Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 27, 2019 | Jun. 30, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | Omnitek Engineering Corp. | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001404804 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 20,420,402 | ||
Entity Public Float | $ 2,001,221 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity's Reporting Status Current | Yes | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | omtk | ||
Contained File Information, File Number | 000-53955 | ||
Entity Incorporation, State Country Name | California | ||
Entity Address, Address Line One | 1333 Keystone Way, #101 | ||
Entity Address, City or Town | Vista | ||
Entity Address, State or Province | California | ||
Entity Address, Postal Zip Code | 92081 | ||
City Area Code | 760 | ||
Local Phone Number | 591-0089 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash | $ 17,060 | $ 23,279 |
Accounts receivable, net | 13,442 | 7,984 |
Accounts receivable - related parties | 6,666 | 3,440 |
Inventories, net | 1,359,678 | 1,554,656 |
Contract assets | 12,772 | 0 |
Deposits | 5,811 | 17,385 |
Total Current Assets | 1,415,429 | 1,606,744 |
PROPERTY & EQUIPMENT, net | 2,376 | 7,253 |
OTHER ASSETS | ||
Other noncurrent assets | 30,425 | 14,280 |
Total Other Assets | 30,425 | 14,280 |
TOTAL ASSETS | 1,448,230 | 1,628,277 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 362,363 | 358,032 |
Accrued management compensation | 506,103 | 406,841 |
Accounts payable - related parties | 145,171 | 114,321 |
Notes payable - related parties | 15,000 | 15,000 |
Convertible notes payable - related parties | 0 | 15,000 |
Convertible notes payable | 100,000 | 0 |
Contract liabilities | 84,496 | 30,000 |
Customer deposits | 140,338 | 212,410 |
Total Current Liabilities | 1,353,471 | 1,151,604 |
Total Liabilities | 1,353,471 | 1,151,604 |
STOCKHOLDERS' EQUITY | ||
Common stock, 125,000,000 shares authorized; no par value; 20,420,402 and 20,281,082 shares, respectively issued and outstanding | 8,427,210 | 8,411,411 |
Additional paid-in capital | 11,923,056 | 11,852,363 |
Accumulated deficit | (20,255,507) | (19,787,101) |
Total Stockholders' Equity | 94,759 | 476,673 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,448,230 | $ 1,628,277 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common Stock, par or stated value | $ 0 | $ 0 |
Common Stock, shares authorized | 125,000,000 | 125,000,000 |
Common Stock, shares issued | 20,420,402 | 20,281,082 |
Common Stock, shares outstanding | 20,420,402 | 20,281,082 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
REVENUES | $ 1,271,118 | $ 1,061,544 |
REVENUES, related parties | 14,568 | 12,669 |
Total Revenues | 1,285,686 | 1,074,213 |
COST OF GOODS SOLD | 687,457 | 599,693 |
INVENTORY RESERVE ADJUSTMENT | 97,436 | 305,458 |
Total Cost of Goods Sold | 784,893 | 905,151 |
GROSS MARGIN | 500,793 | 169,062 |
OPERATING EXPENSES | ||
General and administrative | 811,459 | 1,052,344 |
Research and development | 106,896 | 118,940 |
Depreciation and amortization | 7,590 | 24,586 |
Total Operating Expenses | 925,945 | 1,195,870 |
LOSS FROM OPERATIONS | (425,152) | (1,026,808) |
OTHER INCOME (EXPENSE) | ||
Loss on settlement of debt | (32,963) | 0 |
Other income | 8,391 | 0 |
Interest expense | (17,882) | (8,689) |
Total Other Expense | (42,454) | (8,689) |
LOSS BEFORE INCOME TAXES | (467,606) | (1,035,497) |
INCOME TAX EXPENSE | 800 | 800 |
NET LOSS | $ (468,406) | $ (1,036,297) |
BASIC AND DILUTED LOSS PER SHARE | $ (0.02) | $ (0.05) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 20,349,024 | 20,281,082 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
OPERATING ACTIVITIES | ||
Net loss | $ (468,406) | $ (1,036,297) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization and depreciation expense | 7,590 | 24,586 |
Options and warrants granted | 37,730 | 131,522 |
Inventory reserve | 97,436 | 305,458 |
Loss on settlement of debt | 32,963 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (5,458) | 20,175 |
Accounts receivable-related parties | (3,226) | 3,565 |
Deposits | (4,570) | 4,331 |
Prepaid Expense | 0 | 5,324 |
Inventory | 97,541 | 9,786 |
Contract assets | (12,772) | 30,973 |
Accounts payable and accrued expenses | 5,131 | 32,777 |
Customer deposits | (72,072) | 125,296 |
Accounts payable-related parties | 30,850 | 95,948 |
Contract liabilities | 54,496 | 30,000 |
Accrued management compensation | 99,262 | 192,053 |
Net Cash Used in Operating Activities | (103,505) | (24,503) |
INVESTING ACTIVITIES | ||
Purchase of property and equipment | (2,714) | 0 |
Net Cash Used in Investing Activities | (2,714) | 0 |
FINANCING ACTIVITIES | ||
Proceeds from convertible notes payable - related party | 0 | 15,000 |
Proceeds from convertible notes payable | 100,000 | 0 |
Proceeds from notes payable - related party | 0 | 15,000 |
Net Cash Provided by Financing Activities | 100,000 | 30,000 |
NET CHANGE IN CASH | (6,219) | 5,497 |
CASH AT BEGINNING OF YEAR | 23,279 | 17,782 |
CASH AT END OF PERIOD | 17,060 | 23,279 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS CASH PAID FOR: | ||
Interest | 10,925 | 7,795 |
Income taxes | 800 | 800 |
NON CASH INVESTING AND FINANCING ACTIVITIES | ||
Options issued for accrued salary | 0 | 100,000 |
Conversion of Convertible Note Payable | $ 15,799 | $ 0 |
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, 2016 | $ 8,411,411 | $ 11,620,841 | $ (18,750,804) | $ 1,281,448 |
Stockholders' Equity, beginning of period, Shares at Dec. 31, 2016 | 20,281,082 | |||
Value of options and warrants issued for services | 131,522 | 131,522 | ||
Value of options and warrants issued for accrued management comp | 100,000 | 100,000 | ||
Loss on settlement of debt | 0 | |||
Net loss | (1,036,297) | (1,036,297) | ||
Stockholders' Equity, end of period, Value at Dec. 31, 2017 | $ 8,411,411 | 11,852,363 | (19,787,101) | 476,673 |
Stockholders' Equity, end of period, Shares at Dec. 31, 2017 | 20,281,082 | |||
Value of options and warrants issued for services | 37,730 | 37,730 | ||
Conversion of related note payable, Value | $ 15,799 | 15,799 | ||
Conversion of related note payable, Shares | 139,320 | |||
Loss on settlement of debt | 32,963 | 32,963 | ||
Net loss | (468,406) | (468,406) | ||
Stockholders' Equity, end of period, Value at Dec. 31, 2018 | $ 8,427,210 | $ 11,923,056 | $ (20,255,507) | $ 94,759 |
Stockholders' Equity, end of period, Shares at Dec. 31, 2018 | 20,420,402 |
Note 1- Organization and Busine
Note 1- Organization and Business Activity | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Note 1- Organization and Business Activity | NOTE 1 – ORGANIZATION AND BUSINESS ACTIVITY Omnitek Engineering, Corp. (“Omnitek” or “the Company”) was incorporated on October 9, 2001 under the laws of the State of California. Omnitek develops and sells a proprietary technology to convert diesel engines to an alternative fuel, new natural gas engines, and complementary products. Omnitek products are available for stationary applications and the global transportation markets, which includes light commercial vehicles, minibuses, heavy-duty trucks, municipal buses, as well as rail and marine applications. The technology can be applied for compressed natural gas (“CNG”), liquefied natural gas (“LNG”), or renewable natural gas (“Biogas” or “RNG”), as well as liquid petroleum gas (“Propane” or “LPG”). Omnitek began operations on October 10, 2001, and was a spin-off from Nology Engineering, Inc. