: December 31, December 31, 2020 2019 Book loss $ (117,532) (172,902) Meals and entertainment - 16 State tax deduction - - Deferred rent - - Stock/Options for services 3,709 11,949 Officer’s life ins premium 1,181 1,181 Depreciation (8,265) (8,784) Accrued compensation (26,801) 48,174 Inventory reserve 16,660 58,283 Valuation allowance 262,894 124,964 Net operating loss carryover (131,046) (62,081) Income Tax Expense $ 800 800 On December 21, 2017, the TCJA was enacted. Among other things, the TCJA reduces the U.S. federal corporate tax rate from 35 percent to 21 percent beginning January 1, 2018, requires companies to pay a one-time transition tax on certain previously unremitted earnings on non-U.S. subsidiaries, creates new taxes on certain foreign sourced earnings and imposes additional limitations on certain deductions, including interest expense and net operating losses arising after 2017. The Company has assessed the impact of the TCJA and is not subject to the one-time transition tax. The Company remeasured certain deferred tax assets and liabilities based on the rates that they are expected to reverse in the future, which is generally 21 percent under TCJA. The decrease in the Company’s net deferred tax assets was offset by a corresponding decrease in its valuation allowance. At December 31, 2020, the Company had net operating loss carry forwards of approximately $7,367,497 through 2034. No tax benefit has been reported in the December 31, 2020 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years. |
Note 13 - Subsequent Events
Note 13 - Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Note 13 - Subsequent Events | NOTE 13 – SUBSEQUENT EVENTS On January 19, 2021 the Company and Werner Funk, President and CEO, agreed to a one-year extension of the $15,000 related party note payable due to Mr. Funk. The extended due date is January 19, 2022. On January 30, 2021 the Company received notification from Riverview Bank that the Small Business Administration (“SBA”) had forgiven 100% of the Company’s PPP loan (dated 5/22/20), pursuant to the SBA’s acceptance of the Company’s loan forgiveness application. On March 21, 2021 the Company received funds pursuant to the Paycheck Protection Program loan (the “PPP loan”) from LIBERTY CP2, SPV, LP, under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the SBA. The Company received total proceeds of $100,000 from the PPP loan. Pursuant to the terms of the note, the first payment shall be determined based on the deferment period and time required to process any application for forgiveness. The Note shall be due on March 1, 2026, or as determined by the Small Business Administration and Department of the Treasury. On March 10, 2021 the Company entered into an Employment Agreement with Werner Funk, the President and CEO of the Company. The term of the Employment Agreement shall be for a period of three (3) years, with a Base Salary of $150,000 per year with such salary reviewed on an annual basis by the Board of Directors. In conjunction with and pursuant to the Mr. Funk’s Employment, the Company granted to Werner Funk, the President and Chief Executive Officer, a stock option to purchase 300,000 shares of common stock, at an exercise price of $0.1155 representing 110% of the closing price of the Company’s common stock as of March 10, 2021. Such Options shall be exercisable for a period of seven years. The Option shall vest and be exercisable at the rate of 1/36 per month. No underwriters were used. The securities were issued pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933. As the founder, a Director and the CEO of the Company Mr. Funk was intimately acquainted with the Company’s business plan and proposed activities at the time of issuance and possessed information on the Company necessary to make an informed investment decision. On March 10, 2021, the Company granted to each of John M. Palumbo and Gary S. Maier, the two independent directors, a non-qualified stock option to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.1050 per share representing 100% of the closing price of the Company’s common stock as of March 10, 2021. Such Options shall be exercisable for a period of seven years. The Option shall vest and be exercisable immediately. No underwriters were used. The securities were issued pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933. The individuals receiving the options were intimately acquainted with the Company’s business plan and proposed activities at the time of issuance and possessed information on the Company necessary to make an informed investment decision. |
Note 2 - Summary of Significa_2
Note 2 - Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Policy Text Block [Abstract] | |
a. Accounting Methods | a. Accounting Methods The Company's financial statements are prepared using the accrual method of accounting. The Company has elected a December 31, year-end. |
