Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 16, 2021 | |
Details | ||
Registrant CIK | 0001404804 | |
Fiscal Year End | --12-31 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Entity File Number | 000-53955 | |
Entity Registrant Name | OMNITEK ENGINEERING CORP. | |
Entity Incorporation, State or Country Code | CA | |
Entity Tax Identification Number | 33-0984450 | |
Entity Address, Address Line One | 1345 Specialty Drive | |
Entity Address, Address Line Two | #E | |
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 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 21,600,189 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Document Transition Report | false |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash | $ 20,652 | $ 60,729 |
Accounts receivable, net | 5,977 | 9,455 |
Accounts receivable - related parties | 18,553 | 17,345 |
Inventory Net | 764,264 | 821,866 |
Contract assets | 13,221 | 13,221 |
Prepaid expenses | 11,164 | 0 |
Deposits | 33,183 | 38,610 |
Total Current Assets | 867,014 | 961,226 |
Property and equipment, net | 995 | 1,266 |
OTHER ASSETS | ||
Security Deposits | 27,794 | 14,280 |
Total Other Assets | 27,794 | 14,280 |
TOTAL ASSETS | 895,803 | 976,772 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 459,714 | 468,839 |
Accounts payable - related parties | 128,552 | 121,527 |
Accrued management compensation | 611,888 | 595,158 |
Note payable - related party | 15,000 | 15,000 |
Convertible notes payable - related party | 32,600 | 0 |
Contract liabilities | 75,000 | 75,000 |
Current portion, long-term debt | 4,024 | 69,551 |
Customer deposits | 206,810 | 276,381 |
Total Current Liabilities | 1,533,588 | 1,621,456 |
LONG-TERM LIABILITIES | ||
Convertible note payable - related party, net of current portion | 17,400 | 0 |
Loans payable - SBA, net of current portion | 294,650 | 229,449 |
Total Long-term Liabilities | 312,050 | 229,449 |
Total Liabilities | 1,845,638 | 1,850,905 |
STOCKHOLDERS' DEFICIT | ||
Common stock, 125,000,000 shares authorized, no par value, 21,600,189 shares issued and outstanding | 8,578,210 | 8,578,210 |
Additional paid-in capital | 12,027,172 | 12,013,298 |
Accumulated deficit | (21,555,217) | (21,465,641) |
Total Stockholders' Deficit | (949,835) | (874,133) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 895,803 | $ 976,772 |
Condensed Balance Sheets - Pare
Condensed Balance Sheets - Parenthetical - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Details | ||
Common Stock, Shares Authorized | 125,000,000 | 125,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0 | $ 0 |
Common Stock, Shares, Issued | 21,600,189 | 21,600,189 |
Common Stock, Shares, Outstanding | 21,600,189 | 21,600,189 |
Condensed Statements of Operati
Condensed Statements of Operations (unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Details | ||||
Revenues | $ 228,307 | $ 203,967 | $ 446,420 | $ 434,904 |
COST OF GOODS SOLD | 161,572 | 144,860 | 290,883 | 279,980 |
GROSS MARGIN | 66,735 | 59,107 | 155,537 | 154,924 |
OPERATING EXPENSES | ||||
General and administrative | 132,424 | 168,786 | 298,877 | 354,750 |
Research and development | 17,099 | 17,547 | 33,555 | 49,686 |
Depreciation and amortization | 136 | 136 | 271 | 271 |
Total Operating Expenses | 149,659 | 186,469 | 332,703 | 404,707 |
LOSS FROM OPERATIONS | (82,924) | (127,362) | (177,166) | (249,783) |
OTHER INCOME (EXPENSE) | ||||
Other Income | 67 | 274 | 67 | 874 |
Gain on extinguishment of liability | 0 | 0 | 100,655 | 0 |
Interest expense | (5,524) | (5,409) | (12,332) | (10,293) |
Total Other Income (Expense) | (5,457) | (5,135) | 88,390 | (9,419) |
LOSS BEFORE INCOME TAXES | (88,381) | (132,497) | (88,776) | (259,202) |
INCOME TAX EXPENSE | 800 | 0 | 800 | 0 |
NET LOSS | $ (89,181) | $ (132,497) | $ (89,576) | $ (259,202) |
BASIC AND DILUTED LOSS PER SHARE | $ 0 | $ (0.01) | $ 0 | $ (0.01) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING -BASIC AND DILUTED | 21,600,189 | 21,339,865 | 21,600,189 | 21,339,865 |
Condensed Statements of Stockho
Condensed Statements of Stockholders' Equity (Deficit) (unaudited) - USD ($) | Common Stock | Common Stock Subscribed | Additional Paid-in Capital | Retained Earnings | Total |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2019 | $ 8,527,210 | $ 20,000 | $ 11,997,842 | $ (20,975,929) | $ (430,877) |
Shares, Outstanding, Beginning Balance at Dec. 31, 2019 | 21,339,865 | ||||
Adjustments to Additional Paid in Capital, Warrant Issued | $ 0 | 0 | 10,408 | 0 | 10,408 |
Deposit - Stock purchase agreement | 0 | 31,000 | 31,000 | ||
NET LOSS | 0 | 0 | 0 | (126,705) | (126,705) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2020 | $ 8,527,210 | 51,000 | 12,008,250 | (21,102,634) | (516,174) |
Shares, Outstanding, Ending Balance at Mar. 31, 2020 | 21,339,865 | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2019 | $ 8,527,210 | 20,000 | 11,997,842 | (20,975,929) | (430,877) |
Shares, Outstanding, Beginning Balance at Dec. 31, 2019 | 21,339,865 | ||||
NET LOSS | (259,202) | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2020 | $ 8,527,210 | 51,000 | 12,009,920 | (21,235,131) | (647,001) |
Shares, Outstanding, Ending Balance at Jun. 30, 2020 | 21,339,865 | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Mar. 31, 2020 | $ 8,527,210 | 51,000 | 12,008,250 | (21,102,634) | (516,174) |
Shares, Outstanding, Beginning Balance at Mar. 31, 2020 | 21,339,865 | ||||
Adjustments to Additional Paid in Capital, Warrant Issued | $ 0 | 0 | 1,670 | 0 | 1,670 |