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Note 2 - Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Accounting Methods The Company's financial statements are prepared using the accrual method of accounting. The Company has elected a December 31, year-end. b. Use of Estimates in Preparing Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company also regularly evaluates estimates and assumptions related to deferred income tax asset valuation allowances, inventory valuation allowances, allowance for doubtful receivables and valuations of equity-based payments. c. Cash and Cash Equivalents For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. d. Accounts Receivable Trade receivables are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. Allowance for doubtful accounts for the years ended December 31, 2018 and 2017 was $15,000 and $15,000, respectively. Additionally, bad debt expense for the years ended December 31, 2018 and 2017 was $-0- and $2,905, respectively. e. Inventories Inventories are stated at the lower of cost or market, cost determined on an average cost basis. Market value for raw materials is based on replacement costs. Inventory costs include material, labor and manufacturing overhead. The Company reviews inventories on hand at least annually and records provisions for estimated excess, slow moving and obsolete inventory, as well as inventory with a carrying value in excess of net realizable value. The regular and systematic inventory valuation reviews include a current assessment of future product demand, historical experience and product expiration. f. Long-Lived Assets The Company assesses the recoverability of its long-lived assets annually and whenever circumstances would indicate that there may be an impairment. The Company compares the estimated undiscounted future cash flows to the carrying value of the long lived assets to determine if an impairment has occurred. In the event that an impairment has occurred, the Company will recognize the impairment immediately. No impairment expense was recognized as of December 31, 2018 or 2017. g. Property and Equipment Property and equipment are recorded at cost. Depreciation and amortization are calculated on the straight-line method over the shorter of the lease term or the estimated useful lives of the assets ranging from three to five years. h. Revenue Recognition In general, revenue is recognized when control of the promised goods is transferred to our customers, in an amount that reflects the consideration to which we expect to be entitled in exchange for the goods or services. In order to achieve that core principle, a five-step approach is applied: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue allocated to each performance obligation when we satisfy the performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account for revenue recognition. We recognize revenue on various products and services as follows: Products Contracts Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to a customer, and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of Omnitek’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. Performance Obligations Satisfied Over Time Revenues for Omnitek’s long-term contracts that satisfy the criteria for over time recognition (formerly known as percentage-of-completion method) is recognized as the work progresses. The majority of the revenue is derived from long-term engine development agreements that typically span between 12 to 24 months. Omnitek’s long-term contracts will continue to be recognized over time because our typical contract is for a customized asset with no alternative use and generally the Company has a right to payment for work completed to date. Under the new revenue standard, the cost-to-cost measure of progress continues to best depict the transfer of control of assets to the customer, which occurs as the Company incurs costs. Contract costs include labor and material. Revenue from products and services transferred to customers over time accounted for 1% and 7% of revenue for the years ended December 31,2018 and 2017, 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 93% of revenue for the years ended December 31, 2018 and 2017, 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, 2018 2017 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 484,604 - 484,604 $ 440,696 53,375 494,071 International 788,310 12,772 801,082 563,342 16,800 580,142 $ 1,272,914 12,772 1,285,686 $ 1,004,038 70,175 1,074,213 Filters 819,517 - 819,517 760,006 - 760,006 Components 453,397 - 453,397 244,032 - 244,032 Engineering Services - 12,772 12,772 - 70,175 70,175 $ 1,272,914 12,772 1,285,686 $ 1,004,038 70,175 1,074,213 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, 2018 and 2017, the Company incurred research and development expenses of $106,896 and $118,940, respectively. k. Advertising The Company follows the policy of charging the costs of advertising to expense as incurred. During the years ended December 31, 2018 and 2017, 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, 2018, the Company had no accrued interest or penalties related to uncertain tax positions. The Company files an income tax return in the U.S. federal jurisdiction and the state of California. With few exceptions, the Company is no longer subject to U.S. federal, state, and local, or non-U.S. income tax examinations by tax authorities for years before 2012. m. Basic and Diluted Loss Per Share The computation of basic earnings per share of common stock is based on the weighted average number of shares outstanding during the periods presented. The computation of fully diluted earnings per share includes common stock equivalents outstanding at the balance sheet date. The Company had 2,556,390 and 2,600,556 stock options and warrants that would have been included in the fully diluted earnings per share as of December 31, 2018 and 2017, respectively. However, the common stock equivalents were not included in the loss per share computation because they are anti-dilutive. n. Fair Value Measurements The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: Level 1 – Quoted prices in active markets for identical assets or liabilities; Level 2 – Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and Level 3 – Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. o. Stock-based Compensation The Company recognizes compensation expense for stock-based awards expected to vest on a straight-line basis over the requisite service period of the award based on their grant date fair value. The Company estimates the fair value of stock options using a Black-Scholes option pricing model which requires management to make estimates for certain assumptions regarding risk-free interest rate, expected life of options, expected volatility of stock and expected dividend yield of stock. p. Concentration of Risks Customers During the year ended December 31, 2018, seven customers accounted for approximately 73% of sales. During the year ended December 31, 2017, seven customers accounted for approximately 73% of sales. Suppliers During the year ended December 31, 2018, four suppliers accounted for 82 % of products purchased. During the year ended December 31, 2017, four suppliers accounted for 85% 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, 2018, the Company had an accumulated deficit of $20,255,507 and total stockholders’ equity of $94,759. At December 31, 2018, the Company had current assets of $1,415,429 including cash of $17,060, and current liabilities of $1,353,471, resulting in working capital of $61,958. For 2018, the Company reported a net loss of $468,406 and net cash used by operating activities of $103,505. Management believes that based on its operating plan, the projected sales for 2019, combined with funds available from its working capital will be sufficient to fund operations for the next twelve months. However, there can be no assurance that operations and operating cash flows will continue at the current levels or improve in the near future. Whether, and when, the Company can attain profitability and positive cash flows from operations is uncertain. The Company is also uncertain whether it can raise additional capital. These uncertainties cast significant doubt upon the Company’s ability to continue as a going concern. 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. Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-9, “Revenue from Contracts with Customers”, which provides a single comprehensive accounting standard for revenue recognition for contracts with customers and supersedes current industry-specific guidance, including ASC 605-35. The new standard requires companies to recognize revenue when control of promised goods or services is transferred to customers at an amount that reflects the consideration to which the company expects to be entitled in exchange for the goods or services. The new model requires companies to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time for each of these obligations. The new standard also significantly expands disclosure requirements regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. s. Recently Issued Accounting Pronouncements In February 2016, the FASB issued its new lease accounting guidance in ASU 2016-2, Leases (Topic 842) In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployees Share-Based Payment Accounting currently assessing the impact of ASU 2018-07 will have on the Company, but it is not expected to have a material impact on the Company’s financial statements and related disclosures. |
