10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:  March 31, 2021

Commission File Number: 000-53955

OMNITEK ENGINEERING CORP.

 (Exact name of Registrant as specified in its charter)

California	33-0984450
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1333 Keystone Way, #101, Vista, California 92081

 (Address of principal executive offices, Zip Code)

(760) 591-0089

 (Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒   No ☐

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes ☒   No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of "large accelerated filer,"  "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 Yes ☐   No ☒ 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbols(s)	Name of each exchange on which registered
N/A

As of May 14, 2021, the Registrant had 21,600,189 shares of its no par value Common Stock outstanding.

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION
Item 1.Financial Statements	3
Condensed Balance Sheets as of March 31, 2021 (unaudited) and December 31, 2020	3
Condensed Statements of Operations for the three months ended March 31, 2021 and March 31, 2020 (unaudited)	4
Condensed Statements of Cash Flows for the three months ended March 31, 2021 and March 31, 2020 (unaudited)	5
Condensed Statements of Stockholders’ Deficit as of March 31, 2021 and March 31, 2020 (unaudited)	6
Notes to the Unaudited Condensed Financial Statements	7
Item 2.Management's Discussion and Analysis of the Financial Condition and Results of Operations	16
Item 3.Quantitative and Qualitative Disclosures about Market Risk	20
Item 4.Controls and Procedures	20
PART II - OTHER INFORMATION
Item 1.Legal Proceedings	21
Item 1A. Risk Factors	21
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3.Defaults Upon Senior Securities	21
Item 5.Other Information	22
Item 6.Exhibits	22

Page 2

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS 

OMNITEK ENGINEERING CORP.

Condensed Balance Sheets

	March 31, 2021	December 31, 2020
	(unaudited)
ASSETS
CURRENT ASSETS
Cash	$59,890	$60,729
Accounts receivable, net	4,383	9,455
Accounts receivable - related parties	22,325	17,345
Inventory, net	782,344	821,866
Contract assets	13,221	13,221
Deposits	49,632	38,610
Total Current Assets	931,795	961,226
PROPERTY & EQUIPMENT, net	1,131	1,266
OTHER ASSETS
Other noncurrent assets	14,280	14,280
Total Other Assets	14,280	14,280
TOTAL ASSETS	$947,206	$976,772
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses	$461,911	$468,839
Accrued management compensation	603,235	595,158
Accounts payable - related parties	123,360	121,527
Note payable - related party	15,000	15,000
Contract liabilities	75,000	75,000
Customer deposits	232,945	276,381
Current portion, long-term debt	14,622	69,551
Total Current Liabilities	1,526,073	1,621,456
LONG-TERM LIABILITIES
Loans payable – SBA, net of current portion	284,378	229,449
Total Liabilities	1,810,451	1,850,905
STOCKHOLDERS' DEFICIT
Common stock, 125,000,000 shares authorized; no par value; 21,600,189 shares issued and outstanding	8,578,210	8,528,210
Additional paid-in capital	12,024,581	12,013,298
Accumulated deficit	(21,466,036)	(21,465,641)
Total Stockholders' Deficit	(863,245)	(874,133)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$947,206	$976,772

The accompanying notes are an integral part of these condensed unaudited financial statements.

Page 3

OMNITEK ENGINEERING CORP.

Condensed Statements of Operations (unaudited)

	For the Three Months Ended March 31, 2021	For the Three Months Ended March 31, 2020
REVENUES	$218,113	$230,937
COST OF GOODS SOLD	104,410	110,068
INVENTORY RESERVE ADJUSTMENT	24,901	25,052
Total Cost of Goods Sold	129,311	135,120
GROSS MARGIN	88,802	95,817
OPERATING EXPENSES
General and administrative	166,453	185,963
Research and development	16,456	32,139
Depreciation and amortization	135	135
Total Operating Expenses	183,044	218,237
LOSS FROM OPERATIONS	(94,242)	(122,420)
OTHER INCOME (EXPENSE)
Interest expense	(6,808)	(4,885)
Gain on extinguishment of liability	100,655	-
Other income	-	600
Total Other Income (Expense)	93,847	(4,285)
LOSS BEFORE INCOME TAXES	(395)	(126,705)
INCOME TAX EXPENSE	-	-
NET LOSS	$(395)	$(126,705)
BASIC AND DILUTED LOSS PER SHARE	$(0.00)	$(0.01)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED	21,600,189	21,339,865

The accompanying notes are an integral part of these condensed unaudited financial statements.

Page 4

OMNITEK ENGINEERING CORP.

Condensed Statements of Cash Flows (unaudited)

	For the Three Months Ended March 31, 2021	For the Three Months Ended March 31, 2020
OPERATING ACTIVITIES
Net loss	$(395)	$(126,705)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Amortization and depreciation expense	135	135
Obsolete inventory adjustment	24,901	25,052
Stock option expense	11,283	10,408
Gain on extinguishment of liability	(100,655)	-
Changes in operating assets and liabilities:
Accounts receivable	5,072	(23,080)
Accounts receivable–related parties	(4,980)	(10,575)
Deposits	(11,022)	-
Inventory	14,621	19,447
Accounts payable and accrued expenses	(6,273)	14,409
Customer deposits	(43,436)	30,465
Accounts payable-related parties	1,833	(129)
Accrued management compensation	8,077	36,154
Net Cash Used in Operating Activities	(100,839)	(24,419)
INVESTING ACTIVITIES
Net cash from Investing Activities	-	-
FINANCING ACTIVITIES
Proceeds from stock subscription	-	31,000
Proceeds from notes payable	100,000	-
Net cash Provided by Financing Activities	100,000	31,000
NET CHANGE IN CASH	(839)	6,581
CASH AT BEGINNING OF YEAR	60,729	20,236
CASH AT END OF PERIOD	$59,890	$26,817
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS CASH PAID FOR:
Interest	$3,183	$4,319

The accompanying notes are an integral part of these condensed unaudited financial statements.

