Consolidated SEC Viewer Rendering

Document and Entity Information

v3.22.4
Document and Entity Information - USD ($)
 12 Months Ended
Dec. 31, 2022
Jun. 30, 2022
Apr. 11, 2022
Details      
Registrant CIK 0001404804    
Fiscal Year End --12-31    
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2022    
Entity File Number 000-53955    
Entity Registrant Name OMNITEK ENGINEERING CORP.    
Entity Incorporation, State or Country Code CA    
Entity Tax Identification Number 33-0984450    
Entity Address, Address Line One 1345 Specialty Dr. #E    
Entity Address, City or Town Vista    
Entity Address, State or Province CA    
Entity Address, Postal Zip Code 92081    
City Area Code 760    
Local Phone Number 591-0089    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Non-accelerated Filer    
Entity Small Business true    
Entity Emerging Growth Company false    
Entity Shell Company false    
Entity Public Float   $ 796,415  
Entity Common Stock, Shares Outstanding     21,948,091
Amendment Flag false    
Document Fiscal Year Focus 2022    
Document Fiscal Period Focus FY    
Document Transition Report false    
Auditor Firm ID 3627    
Auditor Name Sadler, Gibb & Associates, LLC    
Auditor Location Draper, UT    

Balance Sheets

v3.22.4
Balance Sheets - USD ($)
Dec. 31, 2022
Dec. 31, 2021
CURRENT ASSETS    
Cash $ 56,379 $ 59,674
Accounts receivable, net 10,180 9,555
Accounts receivable - related parties 2,252 0
Inventory Net 543,353 717,044
Contract assets 0 13,221
Deposits 7,657 4,230
Total Current Assets 619,821 803,724
PROPERTY & EQUIPMENT, net 7,412 14,373
OTHER ASSETS    
Operating lease - right-of-use asset 472,342 593,697
Long-term deposit 13,514 13,514
Total Long-Term Assets 493,268 607,211
TOTAL ASSETS 1,113,089 1,425,308
CURRENT LIABILITIES    
Accounts payable and accrued expenses 353,591 373,221
Accrued management compensation 635,158 620,735
Accounts payable - related parties 127,192 124,472
Notes payable - related parties, current portion 15,000 15,000
Convertible notes payable - related party 32,827 31,090
Contract liabilities 0 75,000
Customer deposits 231,418 170,870
Operating lease liabilities - current 118,756 106,149
Total Current Liabilities 1,513,942 1,516,537
LONG-TERM LIABILITIES    
Loans payable - SBA, net of current portion 199,000 198,674
Convertible notes payable - related party, net of current portion 0 12,826
Operating lease liabilities - long-term 386,207 504,963
Total Long-term Liabilities 585,207 716,463
Total Liabilities 2,099,149 2,233,000
STOCKHOLDERS' DEFICIT    
Common stock, 125,000,000 shares authorized; no par value; 21,948,091 and 21,948,091 shares, respectively issued and outstanding 8,607,086 8,607,086
Additional paid-in capital 12,051,795 12,033,454
Accumulated deficit (21,644,941) (21,448,232)
Total Stockholders' Deficit (986,060) (807,692)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,113,089 $ 1,425,308

Balance Sheets - Parenthetical

v3.22.4
Balance Sheets - Parenthetical - $ / shares
Dec. 31, 2022
Dec. 31, 2021
Balance Sheets    
Common Stock, Shares Authorized 125,000,000 125,000,000
Common Stock, Par or Stated Value Per Share $ 0 $ 0
Common Stock, Shares, Issued 21,948,091 21,948,091
Common Stock, Shares, Outstanding 21,948,091 21,948,091

Statements of Operations

v3.22.4
Statements of Operations - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Statements of Operations    
Revenues $ 1,070,787 $ 1,097,467
COST OF GOODS SOLD 649,427 621,659
GROSS MARGIN 421,360 475,808
OPERATING EXPENSES    
General and administrative 526,836 600,169
Research and development 66,444 63,829
Depreciation and amortization 2,500 1,302
Total Operating Expenses 595,780 665,300
LOSS FROM OPERATIONS (174,420) (189,492)
OTHER INCOME (EXPENSE)    
Other income (expense) 0 32,100
Forgiveness of debt 0 200,321
Interest expense (21,489) (24,720)
Total Other Income (Expense) (21,489) 207,701
INCOME (LOSS) BEFORE INCOME TAXES (195,909) 18,209
INCOME TAX EXPENSE 800 800
NET INCOME (LOSS) $ (196,709) $ 17,409
BASIC AND DILUTED LOSS PER SHARE $ (0.01) $ 0.00
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC 21,948,091 21,600,189
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - FULLY DILUTED 21,948,091 23,708,115

Condensed Statements of Stockholders' Equity (Deficit) (unaudited)

v3.22.4
Condensed Statements of Stockholders' Equity (Deficit) (unaudited) - USD ($)
Common Stock
Additional Paid-in Capital
Retained Earnings
Total
Shares, Outstanding, Beginning Balance at Dec. 31, 2020 21,600,189      
Value of options issued for services $ 0 $ 19,112 $ 0 $ 19,112
Common stock issued for stock subscription $ 28,876 1,044 0 29,920
Common stock issued for stock subscription, shares 347,902      
NET INCOME (LOSS) $ 0 0 17,409 17,409
Equity, Attributable to Parent, Ending Balance at Dec. 31, 2021       (807,692)
Shares, Outstanding, Ending Balance at Dec. 31, 2021 21,948,091      
Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2020 $ 8,578,210 12,013,298 (21,465,641) (874,133)
Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Dec. 31, 2021 8,607,086 12,033,454 (21,448,232) (807,692)
Value of options issued for services 0 18,341 0 18,341
NET INCOME (LOSS) $ 0 0 (196,709) (196,709)
Equity, Attributable to Parent, Ending Balance at Dec. 31, 2022       (986,060)
Shares, Outstanding, Ending Balance at Dec. 31, 2022 21,948,091      
Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Dec. 31, 2022 $ 8,607,086 $ 12,051,795 $ (21,644,941) $ (986,060)

Statements of Cash Flows

v3.22.4
Statements of Cash Flows - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
OPERATING ACTIVITIES    
NET INCOME (LOSS) $ (196,709) $ 17,409
Adjustments to reconcile net loss to net cash used in operating activities    
Depreciation and amortization 2,500 1,302
Options and warrants issued for services 18,341 19,112
Write-off of contract asset 13,221 0
Forgiveness of debt 0 (200,321)
Loss on abandoned asset 0 90
Amortization of ROU asset 127,261 58,653
Inventory reserve (3,980) 53,453
Changes in operating assets and liabilities    
Accounts receivable (625) (26,100)
Operating lease liability (106,149) (41,238)
Accounts receivable-related parties (2,252) 17,345
Deposits (3,427) 34,380
Inventory 177,671 51,369
Other non-current assets 0 766
Accounts payable and accrued expenses (19,304) (65,377)
Customer deposits 60,548 (105,511)
Contract liability (75,000) 0
Accounts payable-related parties 2,720 2,945
Accrued management compensation 14,423 25,577
Net Cash Provided by (Used in) Operating Activities 9,239 (130,146)
INVESTING ACTIVITIES    
Purchase of fixed assets (1,445) (14,499)
Net Cash Used in Investing Activities (1,445) (14,499)
FINANCING ACTIVITIES    
Payments on related party note payable 0 (6,410)
Proceeds from loans payable - SBA 0 100,000
Proceeds (payments on) from related party payable (11,089) 50,000
Net Cash Provided by Financing Activities (11,089) 143,590
NET CHANGE IN CASH (3,295) (1,055)
CASH AT BEGINNING OF YEAR 59,674 60,729
CASH AT END OF YEAR 56,379 59,674
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS    
Interest 17,713 17,913
Income taxes 800 800
NON-CASH INVESTING AND FINANCING ACTIVITIES    
Common stock issued for stock subscription 0 0
Common stock issued for trade payable $ 0 $ 29,920

NOTE 1 - ORGANIZATION AND BUSINESS ACTIVITY

v3.22.4
NOTE 1 - ORGANIZATION AND BUSINESS ACTIVITY
 12 Months Ended
Dec. 31, 2022
Notes  
NOTE 1 - ORGANIZATION AND BUSINESS ACTIVITY

NOTE 1 – ORGANIZATION AND BUSINESS ACTIVITY

 

Omnitek Engineering, Corp. (“Omnitek” or “the Company”) was incorporated on October 9, 2001 under the laws of the State of California. Omnitek develops and sells a proprietary technology to convert diesel engines to an alternative fuel, new natural gas engines, and complementary products. Omnitek products are available for stationary applications and the global transportation markets, which includes light commercial vehicles, minibuses, heavy-duty trucks, municipal buses, as well as rail and marine applications. The technology can be applied for compressed natural gas (“CNG”), liquefied natural gas (“LNG”), or renewable natural gas (“Biogas” or “RNG”), as well as liquid petroleum gas (“Propane” or “LPG”). Omnitek began operations on October 10, 2001, and was a spin-off from Nology Engineering, Inc.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
 12 Months Ended
Dec. 31, 2022
Notes  
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

a.       Accounting Methods

 

The Company's financial statements are prepared using the accrual method of accounting.  The Company has elected a December 31, year-end.

 

b.       Use of Estimates in Preparing Financial Statements

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates. The Company also regularly evaluates estimates and assumptions related to deferred income tax asset valuation allowances, inventory valuation allowances, allowance for doubtful receivables and valuations of equity-based payments.

 

c.       Cash and Cash Equivalents

 

For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.

 

d.       Accounts Receivable

 

Trade receivables are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis.  Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts.  Trade receivables are written off when deemed uncollectible.  Recoveries of trade receivables previously written off are recorded when received.  Allowance for doubtful accounts for the years ended December 31, 2022, and 2021, was $0 and $41,000, respectively. Additionally, bad debt expense for the years ended December 31, 2022, and 2021, was $0 and $26,000, 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

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

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, 2022, or 2021.

 

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 - The Company recognizes revenue from the sale of products (e.g., filters and engine components) as performance obligations are satisfied. This type of revenue is primarily generated from the sale of finished product to customers. Those sales predominantly contain a single delivery element and revenue is recognized at a single point in time when ownership, risks and rewards transfer (i.e., the performance obligation has been satisfied). Control passes FOB shipping point.

