Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 31, 2022 | Jun. 30, 2021 | |
Details | |||
Registrant CIK | 0001404804 | ||
Fiscal Year End | --12-31 | ||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Transition Report | false | ||
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 Dr. #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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 1,595,349 | ||
Entity Common Stock, Shares Outstanding | 21,948,091 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Auditor Firm ID | 3627 | ||
Auditor Name | Sadler, Gibb & Associates, LLC | ||
Auditor Location | Draper, UT |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash | $ 59,674 | $ 60,729 |
Accounts receivable, net | 9,555 | 9,455 |
Accounts receivable - related parties | 0 | 17,345 |
Inventory Net | 717,044 | 821,866 |
Contract assets | 13,221 | 13,221 |
Deposits | 4,230 | 38,610 |
Total Current Assets | 803,724 | 961,226 |
PROPERTY & EQUIPMENT, net | 14,373 | 1,266 |
OTHER ASSETS | ||
Operating lease - Right-of-use asset | 593,697 | 0 |
Long-term deposit | 13,514 | 14,280 |
Total Other Assets | 607,211 | 14,280 |
TOTAL ASSETS | 1,425,308 | 976,772 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 373,221 | 468,839 |
Accrued management compensation | 620,735 | 595,158 |
Accounts payable - related parties | 124,472 | 121,527 |
Notes payable - related parties, current portion | 15,000 | 15,000 |
Convertible notes payable - related party | 31,090 | 0 |
Contract liabilities | 75,000 | 75,000 |
Customer deposits | 170,870 | 276,381 |
Operating lease liabilities - current | 106,149 | 0 |
Current portion, long-term debt | 0 | 69,551 |
Total Current Liabilities | 1,516,537 | 1,621,456 |
LONG-TERM LIABILITIES | ||
Loans payable - SBA, net of current portion | 198,674 | 229,449 |
Convertible notes payable - related party, net of current portion | 12,826 | 0 |
Operating lease liabilities - long-term | 504,963 | 0 |
Total Long-term Liabilities | 716,463 | 229,449 |
Total Liabilities | 2,233,000 | 1,850,905 |
STOCKHOLDERS' DEFICIT | ||
Common stock, 125,000,000 shares authorized; no par value; 21,948,091 and 21,600,189 shares, respectively issued and outstanding | 8,607,086 | 8,578,210 |
Additional paid-in capital | 12,033,454 | 12,013,298 |
Accumulated deficit | (21,448,232) | (21,465,641) |
Total Stockholders' Deficit | (807,692) | (874,133) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 1,425,308 | $ 976,772 |
Balance Sheets - Parenthetical
Balance Sheets - Parenthetical - $ / shares | Dec. 31, 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 | 21,948,091 | 21,600,189 |
Common Stock, Shares, Outstanding | 21,948,091 | 21,600,189 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Details | ||
Revenues | $ 1,097,467 | $ 875,997 |
COST OF GOODS SOLD | 573,700 | 519,527 |
INVENTORY RESERVE ADJUSTMENT | 47,959 | 69,417 |
Total Cost of Goods Sold | 621,659 | 588,944 |
GROSS MARGIN | 475,808 | 287,053 |
OPERATING EXPENSES | ||
General and administrative | 600,169 | 671,672 |
Research and development | 63,829 | 82,052 |
Depreciation and amortization | 1,302 | 543 |
Total Operating Expenses | 665,300 | 754,267 |
LOSS FROM OPERATIONS | (189,492) | (467,214) |
OTHER INCOME (EXPENSE) | ||
Other income (expense) | 32,100 | (1,840) |
Forgiveness of debt | 200,321 | 0 |
Interest expense | (24,720) | (19,858) |
Total Other Expense | 207,701 | (21,698) |
INCOME (LOSS) BEFORE INCOME TAXES | 18,209 | (488,912) |
INCOME TAX EXPENSE | 800 | 800 |
NET INCOME (LOSS) | $ 17,409 | $ (489,712) |
BASIC AND DILUTED LOSS PER SHARE | $ 0 | $ (0.02) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC | 21,600,189 | 21,461,492 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - FULLY DILUTED | 23,708,115 | 21,461,492 |
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 | 15,456 | 0 | 15,546 |
Common stock issued for stock subscription | $ 51,000 | (51,000) | 0 | 0 | |
Common stock issued for stock subscription, shares | 260,324 | ||||
Deposit - Stock purchase agreement | 31,000 | 0 | 31,000 | ||
Net income (loss) | $ 0 | 0 | 0 | (489,712) | (489,712) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Dec. 31, 2020 | $ 8,578,210 | 0 | 12,013,298 | (21,465,641) | (874,133) |
Shares, Outstanding, Ending Balance at Dec. 31, 2020 | 21,600,189 | ||||
Adjustments to Additional Paid in Capital, Warrant Issued | $ 0 | 0 | 19,112 | 0 | 19,112 |
Common stock issued for trade payable | $ 28,876 | 0 | 1,044 | 0 | 29,920 |
Common stock issued for trade payable Share | 347,902 | ||||
Net income (loss) | $ 0 | 0 | 0 | 17,409 | 17,409 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Dec. 31, 2021 | $ 8,607,086 | $ 0 | $ 12,033,454 | $ (21,448,232) | $ (807,692) |
Shares, Outstanding, Ending Balance at Dec. 31, 2021 | 21,948,091 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING ACTIVITIES | ||
Net income (loss) | $ 17,409 | $ (489,712) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 1,302 | 543 |
Options and warrants granted | 19,112 | 15,456 |
Forgiveness of debt | (200,321) | 0 |
Loss on abandoned asset | 90 | 0 |
Amortization of ROU asset | 58,653 | 0 |
Inventory reserve | 53,453 | 69,417 |
Changes in operating assets and liabilities | ||
Accounts receivable | (26,100) | (1,993) |
Operating lease liability | (41,238) | 0 |
Accounts receivable-related parties | 17,345 | (633) |
Deposits | 34,380 | (19,965) |
Inventory | 51,369 | 131,082 |
Other non-current assets | 766 | 0 |
Accounts payable and accrued expenses | (65,377) | (105,506) |
Customer deposits | (105,511) | 112,700 |
Accounts payable-related parties | 2,945 | (12,550) |
Accrued management compensation | 25,577 | 53,654 |
Net Cash Used in Operating Activities | (130,146) | (247,507) |
INVESTING ACTIVITIES | ||
Purchase of fixed assets | (14,499) | 0 |
Net Cash Used in Investing Activities | (14,499) | 0 |
FINANCING ACTIVITIES | ||
Payments on convertible notes payable | (6,410) | (15,000) |