Page 5

OMNITEK ENGINEERING CORP.

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

	Common Stock		Common Stock	Additional Paid-In	Accumulated	Total Stockholders'
	Shares	Amount	Subscribed	Capital	Deficit	Deficit
Balance, December 31, 2020	21,600,189	$8,578,210	$-	$12,013,298	$(21,465,641)	$(874,133)
Value of options and warrants
issued for services	-	-	-	11,283	-	11,283
Net loss for the three months ended
March 31, 2021	-	-	-	-	(395)	(395)
Balance, March 31, 2021	21,600,189	$8,578,210	$-	$12,024,581	$(21,466,036)	$(863,245)

	Common Stock		Common Stock	Additional Paid-In	Accumulated	Total Stockholders'
	Shares	Amount	Subscribed	Capital	Deficit	Deficit
Balance, December 31, 2019	21,339,865	$8,527,210	$20,000	$11,997,842	$(20,975,929)	$(430,877)
Value of options and warrants
issued for services	-	-	-	10,408	-	10,408
Deposit – Stock purchase agreement			31,000			31,000
Net loss for the three months ended
March 31, 2020	-	-	-	-	(126,705)	(126,705)
Balance, March 31, 2020	21,339,865	$8,527,210	$51,000	$12,008,250	$(21,102,634)	$(516,174)

The accompanying notes are an integral part of these condensed unaudited financial statements.

Page 6

OMNITEK ENGINEERING CORP.
Notes to Financial Statements
March 31, 2021
(unaudited)

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at March 31, 2021 and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2020 audited financial statements.  The results of operations for the periods ended March 31, 2021 and 2020 are not necessarily indicative of the operating results for the full years.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Revenue Recognition

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

We recognize revenue on various products and services as follows:

Products - 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).

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.  

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

Page 7

OMNITEK ENGINEERING CORP.
Notes to Financial Statements
March 31, 2021
(unaudited)

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (Continued)

of Omnitek’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct.

Performance Obligations Satisfied Over Time

Revenues for Omnitek’s long-term contracts that satisfy the criteria for over time recognition (formerly known as percentage-of-completion method) is recognized as the work progresses. The majority of the revenue is derived from long-term engine development agreements that typically span between 12 to 24 months. Omnitek’s long-term contracts will continue to be recognized over time because our typical contract is for a customized asset with no alternative use and generally the Company has a right to payment for work completed to date. Under the new revenue standard, the cost-to-cost measure of progress continues to best depict the transfer of control of assets to the customer, which occurs as the Company incurs costs. Contract costs include labor and material. Revenue from products and services transferred to customers over time accounted for 0% and 0% of revenue for the periods ended March 31, 2021 and 2020, respectively.

Performance Obligations Satisfied at a Point in Time

Revenue from product sales is recognized at a point in time. These sales predominantly contain a single delivery element and revenue is recognized at a single point in time when ownership, risk and rewards transfer. Upon fulfilment of the performance obligation, the customer is provided an invoice demonstrating transfer of control to the customer. Revenue from goods and services transferred to customers at a point in time accounted for 100% and 100% of revenue for the periods ended March 31, 2021 and 2020, respectively.

Assurance-type warranties are the only warranties provided by the Company and, as such, Omnitek does not recognize revenue on warranty-related work. Omnitek generally provides a one-year warranty for products that it sells. Warranty claims historically have been insignificant.

Pre-contract costs are generally not incurred by the Company.

Contract Estimates

Accounting for long-term contracts involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, Omnitek estimates the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognizes that profit over the life of the contract.  

Variable Consideration 

The transaction price for contracts may include variable consideration, which includes increases to transaction price for approved and unapproved change orders, claims and incentives, and reductions to transaction price for liquidated damages. Variable consideration historically has been insignificant.  

Page 8

OMNITEK ENGINEERING CORP.
Notes to Financial Statements
March 31, 2021
(unaudited)

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (Continued)

Disaggregation of Revenue

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

	For the three months ended March 31,			For the three months ended March 31,
	2021			2020
Segments	Consumer Products	Long-term Contract	Total	Consumer Products	Long-term Contract	Total
Domestic	$132,782	-	132,782	$178,753	-	178,753
International	85,331	-	85,331	52,184	-	52,184
	$218,113	-	218,113	$230,937	-	230,937
Filters	$104,356	-	104,356	$112,042	-	112,042
Components	105,287	-	105,287	118,895	-	118,895
Engineering Services	8,470	-	8,470	-	-	-
	$218,113	-	218,113	$230,937	-	230,937

Inventory

Inventory is stated at the lower of cost or market.  The Company’s inventory consists of finished goods and raw material and is located in Vista, California, consisting of the following:

Location : Vista, CA		March 31, 2021		December 31, 2020
Raw materials	$	914,131	$	917,567
Finished goods		951,423		962,608
Work in progress		-		-
Allowance for obsolete inventory		(1,083,210)		(1,058,309)
Total	$	782,344	$	821,866

The Company has established an allowance for obsolete inventory.  Expense for obsolete inventory was $24,901 and $25,052, for the periods ended March 31, 2021 and March 31, 2020, respectively.