 

Contracts – Revenues are recognized as performance obligations are satisfied over time (also known as percentage-of-completion method), measured by either achievement of milestones or the ratio of costs incurred up to a given date to estimated total costs for each contract. Contract costs include all direct material, labor, subcontract and other costs. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, estimated profitability and associated change orders and claims, including those changes arising from contract penalty provisions and final contract settlements, may result in revisions to costs and income and are recognized in the period in which the revisions are determined.

 

Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, estimated profitability and associated change orders and claims, including those changes arising from contract penalty provisions and final contract settlements, may result in revisions to costs and income and are recognized in the period in which the revisions are determined.  

 

Performance Obligations

 

A performance obligation is a promise in a contract to transfer a distinct good 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

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

contracts will continue to be recognized over time because our typical contract is for a customized asset with no alternative use and generally the Company has a right to payment for work completed to date. Under the new revenue standard, the cost-to-cost measure of progress continues to best depict the transfer of control of assets to the customer, which occurs as the Company incurs costs. Contract costs include labor and material. Revenue from products and services transferred to customers over time accounted for 0% and 1% of revenue for the years ended December 31, 2022, and 2021, respectively.

 

Performance Obligations Satisfied at a Point in Time

 

Revenue from product sales is recognized at a point in time. These sales predominantly contain a single delivery element and revenue is recognized at a single point in time when ownership, risk and rewards transfer Upon fulfilment of the performance obligation, the customer is provided an invoice demonstrating transfer of control to the customer. Revenue from goods and services transferred to customers at a point in time accounted for 100% and 99% of revenue for the years ended December 31, 2022, and 2021, 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.

 

As of December 31, 2022, the company had no long-term contracts.

 

Disaggregation of Revenue

 

The following table presents Omnitek’s revenues disaggregated by region and product type:

 

 

 

 

December 31,

 

 

December 31,

 

 

 

 

2022

 

 

 

 

2021

 

 

 

 

Consumer

Long-term

 

 

 

Consumer

Long-term

 

Segments

 

 

Products

Contract

Total

 

 

Products

Contract

Total

Domestic

 

$

376,453

-

376,453

 

$

396,750

-

396,750

International

 

 

694,334

 

694,334

 

 

693,052

7,665

700,717

 

 

$

1,070,787

 

1,070,787

 

$

1,089,802

7,665

1,097,467

 

 

 

 

 

 

 

 

 

 

 

Filters

 

 

520,386

-

520,386

 

 

693,768

-

693,768

Components

 

 

549,581

-

549,581

 

 

395,176

-

395,176

Engineering Services

 

 

820

 

820

 

 

858

7,665

8,523

 

 

$

1,070,787

 

1,070,787

 

$

1,089,802

7,665

1,097,467

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

i.       Cost of Goods Sold

 

The Company includes product costs (i.e. material, direct labor and overhead costs), shipping and handling expense, production-related depreciation expense and product license agreement expense in cost of goods sold.

 

j.       Research and Development

 

The Company expenses the costs of researching and developing its products during the period incurred. During the years ended December 31, 2022, and 2021, the Company incurred research and development expenses of $66,444 and $63,829, respectively.

 

k.       Advertising

 

The Company follows the policy of charging the costs of advertising to expense as incurred. During the years ended December 31, 2022, and 2021, 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, 2022, the Company had no accrued interest or penalties related to uncertain tax positions. The Company files an income tax return in the U.S. federal jurisdiction and the state of California. With few exceptions, the Company is no longer subject to U.S. federal, state, and local, or non-U.S. income tax examinations by tax authorities for years before 2012.

 

m.       Basic and Diluted Loss Per Share

 

The computation of basic earnings per share of common stock is based on the weighted average number of shares outstanding during the periods presented. The computation of fully diluted earnings per share includes common stock equivalents outstanding at the balance sheet date. The Company had 3,207,222 vested stock options and warrants that were included in the fully diluted earnings per share computation as of December 31, 2022. As of December 31, 2021, the Company had 3,065,556 Stock Options and Warrants that would have been included in the fully diluted earnings per share computation. However, in 2022 the common stock equivalents were not included in the computation because they were anti-dilutive.  

 

n.       Fair Value Measurements

 

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:

 

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Level 1 – Quoted prices in active markets for identical assets or liabilities;

 

Level 2 – Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and

 

Level 3 – Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

 

The Company had no financial instrument in 2022.

 

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, 2022, eight customers accounted for approximately 81% of sales.

 

During the year ended December 31, 2021, eight customers accounted for approximately 84% of sales.

 

Suppliers

 

During the year ended December 31, 2022, four suppliers accounted for 82% of products purchased.

 

During the year ended December 31, 2021, four suppliers accounted for 81% 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, 2022, the Company had an accumulated deficit of $21,644,941 and total stockholders’ deficit of $(986,060).  At December 31, 2022, the Company had current assets of $619,821 including cash of $56,379, and current liabilities of $1,513,942, resulting in negative working capital of $894,121. For 2022, the Company reported a net loss of $196,709 and net cash provided by operating activities of $9,239. Management believes that based on its operating plan, the projected sales for 2023, combined with funds available from its working capital will be sufficient to fund operations for the next twelve months from the date these financial statements were issued.  However, there can be no assurance that operations and operating cash flows will continue at the current levels or improve in the near future. Whether, and when, the Company can attain profitability and positive cash flows from operations is uncertain. The Company is also uncertain whether it can raise additional capital. These uncertainties cast substantial doubt upon the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. Our financial statements have been prepared on a going concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of operations. The financial statements do not include any adjustments relating to the recoverability or classification of recorded asset amounts or the amounts or classification of liabilities should we be unable to continue as a going concern.     

 

r.       Recent Accounting Pronouncements

 

The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements.

NOTE 3 - CUSTOMER DEPOSITS

v3.22.4
NOTE 3 - CUSTOMER DEPOSITS
 12 Months Ended
Dec. 31, 2022
Notes  
NOTE 3 - CUSTOMER DEPOSITS

NOTE 3 – CUSTOMER DEPOSITS

 

The customers deposit account relates to payments received from customers before product has been shipped. When the product is shipped the Company recognizes the associated revenue by reclassifying the customer deposit to the appropriate revenue account. By contrast, the Contract Liabilities account (see Note 4) relates to long-term contracts where revenue is recognized over the term of the contract. For the periods ended December 31, 2022 and December 31, 2021, the balance due under customer deposits was $231,418 and $170,870, respectively.

NOTE 4 - CONTRACT ASSETS AND LIABILITIES

v3.22.4
NOTE 4 - CONTRACT ASSETS AND LIABILITIES
 12 Months Ended
Dec. 31, 2022
Notes  
NOTE 4 - CONTRACT ASSETS AND LIABILITIES

NOTE 4 – 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). As of December 31, 2022, the company had no long-term 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,

 

2022

 

2021

Contract assets

$

-

 

$

13,221

Contract liabilities

$

-

 

$

(75,000)

Net amount of contract liabilities in excess of contract assets

$

-

 

$

(61,779)

NOTE 5 - OPERATING LEASES

v3.22.4
NOTE 5 - OPERATING LEASES
 12 Months Ended
Dec. 31, 2022
Notes  
NOTE 5 - OPERATING LEASES

NOTE 5 – OPERATING LEASES

 

The Company’s leases consist of an operating lease for general office space and warehouse facilities. The Company recognizes rent expense for this lease on a straight-line basis over the lease term. Because the lease does not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the lease Commencement Date in determining the present value of future lease payments.

 

On June 3, 2021, the Company entered into a lease for the premises located at 1345 Specialty Drive #E, Vista, CA, containing approximately 11,751 square feet of rentable area. The lease commenced on July 1, 2021, and expires on June 30, 2026. The monthly base rent under the lease is $9,988 per month and monthly operating expenses during the term of the lease, subject to adjustment under the lease, is $1,175 per month. On Commencement Date the Company recognized a ROU asset of $653,701 and a lease liability of $652,350.

 

During the year ended December 31, 2022, cash paid for amounts included in the measurement of operating lease liabilities was $133,956 and the Company recorded operating lease expenses included in operating expenses of $43,836 and cost of sales of $105,324, for a total of $149,160.

 

 

NOTE 5 – OPERATING LEASES (continued)

 

Supplemental balance sheet information related to leases as of December 31, 2022 was as follows:

 

Operating leases:

 

 

 

 

 

Operating lease right-of-use-assets

 

 

 

 

472,342

Operating lease liabilities - current

 

 

 

 

118,756

Operating lease liabilities – long-term

 

 

 

 

386,207

Incremental borrowing rate:

 

 

 

 

 

Operating leases

 

 

 

 

4.94%

 

As of December 31, 2022, maturities of operating lease liabilities were as follows:

Years ending December 31,

 

 

 

2023

 

 

 

 

141,036

2024

 

 

 

 

148,074

2025

 

 

 

 

176,268

Thereafter

 

 

 

 

88,134

Total lease payments

 

 

 

 

553,512

Less: Imputed interest

 

 

 

 

(48,549)

Total lease liability

 

 

 

 

504,963

Less: current lease liability

 

 

 

 

(118,756)

Long-term lease liability

 

 

 

$

386,207

NOTE 6 - INVENTORIES

v3.22.4
NOTE 6 - INVENTORIES
 12 Months Ended
Dec. 31, 2022
Notes  
NOTE 6 - INVENTORIES

NOTE 6 – INVENTORIES

 

Inventories are located in Vista, California and at December 31, 2022, and 2021, consisted of the following:

 

 

December 31,

 

December 31,

 

2022

 

2021

Raw materials

$

836,833

 

$

846,499

Finished goods

 

634,275

 

 

802,280

Allowance for obsolete inventory

 

(927,755)

 

 

(931,735)

Total

$

543,353

 

$

717,044

 

The Company has established an allowance for obsolete inventory. The change in obsolete inventory was a decrease of $3,980 and increase of $53,453, for the years ended December 31, 2022, and December 31, 2021, respectively.

NOTE 7 - PROPERTY AND EQUIPMENT

v3.22.4
NOTE 7 - PROPERTY AND EQUIPMENT
 12 Months Ended
Dec. 31, 2022
Notes  
NOTE 7 - PROPERTY AND EQUIPMENT

NOTE 7 – PROPERTY AND EQUIPMENT

 

Property and equipment at December, 2022, and 2021, consisted of the following:

 

 

December 31,

 

December 31,

 

2022

 

2021

Production equipment

$

68,456   

 

$

68,456   

Leasehold Improvements

 

4,689   

 

 

10,627   

Less: accumulated depreciation

 

(65,733)  

 

 

(64,710)  

Total

$

7,412   

 

$

14,373   

 

Depreciation expense for the years ended December 31, 2022, and 2021, was $2,500 and $1,302, respectively.

