Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 31, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | Omnitek Engineering Corp. | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Entity Central Index Key | 1,404,804 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 20,281,082 | ||
Entity Public Float | $ 4,083,548 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | omtk |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | ||
Cash | $ 17,782 | $ 105,846 |
Accounts receivable, net | 28,159 | 30,835 |
Accounts receivable - related parties | 7,005 | 17,257 |
Inventory, net | 1,869,900 | 2,107,463 |
Prepaid expense | 5,324 | 6,050 |
Cost and estimated earnings in excess of billings | 30,973 | 0 |
Deposits | 21,716 | 19,745 |
Total Current Assets | 1,980,859 | 2,287,196 |
FIXED ASSETS, net | 31,839 | 59,151 |
OTHER ASSETS | ||
Intellectual property, net | 0 | 281 |
Other noncurrent assets | 14,280 | 14,280 |
Total Other Assets | 14,280 | 14,561 |
TOTAL ASSETS | 2,026,978 | 2,360,908 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 325,255 | 145,207 |
Accrued management compensation | 314,788 | 189,163 |
Accounts payable - related parties | 18,373 | 7,591 |
Customer deposits | 87,114 | 230,349 |
Total Current Liabilities | 745,530 | 572,310 |
Total Liabilities | 745,530 | 572,310 |
STOCKHOLDERS' EQUITY | ||
Common stock, 125,000,000 shares authorized; no par value; 20,281,082 and 19,981,082 shares issued and outstanding, respectively | 8,411,411 | 8,291,411 |
Additional paid-in capital | 11,620,841 | 11,346,599 |
Accumulated deficit | (18,750,804) | (17,849,412) |
Total Stockholders' Equity | 1,281,448 | 1,788,598 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,026,978 | $ 2,360,908 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position | ||
Common Stock, par or stated value | $ 0 | $ 0 |
Common Stock, shares authorized | 125,000,000 | 125,000,000 |
Common Stock, shares issued | 20,281,082 | 19,981,082 |
Common Stock, shares outstanding | 20,281,082 | 19,981,082 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement | ||
REVENUES | $ 1,296,655 | $ 1,738,632 |
REVENUES, related parties | 11,445 | 54,924 |
Total Revenues | 1,308,100 | 1,793,556 |
COST OF GOODS SOLD | 775,999 | 1,032,412 |
GROSS MARGIN | 532,101 | 761,144 |
OPERATING EXPENSES | ||
General and administrative | 1,217,396 | 1,443,951 |
Research and development | 187,109 | 295,190 |
Depreciation and amortization | 27,593 | 30,628 |
Total Operating Expenses | 1,432,098 | 1,769,769 |
LOSS FROM OPERATIONS | (899,997) | (1,008,625) |
OTHER INCOME (EXPENSE) | ||
Interest income | 1 | 24 |
Other income | 5,574 | 4,209 |
Interest expense | (6,170) | (1,915) |
Total Other Income (Expense) | (595) | 2,318 |
LOSS BEFORE INCOME TAXES | (900,592) | (1,006,307) |
INCOME TAX EXPENSE | 800 | 800 |
NET LOSS | $ (901,392) | $ (1,007,107) |
BASIC AND DILUTED LOSS PER SHARE | $ (0.04) | $ (0.05) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 20,142,284 | 19,980,971 |
Statement of Stockholders' Equi
Statement of Stockholders' Equity - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Stockholders' Equity, beginning of period, Value at Dec. 31, 2014 | $ 8,289,911 | $ 11,121,502 | $ (16,842,305) | $ 2,569,108 |
Stockholders' Equity, beginning of period, Shares at Dec. 31, 2014 | 19,979,582 | |||
Value of options and warrants issued for services | 225,097 | 225,097 | ||
Common stock issued for services, Value | $ 1,500 | 1,500 | ||
Common stock issued for services, Shares | 1,500 | |||
NET LOSS | (1,007,107) | (1,007,107) | ||
Stockholders' Equity, end of period, Value at Dec. 31, 2015 | $ 8,291,411 | 11,346,599 | (17,849,412) | 1,788,598 |
Stockholders' Equity, end of period, Shares at Dec. 31, 2015 | 19,981,082 | |||
Value of options and warrants issued for services | 174,242 | 174,242 | ||
Value of options and warrants issued for accrued management comp | 100,000 | 100,000 | ||
Sale of restricted stock, Value | $ 100,000 | 100,000 | ||
Sale of restricted stock, Shares | 250,000 | |||
Common stock issued for services, Value | $ 20,000 | 20,000 | ||
Common stock issued for services, Shares | 50,000 | |||
NET LOSS | (901,392) | (901,392) | ||
Stockholders' Equity, end of period, Value at Dec. 31, 2016 | $ 8,411,411 | $ 11,620,841 | $ (18,750,804) | $ 1,281,448 |
Stockholders' Equity, end of period, Shares at Dec. 31, 2016 | 20,281,082 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
OPERATING ACTIVITIES | ||
NET LOSS | $ (901,392) | $ (1,007,107) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Amortization and depreciation expense | 27,593 | 30,628 |
Options and warrants granted | 174,242 | 225,097 |
Stock issued for services | ||
Common stock issued for services | 20,000 | 1,500 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,676 | 25,222 |
Accounts receivable-related parties | 10,252 | (2,165) |
Deposits | (1,971) | 73,036 |
Prepaid Expense | 726 | (1,850) |
Inventory | 237,563 | 226,318 |
Cost in excess of billings | (30,973) | |
Accounts payable and accrued expenses | 180,048 | 60,822 |
Customer deposits | (143,235) | (115,495) |
Accounts payable-related parties | 10,782 | 3,991 |
Accrued management compensation | 225,625 | 87,067 |
Net Cash Used in Operating Activities | (188,064) | (392,936) |
INVESTING ACTIVITIES | ||
Net Cash Provided by Investing Activities | ||
FINANCING ACTIVITIES | ||
Proceeds from stock sale | 100,000 | |
Net Cash Provided by Financing Activities | 100,000 | |
NET DECREASE IN CASH | (88,064) | (392,936) |
CASH AT BEGINNING OF YEAR | 105,846 | 498,782 |
CASH AT END OF PERIOD | 17,782 | 105,846 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS CASH FLOW INFORMATION | ||
CASH PAID FOR:Interest | 6,170 | 1,915 |
CASH PAID FOR:Income taxes | 800 | $ 800 |
NON CASH INVESTING AND FINANCING ACTIVITIES | ||
Options issued for accrued salary | $ 100,000 |
Note 1- Organization and Busine
Note 1- Organization and Business Activity | 12 Months Ended |
Dec. 31, 2016 | |