Note 3 - Contract Assets And Li
Note 3 - Contract Assets And Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Note 3 - Contract Assets And Liabilities | NOTE 3 – CONTRACT ASSETS AND LIABILITIES Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) on the balance sheet. For Omnitek’s long-term contracts, amounts are generally billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, Omnitek sometimes receives advances or deposits from its customers, before revenue is recognized, resulting in billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities). The table below reconciles the net excess billings to the amounts included in the balance sheets at those dates: December 31, December 31, 2018 2017 Contract assets $ 12,772 $ - Contract liabilities $ (84,496) $ (30,000) Net amount of contract liabilities in excess of Contract assets $ (71,724) $ (30,000) |
Note 4 - Inventories
Note 4 - Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Note 4 - Inventories | NOTE 4 – INVENTORIES Inventories are located in Vista, California and at December 31, 2018 and 2017 consisted of the following: December 31, December 31, 2018 2017 Raw materials $ 948,060 $ 990,945 Finished goods 1,147,052 1,185,888 Work in progress - 26,432 Inventory in transit 10,611 Allowance for obsolete inventory (746,045) (648,609) Total $ 1,359,678 $ 1,554,656 The Company has established an allowance for obsolete inventory. Expense for obsolete inventory was $97,436 and $305,458, for the years ended December 31, 2018 and December 31, 2017, respectively. |
Note 5 - Property and Equipment
Note 5 - Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Note 5 - Property and Equipment | NOTE 5 – PROPERTY AND EQUIPMENT Property and equipment at December, 2018 and 2017 consisted of the following: December 31, December 31, 2018 2017 Production equipment $ 64,673 $ 61,960 Computers/Office equipment 28,540 28,540 Tooling equipment 12,380 12,380 Leasehold Improvements 42,451 42,451 Less: accumulated depreciation (145,668) (138,078) Total $ 2,376 $ 7,253 Depreciation expense for the years ended December 31, 2018 and 2017 was $7,590 and $24,586, respectively. |
Note 6 - Customer Deposits
Note 6 - Customer Deposits | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Note 6 - Customer Deposits | NOTE 6 – CUSTOMER DEPOSITS The Company may require a customer deposit from domestic and international customers. As of December 31, 2018 and 2017 the Company had customer deposits of $140,338 and $212,410, respectively. |
Note 7 - Notes Payable - Relate
Note 7 - Notes Payable - Related Parties | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Note 7 - Notes Payable - Related Parties | NOTE 7 – NOTES PAYABLE – RELATED PARTIES Convertible Notes – Related Party On November 7, 2017 the Company issued a convertible promissory note for $15,000 to a related party. 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 July 7, 2018. The note has a conversion feature, wherein, at the lender’s option, at the maturity date the lender may convert the remaining unpaid 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 five trading 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, 2017. As of December 31, 2018 and December 31, 2017 Convertible Notes – Related Party consisted of the following: December 31, December 31, 2018 2017 Convertible Note payable, related party $ - $ 15,000 Total $ - $ 15,000 On July 6, 2018, pursuant to the lender’s election, the Company issued 139,320 restricted shares of Common Stock upon the conversion of $15,799, constituting unpaid principal of $15,000 and accrued interest of $799. The shares were issued at a price of $0.1134 per share, representing 90% of the average closing price of the Common Stock for the five (5) trading days (between days 15 and 10 days) before the maturity date. As a result of this conversion a loss on settlement of debt of $32,963 was recognized. The recorded loss is the difference between the fair value of the common shares on the date of conversion ($0.35) and the face value of the note payable and accrued interest. Note 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, 2020. As of December 31, 2018 and December 31, 2017 Note Payable – Related Party consisted of the following: December 31, December 31, 2018 2017 Note payable, related party $ 15,000 $ 15,000 Total $ 15,000 $ 15,000 |
Note 8 - Convertible Note Payab
Note 8 - Convertible Note Payable | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Note 8 - Convertible Note Payable | NOTE 8 – CONVERTIBLE NOTE PAYABLE On June 15, 2018 the Company entered into a Securities Purchase Agreement with an accredited investor, under which the investor purchased a Secured Convertible Promissory Note from the Company in the principal amount of $100,000. Under the terms of the Note simple interest will accrue at a rate of 10% per annum. The note will automatically mature and be due and payable on the eighteen (18) month anniversary. The Company shall make principal payments under the Note in the amount of $5,000 per month, beginning on the seventh month anniversary and continuing each month thereafter through the maturity date. Also commencing on the seventh month anniversary of the Note, the Company shall make interest payments under this Note based on the unpaid principal balance. The Note is secured by the inventory of the Company in accordance with a Security Agreement executed concurrently with the Note and UCC-1 Financing Statement perfecting said security interest. The Note includes a conversion feature wherein, under certain circumstances, the Lender may request a portion of the principal repayment be converted and payable in restricted shares of the Company’s Common Stock at the lesser of five cents ($0.05) per share or 90% of the average closing price calculated over the prior 20 trading days, but not less than $.0025 per share. The floor of $0.025 per share prevents the embedded conversion option from qualifying for derivative accounting under ASC 815-15 “Derivative and Hedging”. As of December 31, 2018 and December 31, 2017 Convertible Note Payable consisted of the following: December 31, December 31, 2018 2017 Convertible note payable $ 100,000 $ - Less current portion - - Convertible note payable, net of current portion $ 100,000 $ - |
Note 9 - Commitments
Note 9 - Commitments | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Note 9 - Commitments | NOTE 9 – COMMITMENTS As of December 31, 2018 and 2017, the Company had outstanding purchase commitments for inventory totaling $133,141 and $116,608, respectively. Of these amounts, the Company had made prepayments of $21,956 as of December 31, 2018 and $16,956 as of December 31, 2017 and had commitments for future cash outlays for inventory totaling $111,185 and $99,652, respectively. On January 10, 2013, the Company entered into an operating lease for its facilities in California. On December 21, 2017 the Company signed an agreement with the lessor to extend the lease term for an additional one-year term from its original expiration date of February 28, 2018. Per the terms of the lease extension agreement, the lease expired effective March 1, 2019. The Company is currently negotiating a new lease with the landlord. |
Note 10 - Related Party Transac