Property and Equipment

Property and equipment at March 31, 2021 and December 31, 2020 consisted of the following:

	March 31,		December 31,
	2021		2020
Production equipment	$	64,673	$	64,673
Computers/Office equipment		28,540		28,540
Tooling equipment		12,380		12,380
Leasehold Improvements		42,451		42,451
Less: accumulated depreciation		(146,913)		(146,778)
Total	$	1,131	$	1,266

Depreciation expense for the periods ended March 31, 2021 and March 31, 2020 was $135 and $135, respectively.

Page 9

OMNITEK ENGINEERING CORP.
Notes to Financial Statements
March 31, 2021
(unaudited)

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (Continued)

Basic and Diluted Loss per Share

The computation of basic earnings per share of common stock is based on the weighted average number of shares outstanding during the periods presented. The computation of fully diluted earnings per share includes common stock equivalents outstanding at the balance sheet date. The Company had 2,998,889 and 2,857,223 stock options and warrants that would have been included in the fully diluted earnings per share as of March 31, 2021 and March 31, 2020, respectively.  However, the common stock equivalents were not included in the computation of the loss per share computation because they are anti dilutive.  

Income Taxes

The Company accounts for income taxes in accordance with Accounting Standards Codification Topic 740, Income Taxes ("Topic 740"), which requires the recognition of deferred tax liabilities and assets at currently enacted tax rates for the expected future tax consequences of events that have been included in the financial statements or tax returns. A valuation allowance is recognized to reduce the net deferred tax asset to an amount that is more likely than not to be realized.

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 March 31, 2021 and December 31, 2020 the Company had no accrued interest or penalties related to uncertain tax positions. The Company files an income tax return in the U.S. federal jurisdiction and the state of California. With few exceptions, the Company is no longer subject to U.S. federal, state, and local, or non-U.S. income tax examinations by tax authorities for years before 2012.

Liquidity and Going Concern

Historically, the Company has incurred net losses and negative cash flows from operations.  As of March 31, 2021, the Company had an accumulated deficit of $21,466,036 and total stockholders’ deficit of $863,245.  At March 31, 2021, the Company had current assets of $931,795 including cash of $59,890, and current liabilities of $1,526,073, resulting in negative working capital of $(594,278). For the three months ended March 31, 2021, the Company reported a net loss of $395 and net cash used in operating activities of $100,839. Management believes that based on its operating plan, the projected sales for 2021, combined with funds available from its working capital will be sufficient to fund operations for the next twelve months.  However, there can be no assurance that operations and operating cash flows will continue at the current levels or improve in the near future. Whether, and when, the Company can attain profitability and positive cash flows from operations is uncertain. The Company is also uncertain whether it can raise additional capital. These uncertainties cast substantial doubt upon the Company’s ability to continue as a going concern. Our financial statements have been prepared on a going concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of operations. The financial statements do not include any adjustments relating to the recoverability or classification of recorded asset amounts or the amounts or classification of liabilities should we be unable to continue as a going concern.     

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.

Page 10

OMNITEK ENGINEERING CORP.
Notes to Financial Statements
March 31, 2021
(unaudited)

NOTE 3 – CONTRACT ASSETS AND LIABILITIES

The timing of revenue recognition, billings and cash collections results in billed accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) on the balance sheet. For Omnitek’s long-term contracts, amounts are generally billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, Omnitek sometimes receives advances or deposits from its customers, before revenue is recognized, resulting in billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities).

The table below reconciles the net excess billings to the amounts included in the balance sheets at those dates:

	March 31,		December 31,
	2021		2020
Contract assets	$	13,221	$	13,221
Contract liabilities	$	(75,000)	$	(75,000)
Net amount of contract liabilities in excess of
Contract assets	$	(61,779)	$	(61,779)

NOTE 4 – COMMITMENTS

Effective September 1, 2019, the Company entered into the Fourth Amendment to the Lease for its facility, reducing the size of the leased space to 21,786 square feet and extending the lease term to August 31, 2020, at which time the lease expired. As of March 31, 2021, no new lease has been negotiated. The current lease payment is $14,161 per month, plus common area maintenance expenses (CAM).  Under the amended lease, past due rent is payable at monthly installments of $10,000, until such time as the past due rent has been paid in full. The lease is not subject to the right-of-use asset rules under ASU 2016-2 because it qualifies for the short-term lease exception under that pronouncement.

As of March 31, 2021 the outstanding balance of back rent, included in accounts payable, was $54,361 and the security deposit of $14,280 remained the same.

NOTE 5 - RELATED PARTY TRANSACTIONS

Accounts Receivable – Related Parties

As of March 31, 2021 and December 31, 2020, the Company was owed $22,325 and $17,345, respectively, by a entity controlled by the Company’s CEO for the purchase of products and services.

Accounts Payable – Related Parties

The Company regularly incurs expenses that are paid to related parties and purchases goods and services from related parties. As of March 31, 2021 and December 31, 2020, the Company owed a board member’s company for such services in the amounts of $123,360 and $121,527, respectively.

Page 11

OMNITEK ENGINEERING CORP.
Notes to Financial Statements
March 31, 2021
(unaudited)

NOTE 5 - RELATED PARTY TRANSACTIONS (Continued)

Accrued Management Compensation

For the periods ended March 31, 2021 and December 31, 2020, the Company’s president was due amounts for services performed for the Company.