Proceeds from common stock subscription | 0 | 31,000 |
Proceeds from long-term debt | 100,000 | 299,000 |
Proceeds from (payments on) notes payable - related party | 50,000 | (27,000) |
Net Cash Provided by Financing Activities | 143,590 | 288,000 |
NET CHANGE IN CASH | (1,055) | 40,493 |
CASH AT BEGINNING OF YEAR | 60,729 | 20,236 |
CASH AT END OF YEAR | 59,674 | 60,729 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS | ||
Interest | 17,913 | 17,104 |
Income taxes | 800 | 800 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Common stock issued for stock subscription | 0 | 51,000 |
Common stock issued for trade payable | $ 29,920 | $ 0 |
NOTE 1 - ORGANIZATION AND BUSIN
NOTE 1 - ORGANIZATION AND BUSINESS ACTIVITY | 12 Months Ended |
Dec. 31, 2021 | |
Notes | |
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 - SIGNIFICANT ACCOUNTING
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Notes | |
NOTE 2 - 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, 2021 and 2020 was $41,000 and $15,000, respectively. Additionally, bad debt expense for the years ended December 31, 2021 and 2020 was $26,000 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. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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, 2021 or 2020. 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 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 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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 1% and 0% of revenue for the years ended December 31, 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 99% and 100% of revenue for the years ended December 31, 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 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, 2021 2020 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 396,750 - 396,750 $ 606,629 - 606,629 International 693,052 7,665 700,717 269,368 - 269,368 $ 1,089,802 7,665 1,097,467 $ 875,997 - 875,997 Filters 693,768 - 693,768 324,961 - 324,961 Components 395,176 - 395,176 551,036 - 551,036 Engineering Services 858 7,665 8,523 - - - $ 1,089,802 7,665 1,097,467 $ 875,997 - 875,997 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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, 2021 and 2020, the Company incurred research and development expenses of $63,829 and $82,052, respectively. k. Advertising The Company follows the policy of charging the costs of advertising to expense as incurred. During the years ended December 31, 2021 and 2020, 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, 2021, 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 3,065,556 vested stock options and warrants that were included in the fully diluted earnings per share computation as of December 31, 2021. As of December 31, 2020 the Company had 2,882,223 Stock Options and Warrants that would have been included in the fully diluted earnings per share computation. However, the common stock equivalents were not included in the computation because they were 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: NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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, 2021, eight customers accounted for approximately 84% of sales. During the year ended December 31, 2020, eight customers accounted for approximately 80% of sales. Suppliers During the year ended December 31, 2021, four suppliers accounted for 81% of products purchased. During the year ended December 31, 2020, eight suppliers accounted for 71% 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, 2021, the Company had an accumulated deficit of $21,448,232 and total stockholders’ deficit of ($807,692). At December 31, 2021, the Company had current assets of $803,724 including cash of $59,674, and current liabilities of $1,516,537, resulting in negative working capital of $712,813. For 2021, the Company reported net income of $17,409 and net cash used by operating activities of $130,146. Management believes that based on its operating plan, the projected sales for 2022, 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 substantial doubt upon the Company’s ability to continue as a going concern for a period of 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. 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, 2021 | |
Notes | |
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, 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 - LEASES
NOTE 4 - LEASES | 12 Months Ended |
Dec. 31, 2021 | |
Notes | |
NOTE 4 - LEASES | NOTE 4 – LEASES The Company’s leases consist of an operating lease for general office space and warehouse facilities. The Company recognizes rent expense for this lease on a straight-line basis over the lease term. Because the lease does not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the lease Commencement Date in determining the present value of future lease payments. On June 3, 2021, the Company entered into a lease for the premises located at 1345 Specialty Drive #E, Vista, CA, containing approximately 11,751 square feet of rentable area. The lease commenced on 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 under the lease, is $1,175 per month. On Commencement Date the Company recognized a ROU asset of $653,701 and a lease liability of $652,350. In agreement with the Company’s former landlord, the Company vacated the previous leasehold effective July 15, 2021. As of December 31, 2021 the outstanding balance of back rent, included in accounts payable, was $23,374. During the year ended December 31, 2021, cash paid for amounts included in the measurement of operating lease liabilities was $56,990 and the Company recorded operating lease expenses included in operating expenses of $74,581. Supplemental balance sheet information related to leases as of December 31, 2021 was as follows: Operating leases: Operating lease right-of-use-assets 593,697 Operating lease liabilities - current 106,149 Operating lease liabilities – long-term 504,963 Total operating lease liabilities $ 611,112 Incremental borrowing rate: Operating leases 4.94% NOTE 4 – LEASES (Continued) As of December 31, 2021, maturities of operating lease liabilities were as follows: Years ending December 31, 2022 133,956 2023 141,036 2024 148,074 2025 176,268 Thereafter 88,134 Total lease payments 687,468 Less: Imputed interest (76,356) Total lease liability 611,112 Less: current lease liability (106,149) Long-term lease liability $ 504,963 |