Note 10 - Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Note 10 - Related Party Transactions | NOTE 10 – RELATED PARTY TRANSACTIONS Accounts Receivable – Related Parties The Company holds a non-controlling interest in various distributors in exchange for use of the Company’s name and logo. As of December 31, 2018, 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, 2018 and December 31, 2017, the Company was owed $6,666 and $3,440, respectively, by related parties for the purchase of products and services. Accrued Management Expenses During the periods ended December 31, 2018 and December 31, 2017, the Company’s president and chief financial officer were due amounts for services performed for the Company. As of December 31, 2018 and December 31, 2017 the accrued management fees consisted of the following: December 31, December 31, 2018 2017 Amounts due to the president $ 399,296 $ 321,796 Amounts due to the chief financial officer 106,807 85,045 Total $ 506,103 $ 406,841 The total amount due to the former vice-president at December 31, 2017 is $80,444. In October 2017 the vice-president retired. As such, this employee no longer qualifies as a related party and the accrued compensation is included in accrued expenses as of December 31, 2017. |
Note 11 - Stockholders' Equity
Note 11 - Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Note 11 - Stockholders' Equity | NOTE 11 – STOCKHOLDERS’ EQUITY Common Stock On July 7, 2018 the Company issued 139,320 shares of its restricted common stock in consideration of a capital contribution via the conversion by John M. Palumbo of $15,799, constituting unpaid principal of $15,000 and accrued interest of $799, owing under that certain Promissory Note dated November 7, 2017. Options and Warrants During the years ended December 31, 2018 and 2017, the Company granted 590,000 and 350,000 options for services, respectively. During the years ended December 31, 2018 and 2017, respectively, the Company recognized expense of $37,730 and $131,522 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 $24,650. 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. During the twelve months ended December 31, 2018 and 2017 the Company granted -0- and 555,556 options to the CEO for accrued compensation, respectively. In April 2007, the Company’s 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 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, 2018 the Company has a total of 600,000 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, 2018 the Company has a total of 2,065,556 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, 2018, the Company has a total of 300,000 options issued under the plan. During the twelve months ended December 31, 2018 and 2017 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, 2018 December 31, 2017 Expected volatility 150% 105% Expected dividends 0% 0% Expected term 7 Years 7 Years Risk-free interest rate 2.46% 2.22% A summary of the status of the options granted at December 31, 2018 and December 31, 2017 and changes during the years then ended is presented below: December 31, December 31, 2018 2017 Weighted-Average Weighted-Average Shares Exercise Price Shares Exercise Price Outstanding at beginning of year 2,600,556 $ 0.82 4,510,313 $ 2.81 Granted 590,000 0.07 905,556 0.18 Exercised - - - - Expired or cancelled (225,000) 1.33 (2,815,313) 3.81 Outstanding at end of year 2,965,556 0.63 2,600,556 0.82 Exercisable 2,556,390 $ 0.67 2,354,723 $ 0.84 A summary of the status of the options outstanding at December 31, 2018 is presented below: Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life Number Exercisable Weighted-Average Exercise Price $0.01-1.00 2,440,556 4.80 years 2,031,390 $0.24 $1.01-2.00 75,000 1.18 years 75,000 1.37 $2.01-3.00 450,000 0.81 years 450,000 2.53 $0.01-3.00 2,965,556 4.11 years 2,556,390 $0.67 A summary of the status of the options and warrants outstanding at December 31, 2017 is presented below: Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life Number Exercisable Weighted-Average Exercise Price $0.01 - 1.00 1,950,556 5.43 years 1,704,723 $0.27 $1.01 - 2.00 125,000 1.54 years 125,000 1.18 $2.01 - 3.00 525,000 1.76 years 525,000 2.52 $0.01 - 3.00 2,600,556 4.50 years 2,354,723 $0.82 |
Note 12 - Income Taxes
Note 12 - Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Note 12 - Income Taxes | NOTE 12 – INCOME TAXES The provision for income taxes for the year ended December 31, 2018 and 2017 consists of the following: December 31, December 31, Federal 2018 2017 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, 2018 and 2017: December 31, December 31, Deferred tax assets: 2018 2017 Net operating loss carryover $ 6,560,622 6,239,260 Research and development carry forward 131,088 136,465 Related party accruals - 130,538 Inventory reserve 179,051 252,958 Allowance for doubtful accounts 3,600 33,605 Warranty allowance 3,068 4,986 Accrued compensation 121,465 158,668 Deferred tax liabilities: Depreciation (97,331) (104,924) Deferred rent - (1,505) Valuation allowance (6,901,563) (6,850,051) 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 24% as of December 31, 2018 and 39% as of December 31, 2017 to pretax income from continuing operations for the year ended December 31, 2018 and 2017 due to the following: December 31, December 31, 2018 2017 Book loss $ (112,418) (404,157) Meals and entertainment 16 64 State tax deduction - - Deferredrent (926) (3,241) Stock/Options for services 9,055 51,294 Officer’s life ins premium 1,181 1,918 Depreciation (7,593) (6,290) Accrued compensation 23,823 67,274 Inventory reserve 23,385 119,129 Valuation allowance 127,753 348,816 Net operating loss carryover (63,476) (174,007) 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, 2018, the Company had net operating loss carry forwards of approximately $6,560,622 through 2034. No tax benefit has been reported in the December 31, 2018 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years. |
Note 13 - Subsequent Events
Note 13 - Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Note 13 - Subsequent Events | NOTE 13 – SUBSEQUENT EVENTS On January 16, 2019 the Company granted a total of 250,000 Non-Qualified Stock Options pursuant to the 2017 Long-Term Incentive Plan. The Options were allocated as follows: 50,000 Options each to two executive officers for past and continued services (vest and exercisable immediately), 50,000 Options each to three outside directors (total of 150,000 Options) for past and continued services (vest and exercisable immediately). On January 19, 2019 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, 2020. |
Note 2 - Summary of Significa_2
Note 2 - Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Policy Text Block [Abstract] | |
a. Accounting Methods | a. Accounting Methods The Company's financial statements are prepared using the accrual method of accounting. The Company has elected a December 31, year-end. |
b. Ues of Estimates in Preparing Financial Statements | b. Use of Estimates in Preparing Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company also regularly evaluates estimates and assumptions related to deferred income tax asset valuation allowances, inventory valuation allowances, allowance for doubtful receivables and valuations of equity-based payments. |
c. Cash and Cash Equivalents | c. Cash and Cash Equivalents For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. |
d. Accounts Receivable | d. Accounts Receivable Trade receivables are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. Allowance for doubtful accounts for the years ended December 31, 2018 and 2017 was $15,000 and $15,000, respectively. Additionally, bad debt expense for the years ended December 31, 2018 and 2017 was $-0- and $2,905, respectively. |
e. Inventories | e. Inventories Inventories are stated at the lower of cost or market, cost determined on an average cost basis. Market value for raw materials is based on replacement costs. Inventory costs include material, labor and manufacturing overhead. The Company reviews inventories on hand at least annually and records provisions for estimated excess, slow moving and obsolete inventory, as well as inventory with a carrying value in excess of net realizable value. The regular and systematic inventory valuation reviews include a current assessment of future product demand, historical experience and product expiration. |