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 supplies new natural gas engine and advanced engine management systems for gaseous fuels and is the manufacturer of a proprietary technology used to convert old or new diesel engines to operate on natural gas, propane or hydrogen. Omnitek began operations on October 10, 2001, and was a spin-off from Nology Engineering, Inc. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 2 - Summary of Significant Accounting Policies | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Accounting Methods The Company's financial statements are prepared using the accrual method of accounting. The Company has elected a December 31, year-end. b. Use of Estimates in Preparing Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 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, 2016 and 2015 was $15,000 and $15,000, respectively. Additionally, bad debt expense for the years ended December 31, 2016 and 2015 was $11,280 and $13,805, respectively. e. Inventory Inventories at the lower of cost, determined on an average cost basis. Market value for raw materials is based on replacement costs. Inventory costs include material, labor and manufacturing overhead. The Company reviews inventories on hand at least annually and records provisions for estimated excess, slow moving and obsolete inventory, as well as inventory with a carrying value in excess of net realizable value. The regular and systematic inventory valuation reviews include a current assessment of future product demand, historical experience and product expiration. f. Long-Lived Assets The Company assesses the recoverability of its long-lived assets annually and whenever circumstances would indicate that there may be an impairment. The Company compares the estimated undiscounted future cash flows to the carrying value of the long lived assets to determine if an impairment has occurred. In the event that an impairment has occurred, the Company will recognize the impairment immediately. No impairment expense was recognized as of December 31, 2016. 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. Intangible Assets We evaluate the recoverability of intangible assets, which consist of patents and trademarks, periodically and take into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. All of our intangible assets are subject to amortization. Intangible assets are amortized on a straight-line basis over the following useful lives which range from 2 to 8 years. i. Costs and Estimated Earnings and Billings on Completed Contracts Billing practices for our contracts are governed by the contract terms of each project based on progress toward completion approved by the owner, achievement of milestones or pre-agreed schedules. Billings do not necessarily correlate with revenue recognized under the percentage-of-completion method of accounting. The current liability, Billings in excess of costs and estimated earnings on uncompleted contracts, represents billings in excess of revenues recognized. The current asset, Costs and estimated earnings in excess of billings on uncompleted contracts, represents revenues recognized in excess of amounts billed to the customer, which are usually billed during normal billing processes following achievement of contractual requirements. j. Revenue Recognition Products Contracts k. 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. l. Research and Development The Company expenses the costs of researching and developing its products during the period incurred. During the years ended December 31, 2016 and 2015, the Company incurred research and development expenses of $187,109 and $295,190, respectively. m. Advertising The Company follows the policy of charging the costs of advertising to expense as incurred. During the years ended December 31, 2016 and 2015, the Company expensed $-0- and $-0-, respectively. n. 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, 2016, 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 2008. o. 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 -0- stock options and warrants that would have been included in the fully diluted earnings per share as of December 31, 2016 and 2015, respectively. p. Fair Value Measurements The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: Level 1 Quoted prices in active markets for identical assets or liabilities; Level 2 Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and Level 3 Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. q. 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. r. Concentration of Risks Customers During the year ended December 31, 2016, eight customers accounted for approximately 67% of sales. During the year ended December 31, 2015, eight customers accounted for approximately 58% of sales. Suppliers During the year ended December 31, 2016, four suppliers accounted for 68% of products purchased. During the year ended December 31, 2015, five suppliers accounted for 47% of products purchased. s. Basis of Presentation, Liquidity and Going Concern Historically, the Company has incurred net losses and negative cash flows from operations. As of December 31, 2016, the Company had an accumulated deficit of $18,750,804 and total stockholders equity of $1,281,448. At December 31, 2016, the Company had current assets of $1,980,859 including cash of $17,782, and current liabilities of $745,530, resulting in working capital of $1,235,329. For 2016, the Company reported a net loss of $901,392 and net cash used by operating activities of $188,064. Management believes that based on its operating plan, the projected sales for 2017, 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 Companys ability to continue as a going concern. Our financial statements have been prepared on a going concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of operations. The financial statements do not include any adjustments relating to the recoverability or classification of recorded asset amounts or the amounts or classification of liabilities should we be unable to continue as a going concern. t. Newly Issued 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 Companys financial position or financial statements. |
Note 3 - Inventory
Note 3 - Inventory | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 3 - Inventory | NOTE 3 INVENTORY Inventory is located in Vista, California and at December 31, 2016 and 2015 consisted of the following: December 31, 2016 December 31, 2015 Raw materials $965,821 $1,093,890 Finished goods 1,247,230 1,263,089 Allowance for obsolete inventory (343,151) (249,516) Total $1,869,900 $2,107,463 The Company has established an allowance for obsolete inventory. Expense for obsolete inventory was $93,635 and $26,666, for the periods ended December 31, 2016 and December 31, 2015, respectively. |
Note 4 - Costs and Estimated Ea