As of March 31, 2021 and December 31, 2020 the accrued management fees consisted of the following:

	March 31,			December 31,
	2021			2020
Amounts due to the president		$	603,235		$	595,158
Total		$	603,235		$	595,158

NOTE 6 – NOTES PAYABLE - RELATED PARTY

On January 19, 2017 the Company issued a promissory note for $15,000 to a related party. The note has an annual interest rate of 5% and is unsecured. The principal amount of the note and all accrued interest is due and payable on or before January 19, 2022.

As of March 31, 2021, and December 31, 2020 Note Payable – Related Party consisted of the following:

	March 31,			December 31,
	2021			2020
Note payable, related party, current portion		$	15,000		$	15,000
Total		$	15,000		$	15,000

NOTE 7 – DEBT

Loans payable – SBA

Economic Injury Disaster Loan

On April 21, 2020, the Company obtained a loan (the “SBA EIDL Loan”) under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the U.S. Small Business Administration. The Company received total proceeds of $199,000 from the SBA EIDL loan.

The SBA EIDL Loan is evidenced by a Loan Authorization and Agreement, a Secured Promissory Note (the “Note” and Security Agreement. Interest on the unpaid principal balance of the Note shall accrue at the rate of three and 75/100 percent (3.75%) per annum. Pursuant to the terms of the Note, commencing May 21, 2021 (i.e., twelve (12) months from the Note date), the Company shall make principal and interest payments in the amount of $970 every month, with any unpaid principal and accrued interest due and payable on April 21, 2050. 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 grantedincludes all tangible and intangible personal property, including, but not limited to: (a) inventory, and (b) equipment.

Page 12

OMNITEK ENGINEERING CORP.
Notes to Financial Statements
March 31, 2021
(unaudited)

NOTE 7 – DEBT (Continued)

Payroll Protection Program

On May 28, 2020, the Company received funds pursuant to a Paycheck Protection Program loan (the “SBA PPP Loan”) from Riverview Bank, under recently enacted CARES Act administered by U.S. Small Business Administration. The Company received total proceeds of $100,000 from the SBA PPP Loan. In accordance with the requirements of the CARES Act, the Company will use proceeds from the SBA PPP Loan primarily for payroll costs. The SBA PPP Loan is scheduled to mature on May 22, 2022 and has a 1.00% interest rate and is subject to the terms and conditions applicable to loans administered by the SBA under the CARES Act. If certain conditions are met, as provided for under section 1106 of the CARES Act, as amended by the PPP Flexibility Act the loan may be forgiven in its entirety. On January 30, 2021, the Company was notified by the SBA that the loan had been forgiven in its entirety, including outstanding principal of $100,000 and accrued interest of $655.

On March 3, 2021 the Company received funds pursuant to the Paycheck Protection Program loan (the “PPP loan”) from LIBERTY CP2, SPV, LP, under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the SBA. The Company received total proceeds of $100,000 from the PPP loan. The loan carries an interest rate of 1.00%. Pursuant to the terms of the note, the first payment shall be determined based on the deferment period and time required to process any application for forgiveness. The Note shall be due on March 1, 2026, or as determined by the Small Business Administration and Department of the Treasury.

As of March 31, 2021, and December 31, 2020 Debt consisted of the following:

	March 31,			December 31,
	2021			2020
Loan payable – SBA EIDL		$	199,000		$	199,000
Loan payable – SBA PPP			100,000			100,000
Less current portion			(14,622)			(69,551)
Total debt, net of current portion		$	284,378		$	229,449

NOTE 8 -  STOCK OPTIONS AND WARRANTS

During the three months ended March 31, 2021 and 2020, the Company granted 400,000 and 150,000 options for services, respectively. During the three months ended March 31, 2021 and 2020, the Company recognized expense of $11,283 and $10,408, respectively, for options that vested during the periods pursuant to ASC Topic 718. As of March 31, 2021 total remaining amount of compensation expense to be recognized in future periods is

$22,745.  

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 March 31, 2021 the Company has a total of 75,000 options issued under the 2011 Plan. On September 11, 2015 the Board of Directors adopted the Omnitek Engineering Corp. 2015 Long Term Incentive Plan (the “2015 Plan”), under which 2,500,000 shares of the Company’s Common Stock were reserved for issuance of both Incentive Stock Options to employees only and Non-Qualified Stock Options to employees and consultants at its discretion. As of March 31, 2021 the Company has a total of 1,915,556 options issued under the 2015 Plan.  In October 2017, the Company’s shareholders approved its 2017 Long-Term Incentive Plan (the “2017 Plan”). Under the 2017 plan, the Company may issue up to 5,000,000 shares of both Incentive Stock Options to employees only and Non-Qualified Stock Options to employees and consultants at its discretion.  As of March 31, 2021, the

Page 13

OMNITEK ENGINEERING CORP.
Notes to Financial Statements
March 31, 2021
(unaudited)

NOTE 8 -  STOCK OPTIONS AND WARRANTS (Continued)

Company has a total of 1,008,333 options issued under the 2017 Plan.  During the three months ended March 31, 2021 and 2020 the Company issued  -0- and -0- warrants, respectively.