NOTE 8 - NOTES PAYABLE - RELATED PARTY

v3.22.4
NOTE 8 - NOTES PAYABLE - RELATED PARTY
 12 Months Ended
Dec. 31, 2022
Notes  
NOTE 8 - NOTES PAYABLE - RELATED PARTY

NOTE 8 – NOTES PAYABLE – RELATED PARTIES

 

Convertible Notes – Related Parties

 

On June 4, 2021, the Company issued a convertible promissory note for $30,000 to its CEO. The note has an annual interest rate of 8% and is unsecured. The note calls for monthly installment payments of $1,050 commencing on July 4, 2021. The unpaid principal amount of the note and all unpaid accrued interest is due and payable on or before June 4, 2023. The note has a conversion feature, wherein, at the maturity date the lender may convert the remaining principal balance and any unpaid accrued interest into shares of the Company’s common stock. The number of shares of common stock to be issued upon such conversion shall be equal to the quotient obtained by dividing (i) the remaining unpaid principal balance and any unpaid accrued interest of this note by (ii) 90% of the average closing price of the common stock of the Company, for the five (5) trading days (between days 15 and 10 days) before the maturity date. Due to this provision, the Company considered whether the embedded conversion option qualifies for derivative accounting under ASC 815-15 “Derivatives and Hedging.” As the note isn’t convertible until maturity, no derivative liability was recognized as of December 31, 2022.

 

On June 4, 2021 the Company issued a convertible promissory note for $20,000 to a board member. The note has an annual interest rate of 8% and is unsecured. The principal amount of the note and all accrued interest is due and payable on or before December 4, 2021. The note has a conversion feature, wherein, at the maturity date the lender may convert the remaining principal balance and any unpaid accrued interest into shares of the Company’s common stock. The number of shares of common stock to be issued upon such conversion shall be equal to the quotient obtained by dividing (i) the remaining unpaid principal balance and any unpaid accrued interest of this note by (ii) 90% of the average closing price of the common stock of the Company, for the five (5) trading days (between days 15 and 10 days) before the maturity date. Due to this provision, the Company considered whether the embedded conversion option qualifies for derivative accounting under ASC 815-15 “Derivatives and Hedging.” As the note isn’t convertible until maturity, no derivative liability was recognized as of December 31, 2022. On December 14, 2021, the Convertible Promissory Note dated June 4, 2021, in the original principal amount of $20,000, with an original Maturity Date of December 4, 2021, was extended for an additional period of 3 months until March 4, 2022. On March 4, 2022, the Note was extended for an additional period of 3 months until June 4, 2022. On June 4, 2022, the Note was extended for an additional period of 6 months until December 4, 2022. On December 4, 2022, the Note was extended for an additional period of 6 months until June 4, 2023.

 

As of December 31, 2022, and December 31, 2021 Convertible Notes – Related Party consisted of the following:

 

 

December 31,

 

December 31,

 

2022

 

2021

Convertible Note payable, related parties

$

32,827

 

$

43,916

Less current portion

 

(32,827)

 

$

(31,090)

Total

$

-

 

$

12,826

 

Notes Payable – Related Party

 

On January 19, 2017, the Company issued a promissory note for $15,000 to a related party. The note has an annual interest rate of 5% and is unsecured. The principal amount of the note and all accrued interest is due and payable on or before January 19, 2024.

 

 

 

NOTE 8 – NOTES PAYABLE – RELATED PARTIES (continued)

 

As of December 31, 2022, and December 31, 2021, Note Payable – Related Party consisted of the following:

 

 

December 31,

 

December 31,

 

2022

 

2021

Note payable, related party

$

15,000

 

$

15,000

Total

$

15,000

 

$

15,000

NOTE 9 - DEBT

v3.22.4
NOTE 9 - DEBT
 12 Months Ended
Dec. 31, 2022
Notes  
NOTE 9 - DEBT

NOTE 9 – DEBT

 

Loans payable – SBA

 

Economic Injury Disaster Loan

 

On April 21, 2020, the Company obtained a loan (the “SBA EIDL Loan”) under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) adminitstered by the U.S. Small Business Administration. The Company received total proceeds of $199,000 from the SBA EIDL loan. The SBA EIDL Loan is evidenced by a Loan Authorization and Agreement, a Secured Promissory Note (the “Note” and Security Agreement. Interest on the unpaid principal balance of the Note shall accrue at the rate of three and 75/100 percent (3.75%) per annum. Pursuant to the terms of the Note, commencing May 21, 2022 (i.e., twenty-four (30) months from the Note date), the Company shall make principal and interest payments in the amount of $970 every month, with any unpaid principal and accrued interest due and payable on April 21, 2050. The obligations under the Loan Authorization and Agreement, and the Note shall be secured pursuant to the Security Agreement and a first position lien and security interest in the Collateral (as defined in the Security Agreement). The collateral in which the security interest is granted includes all tangible and intangible personal property, including, but not limited to: (a) inventory, and (b) equipment.

 

As of December 31, 2022, and December 31, 2021, Debt consisted of the following:

 

 

December 31,

 

December 31,

 

2022

 

2021

Loan payable – SBA EIDL

$

199,000

 

$

198,674

Less current portion

 

-

 

 

-

Total

$

199,000

 

$

198,674

 

As of December 31, 2022 accrued interest was $16,626.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

v3.22.4
NOTE 10 - COMMITMENTS AND CONTINGENCIES
 12 Months Ended
Dec. 31, 2022
Notes  
NOTE 10 - COMMITMENTS AND CONTINGENCIES

NOTE 10 – COMMITMENTS AND CONTINGENCIES

 

As of December 31, 2022, and 2021, the Company had outstanding purchase commitments for inventory totaling $188,946 and $179,240, respectively. Of these amounts, the Company had prepayments of $7,657 as of December 31, 2022, and $4,230 as of December 31, 2021, and had commitments for future cash outlays for inventory totaling $181,289 and $175,010, respectively.

 

On September 16, 2022, the Company received a Summons and was named as a cross-defendant in the matter of Olson-Ecologic Engine Testing Laboratories, LLC -v- Michael Naylor, Omnitek Engineering Corp., and Moto Concerto, Inc., filed in the Superior Court of the State of California, County of Orange, Central Justice Center, Case No. 30-2020-01171344. Olson-Ecologic Engine Testing Laboratories, LLC filed the cross-complaint in response to the original complaint filed by Michael Naylor against Olson-Ecologic Engine Testing Laboratories. Omnitek served as a subcontractor to Olson-Ecologic who received a grant in May 2017 from the California Energy Commission.  In October 2017, very early in the project and before completion of the project, which was to run into 2020, Olson-Ecologic advised Omnitek that the California Energy Commission had terminated the project.  In the cross-complaint Olson-Ecologic alleges that Omnitek participated with Mr. Naylor in overcharging Olson-Ecologic, however, Olson-Ecologic doesn’t provide a specific statement of facts or actions of what Omnitek allegedly did. Olson-Ecologic’s cross-complaint and allegations against Omnitek are without merit and complete nonsense and Omnitek will vigorously defend the cross-complaint.

NOTE 11 - RELATED PARTY TRANSACTIONS

v3.22.4
NOTE 11 - RELATED PARTY TRANSACTIONS
 12 Months Ended
Dec. 31, 2022
Notes  
NOTE 11 - RELATED PARTY TRANSACTIONS

NOTE 11 – RELATED PARTY TRANSACTIONS

 

Accounts Receivable – Related Parties

 

As of December 31, 2022, and December 31, 2021, the Company was owed $2,252 and $0, respectively, by an entity controlled by the Company’s CEO for the purchase of products and services.

 

Accrued Management Expenses

 

During the periods ended December 31, 2022, and December 31, 2021, the Company’s president was due amounts for services performed for the Company.  As of December 31, 2022, and December 31, 2021 the accrued management fees consisted of the following:

 

 

December 31,

 

December 31,

 

2022

 

2021

Amounts due to the president

$

635,158

 

$

620,735

Total

$

635,158

 

$

620,735

NOTE 12 - STOCKHOLDERS' EQUITY

v3.22.4
NOTE 12 - STOCKHOLDERS' EQUITY
 12 Months Ended
Dec. 31, 2022
Notes  
NOTE 12 - STOCKHOLDERS' EQUITY

NOTE 12 – STOCKHOLDERS’ EQUITY

 

Options and Warrants

 

During the years ended December 31, 2022, and 2021, the Company granted 150,000 and 400,000 options for services, respectively.  During the years ended December 31, 2022, and 2021, respectively, the Company recognized expense of $18,341 and $19,112 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 $12,354.

 

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, 2022, the Company has a total of -0- 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, 2022, the Company has a total of 1,815,556 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, 2022, the Company has a total of 1,450,000 options issued under the plan. During the year ended December 31, 2022, and 2021, 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,

2022

 

December 31,

2021

Expected volatility

207%

 

201%

Expected dividends

0%

 

0%

Expected term

7 Years

 

7 Years

Risk-free interest rate

2.95%

 

1.20%

 

 

NOTE 12 – STOCKHOLDERS’ EQUITY (continued)

 

A summary of the status of the options granted at December 31, 2022 and December 31, 2021 and changes during the years then ended is presented below:  

 

 

December 31,

2022

 

December 31,

2021

 

 

 

 

Weighted-Average

 

 

 

 

Weighted-Average

 

Shares

 

 

Exercise Price

 

Shares

 

 

Exercise Price

Outstanding at beginning of year

3,290,556

 

$

0.19

 

2,890,556

 

$

0.20

Granted

150,000

 

 

0.05

 

400,000

 

 

0.11

Exercised

-

 

 

-

 

-

 

 

-

Expired or cancelled

(175,000)

 

 

0.77

 

-

 

 

-

Outstanding at end of year

3,265,556

 

 

0.15

 

3,290,556

 

 

0.19

Exercisable

3,140,556

 

$

0.15

 

3,065,556

 

$

0.19

 

A summary of the status of the options outstanding at December 31, 2022 is presented below:

 

Range of Exercise Prices

 

Number Outstanding

 

Weighted-Average Remaining Contractual Life

 

Number Exercisable

 

Weighted-Average Exercise Price

$0.01-1.00

 

3,265,556

 

2.28 years

 

3,140,556

 

$0.15

 

A summary of the status of the options and warrants outstanding at December 31, 2021 is presented below:

 

Range of Exercise Prices

 

Number Outstanding

 