Note 4 - Costs and Estimated Earnings and Billings On Uncompleted Contracts | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 4 - Costs and Estimated Earnings and Billings On Uncompleted Contracts | NOTE 4 COSTS AND ESTIMATED EARNINGS AND BILLINGS ON UNCOMPLETED CONTRACTS Billing practices for our contracts are governed by the contract terms of each project based on progress toward completion approved by the owner, achievement of milestones or pre-agreed schedules. Billings do not necessarily correlate with revenue recognized under the percentage-of-completion method of accounting. The current liability, Billings in excess of costs and estimated earnings, represents billings in excess of revenues recognized. The current asset, Costs and estimated earnings in excess of billings, represents revenues recognized in excess of amounts billed to the customer, which are usually billed during normal billing processes following achievement of contractual requirements. The two tables below set forth the costs incurred and earnings accrued on uncompleted contracts compared with the billings on those contracts through December 31, 2016 and 2015 and reconcile the net excess billings to the amounts included in the balance sheets at those dates. December 31, 2016 December 31, 2015 Cost incurred on uncompleted contracts $100,335 $ Estimated earnings 52,138 152,473 Billings on uncompleted contracts (121,500) Excess of costs incurred and estimated earnings over billings on uncompleted contracts $30,973 Included in the accompanying balance sheets under the following captions: December 31, 2016 December 31, 2015 Costs and estimated earnings in excess of billings on uncompleted contracts $30,973 $ Billings in excess of costs and estimated earnings on uncompleted contracts Net amount of costs and estimated earnings on uncompleted contracts above billings $30,973 $ |
Note 5 - Property and Equipment
Note 5 - Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 5 - Property and Equipment | NOTE 5 PROPERTY AND EQUIPMENT Property and equipment at December, 2016 and 2015 consisted of the following: December 31, 2016 December 31, 2015 Production equipment $61,960 $61,960 Computers/Office equipment 28,540 28,540 Tooling equipment 12,380 12,380 Leasehold Improvements 42,451 42,451 Less: accumulated depreciation (113,492) (86,180) Total $31,839 $59,151 Depreciation expense for the years ended December 31, 2016 and 2015 was $27,312 and $29,564, respectively. |
Note 6 - Intellectual Property
Note 6 - Intellectual Property | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 6 - Intellectual Property | NOTE 6 INTELLECTUAL PROPERTY The Companys patents and trademarks at December 31, 2016 and 2015 were as follows: December 31, December 31, 2016 2015 Patents 42,295 42,295 Trademarks 1,920 1,920 Intellectual property and customer list 474,000 474,000 Less: accumulated amortization (518,215) (517,934) Total - 281 Amortization expense for the years ended December 31, 2016 and 2015 was $281 and $1,064, respectively. |
Note 7 - Customer Deposits
Note 7 - Customer Deposits | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 7 - Customer Deposits | NOTE CUSTOMER DEPOSITS The Company may require a customer deposit from domestic and international customers. As of December 31, 2016 and 2015 the Company had customer deposits of $87,114 and $230,349, respectively. |
Note 8 - Commitments
Note 8 - Commitments | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 8 - Commitments | NOTE 8 COMMITMENTS As of December 31, 2016 and 2015, the Company had outstanding purchase commitments for inventory totaling $63,274 and $69,126, respectively. Of these amounts, the Company had made prepayments of $21,716 as of December 31, 2016 and $19,745 as of December 31, 2015 and had commitments for future cash outlays for inventory totaling $41,558 and $49,381, respectively. On January 10, 2013, the Company entered into an operating lease for its facilities in California . Future payment obligations under the terms of the operating lease are as follows: Years Ending December 31 2017 $192,085 2018 35,000 Total minimum lease payments $227,085 |
Note 9 - Related Party Transact
Note 9 - Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 9 - Related Party Transactions | NOTE 9 RELATED PARTY TRANSACTIONS Accounts Receivable Related Parties The Company holds a non-controlling interest in various distributors in exchange for use of the Companys name and logo. As of December 31, 2016, the Company owned a 15% interest in Omnitek Engineering Thailand Co. Ltd. and a 20% interest in Omnitek Peru S.A.C. As of December 31, 2016 and December 31, 2015, the Company was owed $7,005 and $17,257, respectively, by related parties for the purchase of products and services. Accrued Management Expenses During the periods ended December 31, 2016 and December 31, 2015, the Companys president, chief financial officer and vice president were due amounts for services performed for the Company . As of December 31, 2016 and December 31, 2015 the accrued management fees consisted of the following: December 31, December 31, 2016 2015 Amounts due to the president $210,257 $148,719 Amounts due to the chief financial officer 35,962 - Amounts due to the vice president 68,569 40,444 Total $314,788 $189,163 |
Note 10 - Stockholders' Equity
Note 10 - Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 10 - Stockholders' Equity | NOTE 10 STOCKHOLDERS EQUITY Common Stock On July 15, 2016 the Company issued 50,000 restricted shares of common stock at a price of $.40 per share (total valuation of $20,000) in consideration of services rendered by an unrelated party. On June 13, 2016 the Company issued 250,000 shares of its restricted common stock in consideration of a capital contribution of $100,000. On January 26, 2015 the Company issued 1,500 shares of its common stock in consideration of the Board Meeting fee for the meeting of the Board of Directors held on January 14, 2015. Options and Warrants During the years ended December 31, 2016 and 2015, the Company granted 250,000 and 375,000 options for services, respectively. During the years ended December 31, 2016 and 2015, respectively, the Company recognized expense of $174,242 and $225,097 related to options that vested during the years, respectively, pursuant to ASC Topic 718. The total remaining amount of compensation expense to be recognized in future periods is $105,922. 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. In April 2007, the Companys shareholders approved its 2006 Long-Term Incentive Plan (the 2006 Plan). Under the 2006 plan, the Company may issue up to 10,000,000 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, 2014 the remaining 2,590,000 options previously issued under the plan expired. 