The Company recognizes compensation expense for stock-based awards expected to vest on a straight-line basis over the requisite service period of the award based on their grant date fair value.  The Company estimates the fair

value of stock options using a Black-Scholes option pricing model which requires management to make estimates for certain assumptions regarding risk-free interest rate, expected life of options, expected volatility of stock and expected dividend yield of stock. When determining expected volatility, the Company considers the historical performance of the Company’s stock, as well as implied volatility. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant, based on the options’ expected term. The expected term of the options is based on the Company’s evaluation of option holders’ exercise patterns and represents the period of time that options are expected to remain unexercised. The Company uses historical data to estimate the timing and amount of forfeitures.

The following table presents the assumptions used to estimate the fair values of the stock options granted:

	March 31, 2021	March 31, 2020
Expected volatility	201 %	159 %
Expected dividends	0 %	0 %
Expected term	7 Years	7 Years
Risk-free interest rate	1.2 %	0.60 %

A summary of the status of the options and warrants granted at March 31, 2021 and December 31, 2020 and changes during the periods then ended is presented below:  

	March 31,			December 31,
	2021			2020
			Weighted-Average			Weighted-Average
	Shares		Exercise Price	Shares		Exercise Price
Outstanding at beginning of year	2,890,556	$	0.20	2,940,556	$	0.25
Granted	400,000		0.11	150,000		0.06
Exercised	-		-	-		-
Expired or cancelled	-		-	(200,000)		0.87
Outstanding at end of period	3,290,556		0.19	2,890,556		0.20
Exercisable	2,998,889	$	0.19	2,882,223	$	0.20

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

Range of Exercise Prices	Number Outstanding	Weighted-Average Remaining Contractual Life	Number Exercisable	Weighted-Average Exercise Price
$0.01-0.99	3,290,556	3.71 years	2,998,889	0.19

Page 14

OMNITEK ENGINEERING CORP.
Notes to Financial Statements
March 31, 2021
(unaudited)

NOTE 9 -  SUBSEQUENT EVENT

The fourth amendment to the Company’s lease for approximately 21,786 square feet of space at 1333 Keystone Way, Suite 101, Vista, CA expired on August 31, 2020. No lease extension was negotiated at the time and the Company is currently occupying the space on a month-to-month basis. Management is now considering downsizing the facility and has commenced the search for a new space. In agreement with the landlord, a move-out date of July 15, 2021 is targeted.

Page 15

ITEM 2MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and related notes to the financial statements included elsewhere in this periodic report.  Some of the statements under “Management’s Discussion and Analysis,” “Description of Business” and elsewhere herein may include forward-looking statements which reflect our current views with respect to future events and financial performance. These statements include forward-looking statements both with respect to us specifically and the alternative fuels engines industry in general. Statements which include the words “expect,” “intend,” “plan,” “believe,” “project,” “anticipate,” “will,” and similar statements of a future or forward-looking nature identify forward-looking statements for purposes of the federal securities laws or otherwise. The safe harbor provisions of the federal securities laws do not apply to any forward-looking statements contained in this registration statement. 

All forward-looking statements address such matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We undertake no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statements you read herein reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our written and oral forward-looking statements attributable to us or individuals acting on our behalf and such statements are expressly qualified in their entirety by this paragraph.

Results of Operations

For the three months ended March 31, 2021 and 2020

Revenues were $218,113 for the three months ended March 31, 2021 compared with $230,937 for the three months ended March 31, 2020, a decrease of $12,824. The decrease in sales relates primarily to a reduction in component sales between periods.

Our total cost of sales was $129,311 for the three months ended March 31, 2021 compared with $135,120 for the three months ended March 31, 2020, a decrease of $5,809. For both periods our total cost of goods sold consisted of two line items: cost of goods sold on revenues and a non-cash inventory reserve adjustment. Our cost of goods sold on revenues decreased to $104,410 for the three months ended March 31, 2021 (resulting in adjusted gross margin of 52%) from $110,068 for the three months ended March 31, 2020 (resulting in gross margin of 52%), a decrease of $5,658.

Operating expenses for the three months ended March 31, 2021 were $183,044 compared with $218,237 in the same period in 2020, a decrease of $35,193 or 16%. General and administrative expense for the three months ended March 31, 2021 was $166,453 compared with $185,963 for the three months ended March 31, 2020.  Major components of general and administrative expenses for the three months ended March 31, 2021 were professional fees of $27,973, rent expense of $32,797, and salary and wages of $51,226. This compares to professional fees of $32,477, rent expense of $32,138 and salaries and wages of $64,177 for the three months ended March 31, 2020.  For the three months ended March 31, 2021 research and development outlays were decreased to $16,456, due to a reduction in research and development wages, compared with $32,139 for the three months ended March 31, 2020.

Our net loss for the three months ended March 31, 2021 was $395, or ($0.00) per share, compared with a net loss of $126,705, or ($0.01) per share, for the three months ended March 31, 2020.  The decreased net loss was primarily due to extinguishment of liability income during the three months ended March 31, 2021.

Page 16

Results for the three months ended March 31, 2021 reflect the impact of non-cash expenses, including the value of options and warrants granted in the amount of $11,283, depreciation and amortization of $135, the inventory reserve adjustment of $24,901 and forgiveness of liability income of $100,655.  For the three month period ended March 31, 2020 non-cash expenses included options and warrants granted in the amount of $10,408, depreciation and amortization of $135 and the inventory reserve adjustment of $25,052.

Liquidity and Capital Resources

Overview

Our primary sources of liquidity are cash provided by financing activities and available working capital. Additionally, from time to time we may raise funds from the equity capital markets to fund our research and development programs, expansion of our business and general operations.