Weighted-Average Remaining Contractual Life

 

Number Exercisable

 

Weighted-Average Exercise Price

$0.01 - 1.00

 

3,290,556

 

2.96 years

 

3,265,556

 

$0.19

NOTE 13 - INCOME TAXES

v3.22.4
NOTE 13 - INCOME TAXES
 12 Months Ended
Dec. 31, 2022
Notes  
NOTE 13 - INCOME TAXES

NOTE 13 – INCOME TAXES

 

The provision for income taxes for the year ended December 31, 2022 and 2021 consists of the following:

 

 

 

December 31,

 

 

December 31,

 

 

2022

 

 

2021

 

Federal

 

 

 

 

 

 

Current

 

$

-   

 

 

$

-   

 

Deferred

 

 

-   

 

 

 

-   

 

State

 

 

 

 

 

 

 

 

Current

 

$

800   

 

 

$

800   

 

Deferred

 

 

-   

 

 

 

-   

 

  Income tax expense

 

$

800   

 

 

$

800   

 

 

 

NOTE 13 – INCOME TAXES (continued)

 

Net deferred tax assets consist of the following components as of December 31, 2022, and 2021:

 

 

 

December 31,

 

 

December 31,

 

 

2022

 

 

2021

 

Deferred tax assets:

 

 

 

 

 

 

Net operating loss carryover

 

$

7,839,147   

 

 

 

7,428,249   

 

Research and development carry forward

 

 

131,088   

 

 

 

131,088   

 

Inventory reserve

 

 

222,661   

 

 

 

223,616   

 

Allowance for doubtful accounts

 

 

3,600   

 

 

 

3,600   

 

Warranty allowance

 

 

3,068   

 

 

 

3,068   

 

Accrued compensation

 

 

152,438   

 

 

 

148,976   

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

Depreciation

 

 

(34,066)  

 

 

 

(33,476)  

 

Valuation allowance

 

 

(8,317,935)  

 

 

 

(7,905,122)  

 

Net deferred tax asset

 

$

-   

 

 

 

-   

 

 

The income tax provision differs from the amount of income tax determined by applying the estimated U.S. federal and state income tax rate of 24% as of December 31, 2022 and December 31, 2021 to pretax income from continuing operations for the year ended December 31, 2022 and 2021 due to the following:  

 

 

 

 

 

 

 

  

 

December 31,

 

 

December 31,

 

 

 

2022

 

 

 

2021

Book income (loss)   

 

$

(47,210)  

 

 

 

4,178  

Meals and entertainment   

 

 

-   

 

 

 

-   

State tax deduction

 

 

-   

 

 

 

-   

Deferred rent

 

 

-  

 

 

 

-  

Stock/Options for services

 

 

4,402   

 

 

 

4,587   

Officer’s life ins premium

 

 

797   

 

 

 

1,181   

Depreciation

 

 

590  

 

 

 

(6,451)  

Accrued compensation

 

 

3,462   

 

 

 

6,138   

Inventory reserve

 

 

(955)   

 

 

 

(30,378)   

Valuation allowance

 

 

78,629   

 

 

 

42,289   

Net operating loss carryover

 

 

(38,915)  

 

 

 

(20,744)  

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, 2022, the Company had net operating loss carry forwards of approximately $7,839,147 through 2034.  No tax benefit has been reported in the December 31, 2022, financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.

NOTE 14 - SUBSEQUENT EVENT

v3.22.4
NOTE 14 - SUBSEQUENT EVENT
 12 Months Ended
Dec. 31, 2022
Notes  
NOTE 14 - SUBSEQUENT EVENT

NOTE 14 – SUBSEQUENT EVENTS

 

On January 19, 2023 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, 2024.  

 

On March 23, 2023 the Company executed a Promissory Note in favor of Werner Funk, President and CEO (the “Lender”), evidencing the Lender’s additional loans to, and made advances on behalf of, the Company in the principal amount of $20,000 as of such date, and to evidence any additional loans to the Company by the Lender. Under the terms of the Note, the Company shall pay Lender, the principal amount with simple interest thereon at the rate of eight percent (8%) per annum, plus the amount of any additional advances and interest thereon made by lender to the Company, from time to time. The principal and all accrued interest thereon shall be due and payable on March 22, 2024. Provided that the Company is not in default, the Company may, and subject to Lender’s consent, extend the term of this Note by an addition 12 months by paying an extension fee of 1.00% of the outstanding principal loan balance, which may at Lenders’ option be advanced and added to the then outstanding principal balance.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: a. Accounting Methods (Policies)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: a. Accounting Methods (Policies)
 12 Months Ended
Dec. 31, 2022
Policies  
a. Accounting Methods

a.       Accounting Methods

 

The Company's financial statements are prepared using the accrual method of accounting.  The Company has elected a December 31, year-end.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: b. Use of Estimates in Preparing Financial Statements (Policies)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: b. Use of Estimates in Preparing Financial Statements (Policies)
 12 Months Ended
Dec. 31, 2022
Policies  
b. Use of Estimates in Preparing Financial Statements

b.       Use of Estimates in Preparing Financial Statements

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates. The Company also regularly evaluates estimates and assumptions related to deferred income tax asset valuation allowances, inventory valuation allowances, allowance for doubtful receivables and valuations of equity-based payments.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: c. Cash and Cash Equivalents (Policies)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: c. Cash and Cash Equivalents (Policies)
 12 Months Ended
Dec. 31, 2022
Policies  
c. Cash and Cash Equivalents

c.       Cash and Cash Equivalents

 

For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: d. Accounts Receivable (Policies)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: d. Accounts Receivable (Policies)
 12 Months Ended
Dec. 31, 2022
Policies  
d. Accounts Receivable

d.       Accounts Receivable

 

Trade receivables are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis.  Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts.  Trade receivables are written off when deemed uncollectible.  Recoveries of trade receivables previously written off are recorded when received.  Allowance for doubtful accounts for the years ended December 31, 2022, and 2021, was $0 and $41,000, respectively. Additionally, bad debt expense for the years ended December 31, 2022, and 2021, was $0 and $26,000, respectively.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: e. Inventory (Policies)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: e. Inventory (Policies)
 12 Months Ended
Dec. 31, 2022
Policies  
e. Inventory

e.       Inventories

 

Inventories are stated at the lower of cost or market, cost determined on an average cost basis.  Market value for raw materials is based on replacement costs. Inventory costs include material, labor and manufacturing overhead.  The Company reviews inventories on hand at least annually and records provisions for estimated excess, slow moving and obsolete inventory, as well as inventory with a carrying value in excess of net realizable value. The regular and systematic inventory valuation reviews include a current assessment of future product demand, historical experience and product expiration.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: f. Long-Lived Assets (Policies)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: f. Long-Lived Assets (Policies)
 12 Months Ended
Dec. 31, 2022
Policies  
f. Long-Lived Assets

f.       Long-Lived Assets

 

The Company assesses the recoverability of its long-lived assets annually and whenever circumstances would indicate that there may be an impairment.  The Company compares the estimated undiscounted future cash flows to

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

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, 2022, or 2021.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: g. Property and Equipment (Policies)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: g. Property and Equipment (Policies)
 12 Months Ended
Dec. 31, 2022
Policies  
g. Property and Equipment

g.       Property and Equipment

 

Property and equipment are recorded at cost.  Depreciation and amortization are calculated on the straight-line method over the shorter of the lease term or the estimated useful lives of the assets ranging from three to five years.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: h. Revenue Recognition (Policies)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: h. Revenue Recognition (Policies)
 12 Months Ended
Dec. 31, 2022
Policies  
h. Revenue Recognition

h.        Revenue Recognition

 

In general, revenue is recognized when control of the promised goods is transferred to our customers, in an amount that reflects the consideration to which we expect to be entitled in exchange for the goods or services. In order to achieve that core principle, a five-step approach is applied: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue allocated to each performance obligation when we satisfy the performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition.

 

We recognize revenue on various products and services as follows:

 

Products - The Company recognizes revenue from the sale of products (e.g., filters and engine components) as performance obligations are satisfied. This type of revenue is primarily generated from the sale of finished product to customers. Those sales predominantly contain a single delivery element and revenue is recognized at a single point in time when ownership, risks and rewards transfer (i.e., the performance obligation has been satisfied). Control passes FOB shipping point.

 

Contracts – Revenues are recognized as performance obligations are satisfied over time (also known as percentage-of-completion method), measured by either achievement of milestones or the ratio of costs incurred up to a given date to estimated total costs for each contract. Contract costs include all direct material, labor, subcontract and other costs. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, estimated profitability and associated change orders and claims, including those changes arising from contract penalty provisions and final contract settlements, may result in revisions to costs and income and are recognized in the period in which the revisions are determined.

 

Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, estimated profitability and associated change orders and claims, including those changes arising from contract penalty provisions and final contract settlements, may result in revisions to costs and income and are recognized in the period in which the revisions are determined.  

 

Performance Obligations

 

A performance obligation is a promise in a contract to transfer a distinct good 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

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

contracts will continue to be recognized over time because our typical contract is for a customized asset with no alternative use and generally the Company has a right to payment for work completed to date. Under the new revenue standard, the cost-to-cost measure of progress continues to best depict the transfer of control of assets to the customer, which occurs as the Company incurs costs. Contract costs include labor and material. Revenue from products and services transferred to customers over time accounted for 0% and 1% of revenue for the years ended December 31, 2022, and 2021, respectively.

 

Performance Obligations Satisfied at a Point in Time

 

Revenue from product sales is recognized at a point in time. These sales predominantly contain a single delivery element and revenue is recognized at a single point in time when ownership, risk and rewards transfer Upon fulfilment of the performance obligation, the customer is provided an invoice demonstrating transfer of control to the customer. Revenue from goods and services transferred to customers at a point in time accounted for 100% and 99% of revenue for the years ended December 31, 2022, and 2021, 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.

 

As of December 31, 2022, the company had no long-term contracts.