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 Companys 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, 2016 the Company has a total of 815,000 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 Companys 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, 2016 the Company has a total of 970,000 options issued under the plan. During the twelve months ended December 31, 2016 and 2015 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 Companys 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 Companys 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, 2016 December 31, 2015 Expected volatility 87% 76% Expected dividends 0% 0% Expected term 7 Years 7 Years Risk-free interest rate 1.52% 1.89% A summary of the status of the options and warrants granted at December 31, 2016 and December 31, 2015 and changes during the years then ended is presented below: December 31, December 31, 2016 2015 Weighted-Average Weighted-Average Shares Exercise Price Shares Exercise Price Outstanding at beginning of year 3,890,313 $ 3.28 3,515,313 $ 3.56 Granted 720,000 0.28 375,000 0.82 Exercised - - - - Expired or cancelled (100,000) 2.74 - - Outstanding at end of year 4,510,313 2.81 3,890,313 3.28 Exercisable 4,222,813 $ 2.93 3,414,063 $ 3.52 A summary of the status of the options and warrants outstanding at December 31, 2016 is presented below: Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life Number Exercisable Weighted-Average Exercise Price 0.01-1.00 1,045,000 5.83 years 824,167 $0.35 $1.01-2.00 215,000 2.13 years 215,000 1.41 $2.01-3.00 530,000 2.74 years 463,333 2.52 $3.01-4.00 2,720,313 0.27 years 2,720,313 3.88 $.01-4.00 4,510,313 1.94 years 4,222,813 $2.92 A summary of the status of the options and warrants outstanding at December 31, 2015 is presented below: Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life Number Exercisable Weighted-Average Exercise Price $0.01-1.00 325,000 5.82 years 79,167 0.84 $1.01-2.00 215,000 3.13 years 180,000 1.44 $2.01-3.00 630,000 3.89 years 434,583 2.53 $3.01-4.00 2,720,313 1.27 years 2,720,313 3.88 $.01-4.00 3,890,313 2.18 years 3,414,063 3.51 |
Note 11 - Income Taxes
Note 11 - Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 11 - Income Taxes | NOTE 11 INCOME TAXES The provision (benefit) for income taxes for the year ended December 31, 2016 and 2015 consists of the following: December 31, December 31, 2016 2015 Federal Current $ - $ - Deferred - - State Current 800 800 Deferred - - Income tax expense $ 800 $ 800 Net deferred tax assets consist of the following components as of December 31, 2016 and 2015: December 31, December 31, 2016 2015 Deferred tax assets: Net operating loss carryover $ 5,772,304 $ 5,805,378 Research and development carry forward 136,465 136,465 Related party accruals 130,538 130,538 Inventory reserve 203,549 240,067 Allowance for doubtful accounts 33,605 33,605 Accrued compensation 36,919 85,913 Deferred tax liabilities: Depreciation (111,214) (117,272) Deferred rent (4,746) (6,128) Warranty allowance (4,986) - Valuation allowance (6,192,434) (6,308,566) 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 rates of 39% to pretax income from continuing operations for the year ended December 31, 2016 and 2015 due to the following: December 31, December 31, 2016 2015 Book loss $ (351,544) $ (392,774) Meals and entertainment 259 299 State tax deduction - - Deferred rent (1,382) 6,128 Stock/Options for services 75,754 88,273 Officers life ins premium 921 - Depreciation (6,058) 11,945 Accrued compensation 48,994 (33,956) Inventory reserve 36,518 3,996 Warranty allowance 4,986 - Valuation allowance 383,903 786,445 Net operating loss carryover (191,551) (469,556) Income Tax Expense $ 800 $ 800 At December 31, 2016, the Company had net operating loss carry forwards of approximately $5,772,304 through 2034. No tax benefit has been reported in the December 31, 2016 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 12 - Subsequent Events
Note 12 - Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
Note 12 - Subsequent Events | NOTE 12 SUBSEQUENT EVENTS On February 10, 2017 the Company granted a total of 905,556 Non-Qualified Stock Options pursuant to the 2015 Long-Term Incentive Plan. The Options were allocated as follows: 555,556 Options to the CEO in exchange of $100,000 of deferred salary (vest and exercisable immediately), 100,000 Options to two employees for past and continued services (vest and exerciable immediately), 50,000 Options each to three directors (total of 150,000 Options) for past and continued services (vest and exercisable immediately) and 100,000 Options to an employee for past and continued services (50,000 Options vest and exercisable immediately and 50,000 Options vest and exercisable on the first anniversary of date of grant). |
Note 2 - Summary of Significa19
Note 2 - Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
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. |
b. Ues of Estimates in Preparing Financial Statements | b. Use of Estimates in Preparing Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
c. Cash and Cash Equivalents | c. Cash and Cash Equivalents For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. |
d. Accounts Receivable | d. Accounts Receivable Trade receivables are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. Allowance for doubtful accounts for the years ended December 31, 2016 and 2015 was $15,000 and $15,000, respectively. Additionally, bad debt expense for the years ended December 31, 2016 and 2015 was $11,280 and $13,805, respectively. |
e. Inventory | e. Inventory Inventories at the lower of cost, determined on an average cost basis. Market value for raw materials is based on replacement costs. Inventory costs include material, labor and manufacturing overhead. The Company reviews inventories on hand at least annually and records provisions for estimated excess, slow moving and obsolete inventory, as well as inventory with a carrying value in excess of net realizable value. The regular and systematic inventory valuation reviews include a current assessment of future product demand, historical experience and product expiration. |
f. Long-lived Assets | f. Long-Lived Assets The Company assesses the recoverability of its long-lived assets annually and whenever circumstances would indicate that there may be an impairment. The Company compares the estimated undiscounted future cash flows to the carrying value of the long lived assets to determine if an impairment has occurred. In the event that an impairment has occurred, the Company will recognize the impairment immediately. No impairment expense was recognized as of December 31, 2016. |