At March 31, 2021, our current liabilities totaled $1,526,073 and our current assets totaled $931,795, resulting in negative working capital of $594,278.  

We have no firm commitments or obligations for capital expenditures.  However, substantial discretionary expenditures may be required to enable us to conduct existing and planned product research, design, development, manufacturing, marketing and distribution of our products. We may need to raise additional capital to facilitate growth and support our long-term product development, manufacturing, and marketing programs. The Company has no established bank-financing arrangements. (See Note 7 to the Financial Statements regarding the loan the Company obtained from the Small Business Administration). Therefore, it is possible that we need to seek additional financing through subsequent future public or private sales of our securities, including equity securities. We may also seek funding for the development, manufacturing, and marketing of our products through strategic partnerships and other arrangements with corporate partners. There can be no assurance, however, that such collaborative arrangements or additional funds will be available when needed, or on terms acceptable to us, if at all. If adequate funds are not available, we may be required to curtail one or more of our research and development programs.

We have historically incurred significant losses, which have resulted in a total accumulated deficit of $21,466,036 at March 31, 2021, of which $5,604,135 is a direct result of derivative expense and change in fair value of derivative liability and is unrelated to our operations or cash flow. Management believes that based on its operating plan, the projected sales for 2021, combined with funds available from its working capital will be sufficient to fund operations for the next twelve months. However, there can be no assurance that operations and operating cash flows will continue at the current levels or improve in the near future. Whether, and when, the Company can attain profitability and positive cash flows from operations is uncertain. The Company is also uncertain whether it can raise additional capital. These uncertainties cast substantial doubt upon the Company’s ability to continue as a going concern.

Operating Activities

We realized a negative cash flow from operations of $100,839 for the three months ended March 31, 2021 compared with a negative cash flow of $24,419 during the three months ended March 31, 2020.  

Included in the operating loss of $94,242 for the three months ended March 31, 2021 are non-cash expenses, which are not a drain on our capital resources.  During the period, these non-cash expenses include the value of options and warrants granted in the amount of $11,283, depreciation and amortization of $135 and inventory reserve adjustment of $24,901.

Page 17

Financing Activities

We realized a positive cash flow from financing activities of $100,000 for the three months ended March 31, 2021 compared with positive cash flow of $31,000 for the three months ended March 31, 2020.The positive cash flow for the three months ended March 31, 2021 relates to proceeds received from long-term debt.  The positive cash flow for the three months ended March 31, 2020 relates to proceeds received on a stock subscription agreement with a qualified investor.

Off-Balance Sheet Arrangements

None.

Critical Accounting Policies and Estimates

Accounting Method and Use of Estimates

The Company's financial statements are prepared using the accrual method of accounting. 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. Areas where significant estimates are required include the following:

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.

Inventory

Inventory is stated at the lower of cost or market. The Company’s inventory consists of finished goods and raw materials. The Company identifies items in its inventory that have not been sold in a timely manner. Accordingly, the Company has established an allowance for the cost of such obsolete inventory.

Long-lived assets

The Company assesses the recoverability of its long-lived assets annually and whenever circumstances would indicate that there may be an impairment. The Company compares the estimated undiscounted future cash flows to the carrying value of the long-lived assets to determine if an impairment has occurred. In the event that an impairment has occurred, the Company recognizes the impairment immediately.

Contract assets and liabilities

The timing of revenue recognition, billings and cash collections results in billed accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) on the balance sheet. For Omnitek’s long-term contracts, amounts are generally billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, Omnitek sometimes receives advances or deposits from its customers, before revenue is recognized, resulting in billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities). 

Page 18

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).

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.  

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to a customer, and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of Omnitek’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct.

Performance Obligations Satisfied Over Time

Revenues for Omnitek’s long-term contracts that satisfy the criteria for over time recognition (formerly known as percentage-of-completion method) is recognized as the work progresses. The majority of the revenue is derived from long-term engine development agreements that typically span between 12 to 24 months. Omnitek’s long-term contracts will continue to be recognized over time because our typical contract is for a customized asset with no alternative use and generally the Company has a right to payment for work completed to date. Under the new revenue standard, the cost-to-cost measure of progress continues to best depict the transfer of control of assets to the customer, which occurs as the Company incurs costs. Contract costs include labor and material. Revenue from products and services transferred to customers over time accounted for 0% and 0% of revenue for the periods ended March 31, 2021 and 2020, respectively.

Performance Obligations Satisfied at a Point in Time

Revenue from product sales is recognized at a point in time. These sales predominantly contain a single delivery element and revenue is recognized at a single point in time when ownership, risk and rewards transfer. Upon fulfilment of the performance obligation, the customer is provided an invoice demonstrating transfer of control to the customer. Revenue from goods and services transferred to customers at a point in time accounted for 100% and 100% of revenue for the periods ended March 31, 2021 and 2020, respectively.

Assurance-type warranties are the only warranties provided by the Company and, as such, Omnitek does not recognize revenue on warranty-related work. Omnitek generally provides a one-year warranty for products that it sells. Warranty claims historically have been insignificant.

Page 19

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.  