b. Ues of Estimates in Preparing Financial Statements | b. Use of Estimates in Preparing Financial Statements 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. Actual results could differ from those estimates. The Company also regularly evaluates estimates and assumptions related to deferred income tax asset valuation allowances, inventory valuation allowances, allowance for doubtful receivables and valuations of equity-based payments. |
c. Cash and Cash Equivalents | c. Cash and Cash Equivalents For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. |
d. Accounts Receivable | d. Accounts Receivable Trade receivables are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. Allowance for doubtful accounts for the years ended December 31, 2020 and 2019 was $15,000 and $15,000, respectively. Additionally, bad debt expense for the years ended December 31, 2020 and 2019 was $-0- and $-0-, respectively. |
e. Inventories | e. Inventories Inventories are stated at the lower of cost or market, cost determined on an average cost basis. Market value for raw materials is based on replacement costs. Inventory costs include material, labor and manufacturing overhead. The Company reviews inventories on hand at least annually and records provisions for estimated excess, slow moving and obsolete inventory, as well as inventory with a carrying value in excess of net realizable value. The regular and systematic inventory valuation reviews include a current assessment of future product demand, historical experience and product expiration. |
f. Long-lived Assets | f. Long-Lived Assets The Company assesses the recoverability of its long-lived assets annually and whenever circumstances would indicate that there may be an impairment. The Company compares the estimated undiscounted future cash flows to the carrying value of the long-lived assets to determine if an impairment has occurred. In the event that an impairment has occurred, the Company will recognize the impairment immediately. No impairment expense was recognized as of December 31, 2020 or 2019. |
g. Property and Equipment | g. Property and Equipment Property and equipment are recorded at cost. Depreciation and amortization are calculated on the straight-line method over the shorter of the lease term or the estimated useful lives of the assets ranging from three to five years. |
h. Revenue Recognition | h. Revenue Recognition In general, revenue is recognized when control of the promised goods is transferred to our customers, in an amount that reflects the consideration to which we expect to be entitled in exchange for the goods or services. In order to achieve that core principle, a five-step approach is applied: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue allocated to each performance obligation when we satisfy the performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. We recognize revenue on various products and services as follows: Products Contracts Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to a customer and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of Omnitek’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. Performance Obligations Satisfied Over Time Revenues for Omnitek’s long-term contracts that satisfy the criteria for over time recognition (formerly known as percentage-of-completion method) is recognized as the work progresses. The majority of the revenue is derived from long-term engine development agreements that typically span between 12 to 24 months. Omnitek’s long-term contracts will continue to be recognized over time because our typical contract is for a customized asset with no alternative use and generally the Company has a right to payment for work completed to date. Under the new revenue standard, the cost-to-cost measure of progress continues to best depict the transfer of control of assets to the customer, which occurs as the Company incurs costs. Contract costs include labor and material. Revenue from products and services transferred to customers over time accounted for 0% and 5% of revenue for the years ended December 31, 2020 and 2019, respectively. Performance Obligations Satisfied at a Point in Time Revenue from product sales is recognized at a point in time. These sales predominantly contain a single delivery element and revenue is recognized at a single point in time when ownership, risk and rewards transfer Upon fulfilment of the performance obligation, the customer is provided an invoice demonstrating transfer of control to the customer. Revenue from goods and services transferred to customers at a point in time accounted for 100% and 95% of revenue for the years ended December 31, 2020 and 2019, respectively. Assurance-type warranties are the only warranties provided by the Company and, as such, Omnitek does not recognize revenue on warranty-related work. Omnitek generally