g. Property and Equipment | g. Property and Equipment Property and equipment are recorded at cost. Depreciation and amortization are calculated on the straight-line method over the shorter of the lease term or the estimated useful lives of the assets ranging from three to five years. |
h. Intangible Assets | h. Intangible Assets We evaluate the recoverability of intangible assets, which consist of patents and trademarks, periodically and take into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. All of our intangible assets are subject to amortization. Intangible assets are amortized on a straight-line basis over the following useful lives which range from 2 to 8 years. |
i. Costs and Estimated Earnings and Billings On Completed Contracts | i. Costs and Estimated Earnings and Billings on Completed Contracts Billing practices for our contracts are governed by the contract terms of each project based on progress toward completion approved by the owner, achievement of milestones or pre-agreed schedules. Billings do not necessarily correlate with revenue recognized under the percentage-of-completion method of accounting. The current liability, Billings in excess of costs and estimated earnings on uncompleted contracts, represents billings in excess of revenues recognized. The current asset, Costs and estimated earnings in excess of billings on uncompleted contracts, represents revenues recognized in excess of amounts billed to the customer, which are usually billed during normal billing processes following achievement of contractual requirements. |
j. Revenue Recognition | j. Revenue Recognition Products Contracts |
k. Cost of Good Sold | k. 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. |
l. Research and Development | l. Research and Development The Company expenses the costs of researching and developing its products during the period incurred. During the years ended December 31, 2016 and 2015, the Company incurred research and development expenses of $187,109 and $295,190, respectively. |
m. Advertising | m. Advertising The Company follows the policy of charging the costs of advertising to expense as incurred. During the years ended December 31, 2016 and 2015, the Company expensed $-0- and $-0-, respectively. |
n. Provision For Income Taxes | n. 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, 2016, 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 2008. |
o. Basic and Diluted Loss Per Share | o. 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 -0- stock options and warrants that would have been included in the fully diluted earnings per share as of December 31, 2016 and 2015, respectively. |
p. Fair Value Measurements | p. Fair Value Measurements The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: Level 1 Quoted prices in active markets for identical assets or liabilities; Level 2 Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and Level 3 Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. |
q. Stock- Based Compensation | q. 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. |
r. Concentration of Risks | r. Concentration of Risks Customers During the year ended December 31, 2016, eight customers accounted for approximately 67% of sales. During the year ended December 31, 2015, eight customers accounted for approximately 58% of sales. Suppliers During the year ended December 31, 2016, four suppliers accounted for 68% of products purchased. During the year ended December 31, 2015, five suppliers accounted for 47% of products purchased. |
s. Basis of Presentation, Liquidity and Going Concern | s. Basis of Presentation, Liquidity and Going Concern Historically, the Company has incurred net losses and negative cash flows from operations. As of December 31, 2016, the Company had an accumulated deficit of $18,750,804 and total stockholders equity of $1,281,448. At December 31, 2016, the Company had current assets of $1,980,859 including cash of $17,782, and current liabilities of $745,530, resulting in working capital of $1,235,329. For 2016, the Company reported a net loss of $901,392 and net cash used by operating activities of $188,064. Management believes that based on its operating plan, the projected sales for 2017, 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 Companys ability to continue as a going concern. Our financial statements have been prepared on a going concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of operations. The financial statements do not include any adjustments relating to the recoverability or classification of recorded asset amounts or the amounts or classification of liabilities should we be unable to continue as a going concern. |
t. Newly Issued Accounting Pronouncements | t. Newly Issued 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 Companys financial position or financial statements. |
Note 3 - Inventory_ Schedule of
Note 3 - Inventory: Schedule of Inventory (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Inventory | Inventory is located in Vista, California and at December 31, 2016 and 2015 consisted of the following: December 31, 2016 December 31, 2015 Raw materials $965,821 $1,093,890 Finished goods 1,247,230 1,263,089 Allowance for obsolete inventory (343,151) (249,516) Total $1,869,900 $2,107,463 |
Note 4 - Costs and Estimated 21
Note 4 - Costs and Estimated Earnings and Billings On Uncompleted Contracts: Schedule of Costs in Excess of Billings (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Costs in Excess of Billings | December 31, 2016 December 31, 2015 Cost incurred on uncompleted contracts $100,335 $ Estimated earnings 52,138 152,473 Billings on uncompleted contracts (121,500) Excess of costs incurred and estimated earnings over billings on uncompleted contracts $30,973 |
Note 4 - Costs and Estimated 22
Note 4 - Costs and Estimated Earnings and Billings On Uncompleted Contracts: Schedule of long term contracts (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of long term contracts | Included in the accompanying balance sheets under the following captions: December 31, 2016 December 31, 2015 Costs and estimated earnings in excess of billings on uncompleted contracts $30,973 $ Billings in excess of costs and estimated earnings on uncompleted contracts Net amount of costs and estimated earnings on uncompleted contracts above billings $30,973 $ |
Note 5 - Property and Equipme23
Note 5 - Property and Equipment: Schedule of Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Property and Equipment | Property and equipment at December, 2016 and 2015 consisted of the following: December 31, 2016 December 31, 2015 Production equipment $61,960 $61,960 Computers/Office equipment 28,540 28,540 Tooling equipment 12,380 12,380 Leasehold Improvements 42,451 42,451 Less: accumulated depreciation (113,492) (86,180) Total $31,839 $59,151 |