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.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our management carried out an evaluation, under the supervision and with the participation of our Principal Executive Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Principal Executive Officer has concluded that our disclosure controls and procedures were not effective as of March 31, 2021. The material weakness, which relates to internal control over financial reporting, that was identified is: due to our small size, we do not have a proper segregation of duties in certain areas of our financial reporting process. This control deficiency, which is pervasive in nature, results in a reasonable possibility that material misstatements of the financial statements will not be prevented or detected on a timely basis.

Changes in Internal Controls

  There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Page 20

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

We are not a party to any pending legal proceeding.  No federal, state or local governmental agency is presently contemplating any proceeding against the Company.  No director, executive officer or affiliate of the Company or owner of record or beneficially of more than five percent of the Company's common stock is a party adverse to the Company or has a material interest adverse to the Company in any proceeding.

ITEM 1A.  RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2.  UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

On March 10, 2021, the Company granted to Werner Funk, President and CEO, a Non-qualified Stock Option pursuant to the 2017 Long-Term Incentive Plan, to purchase 300,000 shares of common stock at an exercise price of $0.1155, representing 110% of the closing price (i.e., $0.1050) of the common stock of the Corporation as of such date. Said Options shall vest and be exercisable at the rate of 1/36 per month and shall be exercisable for a period of seven years from the date of grant.

On March 10, 2021, in consideration for their services as independent directors, the Company granted to each of Messrs. Gary S. Maier and John M. Palumbo, a Non-Qualified Stock Option pursuant to the 2017 Long-Term Incentive Plan to purchase 50,000 shares of common stock, at an exercise price of $0.1050, representing 100% of the closing price (i.e., $0.1050) of the common stock of the Corporation as of such date. Said Options shall vest and be exercisable immediately and shall be exercisable for a period of seven years from the date of grant.

The securities were issued pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933. The individual receiving the options is intimately acquainted with the Company’s business plan and proposed activities at the time of issuance, and possessed information on the Company necessary to make an informed investment decision.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None

Page 21

ITEM 5.  OTHER INFORMATION

Subsequent Events

The Fourth Amendment to the Company’s lease for approximately 21,786 square feet of space at 1333 Keystone Way, Suite 101, Vista, California 92081, expired August 31, 2020. No lease extension was negotiated at the time and the Company is currently occupying the space on a month-to-month basis. Management is now considering downsizing the facility and has commenced the search for a new space. In agreement with the landlord, a move-out date of July 15, 2021 is targeted.

ITEM 6.  EXHIBITS

(a)Documents filed as part of this Report. 

1. Financial Statements.  The condensed unaudited Balance Sheet of Omnitek Engineering Corp. as of March 31, 2021 and the audited balance sheet as of December 31, 2020, the condensed unaudited Statements of Operations for the three month periods ended March 31, 2021 and 2020, the condensed unaudited Statements of Cash Flows for the three month periods ended March 31, 2021 and 2020 and the condensed unaudited Statements of Stockholders’ Equity (Deficit) as of March 31, 2021 and 2020, together with the notes thereto, are included in this Quarterly Report on Form 10-Q. 

3. Exhibits. The following exhibits are either filed as a part hereof or are incorporated by reference. Exhibit numbers correspond to the numbering system in Item 601 of Regulation S-K. 

Exhibit
Number	Description of Exhibit
3(i)	Amended and Restated Articles of Incorporation(1)
3(ii)	Amended and Restated By-Laws Adopted July 12, 2012 (2)
31(i)	CEO certification pursuant to Section 302 of the Sarbanes – Oxley Act of 2002 (3)
31(ii)	CFO certification pursuant to Section 302 of the Sarbanes – Oxley Act of 2002 (3)
32	CEO and CFO certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (3)
101	The following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 formatted in Extensible Business Reporting Language ("XBRL"): (i) the balance sheets (unaudited); (ii) the statements of operations (unaudited); (iii) the statements of cash flows (unaudited); and, (iv) related notes.

(1)Previously filed on Form on Form 10 on April 27, 2010 

(2)Previously filed on Form 8-K on August 2, 2012 

(3)Filed herewith 

Page 22

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Omnitek Engineering Corp.
Dated: May 17, 2021
	By:	Werner Funk
	Its:	Chief Executive Officer Principal Executive Officer

Page 23

EX-31.1

Exhibit 31(i)

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14

I, Werner Funk, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Omnitek Engineering Corp.; 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;  

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;  

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have, for the small business issuer and have:  

(a)         Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)         Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)         Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)         Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5.I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’s board of directors (or persons performing the equivalent functions):  

(a)         All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to  record, process, summarize and report financial information; and

(b)         Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

Dated: May 17, 2021	___________________________
	By:  Werner Funk
	Its:  President and Secretary

EX-32

 Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Omnitek Engineering Corp. (the “Company”) on Form 10-Q for the period ending March 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Werner Funk, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: 

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. 

Dated: May 17, 2021	___________________________
	By:  Werner Funk
	Its:  Chief Executive Officer,
	President and Secretary

Dated: May 17, 2021	___________________________
	By: Werner Funk
	Its:  Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. 