NET LOSS | 0 | 0 | 0 | (132,497) | (132,497) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2020 | $ 8,527,210 | 51,000 | 12,009,920 | (21,235,131) | (647,001) |
Shares, Outstanding, Ending Balance at Jun. 30, 2020 | 21,339,865 | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2020 | $ 8,578,210 | 0 | 12,013,298 | (21,465,641) | (874,133) |
Shares, Outstanding, Beginning Balance at Dec. 31, 2020 | 21,600,189 | ||||
Adjustments to Additional Paid in Capital, Warrant Issued | $ 0 | 0 | 11,283 | 0 | 11,283 |
NET LOSS | 0 | 0 | 0 | (395) | (395) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2021 | $ 8,578,210 | 0 | 12,024,581 | (21,466,036) | (863,245) |
Shares, Outstanding, Ending Balance at Mar. 31, 2021 | 21,600,189 | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2020 | $ 8,578,210 | 0 | 12,013,298 | (21,465,641) | (874,133) |
Shares, Outstanding, Beginning Balance at Dec. 31, 2020 | 21,600,189 | ||||
NET LOSS | (89,576) | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2021 | $ 8,878,210 | 51,000 | 12,027,172 | (21,555,217) | (949,835) |
Shares, Outstanding, Ending Balance at Jun. 30, 2021 | 21,600,189 | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Mar. 31, 2021 | $ 8,578,210 | 0 | 12,024,581 | (21,466,036) | (863,245) |
Shares, Outstanding, Beginning Balance at Mar. 31, 2021 | 21,600,189 | ||||
Adjustments to Additional Paid in Capital, Warrant Issued | $ 0 | 0 | 2,591 | 0 | 2,591 |
NET LOSS | 0 | 0 | 0 | (89,181) | (89,181) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2021 | $ 8,878,210 | $ 51,000 | $ 12,027,172 | $ (21,555,217) | $ (949,835) |
Shares, Outstanding, Ending Balance at Jun. 30, 2021 | 21,600,189 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
OPERATING ACTIVITIES | ||
NET LOSS | $ (89,576) | $ (259,202) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 271 | 271 |
Options issued for services | 13,874 | 12,078 |
Gain on extinguishment of liability | (100,655) | 0 |
Change in Inventory reserve | (88,956) | 50,053 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 3,478 | (28,698) |
Accounts receivable-related parties | (1,208) | 30 |
Prepaid expenses | (11,164) | 0 |
Deposits | (8,088) | (7,983) |
Inventory | 146,558 | 36,002 |
Accounts payable and accrued expenses | (8,469) | (40,949) |
Customer deposits | (69,571) | 6,480 |
Accounts payable-related parties | 7,025 | (14,094) |
Accrued management compensation | 16,730 | 44,808 |
Net Cash Used in Operating Activities | (189,751) | (201,204) |
Net Cash Used in Investing Activities | 0 | 0 |
FINANCING ACTIVITIES | ||
Payments on convertible note payable | 0 | (15,000) |
Payments on note payable | (326) | 0 |
Proceeds from convertible note payable-related party | 50,000 | 0 |
Payments on related party note payable | 0 | (27,000) |
Proceeds from stock subscription | 0 | 31,000 |
Proceeds from loans payable - SBA | 100,000 | 299,000 |
Net Cash Provided by Financing Activities | 149,674 | 288,000 |
NET CHANGE IN CASH | (40,077) | 86,796 |
CASH AT BEGINNING OF YEAR | 60,729 | 20,236 |
CASH AT END OF PERIOD | 20,652 | 107,032 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS | ||
Interest | 8,716 | 11,857 |
Income taxes | $ 800 | $ 0 |
NOTE 1 - CONDENSED FINANCIAL ST
NOTE 1 - CONDENSED FINANCIAL STATEMENTS | 6 Months Ended |
Jun. 30, 2021 | |
Notes | |
NOTE 1 - CONDENSED FINANCIAL STATEMENTS | NOTE 1 - CONDENSED FINANCIAL STATEMENTS The accompanying condensed financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2021 and for all periods presented herein, have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2020 audited financial statements. The results of operations for the periods ended June 30, 2021 and 2020 are not necessarily indicative of the operating results for the full years. In December 2019, a novel strain of coronavirus disease (“COVID-19”) was first reported in Wuhan, China. Less than four months later, on March 11, 2020, the World Health Organization declared COVID-19 a pandemic. The extent of COVID-19’s impact on the Company’s operational and financial performance will depend on future developments, including the duration, spread and intensity of the pandemic, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. As a result, it is not currently possible to ascertain the overall impact of COVID-19 on the Company’s business. However, if the pandemic continues to evolve into a severe worldwide health crisis, the disease could have a material adverse effect on the Company’s business, results of operations, financial condition and cash flows. |
NOTE 2 - SIGNIFICANT ACCOUNTING
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2021 | |
Notes | |
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES Use of Estimates 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. 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 NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) claims, including those changes arising from contract penalty provisions and final contract settlements, may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good 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 0% of revenue for the periods ended June 30, 2021 and 2020, 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 100% of revenue for the periods ended June 30, 2021 and 2020, 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 Variable Consideration NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Disaggregation of Revenue The following table presents Omnitek’s revenues disaggregated by region and product type for the three months ended June 30, 2021 and June 30, 2020: For the three months ended June 30, For the three months ended June 30, 2021 