f. Long-lived Assets | f. Long-Lived Assets The Company assesses the recoverability of its long-lived assets annually and whenever circumstances would indicate that there may be an impairment. The Company compares the estimated undiscounted future cash flows to the carrying value of the long lived assets to determine if an impairment has occurred. In the event that an impairment has occurred, the Company will recognize the impairment immediately. No impairment expense was recognized as of December 31, 2018 or 2017. |
g. Property and Equipment | g. Property and Equipment Property and equipment are recorded at cost. Depreciation and amortization are calculated on the straight-line method over the shorter of the lease term or the estimated useful lives of the assets ranging from three to five years. |
h. Revenue Recognition | h. Revenue Recognition In general, revenue is recognized when control of the promised goods is transferred to our customers, in an amount that reflects the consideration to which we expect to be entitled in exchange for the goods or services. In order to achieve that core principle, a five-step approach is applied: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue allocated to each performance obligation when we satisfy the performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account for revenue recognition. We recognize revenue on various products and services as follows: Products Contracts Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to a customer, and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of Omnitek’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. Performance Obligations Satisfied Over Time Revenues for Omnitek’s long-term contracts that satisfy the criteria for over time recognition (formerly known as percentage-of-completion method) is recognized as the work progresses. The majority of the revenue is derived from long-term engine development agreements that typically span between 12 to 24 months. Omnitek’s long-term contracts will continue to be recognized over time because our typical contract is for a customized asset with no alternative use and generally the Company has a right to payment for work completed to date. Under the new revenue standard, the cost-to-cost measure of progress continues to best depict the transfer of control of assets to the customer, which occurs as the Company incurs costs. Contract costs include labor and material. Revenue from products and services transferred to customers over time accounted for 1% and 7% of revenue for the years ended December 31,2018 and 2017, 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 93% of revenue for the years ended December 31, 2018 and 2017, 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, 2018 2017 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 484,604 - 484,604 $ 440,696 53,375 494,071 International 788,310 12,772 801,082 563,342 16,800 580,142 $ 1,272,914 12,772 1,285,686 $ 1,004,038 70,175 1,074,213 Filters 819,517 - 819,517 760,006 - 760,006 Components 453,397 - 453,397 244,032 - 244,032 Engineering Services - 12,772 12,772 - 70,175 70,175 $ 1,272,914 12,772 1,285,686 $ 1,004,038 70,175 1,074,213 |
i. Cost of Good Sold | i. Cost of Goods Sold The Company includes product costs (i.e. material, direct labor and overhead costs), shipping and handling expense, production-related depreciation expense and product license agreement expense in cost of goods sold. |
j. Research and Development | j. Research and Development The Company expenses the costs of researching and developing its products during the period incurred. During the years ended December 31, 2018 and 2017, the Company incurred research and development expenses of $106,896 and $118,940, respectively. |
k. Advertising | k. Advertising The Company follows the policy of charging the costs of advertising to expense as incurred. During the years ended December 31, 2018 and 2017, the Company expensed $-0- and $-0-, respectively. |
l. Provision For Income Taxes | l. Provision For Income Taxes The Company accounts for income taxes in accordance with Accounting Standards Codification Topic 740, Income Taxes ("Topic 740"), which requires the recognition of deferred tax liabilities and assets at currently enacted tax rates for the expected future tax consequences of events that have been included in the financial statements or tax returns. A valuation allowance is recognized to reduce the net deferred tax asset to an amount that is more likely than not to be realized. Topic 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company's financial statements. Topic 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of December 31, 2018, the Company had no accrued interest or penalties related to uncertain tax positions. The Company files an income tax return in the U.S. federal jurisdiction and the state of California. With few exceptions, the Company is no longer subject to U.S. federal, state, and local, or non-U.S. income tax examinations by tax authorities for years before 2012. |
m. Basic and Diluted Loss Per Share | m. Basic and Diluted Loss Per Share The computation of basic earnings per share of common stock is based on the weighted average number of shares outstanding during the periods presented. The computation of fully diluted earnings per share includes common stock equivalents outstanding at the balance sheet date. The Company had 2,556,390 and 2,600,556 stock options and warrants that would have been included in the fully diluted earnings per share as of December 31, 2018 and 2017, respectively. However, the common stock equivalents were not included in the loss per share computation because they are anti-dilutive. |
n. Fair Value Measurements | n. Fair Value Measurements The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: Level 1 – Quoted prices in active markets for identical assets or liabilities; Level 2 – Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and Level 3 – Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. |
o. Stock- Based Compensation | o. Stock-based Compensation The Company recognizes compensation expense for stock-based awards expected to vest on a straight-line basis over the requisite service period of the award based on their grant date fair value. The Company estimates the fair value of stock options using a Black-Scholes option pricing model which requires management to make estimates for certain assumptions regarding risk-free interest rate, expected life of options, expected volatility of stock and expected dividend yield of stock. |
p. Concentration of Risks | p. Concentration of Risks Customers During the year ended December 31, 2018, seven customers accounted for approximately 73% of sales. During the year ended December 31, 2017, seven customers accounted for approximately 73% of sales. Suppliers During the year ended December 31, 2018, four suppliers accounted for 82 % of products purchased. During the year ended December 31, 2017, four suppliers accounted for 85% of products purchased. |
q. Liquidity and Going Concern | q. Liquidity and Going Concern Historically, the Company has incurred net losses and negative cash flows from operations. As of December 31, 2018, the Company had an accumulated deficit of $20,255,507 and total stockholders’ equity of $94,759. At December 31, 2018, the Company had current assets of $1,415,429 including cash of $17,060, and current liabilities of $1,353,471, resulting in working capital of $61,958. For 2018, the Company reported a net loss of $468,406 and net cash used by operating activities of $103,505. Management believes that based on its operating plan, the projected sales for 2019, combined with funds available from its working capital will be sufficient to fund operations for the next twelve months. However, there can be no assurance that operations and operating cash flows will continue at the current levels or improve in the near future. Whether, and when, the Company can attain profitability and positive cash flows from operations is uncertain. The Company is also uncertain whether it can raise additional capital. These uncertainties cast significant doubt upon the Company’s ability to continue as a going concern. 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. Recently Adopted Accounting Pronouncements | r. Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-9, “Revenue from Contracts with Customers”, which provides a single comprehensive accounting standard for revenue recognition for contracts with customers and supersedes current industry-specific guidance, including ASC 605-35. The new standard requires companies to recognize revenue when control of promised goods or services is transferred to customers at an amount that reflects the consideration to which the company expects to be entitled in exchange for the goods or services. The new model requires companies to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time for each of these obligations. The new standard also significantly expands disclosure requirements regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. |