NOTE 5 - INVENTORIES
NOTE 5 - INVENTORIES | 12 Months Ended |
Dec. 31, 2021 | |
Notes | |
NOTE 5 - INVENTORIES | NOTE 5 – INVENTORIES Inventories are located in Vista, California and at December 31, 2021 and 2020 consisted of the following: December 31, December 31, 2021 2020 Raw materials $ 846,499 $ 917,567 Finished goods 802,280 962,608 Allowance for obsolete inventory (931,735) (1,058,309) Total $ 717,044 $ 821,866 The Company has established an allowance for obsolete inventory. Expense for obsolete inventory was $47,959 and $69,417, for the years ended December 31, 2021 and December 31, 2020, respectively. |
NOTE 6 - PROPERTY AND EQUIPMENT
NOTE 6 - PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2021 | |
Notes | |
NOTE 6 - PROPERTY AND EQUIPMENT | NOTE 6 – PROPERTY AND EQUIPMENT Property and equipment at December, 2021 and 2020 consisted of the following: December 31, December 31, 2021 2020 Production equipment $ 68,456 $ 64,673 Computers/Office equipment - 28,540 Tooling equipment - 12,380 Leasehold Improvements 10,627 42,451 Less: accumulated depreciation (64,710) (146,778) Total $ 14,373 $ 1,266 Depreciation expense for the years ended December 31, 2021 and 2020 was $1,302 and $543, respectively. |
NOTE 7 - CUSTOMER DEPOSITS
NOTE 7 - CUSTOMER DEPOSITS | 12 Months Ended |
Dec. 31, 2021 | |
Notes | |
NOTE 7 - CUSTOMER DEPOSITS | NOTE 7 – CUSTOMER DEPOSITS The Company may require a customer deposit from domestic and international customers. As of December 31, 2021 and 2020 the Company had customer deposits of $170,870 and $276,381, respectively. |
NOTE 8 - NOTES PAYABLE - RELATE
NOTE 8 - NOTES PAYABLE - RELATED PARTY | 12 Months Ended |
Dec. 31, 2021 | |
Notes | |
NOTE 8 - NOTES PAYABLE - RELATED PARTY | NOTE 8 – 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 December 31, 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 December 31, 2021. On December 14, 2021, the Convertible Promissory Note dated June 4, 2021, in the original principal amount of $20,000, with an original Maturity Date of December 4, 2021, was extended for an additional period of 3 months until March 4, 2022. On March 4, 2022, the Note was extended for an additional period of 3 months until June 4, 2022. As of December 31, 2021 and December 31, 2020 Convertible Notes – Related Party consisted of the following: December 31, December 31, 2021 2020 Convertible Note payable, related parties $ 43,916 $ - Less current portion (31,090) $ - Total $ 12,826 $ - Notes Payable – Related Party 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, 2022. As of December 31, 2021 and December 31, 2020 Note Payable – Related Party consisted of the following: December 31, December 31, 2021 2020 Note payable, related party $ 15,000 $ 15,000 Total $ 15,000 $ 15,000 |
NOTE 9 - DEBT
NOTE 9 - DEBT | 12 Months Ended |
Dec. 31, 2021 | |
Notes | |
NOTE 9 - DEBT | NOTE 9 – 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, 2022 (i.e., twenty-four (24) 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. On November 11, 2021, the Company applied for the Targeted SBA EIDL Advance Asistance, 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 $15,000 from the Targeted SBA EIDL Advance Asistance SBA EIDL loan. Application No. 3600495802 was approved in the amount of $5,000.00, and application No. 3600495802 was approved in the amount of $10,000.00. The Targeted EIDL Advance does not need to be repaid. 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. 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. On November 15, 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 $710. As of December 31, 2021 and December 31, 2020 Debt consisted of the following: December 31, December 31, 2021 2020 Loan payable – SBA EIDL $ 198,674 $ 199,000 Loan payable – SBA PPP $ - $ 100,000 Less current portion - (69,551) Total $ 198,674 $ 229,449 |
NOTE 10 - COMMITMENTS
NOTE 10 - COMMITMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Notes | |
NOTE 10 - COMMITMENTS | NOTE 10 – COMMITMENTS As of December 31, 2021 and 2020, the Company had outstanding purchase commitments for inventory totaling $179,240 and $151,411, respectively. Of these amounts, the Company had prepayments of $4,230 as of December 31, 2021 and $38,610 as of December 31, 2020 and had commitments for future cash outlays for inventory totaling $175,010 and $112,801, respectively. |
NOTE 11 - RELATED PARTY TRANSAC
NOTE 11 - RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
Notes | |
NOTE 11 - RELATED PARTY TRANSACTIONS | NOTE 11 – RELATED PARTY TRANSACTIONS Accounts Receivable – Related Parties As of December 31, 2021 and December 31, 2020, the Company was owed $0 and $17,345, respectively, by an entity controlled by the Company’s CEO for the purchase of products and services. Accrued Management Expenses During the periods ended December 31, 2021 and December 31, 2020, the Company’s president was due amounts for services performed for the Company. As of December 31, 2021 and December 31, 2020 the accrued management fees consisted of the following: December 31, December 31, 2021 2020 Amounts due to the president $ 620,735 $ 595,158 Total $ 620,735 $ 595,158 |
NOTE 12 - STOCKHOLDERS' EQUITY
NOTE 12 - STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Notes | |