Note 6 - Intellectual Property_
Note 6 - Intellectual Property: Schedule of Intellectual Property (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Intellectual Property | The Companys patents and trademarks at December 31, 2016 and 2015 were as follows: December 31, December 31, 2016 2015 Patents 42,295 42,295 Trademarks 1,920 1,920 Intellectual property and customer list 474,000 474,000 Less: accumulated amortization (518,215) (517,934) Total - 281 |
Note 8 - Commitments_ Schedule
Note 8 - Commitments: Schedule of Future Minimum Rental Payments for Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Future Minimum Rental Payments for Operating Leases | . Future payment obligations under the terms of the operating lease are as follows: Years Ending December 31 2017 $192,085 2018 35,000 Total minimum lease payments $227,085 |
Note 9 - Related Party Transa26
Note 9 - Related Party Transactions: Schedule of Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Related Party Transactions | . As of December 31, 2016 and December 31, 2015 the accrued management fees consisted of the following: December 31, December 31, 2016 2015 Amounts due to the president $210,257 $148,719 Amounts due to the chief financial officer 35,962 - Amounts due to the vice president 68,569 40,444 Total $314,788 $189,163 |
Note 10 - Stockholders' Equity_
Note 10 - Stockholders' Equity: Schedule of Assumptions Used to Estimate the Fair Values of Stock Options Granted (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 December 31, 2015 Expected volatility 87% 76% Expected dividends 0% 0% Expected term 7 Years 7 Years Risk-free interest rate 1.52% 1.89% |
Note 10 - Stockholders' Equit28
Note 10 - Stockholders' Equity: Schedule of Stock Options and Warrants, Activity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Stock Options and Warrants, Activity | A summary of the status of the options and warrants granted at December 31, 2016 and December 31, 2015 and changes during the years then ended is presented below: December 31, December 31, 2016 2015 Weighted-Average Weighted-Average Shares Exercise Price Shares Exercise Price Outstanding at beginning of year 3,890,313 $ 3.28 3,515,313 $ 3.56 Granted 720,000 0.28 375,000 0.82 Exercised - - - - Expired or cancelled (100,000) 2.74 - - Outstanding at end of year 4,510,313 2.81 3,890,313 3.28 Exercisable 4,222,813 $ 2.93 3,414,063 $ 3.52 |
Note 10 - Stockholders' Equit29
Note 10 - Stockholders' Equity: Summary of the Status of the Options and Warrants Outstanding (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Summary of the Status of the Options and Warrants Outstanding | A summary of the status of the options and warrants outstanding at December 31, 2016 is presented below: Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life Number Exercisable Weighted-Average Exercise Price 0.01-1.00 1,045,000 5.83 years 824,167 $0.35 $1.01-2.00 215,000 2.13 years 215,000 1.41 $2.01-3.00 530,000 2.74 years 463,333 2.52 $3.01-4.00 2,720,313 0.27 years 2,720,313 3.88 $.01-4.00 4,510,313 1.94 years 4,222,813 $2.92 A summary of the status of the options and warrants outstanding at December 31, 2015 is presented below: Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life Number Exercisable Weighted-Average Exercise Price $0.01-1.00 325,000 5.82 years 79,167 0.84 $1.01-2.00 215,000 3.13 years 180,000 1.44 $2.01-3.00 630,000 3.89 years 434,583 2.53 $3.01-4.00 2,720,313 1.27 years 2,720,313 3.88 $.01-4.00 3,890,313 2.18 years 3,414,063 3.51 |
Note 11 - Income Taxes_ Schedul
Note 11 - Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Components of Income Tax Expense (Benefit) | The provision (benefit) for income taxes for the year ended December 31, 2016 and 2015 consists of the following: December 31, December 31, 2016 2015 Federal Current $ - $ - Deferred - - State Current 800 800 Deferred - - Income tax expense $ 800 $ 800 |
Note 11 - Income Taxes_ Sched31
Note 11 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Deferred Tax Assets and Liabilities | Net deferred tax assets consist of the following components as of December 31, 2016 and 2015: December 31, December 31, 2016 2015 Deferred tax assets: Net operating loss carryover $ 5,772,304 $ 5,805,378 Research and development carry forward 136,465 136,465 Related party accruals 130,538 130,538 Inventory reserve 203,549 240,067 Allowance for doubtful accounts 33,605 33,605 Accrued compensation 36,919 85,913 Deferred tax liabilities: Depreciation (111,214) (117,272) Deferred rent (4,746) (6,128) Warranty allowance (4,986) - Valuation allowance (6,192,434) (6,308,566) Net deferred tax asset $ - $ - |
Note 11 - Income Taxes_ Sched32
Note 11 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Effective Income Tax Rate Reconciliation | December 31, December 31, 2016 2015 Book loss $ (351,544) $ (392,774) Meals and entertainment 259 299 State tax deduction - - Deferred rent (1,382) 6,128 Stock/Options for services 75,754 88,273 Officers life ins premium 921 - Depreciation (6,058) 11,945 Accrued compensation 48,994 (33,956) Inventory reserve 36,518 3,996 Warranty allowance 4,986 - Valuation allowance 383,903 786,445 Net operating loss carryover (191,551) (469,556) Income Tax Expense $ 800 $ 800 |
Note 1- Organization and Busi33
Note 1- Organization and Business Activity (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Details | |
Trading Symbol | omtk |
Note 2 - Summary of Significa34
Note 2 - Summary of Significant Accounting Policies: d. Accounts Receivable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Allowance For Doubtful Accounts | $ 15,000 | $ 15,000 |
Provision for Doubtful Accounts | $ 11,280 | $ 13,805 |
Note 2 - Summary of Significa35
Note 2 - Summary of Significant Accounting Policies: f. Long-lived Assets (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Details | |
Asset Impairment Charges | $ 0 |
Note 2 - Summary of Significa36
Note 2 - Summary of Significant Accounting Policies: g. Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Minimum | |
Property, Plant and Equipment, Useful Life | 3 years |
Maximum | |
Property, Plant and Equipment, Useful Life | 5 years |
Note 2 - Summary of Significa37
Note 2 - Summary of Significant Accounting Policies: h. Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Minimum | |
Finite-Lived Intangible Asset, Useful Life | 2 years |
Maximum | |
Finite-Lived Intangible Asset, Useful Life | 8 years |