provides a one-year warranty for products that it sells. Warranty claims historically have been insignificant. Pre-contract costs are generally not incurred by the Company. Contract Estimates Accounting for long-term contracts involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, Omnitek estimates the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognizes that profit over the life of the contract. Variable Consideration The transaction price for contracts may include variable consideration, which includes increases to transaction price for approved and unapproved change orders, claims and incentives, and reductions to transaction price for liquidated damages. Variable consideration historically has been insignificant. Disaggregation of Revenue The following table presents Omnitek’s revenues disaggregated by region and product type: December 31, December 31, 2020 2019 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 606,629 - 606,629 $ 450,986 - 450,986 International 269,368 - 269,368 468,949 44,474 513,423 $ 875,997 - 875,997 $ 919,935 44,474 964,409 Filters 324,961 - 324,961 561,560 - 561,560 Components 551,036 - 551,036 358,375 - 358,375 Engineering Services - - - - 44,474 44,474 $ 875,997 - 875,997 $ 919,935 44,474 964,409 |
i. Cost of Good Sold | i. Cost of Goods Sold The Company includes product costs (i.e. material, direct labor and overhead costs), shipping and handling expense, production-related depreciation expense and product license agreement expense in cost of goods sold. |
j. Research and Development | j. Research and Development The Company expenses the costs of researching and developing its products during the period incurred. During the years ended December 31, 2020 and 2019, the Company incurred research and development expenses of $82,052 and $106,916, respectively. |
k. Advertising | k. Advertising The Company follows the policy of charging the costs of advertising to expense as incurred. During the years ended December 31, 2020 and 2019, the Company expensed $-0- and $-0-, respectively. |
l. Provision For Income Taxes | l. Provision for Income Taxes The Company accounts for income taxes in accordance with Accounting Standards Codification Topic 740, Income Taxes ("Topic 740"), which requires the recognition of deferred tax liabilities and assets at currently enacted tax rates for the expected future tax consequences of events that have been included in the financial statements or tax returns. A valuation allowance is recognized to reduce the net deferred tax asset to an amount that is more likely than not to be realized. Topic 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company's financial statements. Topic 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of December 31, 2020, the Company had no accrued interest or penalties related to uncertain tax positions. The Company files an income tax return in the U.S. federal jurisdiction and the state of California. With few exceptions, the Company is no longer subject to U.S. federal, state, and local, or non-U.S. income tax examinations by tax authorities for years before 2012. |
m. Basic and Diluted Loss Per Share | m. Basic and Diluted Loss Per Share The computation of basic earnings per share of common stock is based on the weighted average number of shares outstanding during the periods presented. The computation of fully diluted earnings per share includes common stock equivalents outstanding at the balance sheet date. The Company had 2,882,223 and 2,672,223 stock options and warrants that would have been included in the fully diluted earnings per share as of December 31, 2020 and 2019, respectively. However, the common stock equivalents were not included in the loss per share computation because they are anti-dilutive. |
n. Fair Value Measurements | n. Fair Value Measurements The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: Level 1 – Quoted prices in active markets for identical assets or liabilities; Level 2 – Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and Level 3 – Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. |
o. Stock- Based Compensation | o. Stock-based Compensation The Company recognizes compensation expense for stock-based awards expected to vest on a straight-line basis over the requisite service period of the award based on their grant date fair value. The Company estimates the fair value of stock options using a Black-Scholes option pricing model which requires management to make estimates for certain assumptions regarding risk-free interest rate, expected life of options, expected volatility of stock and expected dividend yield of stock. |
p. Concentration of Risks | p. Concentration of Risks Customers During the year ended December 31, 2020, eight customers accounted for approximately 80% of sales. During the year ended December 31, 2019, seven customers accounted for approximately 74% of sales. Suppliers During the year ended December 31, 2020, eight suppliers accounted for 71 % of products purchased. During the year ended December 31, 2019, five suppliers accounted for 86% of products purchased. |