NOTE 12 - STOCKHOLDERS' EQUITY | NOTE 12 – STOCKHOLDERS’ EQUITY Common Stock On December 14, 2021, in consideration of $28,876 of legal services provided to the Corporation by Chachas Law Group P.C., and pursuant to the Subscription and Purchase Agreement dated December 14, 2021, the Corporation issued 347,902 shares of common stock at a price of $0.083 per share, representing the 10-day closing average of the Common Stock. Fair market value of the shares issued at time of closing was $29,920. 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. 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 payments 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 payments of $51,000. 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 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. NOTE 12 – STOCKHOLDERS’ EQUITY (continued) Options and Warrants During the years ended December 31, 2021 and 2020, the Company granted 400,000 and 150,000 options for services, respectively. During the years ended December 31, 2021 and 2020, respectively, the Company recognized expense of $19,112 and $15,456 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 $22,745. 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, 2021, 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, 2021, 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, 2021, the Company has a total of 1,300,000 options issued under the plan. During the year ended December 31, 2021 and 2020 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, 2021 December 31, 2020 Expected volatility 201% 159% Expected dividends 0% 0% Expected term 7 Years 7 Years Risk-free interest rate 1.20% 0.60% NOTE 12 – STOCKHOLDERS’ EQUITY (continued) A summary of the status of the options granted at December 31, 2021 and December 31, 2020 and changes during the years then ended is presented below: December 31, 2021 December 31, 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 year 3,290,556 0.19 2,890,556 0.20 Exercisable 3,065,556 $ 0.19 2,882,223 $ 0.20 A summary of the status of the options outstanding at December 31, 2021 is presented below: Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life Number Exercisable Weighted-Average Exercise Price $0.01-1.00 3,290,556 2.96 years 3,065,556 $0.19 A summary of the status of the options and warrants 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 |
NOTE 13 - INCOME TAXES
NOTE 13 - INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Notes | |
NOTE 13 - INCOME TAXES | NOTE 13 – INCOME TAXES The provision for income taxes for the year ended December 31, 2021 and 2020 consists of the following: December 31, December 31, 2021 2020 Federal Current $ - $ - Deferred - - State Current $ 800 $ 800 Deferred - - Income tax expense $ 800 $ 800 NOTE 13 – INCOME TAXES (continued) Net deferred tax assets consist of the following components as of December 31, 2021 and 2020: December 31, December 31, 2021 2020 Deferred tax assets: Net operating loss carryover $ 7,428,249 7,367,497 Research and development carry forward 131,088 131,088 Inventory reserve 223,616 253,994 Allowance for doubtful accounts 3,600 3,600 Warranty allowance 3,068 3,068 Accrued compensation 148,976 142,838 Deferred tax liabilities: Depreciation (33,476) (39,927) Valuation allowance (7,905,122) (7,862,158) 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, 2021 and December 31, 2020 to pretax income from continuing operations for the year ended December 31, 2021 and 2020 due to the following: December 31, December 31, 2021 2020 Book income (loss) $ 4,178 (117,532) Meals and entertainment - - State tax deduction - - Deferred rent - - Stock/Options for services 4,587 3,709 Officer’s life ins premium 1,181 1,181 Depreciation (6,451) (8,265) Accrued compensation 6,138 (26,801) Inventory reserve (30,378) 16,660 Valuation allowance 42,289 262,894 Net operating loss carryover (20,744) (131,046) 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, 2021, the Company had net operating loss carry forwards of approximately $7,453,932 through 2034. No tax benefit has been reported in the December 31, 2021 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 14 - SUBSEQUENT EVENT
NOTE 14 - SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2021 | |
Notes | |
NOTE 14 - SUBSEQUENT EVENT | NOTE 14 – SUBSEQUENT EVENTS On January 19, 2022 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, 2023. On June 4, 2021 the Company issued a convertible promissory note for $20,000 to a board member with an original Maturity Date of December 4, 2021. The Note was extended for an additional period of 3 months until March 4, 2022. On March 4, 2022, the Note was extended for an additional period of 3 months until June 4, 2022. |
NOTE 2 - SIGNIFICANT ACCOUNTI_2
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: a. Accounting Methods (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Policies | |
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. |
NOTE 2 - SIGNIFICANT ACCOUNTI_3
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: b. Use of Estimates in Preparing Financial Statements (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Policies | |
b. Use 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. |
NOTE 2 - SIGNIFICANT ACCOUNTI_4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: c. Cash and Cash Equivalents (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Policies | |
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. |
NOTE 2 - SIGNIFICANT ACCOUNTI_5
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: d. Accounts Receivable (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Policies | |
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, 2021 and 2020 was $41,000 and $15,000, respectively. Additionally, bad debt expense for the years ended December 31, 2021 and 2020 was $26,000 and $-0-, respectively. |
NOTE 2 - SIGNIFICANT ACCOUNTI_6
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: e. Inventory (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Policies | |
e. Inventory | 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. |