Note 2 - Summary of Significa38
Note 2 - Summary of Significant Accounting Policies: j. Revenue Recognition (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Minimum | |
Contract terms | our contracts generally take 12 m |
Maximum | |
Contract terms | 24 m |
Note 2 - Summary of Significa39
Note 2 - Summary of Significant Accounting Policies: l. Research and Development (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Research and development | $ 187,109 | $ 295,190 |
Note 2 - Summary of Significa40
Note 2 - Summary of Significant Accounting Policies: m. Advertising (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Advertising Expense | $ 0 | $ 0 |
Note 2 - Summary of Significa41
Note 2 - Summary of Significant Accounting Policies: o. Basic and Diluted Loss Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 0 |
Note 2 - Summary of Significa42
Note 2 - Summary of Significant Accounting Policies: r. Concentration of Risks (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Customer Concentration Risk | ||
Concentration Risk, Customer | eight customers | eight customers |
Concentration Risk, Percentage | 67.00% | 58.00% |
Supplier Concentration Risk | ||
Concentration Risk, Percentage | 68.00% | 47.00% |
Concentration Risk, Supplier | four suppliers | five suppliers |
Note 2 - Summary of Significa43
Note 2 - Summary of Significant Accounting Policies: s. Basis of Presentation, Liquidity and Going Concern (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Details | |||
Accumulated deficit | $ (18,750,804) | $ (17,849,412) | |
Total Stockholders' Equity | 1,281,448 | 1,788,598 | $ 2,569,108 |
Total Current Assets | 1,980,859 | 2,287,196 | |
Cash | 17,782 | 105,846 | $ 498,782 |
Total Current Liabilities | 745,530 | 572,310 | |
Working Capital | 1,235,329 | ||
NET LOSS | (901,392) | ||
Net Cash Used in Operating Activities | $ (188,064) | $ (392,936) |
Note 3 - Inventory_ Schedule 44
Note 3 - Inventory: Schedule of Inventory (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Details | ||
Raw materials | $ 965,821 | $ 1,093,890 |
Finished goods | 1,247,230 | 1,263,089 |
Allowance for obsolete inventory | (343,151) | (249,516) |
Total | $ 1,869,900 | $ 2,107,463 |
Note 3 - Inventory (Details)
Note 3 - Inventory (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Expense for Obsolete Inventory | $ 93,635 | $ 26,666 |
Note 4 - Costs and Estimated 46
Note 4 - Costs and Estimated Earnings and Billings On Uncompleted Contracts: Schedule of Costs in Excess of Billings (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Details | ||
Cost incurred on uncompleted contracts | $ 100,335 | $ 0 |
Estimated earnings | 52,138 | 0 |
Billings on uncompleted contracts | (121,500) | 0 |
Excess of costs incurred and estimated earnings over billings on uncompleted contracts | $ 30,973 | $ 0 |
Note 4 - Costs and Estimated 47
Note 4 - Costs and Estimated Earnings and Billings On Uncompleted Contracts: Schedule of long term contracts (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Details | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | $ 30,973 | $ 0 |
Billings in excess of costs and estimated earnings on uncompleted contracts | 0 | 0 |
Cost and estimated earnings in excess of billings | $ 30,973 | $ 0 |
Note 5 - Property and Equipme48
Note 5 - Property and Equipment: Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Less: accumulated depreciation | $ (113,492) | $ (86,180) |
Total | 31,839 | 59,151 |
Production Equipment | ||
Property, Plant and Equipment, Gross | 61,960 | 61,960 |
Computer Equipment | ||
Property, Plant and Equipment, Gross | 28,540 | 28,540 |
Tools, Dies and Molds | ||
Property, Plant and Equipment, Gross | 12,380 | 12,380 |
Leasehold Improvements | ||
Property, Plant and Equipment, Gross | $ 42,451 | $ 42,451 |
Note 5 - Property and Equipme49
Note 5 - Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Depreciation expense | $ 27,312 | $ 29,564 |
Note 6 - Intellectual Propert50
Note 6 - Intellectual Property: Schedule of Intellectual Property (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Details | ||
Patents | $ 42,295 | $ 42,295 |
Trademarks | 1,920 | 1,920 |
Intellectual property and customer list | 474,000 | 474,000 |
Less: accumulated amortization | (518,215) | (517,934) |
Total | $ 0 | $ 281 |
Note 6 - Intellectual Property
Note 6 - Intellectual Property (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2014 | |
Details | ||
Amortization expense | $ 281 | $ 1,064 |
Note 7 - Customer Deposits (Det
Note 7 - Customer Deposits (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Details | ||
Customer deposits | $ 87,114 | $ 230,349 |
Note 8 - Commitments (Details)
Note 8 - Commitments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Deposits | $ 21,716 | $ 19,745 |
Inventories | ||
Long-term Purchase Commitment, Amount | 63,274 | 69,126 |
Deposits | 21,716 | 19,745 |
Inventories | Future Cash Outlays | ||
Long-term Purchase Commitment, Amount | $ 41,558 | $ 49,381 |
Note 8 - Commitments_ Schedul54
Note 8 - Commitments: Schedule of Future Minimum Rental Payments for Operating Leases (Details) | Dec. 31, 2016USD ($) |
Details | |
2,016 | $ 192,085 |
2,017 | 35,000 |
Total | $ 227,085 |
Note 9 - Related Party Transa55
Note 9 - Related Party Transactions (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts receivable - related parties | $ 7,005 | $ 17,257 | $ 17,257 |
Omnitek Engineering Thailand Co. Ltd. | |||
Noncontrolling Interest, Ownership Percentage by Parent | 15.00% | ||
Omnitek Peru S.A.C. | |||
Noncontrolling Interest, Ownership Percentage by Parent | 20.00% |
Note 9 - Related Party Transa56
Note 9 - Related Party Transactions: Schedule of Related Party Transactions (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued management compensation | $ 314,788 | $ 189,163 |
President | ||
Accrued management compensation | 210,257 | 148,719 |
Chief Financial Officer | ||
Accrued management compensation | 35,962 | 0 |
Vice President | ||
Accrued management compensation | $ 68,569 | $ 40,444 |
Note 10 - Stockholders' Equity
Note 10 - Stockholders' Equity (Details) - USD ($) | Jul. 15, 2016 | Jun. 13, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 11, 2015 | Dec. 31, 2014 | Aug. 03, 2011 | Apr. 30, 2007 |
Stock Issued During Period, Value, New Issues | $ 20,000 | $ 100,000 | ||||||
Granted | 720,000 | 375,000 | ||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 105,922 | |||||||
Outstanding | 4,510,313 | 3,890,313 | 3,515,313 | |||||
Employee Stock Option | ||||||||
Granted | 250,000 | 375,000 | ||||||