q. Liquidity and Going Concern | q. Liquidity and Going Concern Historically, the Company has incurred net losses and negative cash flows from operations. As of December 31, 2020, the Company had an accumulated deficit of $21,465,641 and total stockholders’ deficit of ($874,133). At December 31, 2020, the Company had current assets of $961,226 including cash of $60,729, and current liabilities of $1,621,456, resulting in negative working capital of $660,230. For 2020, the Company reported a net loss of $489,712 and net cash used by operating activities of $247,507. Management believes that based on its operating plan, the projected sales for 2021, combined with funds available from its working capital will be sufficient to fund operations for the next twelve months from the date these financial statements were issued. However, there can be no assurance that operations and operating cash flows will continue at the current levels or improve in the near future. Whether, and when, the Company can attain profitability and positive cash flows from operations is uncertain. The Company is also uncertain whether it can raise additional capital. These uncertainties cast significant doubt upon the Company’s ability to continue as a going concern. Our financial statements have been prepared on a going concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of operations. The financial statements do not include any adjustments relating to the recoverability or classification of recorded asset amounts or the amounts or classification of liabilities should we be unable to continue as a going concern. |
r. Recent Accounting Pronouncements | r. Recent Accounting Pronouncements The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements. |
Note 2 - Summary of Significa_3
Note 2 - Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents Omnitek’s revenues disaggregated by region and product type: December 31, December 31, 2020 2019 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 606,629 - 606,629 $ 450,986 - 450,986 International 269,368 - 269,368 468,949 44,474 513,423 $ 875,997 - 875,997 $ 919,935 44,474 964,409 Filters 324,961 - 324,961 561,560 - 561,560 Components 551,036 - 551,036 358,375 - 358,375 Engineering Services - - - - 44,474 44,474 $ 875,997 - 875,997 $ 919,935 44,474 964,409 |
Note 3 - Contract Assets And _2
Note 3 - Contract Assets And Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Schedule of Costs in Excess of Billings | The table below reconciles the net excess billings to the amounts included in the balance sheets at those dates: December 31, December 31, 2020 2019 Contract assets $ 13,221 $ 13,221 Contract liabilities $ (75,000) $ (75,000) Net amount of contract liabilities in excess of contract assets $ (61,779) $ (61,779) |
Note 4 - Inventories_ Schedule
Note 4 - Inventories: Schedule of Inventories (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Schedule of Inventories | Inventories are located in Vista, California and at December 31, 2020 and 2019 consisted of the following: December 31, December 31, 2020 2019 Raw materials $ 917,567 $ 935,834 Finished goods 962,608 1,073,623 Work in progress - 1,800 Inventory in transit - - Allowance for obsolete inventory (1,058,309) (988,892) Total $ 821,866 $ 1,022,365 |
Note 5 - Property and Equipme_2
Note 5 - Property and Equipment: Schedule of Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Schedule of Property and Equipment | Property and equipment at December, 2020 and 2019 consisted of the following: December 31, December 31, 2020 2019 Production equipment $ 64,673 $ 64,673 Computers/Office equipment 28,540 28,540 Tooling equipment 12,380 12,380 Leasehold Improvements 42,451 42,451 Less: accumulated depreciation (146,778) (146,235) Total $ 1,266 $ 1,809 |
Note 7 - Notes Payable - Rela_2
Note 7 - Notes Payable - Related Parties: Schedule of Note Payable Related Party (Table) | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Schedule of Notes Payable Related Party | As of December 31, 2020 and December 31, 2019 Note Payable – Related Party consisted of the following: December 31, December 31, 2020 2019 Note payable, related party, current portion $ 15,000 $ 27,000 Note payable, related party, net of current portion - 15,000 Total $ 15,000 $ 42,000 |
Note 8 - Debt_ Schedule of Note
Note 8 - Debt: Schedule of Note payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Schedule of Note payable | On April 27, 2020 the balance of this note was paid in full. As of December 31, 2020, and December 31, 2019 Note Payable consisted of the following: December 31, December 31, 2020 2019 Notes payable $ - $ 15,000 Total $ - $ 15,000 |
Note 8 - Debt_ Schedule of Conv