NOTE 2 - SIGNIFICANT ACCOUNTI_7
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: f. Long-Lived Assets (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Policies | |
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, 2021 or 2020. |
NOTE 2 - SIGNIFICANT ACCOUNTI_8
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: g. Property and Equipment (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Policies | |
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. |
NOTE 2 - SIGNIFICANT ACCOUNTI_9
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: h. Revenue Recognition (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Policies | |
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 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 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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 1% and 0% of revenue for the years ended December 31, 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 99% and 100% of revenue for the years ended December 31, 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 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, 2021 2020 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 396,750 - 396,750 $ 606,629 - 606,629 International 693,052 7,665 700,717 269,368 - 269,368 $ 1,089,802 7,665 1,097,467 $ 875,997 - 875,997 Filters 693,768 - 693,768 324,961 - 324,961 Components 395,176 - 395,176 551,036 - 551,036 Engineering Services 858 7,665 8,523 - - - $ 1,089,802 7,665 1,097,467 $ 875,997 - 875,997 |
NOTE 2 - SIGNIFICANT ACCOUNT_10
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: i. Cost of Goods Sold (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Policies | |
i. Cost of Goods 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. |
NOTE 2 - SIGNIFICANT ACCOUNT_11
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: j. Research and Development (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Policies | |
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, 2021 and 2020, the Company incurred research and development expenses of $63,829 and $82,052, respectively. |
NOTE 2 - SIGNIFICANT ACCOUNT_12
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: k. Advertising (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Policies | |
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, 2021 and 2020, the Company expensed $-0- and $-0-, respectively. |
NOTE 2 - SIGNIFICANT ACCOUNT_13
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: l. Provision for Income Taxes (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Policies | |
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, 2021, 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 ACCOUNT_14
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: m. Basic and Diluted Loss Per Share (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Policies | |
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 3,065,556 vested stock options and warrants that were included in the fully diluted earnings per share computation as of December 31, 2021. As of December 31, 2020 the Company had 2,882,223 Stock Options and Warrants that would have been included in the fully diluted earnings per share computation. However, the common stock equivalents were not included in the computation because they were anti-dilutive. |
NOTE 2 - SIGNIFICANT ACCOUNT_15
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: n. Fair Value Measurements (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Policies | |
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: NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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. |
NOTE 2 - SIGNIFICANT ACCOUNT_16
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: o. Stock-based Compensation (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Policies | |
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. |
NOTE 2 - SIGNIFICANT ACCOUNT_17
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: p. Concentration of Risks (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Policies | |
p. Concentration of Risks | p. Concentration of Risks Customers During the year ended December 31, 2021, eight customers accounted for approximately 84% of sales. During the year ended December 31, 2020, eight customers accounted for approximately 80% of sales. Suppliers During the year ended December 31, 2021, four suppliers accounted for 81% of products purchased. During the year ended December 31, 2020, eight suppliers accounted for 71% of products purchased. |
NOTE 2 - SIGNIFICANT ACCOUNT_18
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: q. Liquidity and Going Concern (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Policies | |
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, 2021, the Company had an accumulated deficit of $21,448,232 and total stockholders’ deficit of ($807,692). At December 31, 2021, the Company had current assets of $803,724 including cash of $59,674, and current liabilities of $1,516,537, resulting in negative working capital of $712,813. For 2021, the Company reported net income of $17,409 and net cash used by operating activities of $130,146. Management believes that based on its operating plan, the projected sales for 2022, 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 substantial doubt upon the Company’s ability to continue as a going concern for a period of 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 ACCOUNT_19
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: r. Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Policies | |
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 - SIGNIFICANT ACCOUNT_20