2020 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 101,088 - 101,088 187,810 - 187,810 International 127,220 - 127,220 16,157 - 16,157 $ 228,307 - 228,307 203,967 - 203,967 Filters $ 106,051 - 106,051 52,001 - 52,001 Components 122,257 - 122,257 151,966 - 151,966 Engineering Services - - - - - - $ 228,307 - 228,307 203,967 - 203,967 The following table presents Omnitek’s revenues disaggregated by region and product type for the six months ended June 30, 2021 and June 30, 2020: For the six months ended June 30, For the six months ended June 30, 2021 2020 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 233,869 - 233,869 366,037 - 366,037 International 212,551 - 212,551 68,867 - 68,867 $ 446,420 - 446,420 434,904 - 434,904 Filters $ 210,407 - 210,407 163,942 - 163,942 Components 227,543 - 227,543 270,962 - 270,962 Engineering Services 8,470 - 8,470 - - - $ 446,420 - 446,420 434,904 - 434,904 NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Inventory Inventory is stated at the lower of cost or market. The Company’s inventory consists of finished goods and raw material and is located in Vista, California, consisting of the following: June 30, December 31, Location : Vista, CA 2021 2020 Raw materials $ 849,473 $ 917,567 Finished goods 884,145 962,608 Work in progress - - Allowance for obsolete inventory (969,354) (1,058,309) Total $ 764,264 $ 821,866 The Company has established an allowance for obsolete inventory. Expense for obsolete inventory was $50,542 and $50,053, for the periods ended June 30, 2021 and June 30, 2020, respectively. Property and Equipment Property and equipment at June 30, 2021 and December 31, 2020 consisted of the following: June 30, December 31, 2021 2020 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 (147,049) (146,778) Total $ 995 $ 1,266 Depreciation expense for the periods ended June 30, 2021 and June 30, 2020 was $271 and $271, respectively. 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 3,023,889 and 2,807,223 stock options that would have been included in the fully diluted earnings per share as of June 30, 2021 and June 30, 2020, respectively. However, the common stock equivalents were not included in the computation of the loss per share computation because they are anti-dilutive. 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. NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 June 30, 2021 and 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. Liquidity and Going Concern Historically, the Company has incurred net losses and negative cash flows from operations. As of June 30, 2021, the Company had an accumulated deficit of $21,555,217 and total stockholders’ deficit of $(949,835). At June 30, 2021, the Company had current assets of $867,014 including cash of $20,652, and current liabilities of $1,533,588, resulting in negative working capital of $(666,574). For the six months ended June 30, 2021, the Company reported a net loss of $89,576 and net cash used in operating activities of $189,751. 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. 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 for one year from the issuance of these financial statements. 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. 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 | 6 Months Ended |
Jun. 30, 2021 | |
Notes | |
NOTE 3 - CONTRACT ASSETS AND LIABILITIES | NOTE 3 – CONTRACT ASSETS AND LIABILITIES 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: June 30, December 31, 2021 2020 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 - COMMITMENTS
NOTE 4 - COMMITMENTS | 6 Months Ended |
Jun. 30, 2021 | |
Notes | |
NOTE 4 - COMMITMENTS | NOTE 4 – COMMITMENTS 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. 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 June 30, 2021 the outstanding balance of back rent, included in accounts payable, was $42,529 and the security deposit of $14,000 remained the same. In agreement with the landlord, the Company vacated the premises effective July 15, 2021. See Note 9 regarding the lease entered into by the Company effective July 1, 2021. |
NOTE 5 - RELATED PARTY TRANSACT
NOTE 5 - RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2021 | |
Notes | |
NOTE 5 - RELATED PARTY TRANSACTIONS | NOTE 5 - RELATED PARTY TRANSACTIONS Accounts Receivable – Related Parties As of June 30, 2021 and December 31, 2020, the Company was owed $18,553 (net of allowance for doubtful accounts of $6,714) and $17,345, respectively, by an entity controlled by the Company’s CEO for the purchase of products and services. Accounts Payable – Related Parties The Company regularly incurs expenses that are paid to related parties and purchases goods and services from related parties. As of June 30, 2021 and December 31, 2020, the Company owed a board member’s company for such expenses, goods and services in the amounts of $128,552 and $121,527, respectively. Accrued Management Compensation For the periods ended June 30, 2021 and December 31, 2020, the Company’s president was due amounts for services performed for the Company. As of June 30, 2021 and December 31, 2020 the accrued management fees consisted of the following: June 30, December 31, 2021 2020 Amounts due to the president $ 611,888 595,158 Total $ 611,888 595,158 |
NOTE 6 - NOTES PAYABLE - RELATE
NOTE 6 - NOTES PAYABLE - RELATED PARTY | 6 Months Ended |
Jun. 30, 2021 | |
Notes | |