Note 8 - Debt: Schedule of Convertible Note payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Schedule of Convertible Note payable | As of December 31, 2020 and December 31, 2019 Debt consisted of the following: December 31, December 31, 2020 2019 Loan payable – SBA EIDL $ 199,000 $ - Loan payable – SBA PPP $ 100,000 $ - Less current portion (69,551) - Total $ 229,449 $ - |
Note 10 - Related Party Trans_2
Note 10 - Related Party Transactions: Schedule of Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Schedule of Related Party Transactions | As of December 31, 2020 and December 31, 2019 the accrued management fees consisted of the following: December 31, December 31, 2020 2019 Amounts due to the president $ 595,158 $ 541,504 Amounts due to the chief financial officer - 165,326 Total $ 595,158 $ 706,830 |
Note 11 - Stockholders' Equity_
Note 11 - Stockholders' Equity: Schedule of Assumptions Used to Estimate the Fair Values of Stock Options Granted (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Schedule of Assumptions Used to Estimate the Fair Values of Stock Options Granted | The following table presents the assumptions used to estimate the fair values of the stock options granted: December 31, 2020 December 31, 2019 Expected volatility 159% 142% Expected dividends 0% 0% Expected term 7 Years 7 Years Risk-free interest rate 0.60% 2.01% |
Note 11 - Stockholders' Equit_2
Note 11 - Stockholders' Equity: Schedule of Stock Options and Warrants, Activity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Schedule of Stock Options and Warrants, Activity | A summary of the status of the options granted at December 31, 2020 and December 31, 2019 and changes during the years then ended is presented below: December 31, December 31, 2020 2019 Weighted-Average Weighted-Average Shares Exercise Price Shares Exercise Price Outstanding at beginning of year 2,940,556 $ 0.25 2,965,556 $ 0.63 Granted 150,000 0.06 450,000 0.08 Exercised - - - - Expired or cancelled (200,000) 0.87 (475,000) 2.49 Outstanding at end of year 2,890,556 0.20 2,940,556 0.25 Exercisable 2,882,223 $ 0.20 2,672,223 $ 0.23 |
Note 11 - Stockholders' Equit_3
Note 11 - Stockholders' Equity: Summary of the Status of the Options and Warrants Outstanding (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Summary of the Status of the Options and Warrants Outstanding | A summary of the status of the options outstanding at December 31, 2020 is presented below: Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life Number Exercisable Weighted-Average Exercise Price $0.01-1.00 2,890,556 3.51 years 2,882,223 $0.20 A summary of the status of the options and warrants outstanding at December 31, 2019 is presented below: Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life Number Exercisable Weighted-Average Exercise Price $0.01 - 1.00 2,890,556 4.18 years 2,622,223 $0.21 $1.01 - 2.00 50,000 0.36 years 50,000 1.13 $0.01 - 2.00 2,940,556 4.12 years 2,672,223 $0.23 |
Note 12 - Income Taxes_ Schedul
Note 12 - Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes for the year ended December 31, 2020 and 2019 consists of the following: December 31, December 31, Federal 2020 2019 Current $ - $ - Deferred - - State Current $ 800 $ 800 Deferred - - Income tax expense $ 800 $ 800 |
Note 12 - Income Taxes_ Sched_2
Note 12 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | Net deferred tax assets consist of the following components as of December 31, 2020 and 2019: December 31, December 31, Deferred tax assets: 2020 2019 Net operating loss carryover $ 7,367,497 6,821,469 Research and development carry forward 131,088 131,088 Inventory reserve 253,994 237,334 Allowance for doubtful accounts 3,600 3,600 Warranty allowance 3,068 3,068 Accrued compensation 142,838 169,639 Deferred tax liabilities: Depreciation (39,927) (47,001) Valuation allowance (7,862,158) (7,319,197) Net deferred tax asset $ - - |
Note 12 - Income Taxes_ Sched_3
Note 12 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Table Text Block Supplement [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The income tax provision differs from the amount of income tax determined by applying the estimated U.S. federal and state income tax rate of 24% as of December 31, 2020 and December 31, 2019 to pretax income from continuing operations for the year ended December 31, 2020 and 2019 due to the following: December 31, December 31, 2020 2019 Book loss $ (117,532) (172,902) Meals and entertainment - 16 State tax deduction - - Deferred rent - - Stock/Options for services 3,709 11,949 Officer’s life ins premium 1,181 1,181 Depreciation (8,265) (8,784) Accrued compensation (26,801) 48,174 Inventory reserve 16,660 58,283 Valuation allowance 262,894 124,964 Net operating loss carryover (131,046) (62,081) Income Tax Expense $ 800 800 |
Note 2 - Summary of Significa_4