 

Disaggregation of Revenue

 

The following table presents Omnitek’s revenues disaggregated by region and product type:

 

 

 

 

December 31,

 

 

December 31,

 

 

 

 

2022

 

 

 

 

2021

 

 

 

 

Consumer

Long-term

 

 

 

Consumer

Long-term

 

Segments

 

 

Products

Contract

Total

 

 

Products

Contract

Total

Domestic

 

$

376,453

-

376,453

 

$

396,750

-

396,750

International

 

 

694,334

 

694,334

 

 

693,052

7,665

700,717

 

 

$

1,070,787

 

1,070,787

 

$

1,089,802

7,665

1,097,467

 

 

 

 

 

 

 

 

 

 

 

Filters

 

 

520,386

-

520,386

 

 

693,768

-

693,768

Components

 

 

549,581

-

549,581

 

 

395,176

-

395,176

Engineering Services

 

 

820

 

820

 

 

858

7,665

8,523

 

 

$

1,070,787

 

1,070,787

 

$

1,089,802

7,665

1,097,467

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: i. Cost of Goods Sold (Policies)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: i. Cost of Goods Sold (Policies)
 12 Months Ended
Dec. 31, 2022
Policies  
i. Cost of Goods Sold

i.       Cost of Goods Sold

 

The Company includes product costs (i.e. material, direct labor and overhead costs), shipping and handling expense, production-related depreciation expense and product license agreement expense in cost of goods sold.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: j. Research and Development (Policies)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: j. Research and Development (Policies)
 12 Months Ended
Dec. 31, 2022
Policies  
j. Research and Development

j.       Research and Development

 

The Company expenses the costs of researching and developing its products during the period incurred. During the years ended December 31, 2022, and 2021, the Company incurred research and development expenses of $66,444 and $63,829, respectively.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: k. Advertising (Policies)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: k. Advertising (Policies)
 12 Months Ended
Dec. 31, 2022
Policies  
k. Advertising

k.       Advertising

 

The Company follows the policy of charging the costs of advertising to expense as incurred. During the years ended December 31, 2022, and 2021, the Company expensed $-0- and $-0-, respectively.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: l. Provision for Income Taxes (Policies)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: l. Provision for Income Taxes (Policies)
 12 Months Ended
Dec. 31, 2022
Policies  
l. Provision for Income Taxes

l.       Provision for Income Taxes

 

The Company accounts for income taxes in accordance with Accounting Standards Codification Topic 740, Income Taxes ("Topic 740"), which requires the recognition of deferred tax liabilities and assets at currently enacted tax rates for the expected future tax consequences of events that have been included in the financial statements or tax returns. A valuation allowance is recognized to reduce the net deferred tax asset to an amount that is more likely than not to be realized. Topic 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company's financial statements. Topic 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

 

The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of December 31, 2022, the Company had no accrued interest or penalties related to uncertain tax positions. The Company files an income tax return in the U.S. federal jurisdiction and the state of California. With few exceptions, the Company is no longer subject to U.S. federal, state, and local, or non-U.S. income tax examinations by tax authorities for years before 2012.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: m. Basic and Diluted Loss Per Share (Policies)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: m. Basic and Diluted Loss Per Share (Policies)
 12 Months Ended
Dec. 31, 2022
Policies  
m. Basic and Diluted Loss Per Share

m.       Basic and Diluted Loss Per Share

 

The computation of basic earnings per share of common stock is based on the weighted average number of shares outstanding during the periods presented. The computation of fully diluted earnings per share includes common stock equivalents outstanding at the balance sheet date. The Company had 3,207,222 vested stock options and warrants that were included in the fully diluted earnings per share computation as of December 31, 2022. As of December 31, 2021, the Company had 3,065,556 Stock Options and Warrants that would have been included in the fully diluted earnings per share computation. However, in 2022 the common stock equivalents were not included in the computation because they were anti-dilutive.  

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: n. Fair Value Measurements (Policies)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: n. Fair Value Measurements (Policies)
 12 Months Ended
Dec. 31, 2022
Policies  
n. Fair Value Measurements

n.       Fair Value Measurements

 

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:

 

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Level 1 – Quoted prices in active markets for identical assets or liabilities;

 

Level 2 – Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and

 

Level 3 – Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

 

The Company had no financial instrument in 2022.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: o. Stock-based Compensation (Policies)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: o. Stock-based Compensation (Policies)
 12 Months Ended
Dec. 31, 2022
Policies  
o. Stock-based Compensation

o.       Stock-based Compensation

 

The Company recognizes compensation expense for stock-based awards expected to vest on a straight-line basis over the requisite service period of the award based on their grant date fair value.  The Company estimates the fair value of stock options using a Black-Scholes option pricing model which requires management to make estimates for certain assumptions regarding risk-free interest rate, expected life of options, expected volatility of stock and expected dividend yield of stock.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: p. Concentration of Risks (Policies)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: p. Concentration of Risks (Policies)
 12 Months Ended
Dec. 31, 2022
Policies  
p. Concentration of Risks

p.       Concentration of Risks

 

Customers

 

During the year ended December 31, 2022, eight customers accounted for approximately 81% of sales.

 

During the year ended December 31, 2021, eight customers accounted for approximately 84% of sales.

 

Suppliers

 

During the year ended December 31, 2022, four suppliers accounted for 82% of products purchased.

 

During the year ended December 31, 2021, four suppliers accounted for 81% of products purchased.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: q. Liquidity and Going Concern (Policies)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: q. Liquidity and Going Concern (Policies)
 12 Months Ended
Dec. 31, 2022
Policies  
q. Liquidity and Going Concern

q.       Liquidity and Going Concern

 

Historically, the Company has incurred net losses and negative cash flows from operations.  As of December 31, 2022, the Company had an accumulated deficit of $21,644,941 and total stockholders’ deficit of $(986,060).  At December 31, 2022, the Company had current assets of $619,821 including cash of $56,379, and current liabilities of $1,513,942, resulting in negative working capital of $894,121. For 2022, the Company reported a net loss of $196,709 and net cash provided by operating activities of $9,239. Management believes that based on its operating plan, the projected sales for 2023, combined with funds available from its working capital will be sufficient to fund operations for the next twelve months from the date these financial statements were issued.  However, there can be no assurance that operations and operating cash flows will continue at the current levels or improve in the near future. Whether, and when, the Company can attain profitability and positive cash flows from operations is uncertain. The Company is also uncertain whether it can raise additional capital. These uncertainties cast substantial doubt upon the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. Our financial statements have been prepared on a going concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of operations. The financial statements do not include any adjustments relating to the recoverability or classification of recorded asset amounts or the amounts or classification of liabilities should we be unable to continue as a going concern.     

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: r. Recent Accounting Pronouncements (Policies)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: r. Recent Accounting Pronouncements (Policies)
 12 Months Ended
Dec. 31, 2022
Policies  
r. Recent Accounting Pronouncements

r.       Recent Accounting Pronouncements

 

The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: h. Revenue Recognition: Schedule of Disaggregation of Revenue (Tables)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: h. Revenue Recognition: Schedule of Disaggregation of Revenue (Tables)
 12 Months Ended
Dec. 31, 2022
Tables/Schedules  
Schedule of Disaggregation of Revenue

The following table presents Omnitek’s revenues disaggregated by region and product type:

 

 

 

 

December 31,

 

 

December 31,

 

 

 

 

2022

 

 

 

 

2021

 

 

 

 

Consumer

Long-term

 

 

 

Consumer

Long-term

 

Segments

 

 

Products

Contract

Total

 

 

Products

Contract

Total

Domestic

 

$

376,453

-

376,453

 

$

396,750

-

396,750

International

 

 

694,334

 

694,334

 

 

693,052

7,665

700,717

 

 

$

1,070,787

 

1,070,787

 

$

1,089,802

7,665

1,097,467

 

 

 

 

 

 

 

 

 

 

 

Filters

 

 

520,386

-

520,386

 

 

693,768

-

693,768

Components

 

 

549,581

-

549,581

 

 

395,176

-

395,176

Engineering Services

 

 

820

 

820

 

 

858

7,665

8,523

 

 

$

1,070,787

 

1,070,787

 

$

1,089,802

7,665

1,097,467

NOTE 4 - CONTRACT ASSETS AND LIABILITIES: Long-Term Contract or Program Disclosure (Tables)

v3.22.4
NOTE 4 - CONTRACT ASSETS AND LIABILITIES: Long-Term Contract or Program Disclosure (Tables)
 12 Months Ended
Dec. 31, 2022
Tables/Schedules  
Long-Term Contract or Program Disclosure

 

 

December 31,

 

December 31,

 

2022

 

2021

Contract assets

$

-

 

$

13,221

Contract liabilities

$

-

 

$

(75,000)

Net amount of contract liabilities in excess of contract assets

$

-

 

$

(61,779)

NOTE 5 - OPERATING LEASES: Schedule of Supplemental Balance Sheet Information Related to Leases (Tables)

v3.22.4
NOTE 5 - OPERATING LEASES: Schedule of Supplemental Balance Sheet Information Related to Leases (Tables)
 12 Months Ended
Dec. 31, 2022
Tables/Schedules  
Schedule of Supplemental Balance Sheet Information Related to Leases

 

Operating leases:

 

 

 

 

 

Operating lease right-of-use-assets

 

 

 

 

472,342

Operating lease liabilities - current

 

 

 

 

118,756

Operating lease liabilities – long-term

 

 

 

 

386,207

Incremental borrowing rate:

 

 

 

 

 

Operating leases

 

 

 

 

4.94%

NOTE 5 - OPERATING LEASES: Schedule of Maturities of Operating Lease Liabilities (Tables)

v3.22.4
NOTE 5 - OPERATING LEASES: Schedule of Maturities of Operating Lease Liabilities (Tables)
 12 Months Ended
Dec. 31, 2022
Tables/Schedules  
Schedule of Maturities of Operating Lease Liabilities

As of December 31, 2022, maturities of operating lease liabilities were as follows:

Years ending December 31,

 

 

 

2023

 

 

 

 

141,036

2024

 

 

 

 

148,074

2025

 

 

 

 

176,268

Thereafter

 

 

 

 

88,134

Total lease payments

 

 

 

 

553,512

Less: Imputed interest

 

 

 

 

(48,549)

Total lease liability

 

 

 

 

504,963

Less: current lease liability

 

 

 

 

(118,756)

Long-term lease liability

 

 

 

$

386,207

NOTE 6 - INVENTORIES: Schedule of Inventories (Tables)

v3.22.4
NOTE 6 - INVENTORIES: Schedule of Inventories (Tables)
 12 Months Ended
Dec. 31, 2022
Tables/Schedules  
Schedule of Inventories

Inventories are located in Vista, California and at December 31, 2022, and 2021, consisted of the following:

 

 

December 31,

 

December 31,

 

2022

 

2021

Raw materials

$

836,833

 

$

846,499

Finished goods

 

634,275

 

 

802,280

Allowance for obsolete inventory

 

(927,755)

 

 

(931,735)

Total

$

543,353

 