NOTE 6 - NOTES PAYABLE - RELATED PARTY | NOTE 6 – NOTES PAYABLE - RELATED PARTIES Convertible Notes – Related Parties On June 4, 2021 the Company issued a convertible promissory note for $30,000 to its CEO. The note has an annual interest rate of 8% and is unsecured. The note calls for monthly installment payments of $1,050 commencing on July 4, 2021. The unpaid principal amount of the note and all unpaid accrued interest is due and payable on or before June 4, 2023. The note has a conversion feature, wherein, at the maturity date the lender may convert the remaining principal balance and any unpaid accrued interest into shares of the Company’s common stock. The number of shares of common stock to be issued upon such conversion shall be equal to the quotient obtained by dividing (i) the remaining unpaid principal balance and any unpaid accrued interest of this note by (ii) 90% of the average closing price of the common stock of the Company, for the five (5) trading days (between days 15 and 10 days) before the maturity date. Due to this provision, the Company considered whether the embedded conversion option qualifies for derivative accounting under ASC 815-15 “Derivatives and Hedging.” As the note isn’t convertible until maturity, no derivative liability was recognized as of June 30, 2021. On June 4, 2021 the Company issued a convertible promissory note for $20,000 to a board member. The note has an annual interest rate of 8% and is unsecured. The principal amount of the note and all accrued interest is due and payable on or before December 4, 2021. The note has a conversion feature, wherein, at the maturity date the lender may convert the remaining principal balance and any unpaid accrued interest into shares of the Company’s common stock. The number of shares of common stock to be issued upon such conversion shall be equal to the quotient obtained by dividing (i) the remaining unpaid principal balance and any unpaid accrued interest of this note by (ii) 90% of the average closing price of the common stock of the Company, for the five (5) trading days (between days 15 and 10 days) before the maturity date. Due to this provision, the Company considered whether the embedded conversion option qualifies for derivative accounting under ASC 815-15 “Derivatives and Hedging.” As the note isn’t convertible until maturity, no derivative liability was recognized as of June 30, 2021. As of June 30, 2021 and December 31, 2020 Convertible Notes – Related Party consisted of the following: June 30, December 31, 2021 2020 Convertible Note payable, related parties $ 50,000 - Less current portion (32,600) - Total $ 17,400 - Notes Payable – Related Parties On January 19, 2017, the Company issued a promissory note for $15,000 to the Company’s CEO. 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, 2022. As of June 30, 2021 and December 31, 2020 Notes Payable – Related Party consisted of the following: June 30, December 31, 2021 2020 Note payable, related party $ 15,000 $ 15,000 Total $ 15,000 $ 15,000 |
NOTE 7 - DEBT
NOTE 7 - DEBT | 6 Months Ended |
Jun. 30, 2021 | |
Notes | |
NOTE 7 - DEBT | NOTE 7 – DEBT 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. In April 2021, the SBA announced that they were extending the first payment due date for all loans until 2022. For COVID-19 EIDL loans made in calendar year 2020, the first payment due date is extended until 24 months from the date of the note. 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 was scheduled to mature on May 22, 2022 but allowed for forgiveness if certain conditions were met. On January 30, 2021, the Company was notified by the SBA that the loan had been forgiven in its entirety, including outstanding principal of $100,000 and accrued interest of $655. On March 3, 2021 the Company received funds pursuant to a 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. The loan carried an interest rate of 1.00%. 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 SBA and Department of the Treasury. As of June 30, 2021, and December 31, 2020 Debt consisted of the following: June 30, December 31, 2021 2020 Loan payable – SBA EIDL $ 198,674 199,000 Loan payable – SBA PPP 100,000 100,000 Less current portion (4,024) (69,551) Total $ 243,026 229,449 |
NOTE 8 - STOCK OPTIONS AND WARR
NOTE 8 - STOCK OPTIONS AND WARRANTS | 6 Months Ended |
Jun. 30, 2021 | |
Notes | |
NOTE 8 - STOCK OPTIONS AND WARRANTS | NOTE 8 - STOCK OPTIONS During the six months ended June 30, 2021 and 2020, the Company granted 400,000 and 150,000 options for services, respectively. During the six months ended June 30, 2021 and 2020, the Company recognized expense of $13,874 and $12,078, respectively, for options that vested during the periods pursuant to ASC Topic 718. Total remaining amount of compensation expense to be recognized in future periods is $27,983. 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 and Non-Qualified Stock Options to employees and consultants at its discretion. As of June 30, 2021 the Company has a total of 75,000 options issued under the 2011 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 June 30, 2021 the Company has a total of 1,915,556 options issued under the 2015 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 June 30, 2021, the Company has a total of 1,008,333 options issued under the 2017 Plan. 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: June 30, 2021 June 30, 2020 Expected volatility 201% 159% Expected dividends 0% 0% Expected term 7 Years 7 Years Risk-free interest rate 1.20% 0.60% NOTE 8 - STOCK OPTIONS (CONTINUED) A summary of the status of the options granted at June 30, 2021 and December 31, 2020 and changes during the periods then ended is presented below: June 30, December 31, 2021 2020 Weighted-Average Weighted-Average Shares Exercise Price Shares Exercise Price Outstanding at beginning of year 2,890,556 0.20 2,940,556 0.25 Granted 400,000 0.11 150,000 0.06 Exercised - - - - Expired or cancelled - - (200,000) 0.87 Outstanding at end of period 3,290,556 0.19 2,890,556 0.20 Exercisable 3,023,889 0.19 2,882,223 0.20 A summary of the status of the options outstanding at June 30, 2021 is presented below: Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life Number Exercisable Weighted-Average Exercise Price $ 0.01-0.99 3,290,556 3.46 years 3,023,889 0.19 |