Note 2 - Summary of Significant Accounting Policies: d. Accounts Receivable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Allowance For Doubtful Accounts | $ 15,000 | $ 15,000 |
Provision for Doubtful Accounts | $ 0 | $ 0 |
Note 2 - Summary of Significa_5
Note 2 - Summary of Significant Accounting Policies: f. Long-lived Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Asset Impairment Charges | $ 0 | $ 0 |
Note 2 - Summary of Significa_6
Note 2 - Summary of Significant Accounting Policies: g. Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Minimum | |
Property, Plant and Equipment, Useful Life | 3 years |
Maximum | |
Property, Plant and Equipment, Useful Life | 5 years |
Note 2 - Summary of Significa_7
Note 2 - Summary of Significant Accounting Policies: h. Revenue Recognition: Disaggregation of Revenue (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Consumer Products | $ 875,997 | $ 919,935 |
Long-term Contract | 0 | 44,474 |
Revenues | 875,997 | 964,409 |
Domestic | ||
Consumer Products | 606,629 | 450,986 |
Long-term Contract | 0 | 0 |
Revenues | 606,629 | 450,986 |
International | ||
Consumer Products | 269,368 | 468,949 |
Long-term Contract | 0 | 44,474 |
Revenues | 269,368 | 513,423 |
Filters | ||
Consumer Products | 324,961 | 561,560 |
Long-term Contract | 0 | 0 |
Revenues | 324,961 | 561,560 |
Components | ||
Consumer Products | 551,036 | 358,375 |
Long-term Contract | 0 | 0 |
Revenues | 551,036 | 358,375 |
Engineering Services | ||
Consumer Products | 0 | 0 |
Long-term Contract | 0 | 44,474 |
Revenues | $ 0 | $ 44,474 |
Note 2 - Summary of Significa_8
Note 2 - Summary of Significant Accounting Policies: h. Revenue Recognition: Performance Obligations (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Performance Obligations Satisfied Over Time [Member] | ||
Revenue percentage | 0.00% | 5.00% |
Performance Obligations Satisfied at a Point in Time [Member] | ||
Revenue percentage | 100.00% | 95.00% |
Note 2 - Summary of Significa_9
Note 2 - Summary of Significant Accounting Policies: j. Research and Development (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Research and Development | $ 82,052 | $ 106,916 |
Note 2 - Summary of Signific_10
Note 2 - Summary of Significant Accounting Policies: k. Advertising (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Advertising Expense | $ 0 | $ 0 |
Note 2 - Summary of Signific_11
Note 2 - Summary of Significant Accounting Policies: m. Basic and Diluted Loss Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,882,223 | 2,672,223 |
Note 2 - Summary of Signific_12
Note 2 - Summary of Significant Accounting Policies: p. Concentration of Risks (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Supplier Concentration Risk | ||
Concentration Risk, Percentage | 71.00% | 86.00% |
Concentration Risk, Supplier | eight suppliers | five suppliers |
Customer Concentration Risk | ||
Concentration Risk, Customer | eight customers | seven customers |
Concentration Risk, Percentage | 80.00% | 74.00% |
Note 2 - Summary of Signific_13
Note 2 - Summary of Significant Accounting Policies: q. Liquidity and Going Concern (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Text Block [Abstract] | |||
Accumulated deficit | $ (21,465,641) | $ (20,975,929) | |
Total Stockholders' Equity | (874,133) | (430,877) | $ 94,759 |
Total Current Assets | 961,226 | 1,082,497 | |
Cash | 60,729 | ||
Total Current Liabilities | 1,621,456 | 1,530,608 | |
Working Capital | (660,230) | ||
NET LOSS | (489,712) | (720,422) | |
Net Cash Used in Operating Activities | $ (247,507) | $ (83,824) |
Note 3 - Contract Assets And _3
Note 3 - Contract Assets And Liabilities - Net excess billings (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Notes to Financial Statements | ||
Contract assets | $ 13,221 | $ 13,221 |
Contract liabilities | (75,000) | (75,000) |
Net amount of contract liabilities in excess of Contract assets | $ (61,779) | $ (61,779) |
Note 4 - Inventory (Details)
Note 4 - Inventory (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Expense for Obsolete Inventory | $ 69,417 | $ 242,846 |
Note 4 - Inventory_ Schedule of
Note 4 - Inventory: Schedule of Inventory (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Text Block [Abstract] | ||
Raw materials | $ 917,567 | $ 935,834 |
Finished goods | 962,608 | 1,073,623 |
Work in progress | 0 | 1,800 |
Inventory in transit | 0 | 0 |
Allowance for obsolete inventory | (1,058,309) | (988,892) |
Total | $ 821,866 | $ 1,022,365 |
Note 5 - Property and Equipme_3
Note 5 - Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Depreciation expense | $ 543 | $ 567 |
Note 5 - Property and Equipme_4
Note 5 - Property and Equipment: Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Less: accumulated depreciation | $ (146,778) | $ (146,235) |
Total | 1,266 | 1,809 |
Production Equipment | ||
Property, Plant and Equipment, Gross | 64,673 | 64,673 |
Computer Equipment | ||