$

717,044

NOTE 7 - PROPERTY AND EQUIPMENT: Schedule of Property and Equipment (Tables)

v3.22.4
NOTE 7 - PROPERTY AND EQUIPMENT: Schedule of Property and Equipment (Tables)
 12 Months Ended
Dec. 31, 2022
Tables/Schedules  
Schedule of Property and Equipment

Property and equipment at December, 2022, and 2021, consisted of the following:

 

 

December 31,

 

December 31,

 

2022

 

2021

Production equipment

$

68,456   

 

$

68,456   

Leasehold Improvements

 

4,689   

 

 

10,627   

Less: accumulated depreciation

 

(65,733)  

 

 

(64,710)  

Total

$

7,412   

 

$

14,373   

NOTE 8 - NOTES PAYABLE - RELATED PARTY: Schedule of Convertible Notes - Related Parties (Tables)

v3.22.4
NOTE 8 - NOTES PAYABLE - RELATED PARTY: Schedule of Convertible Notes - Related Parties (Tables)
 12 Months Ended
Dec. 31, 2022
Tables/Schedules  
Schedule of Convertible Notes - Related Parties

 

 

December 31,

 

December 31,

 

2022

 

2021

Convertible Note payable, related parties

$

32,827

 

$

43,916

Less current portion

 

(32,827)

 

$

(31,090)

Total

$

-

 

$

12,826

NOTE 8 - NOTES PAYABLE - RELATED PARTY: Schedule Of Notes Payable Related Party table (Tables)

v3.22.4
NOTE 8 - NOTES PAYABLE - RELATED PARTY: Schedule Of Notes Payable Related Party table (Tables)
 12 Months Ended
Dec. 31, 2022
Tables/Schedules  
Schedule Of Notes Payable Related Party table

 

 

December 31,

 

December 31,

 

2022

 

2021

Note payable, related party

$

15,000

 

$

15,000

Total

$

15,000

 

$

15,000

NOTE 9 - DEBT: Schedule of Debt (Tables)

v3.22.4
NOTE 9 - DEBT: Schedule of Debt (Tables)
 12 Months Ended
Dec. 31, 2022
Tables/Schedules  
Schedule of Debt

As of December 31, 2022, and December 31, 2021, Debt consisted of the following:

 

 

December 31,

 

December 31,

 

2022

 

2021

Loan payable – SBA EIDL

$

199,000

 

$

198,674

Less current portion

 

-

 

 

-

Total

$

199,000

 

$

198,674

NOTE 11 - RELATED PARTY TRANSACTIONS: Schedule Of Related Party Transactions Table (Tables)

v3.22.4
NOTE 11 - RELATED PARTY TRANSACTIONS: Schedule Of Related Party Transactions Table (Tables)
 12 Months Ended
Dec. 31, 2022
Tables/Schedules  
Schedule Of Related Party Transactions Table

 

 

December 31,

 

December 31,

 

2022

 

2021

Amounts due to the president

$

635,158

 

$

620,735

Total

$

635,158

 

$

620,735

NOTE 12 - STOCKHOLDERS' EQUITY: Schedule of Assumptions Used to Estimate the Fair Values of Stock Options Granted (Tables)

v3.22.4
NOTE 12 - STOCKHOLDERS' EQUITY: Schedule of Assumptions Used to Estimate the Fair Values of Stock Options Granted (Tables)
 12 Months Ended
Dec. 31, 2022
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,

2022

 

December 31,

2021

Expected volatility

207%

 

201%

Expected dividends

0%

 

0%

Expected term

7 Years

 

7 Years

Risk-free interest rate

2.95%

 

1.20%

NOTE 12 - STOCKHOLDERS' EQUITY: Schedule of Stock Options and Warrants, Activity (Tables)

v3.22.4
NOTE 12 - STOCKHOLDERS' EQUITY: Schedule of Stock Options and Warrants, Activity (Tables)
 12 Months Ended
Dec. 31, 2022
Tables/Schedules  
Schedule of Stock Options and Warrants, Activity

A summary of the status of the options granted at December 31, 2022 and December 31, 2021 and changes during the years then ended is presented below:  

 

 

December 31,

2022

 

December 31,

2021

 

 

 

 

Weighted-Average

 

 

 

 

Weighted-Average

 

Shares

 

 

Exercise Price

 

Shares

 

 

Exercise Price

Outstanding at beginning of year

3,290,556

 

$

0.19

 

2,890,556

 

$

0.20

Granted

150,000

 

 

0.05

 

400,000

 

 

0.11

Exercised

-

 

 

-

 

-

 

 

-

Expired or cancelled

(175,000)

 

 

0.77

 

-

 

 

-

Outstanding at end of year

3,265,556

 

 

0.15

 

3,290,556

 

 

0.19

Exercisable

3,140,556

 

$

0.15

 

3,065,556

 

$

0.19

NOTE 12 - STOCKHOLDERS' EQUITY: Summary of the Status of the Options (Tables)

v3.22.4
NOTE 12 - STOCKHOLDERS' EQUITY: Summary of the Status of the Options (Tables)
 12 Months Ended
Dec. 31, 2022
Tables/Schedules  
Summary of the Status of the Options

A summary of the status of the options outstanding at December 31, 2022 is presented below:

 

Range of Exercise Prices

 

Number Outstanding

 

Weighted-Average Remaining Contractual Life

 

Number Exercisable

 

Weighted-Average Exercise Price

$0.01-1.00

 

3,265,556

 

2.28 years

 

3,140,556

 

$0.15

 

A summary of the status of the options and warrants outstanding at December 31, 2021 is presented below:

 

Range of Exercise Prices

 

Number Outstanding

 

Weighted-Average Remaining Contractual Life

 

Number Exercisable

 

Weighted-Average Exercise Price

$0.01 - 1.00

 

3,290,556

 

2.96 years

 

3,265,556

 

$0.19

NOTE 13 - INCOME TAXES: Schedule of Components of Income Tax Expense (Benefit) (Tables)

v3.22.4
NOTE 13 - INCOME TAXES: Schedule of Components of Income Tax Expense (Benefit) (Tables)
 12 Months Ended
Dec. 31, 2022
Tables/Schedules  
Schedule of Components of Income Tax Expense (Benefit)

 

 

 

December 31,

 

 

December 31,

 

 

2022

 

 

2021

 

Federal

 

 

 

 

 

 

Current

 

$

-   

 

 

$

-   

 

Deferred

 

 

-   

 

 

 

-   

 

State

 

 

 

 

 

 

 

 

Current

 

$

800   

 

 

$

800   

 

Deferred

 

 

-   

 

 

 

-   

 

  Income tax expense

 

$

800   

 

 

$

800   

 

NOTE 13 - INCOME TAXES: Schedule of Deferred Tax Assets and Liabilities (Tables)

v3.22.4
NOTE 13 - INCOME TAXES: Schedule of Deferred Tax Assets and Liabilities (Tables)
 12 Months Ended
Dec. 31, 2022
Tables/Schedules  
Schedule of Deferred Tax Assets and Liabilities

Net deferred tax assets consist of the following components as of December 31, 2022, and 2021:

 

 

 

December 31,

 

 

December 31,

 

 

2022

 

 

2021

 

Deferred tax assets:

 

 

 

 

 

 

Net operating loss carryover

 

$

7,839,147   

 

 

 

7,428,249   

 

Research and development carry forward

 

 

131,088   

 

 

 

131,088   

 

Inventory reserve

 

 

222,661   

 

 

 

223,616   

 

Allowance for doubtful accounts

 

 

3,600   

 

 

 

3,600   

 

Warranty allowance

 

 

3,068   

 

 

 

3,068   

 

Accrued compensation

 

 

152,438   

 

 

 

148,976   

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

Depreciation

 

 

(34,066)  

 

 

 

(33,476)  

 

Valuation allowance

 

 

(8,317,935)  

 

 

 

(7,905,122)  

 

Net deferred tax asset

 

$

-   

 

 

 

-   

 

NOTE 13 - INCOME TAXES: Schedule of Effective Income Tax Rate Reconciliation (Tables)

v3.22.4
NOTE 13 - INCOME TAXES: Schedule of Effective Income Tax Rate Reconciliation (Tables)
 12 Months Ended
Dec. 31, 2022
Tables/Schedules  
Schedule of Effective Income Tax Rate Reconciliation

 

 

 

 

 

 

 

  

 

December 31,

 

 

December 31,

 

 

 

2022

 

 

 

2021

Book income (loss)   

 

$

(47,210)  

 

 

 

4,178  

Meals and entertainment   

 

 

-   

 

 

 

-   

State tax deduction

 

 

-   

 

 

 

-   

Deferred rent

 

 

-  

 

 

 

-  

Stock/Options for services

 

 

4,402   

 

 

 

4,587   

Officer’s life ins premium

 

 

797   

 

 

 

1,181   

Depreciation

 

 

590  

 

 

 

(6,451)  

Accrued compensation

 

 

3,462   

 

 

 

6,138   

Inventory reserve

 

 

(955)   

 

 

 

(30,378)   

Valuation allowance

 

 

78,629   

 

 

 

42,289   

Net operating loss carryover

 

 

(38,915)  

 

 

 

(20,744)  

Income Tax Expense

 

$

800   

 

 

 

800   

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: d. Accounts Receivable (Details)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: d. Accounts Receivable (Details) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Details    
Accounts Receivable, Allowance for Credit Loss $ 0 $ 41,000
Bad Debt Expense $ 0 $ 26,000

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: h. Revenue Recognition (Details)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: h. Revenue Recognition (Details)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Transferred over Time    
Concentration Risk, Percentage 0.00% 1.00%
Transferred at Point in Time    
Concentration Risk, Percentage 100.00% 99.00%

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: h. Revenue Recognition: Schedule of Disaggregation of Revenue (Details)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: h. Revenue Recognition: Schedule of Disaggregation of Revenue (Details) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Geographic Distribution, Domestic    
Products $ 376,453 $ 396,750
Contract 0 0
Revenues 376,453 396,750
Geographic Distribution, Foreign    
Products 694,334 693,052
Contract   7,665
Revenues 694,334 700,717
Filters    
Products 520,386 693,768
Contract 0 0
Revenues 520,386 693,768
Components    
Products 549,581 395,176
Contract 0 0
Revenues 549,581 395,176
Engineering Services    
Products 820 858
Contract   7,665
Revenues 820 8,523
Products 1,070,787 1,089,802
Contract   7,665
Revenues $ 1,070,787 $ 1,097,467