NOTE 9 - SUBSEQUENT EVENT
NOTE 9 - SUBSEQUENT EVENT | 6 Months Ended |
Jun. 30, 2021 | |
Notes | |
NOTE 9 - SUBSEQUENT EVENT | NOTE 9 - SUBSEQUENT EVENTS Effective July 1, 2021, the Company entered into a lease for the premises located at 1345 Specialty Drive, Vista, California, consisting of Suites D & E, containing approximately 11,751 square feet of rentable area. The lease commences July 1, 2021 and expires on June 30, 2026. The monthly base rent under the lease is $9,988 per month and monthly operating expenses during the term of the lease, subject to adjustment per the lease, of $1,175 per month. |
NOTE 2 - SIGNIFICANT ACCOUNTI_2
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Use of Estimates (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Policies | |
Use of Estimates | Use of Estimates 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. |
NOTE 2 - SIGNIFICANT ACCOUNTI_3
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Revenue Recognition (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Policies | |
Revenue Recognition | 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 NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) claims, including those changes arising from contract penalty provisions and final contract settlements, may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good 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 0% of revenue for the periods ended June 30, 2021 and 2020, 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 100% of revenue for the periods ended June 30, 2021 and 2020, 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 Variable Consideration NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Disaggregation of Revenue The following table presents Omnitek’s revenues disaggregated by region and product type for the three months ended June 30, 2021 and June 30, 2020: For the three months ended June 30, For the three months ended June 30, 2021 2020 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 101,088 - 101,088 187,810 - 187,810 International 127,220 - 127,220 16,157 - 16,157 $ 228,307 - 228,307 203,967 - 203,967 Filters $ 106,051 - 106,051 52,001 - 52,001 Components 122,257 - 122,257 151,966 - 151,966 Engineering Services - - - - - - $ 228,307 - 228,307 203,967 - 203,967 The following table presents Omnitek’s revenues disaggregated by region and product type for the six months ended June 30, 2021 and June 30, 2020: For the six months ended June 30, For the six months ended June 30, 2021 2020 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 233,869 - 233,869 366,037 - 366,037 International 212,551 - 212,551 68,867 - 68,867 $ 446,420 - 446,420 434,904 - 434,904 Filters $ 210,407 - 210,407 163,942 - 163,942 Components 227,543 - 227,543 270,962 - 270,962 Engineering Services 8,470 - 8,470 - - - $ 446,420 - 446,420 434,904 - 434,904 |
NOTE 2 - SIGNIFICANT ACCOUNTI_4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Inventory (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Policies | |
Inventory | Inventory Inventory is stated at the lower of cost or market. The Company’s inventory consists of finished goods and raw material and is located in Vista, California, consisting of the following: June 30, December 31, Location : Vista, CA 2021 2020 Raw materials $ 849,473 $ 917,567 Finished goods 884,145 962,608 Work in progress - - Allowance for obsolete inventory (969,354) (1,058,309) Total $ 764,264 $ 821,866 The Company has established an allowance for obsolete inventory. Expense for obsolete inventory was $50,542 and $50,053, for the periods ended June 30, 2021 and June 30, 2020, respectively. |
NOTE 2 - SIGNIFICANT ACCOUNTI_5
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Property and Equipment (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Policies | |
Property and Equipment | Property and Equipment Property and equipment at June 30, 2021 and December 31, 2020 consisted of the following: June 30, December 31, 2021 2020 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 (147,049) (146,778) Total $ 995 $ 1,266 Depreciation expense for the periods ended June 30, 2021 and June 30, 2020 was $271 and $271, respectively. |
NOTE 2 - SIGNIFICANT ACCOUNTI_6
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Basic and Diluted Loss per Share (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Policies | |
Basic and Diluted Loss per Share | 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 3,023,889 and 2,807,223 stock options that would have been included in the fully diluted earnings per share as of June 30, 2021 and June 30, 2020, respectively. However, the common stock equivalents were not included in the computation of the loss per share computation because they are anti-dilutive. |
NOTE 2 - SIGNIFICANT ACCOUNTI_7
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Income Taxes (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Policies | |