Property, Plant and Equipment, Gross | 28,540 | 28,540 |
Tools, Dies and Molds | ||
Property, Plant and Equipment, Gross | 12,380 | 12,380 |
Leasehold Improvements | ||
Property, Plant and Equipment, Gross | $ 42,451 | $ 42,451 |
Note 6 - Customer Deposits (Det
Note 6 - Customer Deposits (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Text Block [Abstract] | ||
Customer deposits | $ 276,381 | $ 163,681 |
Note 7 - Notes Payable - Rela_3
Note 7 - Notes Payable - Related Parties (Details) - Notes Payable Related Party - USD ($) | Sep. 11, 2019 | Apr. 29, 2020 | May 28, 2019 | Jan. 19, 2017 |
Board Member | ||||
Promissory note | $ 12,000 | |||
Debt Instrument, Interest Rate During Period | 8.00% | |||
Debt Instrument, Maturity Date | Jun. 30, 2020 | |||
Repayment of promissory note | $ 12,000 | |||
Chief Executive Officer [Member] | ||||
Promissory note | $ 15,000 | $ 15,000 | ||
Debt Instrument, Interest Rate During Period | 5.00% | 5.00% | ||
Debt Instrument, Maturity Date | Dec. 31, 2020 | Jan. 19, 2021 | ||
Repayment of promissory note | $ 15,000 |
Note 7 - Notes Payable - Rela_4
Note 7 - Notes Payable - Related Parties: Schedule of Note Payable Related Party (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Notes to Financial Statements | ||
Note payable, related party, current portion | $ 15,000 | $ 27,000 |
Note payable, related party, net of current portion | 0 | 15,000 |
Total | $ 15,000 | $ 42,000 |
Note 8 - Debt (Details)
Note 8 - Debt (Details) - USD ($) | Dec. 11, 2019 | May 28, 2020 | Apr. 27, 2020 | Apr. 21, 2020 |
Convertible Note Payable [Member] | ||||
Debt Instrument, Face Amount | $ 40,000 | |||
Debt conversion, amount | $ 25,000 | |||
Repayments of note payable | $ 40,000 | |||
SBA EIDL Loan[Member] | ||||
Proceeds from loan | $ 199,000 | |||
Debt Instrument, Description | Interest on the unpaid principal balance of the Note shall accrue at the rate of three and 75/100 percent (3.75%) per annum. Pursuant to the terms of the Note, commencing May 21, 2021 (i.e., twelve (12) months from the Note date), the Company shall make principal and interest payments in the amount of $970 every month, with any unpaid principal and accrued interest due and payable on April 21, 2050. | |||
Payroll Protection Program [Member] | ||||
Proceeds from loan | $ 100,000 | |||
Debt instrument, maturity date | May 22, 2022 | |||
Debt instrument, interest rate | 1.00% |
Note 8 - Debt_ Schedule of No_2
Note 8 - Debt: Schedule of Note payable (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Disclosure Text Block [Abstract] | ||
Notes payable | $ 0 | $ 15,000 |
Total | $ 0 | $ 15,000 |
Note 8 - Debt _ Schedule of Con
Note 8 - Debt : Schedule of Convertible Note Payable (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Less current portion | $ (69,551) | $ 0 |
Total | 229,449 | 0 |
SBA EIDL Loan | ||
Loan payable | 199,000 | 0 |
SBA PPP Loan | ||
Loan payable | $ 100,000 | $ 0 |
Note 9 - Commitments (Details)
Note 9 - Commitments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Deposits | $ 38,610 | $ 2,501 |
Lease payment | 14,161 | |
Security deposit | 14,280 | |
Commitments outstanding balance | 52,529 | |
Inventories | ||
Long-term Purchase Commitment, Amount | 112,801 | 133,938 |
Deposits | 38,610 | 18,645 |
Future Cash Outlays | Inventories | ||
Long-term Purchase Commitment, Amount | $ 151,411 | $ 152,583 |
Note 10 - Related Party Trans_3
Note 10 - Related Party Transactions (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts receivable - related parties | $ 17,345 | $ 16,712 |
Omnitek Engineering Thailand Co. Ltd. | ||
Noncontrolling Interest, Ownership Percentage by Parent | 15.00% | |
Omnitek Peru S.A.C. | ||
Noncontrolling Interest, Ownership Percentage by Parent | 20.00% |
Note 10 - Related Party Trans_4
Note 10 - Related Party Transactions: Schedule of Related Party Transactions (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued management compensation | $ 595,158 | $ 706,830 |
President | ||
Accrued management compensation | 595,158 | 541,504 |
Chief Financial Officer | ||
Accrued management compensation | $ 0 | $ 165,326 |
Note 11 - Stockholders' Equity
Note 11 - Stockholders' Equity (Details) - USD ($) | Jul. 14, 2020 | Sep. 09, 2017 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Oct. 31, 2017 | Sep. 11, 2015 | Aug. 03, 2011 |
Granted | 150,000 | 450,000 | |||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 257 | ||||||||
Shares outstanding | 2,940,556 | 2,890,556 | 2,940,556 | 2,965,556 | |||||
Warrants issued | 0 | 0 | 0 | ||||||
SecuritiesPurchaseAgreement | |||||||||
Stock Issued During Period, Shares, Restricted Stock | 260,324 | 3,579,014 | 500,000 | ||||||
Share Price | $ .1788 | ||||||||
Stock Issued During Period, Value, Restricted Stock | $ 51,000 | $ 640,000 | $ 25,000 | ||||||
Employee Stock Option | |||||||||
Granted | 150,000 | 450,000 | |||||||