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: j. Research and Development (Details)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: j. Research and Development (Details) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Details    
Research and development $ 66,444 $ 63,829

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: m. Basic and Diluted Loss Per Share (Details)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: m. Basic and Diluted Loss Per Share (Details) - shares
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Details    
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 3,207,222 3,065,556

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: p. Concentration of Risks (Details)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: p. Concentration of Risks (Details)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Details    
Concentration Risk, Customer eight customers accounted for approximately 81% of sales eight customers accounted for approximately 84% of sales
Concentration Risk, Supplier four suppliers accounted for 82% of products purchased four suppliers accounted for 81% of products purchased

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: q. Liquidity and Going Concern (Details)

v3.22.4
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: q. Liquidity and Going Concern (Details) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Details    
Accumulated deficit $ 21,644,941 $ 21,448,232
Total Stockholders' Deficit (986,060) (807,692)
Total Current Assets 619,821 803,724
Cash 56,379 59,674
Total Current Liabilities 1,513,942 1,516,537
Working Capital 894,121  
NET INCOME (LOSS) 196,709 (17,409)
Net Cash Provided by (Used in) Operating Activities $ 9,239 $ (130,146)

NOTE 3 - CUSTOMER DEPOSITS (Details)

v3.22.4
NOTE 3 - CUSTOMER DEPOSITS (Details) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Details    
Customer deposits $ 231,418 $ 170,870

NOTE 4 - CONTRACT ASSETS AND LIABILITIES: Long-Term Contract or Program Disclosure (Details)

v3.22.4
NOTE 4 - CONTRACT ASSETS AND LIABILITIES: Long-Term Contract or Program Disclosure (Details) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Details    
Contract assets $ 0 $ 13,221
Contract liabilities 0 (75,000)
Net amount of contract liabilities in excess of contract assets $ 0 $ (61,779)

NOTE 5 - OPERATING LEASES (Details)

v3.22.4
NOTE 5 - OPERATING LEASES (Details)
 12 Months Ended
Dec. 31, 2022
USD ($)
Details  
Monthly base rent $ 9,988
Monthly Operating Lease Expense 1,175
Adoption of ASC 842 - ROU Asset 653,701
Adoption of ASC 842 - ROU Liability $ 652,350

NOTE 5 - OPERATING LEASES: Schedule of Supplemental Balance Sheet Information Related to Leases (Details)

v3.22.4
NOTE 5 - OPERATING LEASES: Schedule of Supplemental Balance Sheet Information Related to Leases (Details)
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Details    
Operating lease - right-of-use asset $ 472,342 $ 593,697
Operating lease liabilities - current 118,756 106,149
Operating lease liabilities - long-term $ 386,207 $ 504,963
Operating leases Incremental Borrowing Rate 0.0494  

NOTE 5 - OPERATING LEASES: Schedule of Maturities of Operating Lease Liabilities (Details)

v3.22.4
NOTE 5 - OPERATING LEASES: Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Details    
Lessee, Operating Lease, Liability, to be Paid, Remainder of Fiscal Year $ 141,036  
Lessee, Operating Lease, Liability, to be Paid, Year Two 148,074  
Lessee, Operating Lease, Liability, to be Paid, Year Three 176,268  
Lessee, Operating Lease, Liability, to be Paid, Thereafter 88,134  
Lessee, Operating Lease, Liability, to be Paid 553,512  
Operating Lease, Imputed interest (48,549)  
Operating Lease, Liability 504,963  
Operating lease liabilities - current (118,756) $ (106,149)
Operating lease liabilities - long-term $ 386,207 $ 504,963

NOTE 6 - INVENTORIES: Schedule of Inventories (Details)

v3.22.4
NOTE 6 - INVENTORIES: Schedule of Inventories (Details) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Details    
Raw materials $ 836,833 $ 846,499
Finished goods 634,275 802,280
Allowance for obsolete inventory (927,755) (931,735)
Inventory Net $ 543,353 $ 717,044

NOTE 6 - INVENTORIES (Details)

v3.22.4
NOTE 6 - INVENTORIES (Details) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Details    
Inventory Write-down $ 3,980 $ 53,453

NOTE 7 - PROPERTY AND EQUIPMENT: Schedule of Property and Equipment (Details)

v3.22.4
NOTE 7 - PROPERTY AND EQUIPMENT: Schedule of Property and Equipment (Details) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
PROPERTY & EQUIPMENT, net $ 7,412 $ 14,373
Less: accumulated depreciation (65,733) (64,710)
Production Equipment    
PROPERTY & EQUIPMENT, net 68,456 68,456
Leasehold Improvements    
PROPERTY & EQUIPMENT, net $ 4,689 $ 10,627

NOTE 7 - PROPERTY AND EQUIPMENT (Details)

v3.22.4
NOTE 7 - PROPERTY AND EQUIPMENT (Details) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Details    
Depreciation and amortization $ 2,500 $ 1,302

NOTE 8 - NOTES PAYABLE - RELATED PARTY (Details)

v3.22.4
NOTE 8 - NOTES PAYABLE - RELATED PARTY (Details) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2022
Dec. 31, 2021
Convertible Note payable, related parties $ 32,827 $ 32,827 $ 43,916
Debt Instrument, Interest Rate During Period   5.00%  
Debt Conversion, Original Debt, Amount   $ 15,000  
Chief Executive Officer      
Convertible Note payable, related parties $ 30,000 30,000  
Debt Instrument, Interest Rate During Period 8.00%    
Board Member      
Convertible Note payable, related parties $ 20,000 $ 20,000  
Debt Instrument, Interest Rate During Period 8.00%    

NOTE 8 - NOTES PAYABLE - RELATED PARTY: Schedule of Convertible Notes - Related Parties (Details)

v3.22.4
NOTE 8 - NOTES PAYABLE - RELATED PARTY: Schedule of Convertible Notes - Related Parties (Details) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Details    
Convertible Note payable, related parties $ 32,827 $ 43,916
Convertible notes payable - related party (32,827) (31,090)
Convertible notes payable - related party, net of current portion $ 0 $ 12,826

NOTE 8 - NOTES PAYABLE - RELATED PARTY: Schedule Of Notes Payable Related Party table (Details)

v3.22.4
NOTE 8 - NOTES PAYABLE - RELATED PARTY: Schedule Of Notes Payable Related Party table (Details) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Details    
Notes payable - related parties, current portion $ 15,000 $ 15,000
Notes Payable, Related Parties $ 15,000 $ 15,000

NOTE 9 - DEBT (Details)

v3.22.4
NOTE 9 - DEBT (Details) - SBA EIDL Loan
 32 Months Ended
Dec. 31, 2022
USD ($)
Proceeds from Loans $ 199,000
Debt Instrument, Interest Rate, Effective Percentage 3.75%
Interest Expense, Debt $ 970
Debt Instrument, Maturity Date Apr. 21, 2050

NOTE 9 - DEBT: Schedule of Debt (Details)

v3.22.4
NOTE 9 - DEBT: Schedule of Debt (Details) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
SBA EIDL Loan    
Loans Payable $ 199,000 $ 198,674
Loans Payable, Current 0 0
Loans Payable, Noncurrent $ 199,000 $ 198,674

NOTE 10 - COMMITMENTS AND CONTINGENCIES (Details)

v3.22.4
NOTE 10 - COMMITMENTS AND CONTINGENCIES (Details) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Details    
Purchase Commitment, Remaining Minimum Amount Committed $ 188,946 $ 179,240
Prepayment of Purchase Commitments for Inventory 7,657 4,230
Commitments for Future Cash Outlays for Inventory $ 181,289 $ 175,010

NOTE 11 - RELATED PARTY TRANSACTIONS (Details)

v3.22.4
NOTE 11 - RELATED PARTY TRANSACTIONS (Details) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Details    
Accounts receivable - related parties $ 2,252 $ 0

NOTE 11 - RELATED PARTY TRANSACTIONS: Schedule Of Related Party Transactions Table (Details)

v3.22.4
NOTE 11 - RELATED PARTY TRANSACTIONS: Schedule Of Related Party Transactions Table (Details) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
President    
Accrued management compensation $ 635,158 $ 620,735
Accrued management compensation $ 635,158 $ 620,735

NOTE 12 - STOCKHOLDERS' EQUITY (Details)

v3.22.4
NOTE 12 - STOCKHOLDERS' EQUITY (Details) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Oct. 01, 2017
Aug. 03, 2011
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Net of Forfeitures 150,000 400,000      
Options and warrants issued for services $ 18,341 $ 19,112      
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount $ 12,354        
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number 3,265,556 3,290,556 2,890,556    
Employee Stock Option          
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Net of Forfeitures 150,000 400,000      
Employee Stock Option | 2011 Long Term Incentive Plan          
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized         1,000,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number 0        
Employee Stock Option | 2015 Long Term Incentive Plan          
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized 2,500,000        
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number 1,815,556        
Employee Stock Option | 2017 Long Term Incentive Plan          
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized       5,000,000  
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number 1,450,000        

NOTE 12 - STOCKHOLDERS' EQUITY: Schedule of Assumptions Used to Estimate the Fair Values of Stock Options Granted (Details)

v3.22.4
NOTE 12 - STOCKHOLDERS' EQUITY: Schedule of Assumptions Used to Estimate the Fair Values of Stock Options Granted (Details)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Details    
Expected volatility 207.00% 201.00%
Expected dividends 0.00% 0.00%
Expected term 7 years 7 years
Risk-free interest rate 2.95% 1.20%

NOTE 12 - STOCKHOLDERS' EQUITY: Schedule of Stock Options and Warrants, Activity (Details)

v3.22.4
NOTE 12 - STOCKHOLDERS' EQUITY: Schedule of Stock Options and Warrants, Activity (Details) - $ / shares
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Details      
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number 3,265,556 3,290,556 2,890,556
Outstanding, Weighted Average Exercise Price $ 0.15 $ 0.19 $ 0.20
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Net of Forfeitures 150,000 400,000  
Granted, Weighted Average Exercise Price $ 0.05 $ 0.11  
Exercised 0 0  
Exercised, Weighted Average Exercise Price $ 0 $ 0  
Expired or cancelled (175,000) 0  
Expired or cancelled, Weighted Average Exercise Price $ 0.77 $ 0  
Exercisable 3,140,556 3,065,556  
Exercisable, Weighted Average Exercise Price $ 0.15 $ 0.19  