Income Taxes | 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. NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 June 30, 2021 and 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. |
NOTE 2 - SIGNIFICANT ACCOUNTI_8
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Liquidity and Going Concern (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Policies | |
Liquidity and Going Concern | Liquidity and Going Concern Historically, the Company has incurred net losses and negative cash flows from operations. As of June 30, 2021, the Company had an accumulated deficit of $21,555,217 and total stockholders’ deficit of $(949,835). At June 30, 2021, the Company had current assets of $867,014 including cash of $20,652, and current liabilities of $1,533,588, resulting in negative working capital of $(666,574). For the six months ended June 30, 2021, the Company reported a net loss of $89,576 and net cash used in operating activities of $189,751. 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. 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 for one year from the issuance of these financial statements. 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. |
NOTE 2 - SIGNIFICANT ACCOUNTI_9
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Policies | |
Recent Accounting Pronouncements | 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 - SIGNIFICANT ACCOUNT_10
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Revenue Recognition: Schedule of Disaggregation of Revenue (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Tables/Schedules | |
Schedule of Disaggregation of Revenue | The following table presents Omnitek’s revenues disaggregated by region and product type for the three months ended June 30, 2021 and June 30, 2020: For the three months ended June 30, For the three months ended June 30, 2021 2020 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 101,088 - 101,088 187,810 - 187,810 International 127,220 - 127,220 16,157 - 16,157 $ 228,307 - 228,307 203,967 - 203,967 Filters $ 106,051 - 106,051 52,001 - 52,001 Components 122,257 - 122,257 151,966 - 151,966 Engineering Services - - - - - - $ 228,307 - 228,307 203,967 - 203,967 The following table presents Omnitek’s revenues disaggregated by region and product type for the six months ended June 30, 2021 and June 30, 2020: For the six months ended June 30, For the six months ended June 30, 2021 2020 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 233,869 - 233,869 366,037 - 366,037 International 212,551 - 212,551 68,867 - 68,867 $ 446,420 - 446,420 434,904 - 434,904 Filters $ 210,407 - 210,407 163,942 - 163,942 Components 227,543 - 227,543 270,962 - 270,962 Engineering Services 8,470 - 8,470 - - - $ 446,420 - 446,420 434,904 - 434,904 |
NOTE 2 - SIGNIFICANT ACCOUNT_11
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Inventory: Schedule Of Inventory Current (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Tables/Schedules | |
Schedule Of Inventory Current | June 30, December 31, Location : Vista, CA 2021 2020 Raw materials $ 849,473 $ 917,567 Finished goods 884,145 962,608 Work in progress - - Allowance for obsolete inventory (969,354) (1,058,309) Total $ 764,264 $ 821,866 |
NOTE 2 - SIGNIFICANT ACCOUNT_12
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Property and Equipment: Property Plant And Equipment (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Tables/Schedules | |
Property Plant And Equipment | June 30, December 31, 2021 2020 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 (147,049) (146,778) Total $ 995 $ 1,266 |
NOTE 3 - CONTRACT ASSETS AND _2
NOTE 3 - CONTRACT ASSETS AND LIABILITIES: Long-Term Contract or Program Disclosure (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Tables/Schedules | |
Long-Term Contract or Program Disclosure | June 30, December 31, 2021 2020 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 5 - RELATED PARTY TRANSA_2
NOTE 5 - RELATED PARTY TRANSACTIONS: Schedule Of Related Party Transactions Table (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Tables/Schedules | |
Schedule Of Related Party Transactions Table | June 30, December 31, 2021 2020 Amounts due to the president $ 611,888 595,158 Total $ 611,888 595,158 |
NOTE 6 - NOTES PAYABLE - RELA_2
NOTE 6 - NOTES PAYABLE - RELATED PARTY: Schedule of Convertible Notes - Related Parties (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Tables/Schedules | |
Schedule of Convertible Notes - Related Parties | June 30, December 31, 2021 2020 Convertible Note payable, related parties $ 50,000 - Less current portion (32,600) - Total $ 17,400 - |
NOTE 6 - NOTES PAYABLE - RELA_3
NOTE 6 - NOTES PAYABLE - RELATED PARTY: Schedule Of Notes Payable Related Party table (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Tables/Schedules | |
Schedule Of Notes Payable Related Party table | June 30, December 31, 2021 2020 Note payable, related party $ 15,000 $ 15,000 Total $ 15,000 $ 15,000 |
NOTE 7 - DEBT_ Schedule of Debt
NOTE 7 - DEBT: Schedule of Debt (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Tables/Schedules | |
Schedule of Debt | As of June 30, 2021, and December 31, 2020 Debt consisted of the following: June 30, December 31, 2021 2020 Loan payable – SBA EIDL $ 198,674 199,000 Loan payable – SBA PPP 100,000 100,000 Less current portion (4,024) (69,551) Total $ 243,026 229,449 |
NOTE 8 - STOCK OPTIONS AND WA_2
NOTE 8 - STOCK OPTIONS AND WARRANTS: The following table presents the assumptions used to estimate the fair values of the stock options granted (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Tables/Schedules | |