Allocated Share-based Compensation Expense | $ 15,456 | $ 49,786 | |||||||
Employee Stock Option | 2011 Long-Term Incentive Plan | |||||||||
Number of Shares Authorized | 1,000,000 | ||||||||
Shares outstanding | 75,000 | ||||||||
Employee Stock Option | 2015 Long-Term Incentive Plan | |||||||||
Number of Shares Authorized | 2,500,000 | ||||||||
Shares outstanding | 1,915,556 | ||||||||
Employee Stock Option | 2017 Long-Term Incentive Plan | |||||||||
Number of Shares Authorized | 5,000,000 | ||||||||
Shares outstanding | 891,667 |
Note 11 - Stockholders' Equit_4
Note 11 - Stockholders' Equity: Schedule of Assumptions Used to Estimate the Fair Values of Stock Options Granted (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Expected volatility | 159.00% | 142.00% |
Expected dividends | 0.00% | 0.00% |
Expected term | 7 years | 7 years |
Risk-free interest rate | 0.60% | 2.01% |
Note 11 - Stockholders' Equit_5
Note 11 - Stockholders' Equity: Schedule of Stock Options and Warrants, Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Outstanding at beginning of year | 2,940,556 | 2,965,556 |
Granted | 150,000 | 450,000 |
Exercised | 0 | 0 |
Expired or cancelled | (200,000) | (475,000) |
Outstanding at end of year | 2,890,556 | 2,940,556 |
Exercisable | 2,882,223 | 2,672,223 |
Outstanding, Weighted Average Exercise Price at beginning of year | $ 0.25 | $ 0.63 |
Granted, Weighted Average Exercise Price | 0.06 | 0.08 |
Exercised, Weighted Average Exercise | 0 | 0 |
Expired or cancelled, Weighted Average Exercise Price | 0.87 | 2.49 |
Outstanding, Weighted Average Exercise Price at end of year | 0.20 | 0.25 |
Exercisable, Weighted Average Exercise Price | $ 0.20 | $ 0.23 |
Note 11 - Stockholders' Equit_6
Note 11 - Stockholders' Equity: Summary of the Status of the Options and Warrants Outstanding (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
$0.01 - 1.00 | ||
Number Outstanding | 2,890,556 | 2,890,556 |
Weighted-Average Remaining Contractual Life | 3 years 6 months 3 days | 4 years 2 months 5 days |
Number Exercisable | 2,882,223 | 2,622,223 |
Weighted-Average Exercise Price | $ 0.20 | $ 0.21 |
$1.01 - 2.00 | ||
Number Outstanding | 50,000 | |
Weighted-Average Remaining Contractual Life | 4 months 9 days | |
Number Exercisable | 50,000 | |
Weighted-Average Exercise Price | $ 1.13 | |
$0.01-2.00 | ||
Number Outstanding | 2,940,556 | |
Weighted-Average Remaining Contractual Life | 4 years 1 month 13 days | |
Number Exercisable | 2,672,223 | |
Weighted-Average Exercise Price | $ 0.23 |
Note 12 - Income Taxes (Details
Note 12 - Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Estimated US federal and state income tax rates | 24.00% | 24.00% |
Net Operating Loss Carryforwards | $ 7,367,497 |
Note 12 - Income Taxes_ Sched_4
Note 12 - Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Federal | ||
Current | $ 0 | $ 0 |
Deferred | 0 | 0 |
State | ||
Current | 800 | 800 |
Deferred | 0 | 0 |
Income Tax Expense (Benefit), Total | $ 800 | $ 800 |
Note 12 - Income Taxes_ Sched_5
Note 12 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Net operating loss carryover | $ 7,367,497 | $ 6,821,469 |
Research and development carry forward | 131,088 | 131,088 |
Inventory reserve | 253,994 | 237,334 |
Allowance for doubtful accounts | 3,600 | 3,600 |
Warranty allowance | 3,068 | 3,068 |
Accrued compensation | 142,838 | 169,639 |
Deferred tax liabilities: | ||
Depreciation | (39,927) | (47,001) |
Valuation allowance | (7,862,158) | (7,319,197) |
Net deferred tax asset | $ 0 | $ 0 |
Note 12 - Income Taxes_ Sched_6
Note 12 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Text Block [Abstract] | ||
Book loss | $ (117,532) | $ (172,902) |
Meals and entertainment | 0 | 16 |
State tax deduction | 0 | 0 |
Deferred rent | 0 | 0 |
Stock/Options for services | 3,709 | 11,949 |
Officer's life ins premium | 1,181 | 1,181 |
Depreciation | (8,265) | (8,784) |
Accrued compensation | (26,801) | 48,174 |
Inventory reserve | 16,660 | 58,283 |
Valuation allowance | 262,894 | 124,964 |
Net operating loss carryover | (131,046) | (62,081) |
Income Tax Expense | $ 800 | $ 800 |
Note 13 - Subsequent Events (De
Note 13 - Subsequent Events (Details) - USD ($) | 1 Months Ended | |||||
Jan. 30, 2021 | Jan. 19, 2021 | Mar. 10, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Options issued | 2,890,556 | 2,940,556 | 2,965,556 | |||
Exercise price | $ 0.20 | $ 0.25 | $ 0.63 | |||
Subsequent Event | Chief Executive Officer [Member] | ||||||
Options issued | 300,000 | |||||
Exercise price | $ 0.1155 | |||||
Subsequent Event | Two Independent Directors [Member] | ||||||
Options issued | 50,000 | |||||
Exercise price | $ 0.1050 | |||||
Subsequent Event | Payroll Protection Program [Member] | ||||||
Loan forgiveness, percentage | 100.00% | |||||
Subsequent Event | Chief Executive Officer [Member] | ||||||
Extension fee for related party note payable | $ 15,000 | |||||
Due date | Jan. 19, 2022 |