s. Recently Issued Accounting Pronouncements | s. Recently Issued Accounting Pronouncements In February 2016, the FASB issued its new lease accounting guidance in ASU 2016-2, Leases (Topic 842) In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployees Share-Based Payment Accounting currently assessing the impact of ASU 2018-07 will have on the Company, but it is not expected to have a material impact on the Company’s financial statements and related disclosures. |
Note 2 - Summary of Significa_3
Note 2 - Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents Omnitek’s revenues disaggregated by region and product type: December 31, December 31, 2018 2017 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 484,604 - 484,604 $ 440,696 53,375 494,071 International 788,310 12,772 801,082 563,342 16,800 580,142 $ 1,272,914 12,772 1,285,686 $ 1,004,038 70,175 1,074,213 Filters 819,517 - 819,517 760,006 - 760,006 Components 453,397 - 453,397 244,032 - 244,032 Engineering Services - 12,772 12,772 - 70,175 70,175 $ 1,272,914 12,772 1,285,686 $ 1,004,038 70,175 1,074,213 |
Note 3 - Contract Assets And _2
Note 3 - Contract Assets And Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Schedule of Costs in Excess of Billings | The table below reconciles the net excess billings to the amounts included in the balance sheets at those dates: December 31, December 31, 2018 2017 Contract assets $ 12,772 $ - Contract liabilities $ (84,496) $ (30,000) Net amount of contract liabilities in excess of Contract assets $ (71,724) $ (30,000) |
Note 4 - Inventories_ Schedule
Note 4 - Inventories: Schedule of Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Table Text Block Supplement [Abstract] | |
Schedule of Inventories | Inventories are located in Vista, California and at December 31, 2018 and 2017 consisted of the following: December 31, December 31, 2018 2017 Raw materials $ 948,060 $ 990,945 Finished goods 1,147,052 1,185,888 Work in progress - 26,432 Inventory in transit 10,611 Allowance for obsolete inventory (746,045) (648,609) Total $ 1,359,678 $ 1,554,656 |
Note 5 - Property and Equipme_2
Note 5 - Property and Equipment: Schedule of Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Table Text Block Supplement [Abstract] | |
Schedule of Property and Equipment | Property and equipment at December, 2018 and 2017 consisted of the following: December 31, December 31, 2018 2017 Production equipment $ 64,673 $ 61,960 Computers/Office equipment 28,540 28,540 Tooling equipment 12,380 12,380 Leasehold Improvements 42,451 42,451 Less: accumulated depreciation (145,668) (138,078) Total $ 2,376 $ 7,253 |
Note 7 - Notes Payable - Rela_2
Note 7 - Notes Payable - Related Parties: Schedule of Convertible Notes Related Party (Table) | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Schedule of Convertible Related Party | As of December 31, 2018 and December 31, 2017 Convertible Notes – Related Party consisted of the following: December 31, December 31, 2018 2017 Convertible Note payable, related party $ - $ 15,000 Total $ - $ 15,000 |
Note 7 - Notes Payable - Rela_3
Note 7 - Notes Payable - Related Parties: Schedule of Note Payable Related Party (Table) | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Schedule of Notes Payable Related Party | As of December 31, 2018 and December 31, 2017 Note Payable – Related Party consisted of the following: December 31, December 31, 2018 2017 Note payable, related party $ 15,000 $ 15,000 Total $ 15,000 $ 15,000 |
Note 8 - Convertible Note Pay_2
Note 8 - Convertible Note Payable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Schedule of Convertible Note payable | As of December 31, 2018 and December 31, 2017 Convertible Note Payable consisted of the following: December 31, December 31, 2018 2017 Convertible note payable $ 100,000 $ - Less current portion - - Convertible note payable, net of current portion $ 100,000 $ - |
Note 10 - Related Party Trans_2
Note 10 - Related Party Transactions: Schedule of Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Table Text Block Supplement [Abstract] | |
Schedule of Related Party Transactions | As of December 31, 2018 and December 31, 2017 the accrued management fees consisted of the following: December 31, December 31, 2018 2017 Amounts due to the president $ 399,296 $ 321,796 Amounts due to the chief financial officer 106,807 85,045 Total $ 506,103 $ 406,841 |
Note 11 - Stockholders' Equity_
Note 11 - Stockholders' Equity: Schedule of Assumptions Used to Estimate the Fair Values of Stock Options Granted (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Table Text Block Supplement [Abstract] | |
Schedule of Assumptions Used to Estimate the Fair Values of Stock Options Granted | The following table presents the assumptions used to estimate the fair values of the stock options granted: December 31, 2018 December 31, 2017 Expected volatility 150% 105% Expected dividends 0% 0% Expected term 7 Years 7 Years Risk-free interest rate 2.46% 2.22% |
Note 11 - Stockholders' Equit_2
Note 11 - Stockholders' Equity: Schedule of Stock Options and Warrants, Activity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Table Text Block Supplement [Abstract] | |
Schedule of Stock Options and Warrants, Activity | A summary of the status of the options granted at December 31, 2018 and December 31, 2017 and changes during the years then ended is presented below: December 31, December 31, 2018 2017 Weighted-Average Weighted-Average Shares Exercise Price Shares Exercise Price Outstanding at beginning of year 2,600,556 $ 0.82 4,510,313 $ 2.81 Granted 590,000 0.07 905,556 0.18 Exercised - - - - Expired or cancelled (225,000) 1.33 (2,815,313) 3.81 Outstanding at end of year 2,965,556 0.63 2,600,556 0.82 Exercisable 2,556,390 $ 0.67 2,354,723 $ 0.84 |
Note 11 - Stockholders' Equit_3
Note 11 - Stockholders' Equity: Summary of the Status of the Options and Warrants Outstanding (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Table Text Block Supplement [Abstract] | |
Summary of the Status of the Options and Warrants Outstanding | A summary of the status of the options outstanding at December 31, 2018 is presented below: Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life Number Exercisable Weighted-Average Exercise Price $0.01-1.00 2,440,556 4.80 years 2,031,390 $0.24 $1.01-2.00 75,000 1.18 years 75,000 1.37 $2.01-3.00 450,000 0.81 years 450,000 2.53 $0.01-3.00 2,965,556 4.11 years 2,556,390 $0.67 A summary of the status of the options and warrants outstanding at December 31, 2017 is presented below: Range of Exercise Prices Number Outstanding Weighted-Average Remaining Contractual Life Number Exercisable Weighted-Average Exercise Price $0.01 - 1.00 1,950,556 5.43 years 1,704,723 $0.27 $1.01 - 2.00 125,000 1.54 years 125,000 1.18 $2.01 - 3.00 525,000 1.76 years 525,000 2.52 $0.01 - 3.00 2,600,556 4.50 years 2,354,723 $0.82 |
Note 12 - Income Taxes_ Schedul
Note 12 - Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Table Text Block Supplement [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes for the year ended December 31, 2018 and 2017 consists of the following: December 31, December 31, Federal 2018 2017 Current $ - $ - Deferred - - State Current $ 800 $ 800 Deferred - - Income tax expense $ 800 $ 800 |
Note 12 - Income Taxes_ Sched_2