The following table presents the assumptions used to estimate the fair values of the stock options granted | The following table presents the assumptions used to estimate the fair values of the stock options granted: June 30, 2021 June 30, 2020 Expected volatility 201% 159% Expected dividends 0% 0% Expected term 7 Years 7 Years Risk-free interest rate 1.20% 0.60% |
NOTE 8 - STOCK OPTIONS AND WA_3
NOTE 8 - STOCK OPTIONS AND WARRANTS: Schedule Of Share Based Compensation Stock Options Activity (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Tables/Schedules | |
Schedule Of Share Based Compensation Stock Options Activity | June 30, December 31, 2021 2020 Weighted-Average Weighted-Average Shares Exercise Price Shares Exercise Price Outstanding at beginning of year 2,890,556 0.20 2,940,556 0.25 Granted 400,000 0.11 150,000 0.06 Exercised - - - - Expired or cancelled - - (200,000) 0.87 Outstanding at end of period 3,290,556 0.19 2,890,556 0.20 Exercisable 3,023,889 0.19 2,882,223 0.20 |
NOTE 8 - STOCK OPTIONS AND WA_4
NOTE 8 - STOCK OPTIONS AND WARRANTS: Summary of the Status of the Options (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Tables/Schedules | |
Summary of the Status of the Options | Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life Number Exercisable Weighted-Average Exercise Price $ 0.01-0.99 3,290,556 3.46 years 3,023,889 0.19 |
NOTE 2 - SIGNIFICANT ACCOUNT_13
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Revenue Recognition (Details) | 3 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Transferred over Time | ||
Concentration Risk, Percentage | 0.00% | 0.00% |
Transferred at Point in Time | ||
Concentration Risk, Percentage | 100.00% | 100.00% |
NOTE 2 - SIGNIFICANT ACCOUNT_14
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Revenue Recognition: Schedule of Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Geographic Distribution, Domestic | ||||
Products | $ 101,088 | $ 187,810 | $ 233,869 | $ 366,037 |
Contract | 0 | 0 | 0 | 0 |
Revenues | 101,088 | 187,810 | 233,869 | 366,037 |
Geographic Distribution, Foreign | ||||
Products | 127,220 | 16,157 | 212,551 | 68,867 |
Contract | 0 | 0 | 0 | 0 |
Revenues | 127,220 | 16,157 | 212,551 | 68,867 |
Filters | ||||
Products | 106,051 | 52,001 | 210,407 | 163,942 |
Contract | 0 | 0 | 0 | 0 |
Revenues | 106,051 | 52,001 | 210,407 | 163,942 |
Components | ||||
Products | 122,257 | 151,966 | 227,543 | 270,962 |
Contract | 0 | 0 | 0 | 0 |
Revenues | 122,257 | 151,966 | 227,543 | 270,962 |
Engineering Services | ||||
Products | 0 | 0 | 8,470 | 0 |
Contract | 0 | 0 | 0 | 0 |
Revenues | 0 | 0 | 8,470 | 0 |
Products | 228,307 | 203,967 | 446,420 | 434,904 |
Contract | 0 | 0 | 0 | 0 |
Revenues | $ 228,307 | $ 203,967 | $ 446,420 | $ 434,904 |
NOTE 2 - SIGNIFICANT ACCOUNT_15
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Inventory: Schedule Of Inventory Current (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Details | ||
Raw materials | $ 849,473 | $ 917,567 |
Finished goods | 884,145 | 962,608 |
Work in progress | 0 | 0 |
Allowance for obsolete inventory | (969,354) | (1,058,309) |
Inventory Net | $ 764,264 | $ 821,866 |
NOTE 2 - SIGNIFICANT ACCOUNT_16
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Inventory (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Details | ||
Inventory Reserve Adjustment | $ 50,542 | $ 50,053 |
NOTE 2 - SIGNIFICANT ACCOUNT_17
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Property and Equipment: Property Plant And Equipment (Details) - USD ($) | Jun. 30, 2021 | Jun. 30, 2020 |
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 |
Land and Land Improvements | ||
Property Plant And Equipment Gross | 42,451 | 42,451 |
Property Plant And Equipment Gross | 995 | 1,266 |
Less: accumulated depreciation | $ (147,049) | $ (146,778) |
NOTE 2 - SIGNIFICANT ACCOUNT_18
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Property and Equipment (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Details | ||
Depreciation | $ 271 | $ 271 |
NOTE 2 - SIGNIFICANT ACCOUNT_19
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Basic and Diluted Loss per Share (Details) - shares | 3 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Details | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,023,889 | 2,807,223 |
NOTE 2 - SIGNIFICANT ACCOUNT_20
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Liquidity and Going Concern (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Details | |||||||
Accumulated deficit | $ 21,555,217 | $ 21,555,217 | $ 21,465,641 | ||||
Total Stockholders' Deficit | (949,835) | (949,835) | (874,133) | ||||
Total Current Assets | 867,014 | 867,014 | 961,226 | ||||
Cash | 20,652 | 20,652 | 60,729 | ||||
Total Current Liabilities | 1,533,588 | 1,533,588 | $ 1,621,456 | ||||
Working Capital | (666,574) | (666,574) | |||||
NET LOSS | $ 89,181 | $ 395 | $ 132,497 | $ 126,705 | 89,576 | $ 259,202 | |
Net Cash Used in Operating Activities | $ 189,751 | $ 201,204 |
NOTE 3 - CONTRACT ASSETS AND _3
NOTE 3 - CONTRACT ASSETS AND LIABILITIES: Long-Term Contract or Program Disclosure (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Details | ||
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 - COMMITMENTS (Details)
NOTE 4 - COMMITMENTS (Details) | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Details | |
Lease Expiration Date | Aug. 31, 2020 |
Operating Lease, Payments | $ 14,161 |
Other Commitment | 42,529 |
Security Deposit | $ 14,000 |
NOTE 5 - RELATED PARTY TRANSA_3
NOTE 5 - RELATED PARTY TRANSACTIONS (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Details | ||