Allocated Share-based Compensation Expense | $ 174,242 | $ 225,097 | ||||||
Employee Stock Option | 2006 Long-Term Incentive Plan | ||||||||
Number of Shares Authorized | 10,000,000 | |||||||
Outstanding | 2,590,000 | |||||||
Employee Stock Option | 2011 Long-Term Incentive Plan | ||||||||
Number of Shares Authorized | 1,000,000 | |||||||
Outstanding | 815,000 | |||||||
Employee Stock Option | 2015 Long-Term Incentive Plan | ||||||||
Number of Shares Authorized | 2,500,000 | |||||||
Outstanding | 970,000 | |||||||
Common Stock | ||||||||
Stock Issued During Period, Shares, New Issues | 50,000 | 250,000 | ||||||
Share Price | $ 0.40 | |||||||
Common stock issued for services, Shares | 50,000 | 1,500 | ||||||
Common Stock | Board of Directors Chairman | ||||||||
Common stock issued for services, Shares | 1,500 |
Note 10 - Stockholders' Equit58
Note 10 - Stockholders' Equity: Schedule of Assumptions Used to Estimate the Fair Values of Stock Options Granted (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Expected volatility | 87.00% | 76.00% |
Expected dividends | 0.00% | 0.00% |
Expected term | 7 years | 7 years |
Risk-free interest rate | 1.52% | 1.89% |
Note 10 - Stockholders' Equit59
Note 10 - Stockholders' Equity: Schedule of Stock Options and Warrants, Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Outstanding at beginning of year | 3,890,313 | 3,515,313 |
Outstanding, Weighted Average Exercise Price at beginning of year | $ 3.28 | $ 3.56 |
Granted | 720,000 | 375,000 |
Granted, Weighted Average Exercise Price | $ 0.28 | $ 0.82 |
Exercised, Weighted Average Exercise | $ 0 | $ 0 |
Expired or cancelled | 100,000 | 0 |
Expired or cancelled | (100,000) | 0 |
Expired or cancelled, Weighted Average Exercise Price | $ 2.74 | $ 0 |
Outstanding at end of year | 4,510,313 | 3,890,313 |
Outstanding, Weighted Average Exercise Price at end of year | $ 2.81 | $ 3.28 |
Exercisable | 4,222,813 | 3,414,063 |
Exercisable, Weighted Average Exercise Price | $ 2.93 | $ 3.52 |
Common Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 |
Note 10 - Stockholders' Equit60
Note 10 - Stockholders' Equity: Summary of the Status of the Options and Warrants Outstanding (Details) - $ / shares | 12 Months Ended | 24 Months Ended |
Dec. 31, 2016 | Dec. 31, 2015 | |
$0.01 - 1.00 | ||
Number Outstanding | 1,045,000 | 325,000 |
Weighted-Average Remaining Contractual Life | 5 years 9 months 29 days | 5 years 9 months 25 days |
Number Exercisable | 824,167 | 79,167 |
Weighted-Average Exercise Price | $ 0.35 | $ 0.84 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | 0.01 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $ 1 | |
$1.01 - 2.00 | ||
Number Outstanding | 215,000 | 215,000 |
Weighted-Average Remaining Contractual Life | 2 years 1 month 17 days | 3 years 1 month 17 days |
Number Exercisable | 215,000 | 180,000 |
Weighted-Average Exercise Price | $ 1.41 | $ 1.44 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | 1.01 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $ 2 | |
$2.01 - 3.00 | ||
Number Outstanding | 530,000 | 630,000 |
Weighted-Average Remaining Contractual Life | 2 years 8 months 26 days | 3 years 10 months 20 days |
Number Exercisable | 463,333 | 434,583 |
Weighted-Average Exercise Price | $ 2.52 | $ 2.53 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | 2.01 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $ 3 | |
$3.01 - 4.00 | ||
Number Outstanding | 2,720,313 | 2,720,313 |
Weighted-Average Remaining Contractual Life | 3 months 7 days | 1 year 3 months 7 days |
Number Exercisable | 2,720,313 | 2,720,313 |
Weighted-Average Exercise Price | $ 3.88 | $ 3.88 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | 3.01 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $ 4 | |
$0.01-4.00 | ||
Number Outstanding | 4,510,313 | 3,890,313 |
Weighted-Average Remaining Contractual Life | 1 year 11 months 8 days | 2 years 2 months 5 days |
Number Exercisable | 4,222,813 | 3,414,063 |
Weighted-Average Exercise Price | $ 2.92 | $ 3.51 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | 0.01 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $ 4 |
Note 11 - Income Taxes_ Sched61
Note 11 - Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Federal | ||
Current | $ 0 | $ 0 |
Deferred | 0 | 0 |
State | ||
Current | 800 | 800 |
Deferred | 0 | 0 |
Income Tax Expense (Benefit), Total | $ 800 | $ 800 |
Note 11 - Income Taxes_ Sched62
Note 11 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Net operating loss carryover | $ 5,772,304 | $ 5,805,378 |
Research and development carry forward | 136,465 | 136,465 |
Related party accruals | 130,538 | 130,538 |
Inventory reserve | 203,549 | 240,067 |
Allowance for doubtful accounts | 33,605 | 33,605 |
Accrued compensation | 36,919 | 85,913 |
Deferred tax liabilities: | ||
Depreciation | (111,214) | (117,272) |
Deferred rent | (4,746) | (6,128) |
Warranty allowance | (4,986) | 0 |
Valuation allowance | (6,192,434) | (6,308,566) |
Net deferred tax asset | $ 0 | $ 0 |
Note 11 - Income Taxes (Details
Note 11 - Income Taxes (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Details | |
Estimated US federal and state income tax rates | 39.00% |
Net Operating Loss Carryforwards | $ 5,772,304 |
Note 11 - Income Taxes_ Sched64
Note 11 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Book loss | $ (351,544) | $ (392,774) |
Meals and entertainment | 259 | 299 |
State tax deduction | 0 | 0 |
Deferred rent | (1,382) | 6,128 |
Stock/Options for services | 75,754 | 88,273 |
Officer's life ins premium | 921 | 0 |
Depreciation | (6,058) | 11,945 |
Accrued compensation | 48,994 | (33,956) |
Inventory reserve | 36,518 | 3,996 |
Income Tax Reconciliation Warranty Allowance | 4,986 | 0 |
Valuation allowance | 383,903 | 786,445 |
Net operating loss carryover | (191,551) | (469,556) |
Income Tax Expense | $ 800 | $ 800 |
Note 12 - Subsequent Events (De
Note 12 - Subsequent Events (Details) - Subsequent Event | Feb. 10, 2017USD ($)shares |
Employee Stock Option | Chief Executive Officer | |
Deferred Compensation Arrangement with Individual, Shares Issued | 555,556 |
Deferred Compensation Arrangement with Individual, Fair Value of Shares Issued | $ | $ 100,000 |
Employee Stock Option | Two Employees | |
Deferred Compensation Arrangement with Individual, Shares Issued | 100,000 |
Employee Stock Option | Three Directors | |
Deferred Compensation Arrangement with Individual, Shares Issued | 150,000 |
Employee Stock Option | Employee | |
Deferred Compensation Arrangement with Individual, Shares Issued | 100,000 |
2015 Long-Term Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 905,556 |