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: h. Revenue Recognition: Schedule of Disaggregation of Revenue (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Schedule of Disaggregation of Revenue | The following table presents Omnitek’s revenues disaggregated by region and product type: December 31, December 31, 2021 2020 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 396,750 - 396,750 $ 606,629 - 606,629 International 693,052 7,665 700,717 269,368 - 269,368 $ 1,089,802 7,665 1,097,467 $ 875,997 - 875,997 Filters 693,768 - 693,768 324,961 - 324,961 Components 395,176 - 395,176 551,036 - 551,036 Engineering Services 858 7,665 8,523 - - - $ 1,089,802 7,665 1,097,467 $ 875,997 - 875,997 |
NOTE 3 - CONTRACT ASSETS AND _2
NOTE 3 - CONTRACT ASSETS AND LIABILITIES: Long-Term Contract or Program Disclosure (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Long-Term Contract or Program Disclosure | December 31, 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 - LEASES_ Schedule of Su
NOTE 4 - LEASES: Schedule of Supplemental Balance Sheet Information Related to Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Schedule of Supplemental Balance Sheet Information Related to Leases | Operating leases: Operating lease right-of-use-assets 593,697 Operating lease liabilities - current 106,149 Operating lease liabilities – long-term 504,963 Total operating lease liabilities $ 611,112 Incremental borrowing rate: Operating leases 4.94% |
NOTE 4 - LEASES_ Schedule of Ma
NOTE 4 - LEASES: Schedule of Maturities of Operating Lease Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Schedule of Maturities of Operating Lease Liabilities | As of December 31, 2021, maturities of operating lease liabilities were as follows: Years ending December 31, 2022 133,956 2023 141,036 2024 148,074 2025 176,268 Thereafter 88,134 Total lease payments 687,468 Less: Imputed interest (76,356) Total lease liability 611,112 Less: current lease liability (106,149) Long-term lease liability $ 504,963 |
NOTE 5 - INVENTORIES_ Schedule
NOTE 5 - INVENTORIES: Schedule of Inventories (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Schedule of Inventories | Inventories are located in Vista, California and at December 31, 2021 and 2020 consisted of the following: December 31, December 31, 2021 2020 Raw materials $ 846,499 $ 917,567 Finished goods 802,280 962,608 Allowance for obsolete inventory (931,735) (1,058,309) Total $ 717,044 $ 821,866 |
NOTE 6 - PROPERTY AND EQUIPME_2
NOTE 6 - PROPERTY AND EQUIPMENT: Schedule of Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Schedule of Property and Equipment | Property and equipment at December, 2021 and 2020 consisted of the following: December 31, December 31, 2021 2020 Production equipment $ 68,456 $ 64,673 Computers/Office equipment - 28,540 Tooling equipment - 12,380 Leasehold Improvements 10,627 42,451 Less: accumulated depreciation (64,710) (146,778) Total $ 14,373 $ 1,266 |
NOTE 8 - NOTES PAYABLE - RELA_2
NOTE 8 - NOTES PAYABLE - RELATED PARTY: Schedule of Convertible Notes - Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Schedule of Convertible Notes - Related Parties | December 31, December 31, 2021 2020 Convertible Note payable, related parties $ 43,916 $ - Less current portion (31,090) $ - Total $ 12,826 $ - |
NOTE 8 - NOTES PAYABLE - RELA_3
NOTE 8 - NOTES PAYABLE - RELATED PARTY: Schedule Of Notes Payable Related Party table (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Schedule Of Notes Payable Related Party table | December 31, December 31, 2021 2020 Note payable, related party $ 15,000 $ 15,000 Total $ 15,000 $ 15,000 |
NOTE 9 - DEBT_ Schedule of Debt
NOTE 9 - DEBT: Schedule of Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Schedule of Debt | As of December 31, 2021 and December 31, 2020 Debt consisted of the following: December 31, December 31, 2021 2020 Loan payable – SBA EIDL $ 198,674 $ 199,000 Loan payable – SBA PPP $ - $ 100,000 Less current portion - (69,551) Total $ 198,674 $ 229,449 |
NOTE 11 - RELATED PARTY TRANS_2
NOTE 11 - RELATED PARTY TRANSACTIONS: Schedule Of Related Party Transactions Table (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Schedule Of Related Party Transactions Table | December 31, December 31, 2021 2020 Amounts due to the president $ 620,735 $ 595,158 Total $ 620,735 $ 595,158 |
NOTE 12 - STOCKHOLDERS' EQUITY_
NOTE 12 - STOCKHOLDERS' EQUITY: Schedule of Assumptions Used to Estimate the Fair Values of Stock Options Granted (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
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, 2021 December 31, 2020 Expected volatility 201% 159% Expected dividends 0% 0% Expected term 7 Years 7 Years Risk-free interest rate 1.20% 0.60% |
NOTE 12 - STOCKHOLDERS' EQUIT_2
NOTE 12 - STOCKHOLDERS' EQUITY: Schedule of Stock Options and Warrants, Activity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Schedule of Stock Options and Warrants, Activity | A summary of the status of the options granted at December 31, 2021 and December 31, 2020 and changes during the years then ended is presented below: December 31, 2021 December 31, 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 year 3,290,556 0.19 2,890,556 0.20 Exercisable 3,065,556 $ 0.19 2,882,223 $ 0.20 |
NOTE 12 - STOCKHOLDERS' EQUIT_3
NOTE 12 - STOCKHOLDERS' EQUITY: Summary of the Status of the Options (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Summary of the Status of the Options | A summary of the status of the options outstanding at December 31, 2021 is presented below: Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life Number Exercisable Weighted-Average Exercise Price $0.01-1.00 3,290,556 2.96 years 3,065,556 $0.19 A summary of the status of the options and warrants 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 |
NOTE 13 - INCOME TAXES_ Schedul
NOTE 13 - INCOME TAXES: Schedule of Components of Income Tax Expense (Benefit) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Schedule of Components of Income Tax Expense (Benefit) | December 31, December 31, 2021 2020 Federal Current $ - $ - Deferred - - State Current $ 800 $ 800 Deferred - - Income tax expense $ 800 $ 800 |