Accounts Receivable, Related Parties, Current | $ 18,553 | $ 17,345 |
Accounts Receivable, Allowance for Credit Loss | 6,714 | |
Accounts payable - related parties | $ 128,552 | $ 121,527 |
NOTE 5 - RELATED PARTY TRANSA_4
NOTE 5 - RELATED PARTY TRANSACTIONS: Schedule Of Related Party Transactions Table (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 |
President | |||
Accrued management compensation | $ 611,888 | $ 595,158 | |
Accrued management compensation | $ 611,888 | $ 595,158 | $ 595,158 |
NOTE 6 - NOTES PAYABLE - RELA_4
NOTE 6 - NOTES PAYABLE - RELATED PARTY (Details) - USD ($) | Jun. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Convertible Note payable, related parties | $ 50,000 | $ 50,000 | $ 0 |
Debt Instrument, Interest Rate During Period | 5.00% | ||
Debt Conversion, Original Debt, Amount | $ 15,000 | ||
Chief Executive Officer | |||
Convertible Note payable, related parties | $ 30,000 | 30,000 | |
Debt Instrument, Interest Rate During Period | 8.00% | ||
Board Member | |||
Convertible Note payable, related parties | $ 20,000 | $ 20,000 | |
Debt Instrument, Interest Rate During Period | 8.00% |
NOTE 6 - NOTES PAYABLE - RELA_5
NOTE 6 - NOTES PAYABLE - RELATED PARTY: Schedule of Convertible Notes - Related Parties (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Details | ||
Convertible Note payable, related parties | $ 50,000 | $ 0 |
Convertible notes payable - related party | (32,600) | 0 |
Convertible note payable - related party, net of current portion | $ 17,400 | $ 0 |
NOTE 6 - NOTES PAYABLE - RELA_6
NOTE 6 - NOTES PAYABLE - RELATED PARTY: Schedule Of Notes Payable Related Party table (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Details | ||
Note payable - related party | $ 15,000 | $ 15,000 |
Notes Payable, Related Parties | $ 15,000 | $ 15,000 |
NOTE 7 - DEBT (Details)
NOTE 7 - DEBT (Details) - USD ($) | Mar. 03, 2021 | May 28, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jan. 30, 2021 |
Proceeds from loans payable - SBA | $ 100,000 | $ 299,000 | ||||
SBA EIDL Loan | ||||||
Proceeds from loans payable - SBA | $ 199,000 | |||||
Debt Instrument, Interest Rate, Effective Percentage | 3.75% | 3.75% | ||||
Interest Expense, Debt | $ 970 | |||||
Debt Instrument, Maturity Date | Apr. 21, 2050 | |||||
SBA PPP Loan | ||||||
Proceeds from loans payable - SBA | $ 100,000 | |||||
Debt Instrument, Maturity Date | May 22, 2022 | |||||
Debt Instrument, Face Amount | $ 100,000 | |||||
Interest Payable, Current | $ 655 | |||||
PPP Loan | ||||||
Proceeds from loans payable - SBA | $ 100,000 | |||||
Debt Instrument, Interest Rate, Effective Percentage | 1.00% |
NOTE 7 - DEBT_ Schedule of De_2
NOTE 7 - DEBT: Schedule of Debt (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
SBA EIDL Loan | ||
Loans Payable | $ 198,674 | $ 199,000 |
SBA PPP Loan | ||
Loans Payable | 100,000 | 100,000 |
Loans Payable, Current | (4,024) | (69,551) |
Loans Payable, Noncurrent | $ 243,026 | $ 229,449 |
NOTE 8 - STOCK OPTIONS AND WA_5
NOTE 8 - STOCK OPTIONS AND WARRANTS (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 01, 2017 | Sep. 11, 2015 | Aug. 03, 2011 | |
Granted | 400,000 | 150,000 | |||||
Options issued for services | $ 13,874 | $ 12,078 | |||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 27,983 | ||||||
Outstanding | 3,290,556 | 2,890,556 | 2,940,556 | ||||
Employee Stock Option | |||||||
Granted | 400,000 | 150,000 | |||||
Employee Stock Option | 2011 Long Term Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,000,000 | ||||||
Outstanding | 75,000 | ||||||
Employee Stock Option | 2015 Long Term Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,500,000 | ||||||
Outstanding | 1,915,556 | ||||||
Employee Stock Option | 2017 Long Term Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 5,000,000 | ||||||
Outstanding | 1,008,333 |
NOTE 8 - STOCK OPTIONS AND WA_6
NOTE 8 - STOCK OPTIONS AND WARRANTS: The following table presents the assumptions used to estimate the fair values of the stock options granted (Details) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Details | ||
Expected volatility | 201.00% | 159.00% |
Expected dividends | 0.00% | 0.00% |
Expected term | 7 years | 7 years |
Risk-free interest rate | 1.20% | 0.60% |
NOTE 8 - STOCK OPTIONS AND WA_7
NOTE 8 - STOCK OPTIONS AND WARRANTS: Schedule Of Share Based Compensation Stock Options Activity (Details) - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Details | |||
Outstanding | 3,290,556 | 2,890,556 | 2,940,556 |
Outstanding, Weighted Average Exercise Price | $ 0.19 | $ 0.20 | $ 0.25 |
Granted | 400,000 | 150,000 | |
Granted, Weighted Average Exercise Price | $ 0.11 | $ 0.06 | |
Exercised | 0 | 0 | |
Exercised, Weighted Average Exercise Price | $ 0 | $ 0 | |
Expired or cancelled | 0 | (200,000) | |
Expired or cancelled, Weighted Average Exercise Price | $ 0 | $ 0.87 | |
Exercisable | 3,023,889 | 2,882,223 | |
Exercisable, Weighted Average Exercise Price | $ 0.19 | $ 0.20 |
NOTE 8 - STOCK OPTIONS AND WA_8
NOTE 8 - STOCK OPTIONS AND WARRANTS: Summary of the Status of the Options (Details) | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Details | |
Share-based Payment Arrangement, Option, Exercise Price Range, Lower Range Limit | $ 0.01 |
Share-based Payment Arrangement, Option, Exercise Price Range, Upper Range Limit | $ 0.99 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | shares | 3,290,556 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | 3 years 5 months 15 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number | shares | 3,023,889 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 0.19 |