Note 12 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Table Text Block Supplement [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | Net deferred tax assets consist of the following components as of December 31, 2018 and 2017: December 31, December 31, Deferred tax assets: 2018 2017 Net operating loss carryover $ 6,560,622 6,239,260 Research and development carry forward 131,088 136,465 Related party accruals - 130,538 Inventory reserve 179,051 252,958 Allowance for doubtful accounts 3,600 33,605 Warranty allowance 3,068 4,986 Accrued compensation 121,465 158,668 Deferred tax liabilities: Depreciation (97,331) (104,924) Deferred rent - (1,505) Valuation allowance (6,901,563) (6,850,051) Net deferred tax asset $ - - |
Note 12 - Income Taxes_ Sched_3
Note 12 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Table Text Block Supplement [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The income tax provision differs from the amount of income tax determined by applying the estimated U.S. federal and state income tax rates of 24% as of December 31, 2018 and 39% as of December 31, 2017 to pretax income from continuing operations for the year ended December 31, 2018 and 2017 due to the following: December 31, December 31, 2018 2017 Book loss $ (112,418) (404,157) Meals and entertainment 16 64 State tax deduction - - Deferredrent (926) (3,241) Stock/Options for services 9,055 51,294 Officer’s life ins premium 1,181 1,918 Depreciation (7,593) (6,290) Accrued compensation 23,823 67,274 Inventory reserve 23,385 119,129 Valuation allowance 127,753 348,816 Net operating loss carryover (63,476) (174,007) Income Tax Expense $ 800 800 |
Note 1- Organization and Busi_2
Note 1- Organization and Business Activity (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Text Block [Abstract] | |
Trading Symbol | omtk |
Note 2 - Summary of Significa_4
Note 2 - Summary of Significant Accounting Policies: d. Accounts Receivable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Text Block [Abstract] | ||
Allowance For Doubtful Accounts | $ 15,000 | $ 15,000 |
Provision for Doubtful Accounts | $ 0 | $ 2,905 |
Note 2 - Summary of Significa_5
Note 2 - Summary of Significant Accounting Policies: f. Long-lived Assets (Details) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Text Block [Abstract] | |
Asset Impairment Charges | $ 0 |
Note 2 - Summary of Significa_6
Note 2 - Summary of Significant Accounting Policies: g. Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Minimum | |
Property, Plant and Equipment, Useful Life | 3 years |
Maximum | |
Property, Plant and Equipment, Useful Life | 5 years |
Note 2 - Summary of Significa_7
Note 2 - Summary of Significant Accounting Policies: h. Revenue Recognition: Disaggregation of Revenue (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Consumer Products | $ 1,272,914 | $ 1,004,038 |
Long-term Contract | 12,772 | 70,175 |
Revenues | 1,285,686 | 1,074,213 |
Filters | ||
Consumer Products | 819,517 | 760,006 |
Long-term Contract | 0 | 0 |
Revenues | 819,517 | 760,006 |
Components | ||
Consumer Products | 453,397 | 244,032 |
Long-term Contract | 0 | 0 |
Revenues | 453,397 | 244,032 |
Engineering Services | ||
Consumer Products | 0 | 0 |
Long-term Contract | 12,772 | 70,175 |
Revenues | 12,772 | 70,175 |
Domestic | ||
Consumer Products | 484,604 | 440,696 |
Long-term Contract | 0 | 53,375 |
Revenues | 484,604 | 494,071 |
International | ||
Consumer Products | 788,310 | 563,342 |
Long-term Contract | 12,772 | 16,800 |
Revenues | $ 801,082 | $ 580,142 |
Note 2 - Summary of Significa_8
Note 2 - Summary of Significant Accounting Policies: k. Advertising (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Text Block [Abstract] | ||
Advertising Expense | $ 0 | $ 0 |
Note 2 - Summary of Significa_9
Note 2 - Summary of Significant Accounting Policies: m. Basic and Diluted Loss Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Text Block [Abstract] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,556,390 | 2,600,556 |
Note 2 - Summary of Signific_10
Note 2 - Summary of Significant Accounting Policies: p. Concentration of Risks (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Supplier Concentration Risk | ||
Concentration Risk, Percentage | 82.00% | 85.00% |
Concentration Risk, Supplier | four suppliers | four suppliers |
Customer Concentration Risk | ||
Concentration Risk, Customer | seven customers | seven customers |
Concentration Risk, Percentage | 73.00% | 73.00% |
Note 2 - Summary of Signific_11
Note 2 - Summary of Significant Accounting Policies: q. Liquidity and Going Concern (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Text Block [Abstract] | |||
Accumulated deficit | $ (20,255,507) | $ (19,787,101) | |
Total Stockholders' Equity | 94,759 | 476,673 | $ 1,281,448 |
Total Current Assets | 1,415,429 | 1,606,744 | |
Cash | 17,060 | 23,279 | $ 17,782 |
Total Current Liabilities | 1,353,471 | 1,151,604 | |
Working Capital | 61,958 | ||
NET LOSS | (468,406) | ||
Net Cash Used in Operating Activities | $ (103,505) | $ (24,503) |
Note 3 - Contract Assets And _3
Note 3 - Contract Assets And Liabilities - Net excess billings (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Notes to Financial Statements | ||
Contract assets | $ 12,772 | $ 0 |
Contract liabilities | (84,496) | (30,000) |
Net amount of contract liabilities in excess of Contract assets | $ (71,724) | $ (30,000) |
Note 4 - Inventory (Details)
Note 4 - Inventory (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Text Block [Abstract] | ||
Expense for Obsolete Inventory | $ 97,436 | $ 305,458 |
Note 4 - Inventory_ Schedule of
Note 4 - Inventory: Schedule of Inventory (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Text Block [Abstract] | ||
Raw materials | $ 948,060 | $ 990,945 |
Finished goods | 1,147,052 | 1,185,888 |
Work in progress | 0 | 26,432 |
Inventory in transit | 10,611 | 0 |
Allowance for obsolete inventory | (746,045) | (648,609) |
Total | $ 1,359,678 | $ 1,554,656 |
Note 5 - Property and Equipme_3
Note 5 - Property and Equipment: Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Less: accumulated depreciation | $ (145,668) | $ (138,078) |
Total | 2,376 | 7,253 |
Production Equipment | ||
Property, Plant and Equipment, Gross | 64,673 | 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 Equipme_4
Note 5 - Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Text Block [Abstract] | ||
Depreciation expense | $ 7,590 | $ 24,586 |
Note 6 - Customer Deposits (Det
Note 6 - Customer Deposits (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Text Block [Abstract] | ||
Customer deposits | $ 140,338 | $ 212,410 |
Note 7 - Notes Payable - Rela_4
Note 7 - Notes Payable - Related Parties (Details) - USD ($) | Nov. 07, 2018 | Jul. 07, 2018 | Jul. 06, 2018 | Jan. 19, 2018 |
Loss on settlement of debt | $ 32,963 | |||
John M. Palumbo | ||||
Stock Issued During Period, Shares, New Issues | 139,320 | |||
Stock Issued During Period, Value, New Issues | $ 15,799 | |||
Debt Instrument, Convertible, Conversion Price | $ 0.35 | |||
John M. Palumbo | Unpaid Principal | ||||
Stock Issued During Period, Value, New Issues | $ 15,000 | |||
John M. Palumbo | Accrued interest | ||||
Stock Issued During Period, Value, New Issues | $ 799 | |||
Convertible Notes Related Party | ||||
Promissory note | $ 15,000 | |||
Debt Instrument, Interest Rate During Period | 8.00% | |||
Debt Instrument, Maturity Date | Jul. 7, 2018 | |||
Notes Payable Related Party | ||||
Promissory note | $ 15,000 | |||
Debt Instrument, Interest Rate During Period | 5.00% | |||
Debt Instrument, Maturity Date | Jan. 19, 2018 |
Note 7 - Notes Payable - Rela_5
Note 7 - Notes Payable - Related Parties: Schedule of Convertible Notes Related Party (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Notes to Financial Statements | ||
Convertible notes payable - related parties | $ 0 | $ 15,000 |
Total | $ 0 | $ 15,000 |
Note 7 - Notes Payable - Rela_6
Note 7 - Notes Payable - Related Parties: Schedule of Note Payable Related Party (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Notes to Financial Statements | ||
Note payable, related party | $ 15,000 | $ 15,000 |
Total | $ 15,000 | $ 15,000 |
Note 8 - Convertible Note Pay_3
Note 8 - Convertible Note Payable (Details) - Secured Convertible Promissory Note - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Jun. 15, 2018 | |
Debt Instrument, Face Amount | $ 100,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |
Debt Instrument, Periodic Payment | $ 5,000 | |
Debt Instrument, Convertible, Conversion Price | $ 0.0025 |
Note 8 - Convertible Note Pay_4
Note 8 - Convertible Note Payable: Convertible Note Payable (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure Text Block [Abstract] | ||
Convertible note payable | $ 100,000 | $ 0 |
Convertible notes payable, current portion | 0 | 0 |
Convertible notes payable, net of current portion | $ 100,000 | $ 0 |
Note 9 - Commitments (Details)
Note 9 - Commitments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Deposits | $ 5,811 | $ 17,385 |
Expiration date | Mar. 1, 2019 | |
Inventories | ||
Long-term Purchase Commitment, Amount | $ 133,141 | 116,608 |
Deposits | 21,956 | 16,956 |
Future Cash Outlays | Inventories | ||
Long-term Purchase Commitment, Amount | $ 111,185 | $ 99,652 |
Note 10 - Related Party Trans_3
Note 10 - Related Party Transactions (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts receivable - related parties | $ 6,666 | $ 3,440 |
Omnitek Engineering Thailand Co. Ltd. | ||
Noncontrolling Interest, Ownership Percentage by Parent | 15.00% | |
Omnitek Peru S.A.C. | ||
Noncontrolling Interest, Ownership Percentage by Parent | 20.00% |
Note 10 - Related Party Trans_4
Note 10 - Related Party Transactions: Schedule of Related Party Transactions (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued management compensation | $ 506,103 | $ 406,841 |
President | ||
Accrued management compensation | 399,296 | 321,796 |
Chief Financial Officer | ||
Accrued management compensation | $ 106,807 | $ 85,045 |
Note 11 - Stockholders' Equity
Note 11 - Stockholders' Equity (Details) - USD ($) | Jul. 07, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2017 | Dec. 31, 2016 | Sep. 11, 2015 | Dec. 31, 2014 | Aug. 03, 2011 | Apr. 30, 2007 |
Granted | 590,000 | 905,556 | |||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 24,650 | ||||||||
Outstanding | 2,965,556 | 2,600,556 | 4,510,313 | ||||||
Employee Stock Option | |||||||||
Granted | 590,000 | 350,000 | |||||||
Allocated Share-based Compensation Expense | $ 37,730 | $ 131,522 | |||||||
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 | 600,000 | ||||||||
Employee Stock Option | 2015 Long-Term Incentive Plan | |||||||||
Number of Shares Authorized | 2,500,000 | ||||||||
Outstanding | 2,065,556 | ||||||||
Employee Stock Option | 2017 Long-Term Incentive Plan | |||||||||
Outstanding | 5,000,000 | ||||||||
John M. Palumbo | |||||||||
Stock Issued During Period, Shares, New Issues | 139,320 | ||||||||
Stock Issued During Period, Value, New Issues | $ 15,799 | ||||||||
John M. Palumbo | Unpaid Principal | |||||||||
Stock Issued During Period, Value, New Issues | 15,000 | ||||||||
John M. Palumbo | Accrued interest | |||||||||
Stock Issued During Period, Value, New Issues | $ 799 | ||||||||
Chief Executive Officer | Employee Stock Option | |||||||||
Granted | 0 | 555,556 |
Note 11 - Stockholders' Equit_4
Note 11 - Stockholders' Equity: Schedule of Assumptions Used to Estimate the Fair Values of Stock Options Granted (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Text Block [Abstract] | ||
Expected volatility | 150.00% | 105.00% |
Expected dividends | 0.00% | 0.00% |
Expected term | 7 years | 7 years |
Risk-free interest rate | 2.46% | 2.22% |
Note 11 - Stockholders' Equit_5
Note 11 - Stockholders' Equity: Schedule of Stock Options and Warrants, Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Text Block [Abstract] | ||
Outstanding at beginning of year | 2,600,556 | 4,510,313 |
Outstanding, Weighted Average Exercise Price at beginning of year | $ 0.82 | $ 2.81 |
Granted | 590,000 | 905,556 |
Granted, Weighted Average Exercise Price | $ 0.07 | $ 0.18 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | 0 |
Exercised, Weighted Average Exercise | $ 0 | |
Expired or cancelled | (225,000) | (2,815,313) |
Expired or cancelled, Weighted Average Exercise Price | $ 1.33 | $ 3.81 |
Outstanding at end of year | 2,965,556 | 2,600,556 |
Outstanding, Weighted Average Exercise Price at end of year | $ 0.63 | $ 0.82 |
Exercisable | 2,556,390 | 2,354,723 |
Exercisable, Weighted Average Exercise Price | $ 0.67 | $ 0.84 |
Note 11 - Stockholders' Equit_6
Note 11 - Stockholders' Equity: Summary of the Status of the Options and Warrants Outstanding (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
$0.01 - 1.00 | ||
Number Outstanding | 2,440,556 | 1,950,556 |
Weighted-Average Remaining Contractual Life | 4 years 9 months 18 days | 5 years 5 months 5 days |
Number Exercisable | 2,031,390 | 1,704,723 |
Weighted-Average Exercise Price | $ 0.24 | $ 0.27 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | 0.01 | 0.01 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $ 1 | $ 1 |
$1.01 - 2.00 | ||
Number Outstanding | 75,000 | 125,000 |
Weighted-Average Remaining Contractual Life | 1 year 2 months 5 days | 1 year 6 months 14 days |
Number Exercisable | 75,000 | 125,000 |
Weighted-Average Exercise Price | $ 1.37 | $ 1.18 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | 1.01 | 1.01 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $ 2 | $ 2 |
$2.01 - 3.00 | ||
Number Outstanding | 450,000 | 525,000 |
Weighted-Average Remaining Contractual Life | 9 months 22 days | 1 year 9 months 3 days |
Number Exercisable | 450,000 | 525,000 |
Weighted-Average Exercise Price | $ 2.53 | $ 2.52 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | 2.01 | 2.01 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $ 3 | $ 3 |
$0.01-3.00 | ||
Number Outstanding | 2,965,556 | 2,600,556 |
Weighted-Average Remaining Contractual Life | 4 years 1 month 9 days | 4 years 6 months |
Number Exercisable | 2,556,390 | 2,354,723 |
Weighted-Average Exercise Price | $ 0.67 | $ 0.82 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | 0.01 | 0.01 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $ 3 | $ 3 |
Note 12 - Income Taxes (Details
Note 12 - Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Text Block [Abstract] | ||
Estimated US federal and state income tax rates | 24.00% | 39.00% |
Net Operating Loss Carryforwards | $ 6,560,622 |
Note 12 - Income Taxes_ Sched_4
Note 12 - Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Federal | ||
Current | $ 0 | $ 0 |
Deferred | 0 | 0 |
State | ||
Current | 800 | 800 |
Deferred | 0 | 0 |
Income Tax Expense (Benefit), Total | $ 800 | $ 800 |
Note 12 - Income Taxes_ Sched_5
Note 12 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss carryover | $ 6,560,622 | $ 6,239,260 |
Research and development carry forward | 131,088 | 136,465 |
Related party accruals | 0 | 130,538 |
Inventory reserve | 179,051 | 252,958 |
Allowance for doubtful accounts | 3,600 | 33,605 |
Warranty allowance | 3,068 | 4,986 |
Accrued compensation | 121,465 | 158,668 |
Deferred tax liabilities: | ||
Depreciation | (97,331) | (104,924) |
Deferred rent | 0 | (1,505) |
Valuation allowance | (6,901,563) | (6,850,051) |
Net deferred tax asset | $ 0 | $ 0 |
Note 12 - Income Taxes_ Sched_6
Note 12 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Text Block [Abstract] | ||
Book loss | $ (112,418) | $ (404,157) |
Meals and entertainment | 16 | 64 |
State tax deduction | 0 | 0 |
Deferred rent | (926) | (3,241) |
Stock/Options for services | 9,055 | 51,294 |
Officer's life ins premium | 1,181 | 1,918 |
Depreciation | (7,593) | (6,290) |
Accrued compensation | 23,823 | 67,274 |
Inventory reserve | 23,385 | 119,129 |
Valuation allowance | 127,753 | 348,816 |
Net operating loss carryover | (63,476) | (174,007) |
Income Tax Expense | $ 800 | $ 800 |
Note 13 - Subsequent Events (De
Note 13 - Subsequent Events (Details) - Subsequent Event - USD ($) | Jan. 11, 2019 | Jan. 19, 2019 |
Chief Executive Officer | ||
Extension fee for related party note payable | $ 15,000 | |
Due date | Jan. 19, 2020 | |
2017 Long-Term Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 250,000 | |
Subsequrnt event | The Options were allocated as follows: 50,000 Options each to two executive officers for past and continued services (vest and exercisable immediately), 50,000 Options each to three outside directors (total of 150,000 Options) for past and continued services (vest and exercisable immediately). |