NOTE 12 - STOCKHOLDERS' EQUITY: Summary of the Status of the Options (Details)

v3.22.4
NOTE 12 - STOCKHOLDERS' EQUITY: Summary of the Status of the Options (Details) - $ / shares
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number 3,265,556 3,290,556
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term 2 years 3 months 11 days 2 years 11 months 16 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number 3,140,556 3,265,556
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price $ 0.15 $ 0.19
Minimum    
Share-Based Payment Arrangement, Option, Exercise Price Range, Lower Range Limit 0.01 0.01
Maximum    
Share-Based Payment Arrangement, Option, Exercise Price Range, Lower Range Limit $ 1.00 $ 1.00

NOTE 13 - INCOME TAXES: Schedule of Components of Income Tax Expense (Benefit) (Details)

v3.22.4
NOTE 13 - INCOME TAXES: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Federal    
Current $ 0 $ 0
Deferred 0 0
State    
Current 800 800
Deferred 0 0
INCOME TAX EXPENSE $ 800 $ 800

NOTE 13 - INCOME TAXES: Schedule of Deferred Tax Assets and Liabilities (Details)

v3.22.4
NOTE 13 - INCOME TAXES: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Deferred tax assets    
Net operating loss carryover $ 7,839,147 $ 7,428,249
Research and development carry forward 131,088 131,088
Inventory reserve 222,661 223,616
Allowance for doubtful accounts 3,600 3,600
Warranty allowance 3,068 3,068
Accrued compensation 152,438 148,976
Deferred tax liabilities    
Depreciation (34,066) (33,476)
Valuation allowance (8,317,935) (7,905,122)
Net deferred tax asset $ 0 $ 0

NOTE 13 - INCOME TAXES (Details)

v3.22.4
NOTE 13 - INCOME TAXES (Details) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Details    
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent 24.00% 24.00%
Operating Loss Carryforwards $ 7,839,147  

NOTE 13 - INCOME TAXES: Schedule of Effective Income Tax Rate Reconciliation (Details)

v3.22.4
NOTE 13 - INCOME TAXES: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Details    
Book income (loss) $ (47,210) $ 4,178
Meals and entertainment 0 0
State tax deduction 0 0
Deferred rent 0 0
Stock/Options for services 4,402 4,587
Officer's life ins premium 797 1,181
Depreciation 590 (6,451)
Accrued compensation 3,462 6,138
Inventory reserve (955) (30,378)
Valuation allowance 78,629 42,289
Net operating loss carryover (38,915) (20,744)
Income Tax Expense $ 800 $ 800

Element Counts

Number of Extension Elements: 258
Number of Contexts: 60
Number of Segments: 22
Number of Units: 4

Content Summary

Documents

000010 - Document - Document and Entity Information

Statements

000020 - Statement - Balance Sheets

000030 - Statement - Balance Sheets - Parenthetical

000040 - Statement - Statements of Operations

000050 - Statement - Condensed Statements of Stockholders' Equity (Deficit) (unaudited)

000060 - Statement - Statements of Cash Flows

Notes to Financials (level 1)

000070 - Disclosure - NOTE 1 - ORGANIZATION AND BUSINESS ACTIVITY

000080 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

000090 - Disclosure - NOTE 3 - CUSTOMER DEPOSITS

000100 - Disclosure - NOTE 4 - CONTRACT ASSETS AND LIABILITIES

000110 - Disclosure - NOTE 5 - OPERATING LEASES

000120 - Disclosure - NOTE 6 - INVENTORIES

000130 - Disclosure - NOTE 7 - PROPERTY AND EQUIPMENT

000140 - Disclosure - NOTE 8 - NOTES PAYABLE - RELATED PARTY

000150 - Disclosure - NOTE 9 - DEBT

000160 - Disclosure - NOTE 10 - COMMITMENTS AND CONTINGENCIES

000170 - Disclosure - NOTE 11 - RELATED PARTY TRANSACTIONS

000180 - Disclosure - NOTE 12 - STOCKHOLDERS' EQUITY

000190 - Disclosure - NOTE 13 - INCOME TAXES

000200 - Disclosure - NOTE 14 - SUBSEQUENT EVENT

Policies (level 2)

000210 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: a. Accounting Methods (Policies)

000220 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: b. Use of Estimates in Preparing Financial Statements (Policies)

000230 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: c. Cash and Cash Equivalents (Policies)

000240 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: d. Accounts Receivable (Policies)

000250 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: e. Inventory (Policies)

000260 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: f. Long-Lived Assets (Policies)

000270 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: g. Property and Equipment (Policies)

000280 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: h. Revenue Recognition (Policies)

000290 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: i. Cost of Goods Sold (Policies)

000300 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: j. Research and Development (Policies)

000310 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: k. Advertising (Policies)

000320 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: l. Provision for Income Taxes (Policies)

000330 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: m. Basic and Diluted Loss Per Share (Policies)

000340 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: n. Fair Value Measurements (Policies)

000350 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: o. Stock-based Compensation (Policies)

000360 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: p. Concentration of Risks (Policies)

000370 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: q. Liquidity and Going Concern (Policies)

000380 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: r. Recent Accounting Pronouncements (Policies)

Tables/Schedules (level 3)

000390 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: h. Revenue Recognition: Schedule of Disaggregation of Revenue (Tables)

000400 - Disclosure - NOTE 4 - CONTRACT ASSETS AND LIABILITIES: Long-Term Contract or Program Disclosure (Tables)

000410 - Disclosure - NOTE 5 - OPERATING LEASES: Schedule of Supplemental Balance Sheet Information Related to Leases (Tables)

000420 - Disclosure - NOTE 5 - OPERATING LEASES: Schedule of Maturities of Operating Lease Liabilities (Tables)

000430 - Disclosure - NOTE 6 - INVENTORIES: Schedule of Inventories (Tables)

000440 - Disclosure - NOTE 7 - PROPERTY AND EQUIPMENT: Schedule of Property and Equipment (Tables)

000450 - Disclosure - NOTE 8 - NOTES PAYABLE - RELATED PARTY: Schedule of Convertible Notes - Related Parties (Tables)

000460 - Disclosure - NOTE 8 - NOTES PAYABLE - RELATED PARTY: Schedule Of Notes Payable Related Party table (Tables)

000470 - Disclosure - NOTE 9 - DEBT: Schedule of Debt (Tables)

000480 - Disclosure - NOTE 11 - RELATED PARTY TRANSACTIONS: Schedule Of Related Party Transactions Table (Tables)

000490 - Disclosure - NOTE 12 - STOCKHOLDERS' EQUITY: Schedule of Assumptions Used to Estimate the Fair Values of Stock Options Granted (Tables)

000500 - Disclosure - NOTE 12 - STOCKHOLDERS' EQUITY: Schedule of Stock Options and Warrants, Activity (Tables)

000510 - Disclosure - NOTE 12 - STOCKHOLDERS' EQUITY: Summary of the Status of the Options (Tables)

000520 - Disclosure - NOTE 13 - INCOME TAXES: Schedule of Components of Income Tax Expense (Benefit) (Tables)

000530 - Disclosure - NOTE 13 - INCOME TAXES: Schedule of Deferred Tax Assets and Liabilities (Tables)

000540 - Disclosure - NOTE 13 - INCOME TAXES: Schedule of Effective Income Tax Rate Reconciliation (Tables)

Details (level 4)

000550 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: d. Accounts Receivable (Details)

000560 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: h. Revenue Recognition (Details)

000570 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: h. Revenue Recognition: Schedule of Disaggregation of Revenue (Details)

000580 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: j. Research and Development (Details)

000590 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: m. Basic and Diluted Loss Per Share (Details)

000600 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: p. Concentration of Risks (Details)

000610 - Disclosure - NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: q. Liquidity and Going Concern (Details)

000620 - Disclosure - NOTE 3 - CUSTOMER DEPOSITS (Details)

000630 - Disclosure - NOTE 4 - CONTRACT ASSETS AND LIABILITIES: Long-Term Contract or Program Disclosure (Details)

000640 - Disclosure - NOTE 5 - OPERATING LEASES (Details)

000650 - Disclosure - NOTE 5 - OPERATING LEASES: Schedule of Supplemental Balance Sheet Information Related to Leases (Details)

000660 - Disclosure - NOTE 5 - OPERATING LEASES: Schedule of Maturities of Operating Lease Liabilities (Details)

000670 - Disclosure - NOTE 6 - INVENTORIES: Schedule of Inventories (Details)

000680 - Disclosure - NOTE 6 - INVENTORIES (Details)

000690 - Disclosure - NOTE 7 - PROPERTY AND EQUIPMENT: Schedule of Property and Equipment (Details)

000700 - Disclosure - NOTE 7 - PROPERTY AND EQUIPMENT (Details)

000710 - Disclosure - NOTE 8 - NOTES PAYABLE - RELATED PARTY (Details)

000720 - Disclosure - NOTE 8 - NOTES PAYABLE - RELATED PARTY: Schedule of Convertible Notes - Related Parties (Details)

000730 - Disclosure - NOTE 8 - NOTES PAYABLE - RELATED PARTY: Schedule Of Notes Payable Related Party table (Details)

000740 - Disclosure - NOTE 9 - DEBT (Details)

000750 - Disclosure - NOTE 9 - DEBT: Schedule of Debt (Details)

000760 - Disclosure - NOTE 10 - COMMITMENTS AND CONTINGENCIES (Details)

000770 - Disclosure - NOTE 11 - RELATED PARTY TRANSACTIONS (Details)

000780 - Disclosure - NOTE 11 - RELATED PARTY TRANSACTIONS: Schedule Of Related Party Transactions Table (Details)

000790 - Disclosure - NOTE 12 - STOCKHOLDERS' EQUITY (Details)

000800 - Disclosure - NOTE 12 - STOCKHOLDERS' EQUITY: Schedule of Assumptions Used to Estimate the Fair Values of Stock Options Granted (Details)

000810 - Disclosure - NOTE 12 - STOCKHOLDERS' EQUITY: Schedule of Stock Options and Warrants, Activity (Details)

000820 - Disclosure - NOTE 12 - STOCKHOLDERS' EQUITY: Summary of the Status of the Options (Details)

000830 - Disclosure - NOTE 13 - INCOME TAXES: Schedule of Components of Income Tax Expense (Benefit) (Details)

000840 - Disclosure - NOTE 13 - INCOME TAXES: Schedule of Deferred Tax Assets and Liabilities (Details)

000850 - Disclosure - NOTE 13 - INCOME TAXES (Details)

000860 - Disclosure - NOTE 13 - INCOME TAXES: Schedule of Effective Income Tax Rate Reconciliation (Details)

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