NOTE 13 - INCOME TAXES_ Sched_2
NOTE 13 - INCOME TAXES: Schedule of Deferred Tax Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Schedule of Deferred Tax Assets and Liabilities | December 31, December 31, 2021 2020 Deferred tax assets: Net operating loss carryover $ 7,428,249 7,367,497 Research and development carry forward 131,088 131,088 Inventory reserve 223,616 253,994 Allowance for doubtful accounts 3,600 3,600 Warranty allowance 3,068 3,068 Accrued compensation 148,976 142,838 Deferred tax liabilities: Depreciation (33,476) (39,927) Valuation allowance (7,905,122) (7,862,158) Net deferred tax asset $ - - |
NOTE 13 - INCOME TAXES_ Sched_3
NOTE 13 - INCOME TAXES: Schedule of Effective Income Tax Rate Reconciliation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Schedule of Effective Income Tax Rate Reconciliation | December 31, December 31, 2021 2020 Book income (loss) $ 4,178 (117,532) Meals and entertainment - - State tax deduction - - Deferred rent - - Stock/Options for services 4,587 3,709 Officer’s life ins premium 1,181 1,181 Depreciation (6,451) (8,265) Accrued compensation 6,138 (26,801) Inventory reserve (30,378) 16,660 Valuation allowance 42,289 262,894 Net operating loss carryover (20,744) (131,046) Income Tax Expense $ 800 800 |
NOTE 2 - SIGNIFICANT ACCOUNT_21
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: h. Revenue Recognition (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Transferred over Time | ||
Concentration Risk, Percentage | 1.00% | 0.00% |
Transferred at Point in Time | ||
Concentration Risk, Percentage | 99.00% | 100.00% |
NOTE 2 - SIGNIFICANT ACCOUNT_22
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: h. Revenue Recognition: Schedule of Disaggregation of Revenue (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Geographic Distribution, Domestic | ||
Products | $ 396,750 | $ 606,629 |
Contract | 0 | 0 |
Revenues | 396,750 | 606,629 |
Geographic Distribution, Foreign | ||
Products | 693,052 | 269,368 |
Contract | 7,665 | 0 |
Revenues | 700,717 | 269,368 |
Filters | ||
Products | 693,768 | 324,961 |
Contract | 0 | 0 |
Revenues | 693,768 | 324,961 |
Components | ||
Products | 395,176 | 551,036 |
Contract | 0 | 0 |
Revenues | 395,176 | 551,036 |
Engineering Services | ||
Products | 858 | 0 |
Contract | 7,665 | 0 |
Revenues | 8,523 | 0 |
Products | 1,089,802 | 875,997 |
Contract | 7,665 | 0 |
Revenues | $ 1,097,467 | $ 875,997 |
NOTE 3 - CONTRACT ASSETS AND _3
NOTE 3 - CONTRACT ASSETS AND LIABILITIES: Long-Term Contract or Program Disclosure (Details) - USD ($) | Dec. 31, 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 - LEASES (Details)
NOTE 4 - LEASES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Adoption of ASC 842 - ROU Asset | $ 653,701 | |
Adoption of ASC 842 - ROU Liability | 652,350 | |
Accounts payable and accrued expenses | 373,221 | $ 468,839 |
Back Rent | ||
Accounts payable and accrued expenses | $ 23,374 |
NOTE 4 - LEASES_ Schedule of _2
NOTE 4 - LEASES: Schedule of Supplemental Balance Sheet Information Related to Leases (Details) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Details | ||
Operating lease - Right-of-use asset | $ 593,697 | $ 0 |
Operating lease liabilities - current | 106,149 | 0 |
Operating lease liabilities - long-term | 504,963 | $ 0 |
Operating Lease, Liability | $ 611,112 | |
Operating leases Incremental Borrowing Rate | 0.0494 |
NOTE 4 - LEASES_ Schedule of _3
NOTE 4 - LEASES: Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Details | ||
Lessee, Operating Lease, Liability, to be Paid, Remainder of Fiscal Year | $ 133,956 | |
Lessee, Operating Lease, Liability, to be Paid, Year Two | 141,036 | |
Lessee, Operating Lease, Liability, to be Paid, Year Three | 148,074 | |
Lessee, Operating Lease, Liability, to be Paid, Year Four | 176,268 | |
Lessee, Operating Lease, Liability, to be Paid, Thereafter | 88,134 | |
Lessee, Operating Lease, Liability, to be Paid | 687,468 | |
Operating Lease, Imputed interest | (76,356) | |
Operating Lease, Liability | 611,112 | |
Operating lease liabilities - current | (106,149) | $ 0 |
Operating lease liabilities - long-term | $ 504,963 | $ 0 |
NOTE 5 - INVENTORIES_ Schedul_2
NOTE 5 - INVENTORIES: Schedule of Inventories (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Details | ||
Raw materials | $ 846,499 | $ 917,567 |
Finished goods | 802,280 | 962,608 |
Allowance for obsolete inventory | (931,735) | (1,058,309) |
Inventory Net | $ 717,044 | $ 821,866 |
NOTE 6 - PROPERTY AND EQUIPME_3
NOTE 6 - PROPERTY AND EQUIPMENT: Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
PROPERTY & EQUIPMENT, net | $ 14,373 | $ 1,266 |
Less: accumulated depreciation | (64,710) | (146,778) |
Production Equipment | ||
PROPERTY & EQUIPMENT, net | 68,456 | 64,673 |
Computer Equipment | ||
PROPERTY & EQUIPMENT, net | 0 | 28,540 |
Equipment | ||
PROPERTY & EQUIPMENT, net | 0 | 12,380 |
Leasehold Improvements | ||
PROPERTY & EQUIPMENT, net | $ 10,627 | $ 42,451 |
NOTE 6 - PROPERTY AND EQUIPME_4
NOTE 6 - PROPERTY AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Details | ||
Depreciation and amortization | $ 1,302 | $ 543 |
NOTE 7 - CUSTOMER DEPOSITS (Det
NOTE 7 - CUSTOMER DEPOSITS (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Details | ||
Customer deposits | $ 170,870 | $ 276,381 |
NOTE 8 - NOTES PAYABLE - RELA_4
NOTE 8 - NOTES PAYABLE - RELATED PARTY (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Convertible Note payable, related parties | $ 43,916 | $ 43,916 | $ 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 8 - NOTES PAYABLE - RELA_5
NOTE 8 - NOTES PAYABLE - RELATED PARTY: Schedule of Convertible Notes - Related Parties (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Details | ||
Convertible Note payable, related parties | $ 43,916 | $ 0 |
Convertible notes payable - related party | (31,090) | 0 |
Convertible notes payable - related party, net of current portion | $ 12,826 | $ 0 |
NOTE 8 - NOTES PAYABLE - RELA_6
NOTE 8 - NOTES PAYABLE - RELATED PARTY: Schedule Of Notes Payable Related Party table (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Details | ||
Notes payable - related parties, current portion | $ 15,000 | $ 15,000 |
Notes Payable, Related Parties | $ 15,000 | $ 15,000 |
NOTE 9 - DEBT (Details)
NOTE 9 - DEBT (Details) - USD ($) | Mar. 03, 2021 | May 28, 2020 | Dec. 31, 2021 | Jan. 30, 2021 |
SBA EIDL Loan | ||||
Proceeds from Loans | $ 199,000 | |||
Debt Instrument, Interest Rate, Effective Percentage | 3.75% | |||
Interest Expense, Debt | $ 970 | |||
Debt Instrument, Maturity Date | Apr. 21, 2050 | |||
SBA PPP Loan | ||||
Proceeds from Loans | $ 100,000 | |||
Debt Instrument, Maturity Date | May 22, 2022 | |||
Debt Instrument, Face Amount | $ 100,000 | |||
Interest Payable, Current | $ 655 | |||
PPP Loan | ||||
Proceeds from Loans | $ 100,000 | |||
Debt Instrument, Interest Rate, Effective Percentage | 1.00% |
NOTE 9 - DEBT_ Schedule of De_2
NOTE 9 - DEBT: Schedule of Debt (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
SBA EIDL Loan | ||
Loans Payable | $ 198,674 | $ 199,000 |
SBA PPP Loan | ||
Loans Payable | 0 | 100,000 |
Loans Payable, Current | 0 | (69,551) |
Loans Payable, Noncurrent | $ 198,674 | $ 229,449 |
NOTE 10 - COMMITMENTS (Details)
NOTE 10 - COMMITMENTS (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Details | ||
Purchase Commitment, Remaining Minimum Amount Committed | $ 179,240 | $ 151,411 |
Prepayment of Purchase Commitments for Inventory | 4,230 | 38,610 |
Commitments for Future Cash Outlays for Inventory | $ 175,010 | $ 112,801 |
NOTE 11 - RELATED PARTY TRANS_3
NOTE 11 - RELATED PARTY TRANSACTIONS (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Details | ||
Accounts Receivable, Related Parties, Current | $ 0 | $ 17,345 |
NOTE 11 - RELATED PARTY TRANS_4
NOTE 11 - RELATED PARTY TRANSACTIONS: Schedule Of Related Party Transactions Table (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
President | ||
Accrued management compensation | $ 620,735 | $ 595,158 |
Accrued management compensation | $ 620,735 | $ 595,158 |
NOTE 12 - STOCKHOLDERS' EQUITY
NOTE 12 - STOCKHOLDERS' EQUITY (Details) - USD ($) | Jul. 14, 2020 | Sep. 30, 2019 | Sep. 06, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 01, 2017 | Sep. 11, 2015 | Aug. 03, 2011 |
Common stock issued for trade payable | $ 29,920 | ||||||||
Common stock issued for trade payable | $ 29,920 | $ 0 | |||||||
Granted | 400,000 | 150,000 | |||||||
Options and warrants granted | $ 19,112 | $ 15,456 | |||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 22,745 | ||||||||
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 | 1,300,000 | ||||||||
Securities Purchase Agreement | |||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 260,324 | 3,579,014 | 3,579,014 | ||||||
Share Price | $ 0.1788 | ||||||||
Stock Issued During Period, Value, Restricted Stock Award, Gross | $ 51,000 | $ 640,000 | $ 640,000 | ||||||
Common Stock | |||||||||
Common stock issued for trade payable | $ 28,876 | ||||||||
Common stock issued for trade payable Share | 347,902 |
NOTE 12 - STOCKHOLDERS' EQUIT_4
NOTE 12 - STOCKHOLDERS' EQUITY: Schedule of Assumptions Used to Estimate the Fair Values of Stock Options Granted (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 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 12 - STOCKHOLDERS' EQUIT_5
NOTE 12 - STOCKHOLDERS' EQUITY: Schedule of Stock Options and Warrants, Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 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 | |
Outstanding | 3,290,556 | 2,890,556 | |
Exercisable | 3,065,556 | 2,882,223 | |
Exercisable, Weighted Average Exercise Price | $ 0.19 | $ 0.20 |
NOTE 12 - STOCKHOLDERS' EQUIT_6
NOTE 12 - STOCKHOLDERS' EQUITY: Summary of the Status of the Options (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 3,290,556 | 2,890,556 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | 2 years 11 months 15 days | 3 years 6 months 3 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number | 3,065,556 | 2,882,223 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 0.19 | $ 0.20 |
Minimum | ||
Share-based Payment Arrangement, Option, Exercise Price Range, Lower Range Limit | 0.01 | 0.01 |
Maximum | ||
Share-based Payment Arrangement, Option, Exercise Price Range, Lower Range Limit | $ 1 | $ 1 |
NOTE 13 - INCOME TAXES_ Sched_4
NOTE 13 - INCOME TAXES: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Federal | ||
Current | $ 0 | $ 0 |
Deferred | 0 | 0 |
State | ||
Current | 800 | 800 |
Deferred | 0 | 0 |
INCOME TAX EXPENSE | $ 800 | $ 800 |
NOTE 13 - INCOME TAXES_ Sched_5
NOTE 13 - INCOME TAXES: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets | ||
Net operating loss carryover | $ 7,428,249 | $ 7,367,497 |
Research and development carry forward | 131,088 | 131,088 |
Inventory reserve | 223,616 | 253,994 |
Allowance for doubtful accounts | 3,600 | 3,600 |
Warranty allowance | 3,068 | 3,068 |
Accrued compensation | 148,976 | 142,838 |
Deferred tax liabilities | ||
Depreciation | (33,476) | (39,927) |
Valuation allowance | (7,905,122) | (7,862,158) |
Net deferred tax asset | $ 0 | $ 0 |
NOTE 13 - INCOME TAXES (Details
NOTE 13 - INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Details | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 24.00% | 24.00% |
Operating Loss Carryforwards | $ 7,453,932 |
NOTE 13 - INCOME TAXES_ Sched_6
NOTE 13 - INCOME TAXES: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Details | ||
Book income (loss) | $ 4,178 | $ (117,532) |
Meals and entertainment | 0 | 0 |
State tax deduction | 0 | 0 |
Deferred rent | 0 | 0 |
Stock/Options for services | 4,587 | 3,709 |
Officer's life ins premium | 1,181 | 1,181 |
Depreciation | (6,451) | (8,265) |
Accrued compensation | 6,138 | (26,801) |
Inventory reserve | (30,378) | 16,660 |
Valuation allowance | 42,289 | 262,894 |
Net operating loss carryover | (20,744) | (131,046) |
Income Tax Expense | $ 800 | $ 800 |