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2021	May 14, 2021
Document and Entity Information [Abstract]
Entity Registrant Name	Omnitek Engineering Corp.
Document Type	10-Q
Document Period End Date	Mar. 31, 2021
Amendment Flag	false
Entity Central Index Key	0001404804
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		21,600,189
Entity Filer Category	Non-accelerated Filer
Entity's Reporting Status Current	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Interactive Data Current	Yes
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Entity File Number	000-53955
Entity Incorporation, State Country Code	CA
Entity Address, Address Line One	1333 Keystone Way, #101
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

XML

Condensed Balance Sheets (unaudited) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
CURRENT ASSETS
Cash	$ 59,890	$ 60,729
Accounts receivable, net	4,383	9,455
Accounts receivable - related parties	22,325	17,345
Inventory, net	782,344	821,866
Contract assets	13,221	13,221
Deposits	49,632	38,610
Total Current Assets	931,795	961,226
PROPERTY & EQUIPMENT, net	1,131	1,266
OTHER ASSETS
Other noncurrent assets	14,280	14,280
Total Other Assets	14,280	14,280
TOTAL ASSETS	947,206	976,772
CURRENT LIABILITIES
Accounts payable and accrued expenses	461,911	468,839
Accrued management compensation	603,235	595,158
Accounts payable - related parties	123,360	121,527
Note payable - related party	15,000	15,000
Contract liabilities	75,000	75,000
Customer deposits	232,945	276,381
Current portion, long-term debt	14,622	69,551
Total Current Liabilities	1,526,073	1,621,456
LONG-TERM LIABILITIES
Loans payable - SBA, net of current portion	284,378	229,449
Total Liabilities	1,810,451	1,850,905
STOCKHOLDERS' DEFICIT
Common stock, 125,000,000 shares authorized; no par value; 21,600,189 shares issued and outstanding	8,578,210	8,528,210
Additional paid-in capital	12,024,581	12,013,298
Accumulated deficit	(21,466,036)	(21,465,641)
Total Stockholders' Deficit	(863,245)	(874,133)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 947,206	$ 976,772

XML

Condensed Balance Sheets (unaudited) (Parenthetical) - $ / shares	Mar. 31, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Common Stock, par or stated value	$ 0	$ 0
Common Stock, shares authorized	125,000,000	125,000,000
Common Stock, shares issued	21,600,189	21,600,189
Common Stock, shares outstanding	21,600,189	21,600,189

XML

Condensed Statements of Operations (unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Statement [Abstract]
REVENUES	$ 218,113	$ 230,937
COST OF GOODS SOLD	104,410	110,068
INVENTORY RESERVE ADJUSTMENT	24,901	25,052
Total Cost of Goods Sold	129,311	135,120
GROSS MARGIN	88,802	95,817
OPERATING EXPENSES
General and administrative	166,453	185,963
Research and development	16,456	32,139
Depreciation and amortization	135	135
Total Operating Expenses	183,044	218,237
LOSS FROM OPERATIONS	(94,242)	(122,420)
OTHER INCOME (EXPENSE)
Interest expense	(6,808)	(4,885)
Gain on extinguishment of liability	100,655	0
Other income	0	600
Total Other Income (Expense)	93,847	(4,285)
LOSS BEFORE INCOME TAXES	(395)	(126,705)
INCOME TAX EXPENSE	0	0
NET LOSS	$ (395)	$ (126,705)
BASIC AND DILUTED LOSS PER SHARE	$ (0.00)	$ (0.01)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED	21,600,189	21,339,865

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Condensed Statements of Cash Flows (unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
OPERATING ACTIVITIES
Net loss	$ (395)	$ (126,705)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Amortization and depreciation expense	135	135
Obsolete inventory adjustment	24,901	25,052
Stock option expense	11,283	10,408
Gain on extinguishment of liability	(100,655)	0
Changes in operating assets and liabilities:
Accounts receivable	5,072	(23,080)
Accounts receivable-related parties	(4,980)	(10,575)
Deposits	(11,022)	0
Inventory	14,621	19,447
Accounts payable and accrued expenses	(6,273)	14,409
Customer deposits	(43,436)	30,465
Accounts payable-related parties	1,833	(129)
Accrued management compensation	8,077	36,154
Net Cash Used in Operating Activities	(100,839)	(24,419)
INVESTING ACTIVITIES
Net Cash Used in Investing Activities	0	0
FINANCING ACTIVITIES
Proceeds from stock subscription	0	31,000
Proceeds from loans payable	100,000	0
Net cash Provided by Financing Activities	100,000	31,000
NET CHANGE IN CASH	(839)	6,581
CASH AT BEGINNING OF YEAR	60,729	20,236
CASH AT END OF PERIOD	59,890	26,817
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS
Cash paid for: Interest	$ 3,183	$ 4,319

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Condensed Statements of Stockholders' Equity (Deficit) (unaudited) - USD ($)	Common Stock	Common Stock Subscribed	Additional Paid-In Capital	Accumulated Deficit	Total
Stockholders' Equity, beginning of period, Value at Dec. 31, 2019	$ 8,527,210	$ 20,000	$ 11,997,842	$ (20,975,929)	$ (430,877)
Stockholders' Equity, beginning of period, Shares at Dec. 31, 2019	21,339,865
Value of options and warrants issued for services			10,408		10,408
Deposit - stock purchase agreement		31,000			31,000
Net loss				(126,705)	(126,705)
Stockholders' Equity, end of period, Value at Mar. 31, 2020	$ 8,527,210	51,000	12,008,250	(21,102,634)	(516,174)
Stockholders' Equity, end of period, Shares at Mar. 31, 2020	21,339,865
Stockholders' Equity, beginning of period, Value at Dec. 31, 2020	$ 8,578,210		12,013,298	(21,465,641)	(874,133)
Stockholders' Equity, beginning of period, Shares at Dec. 31, 2020	21,600,189
Value of options and warrants issued for services			11,283		11,283
Net loss				(395)	(395)
Stockholders' Equity, end of period, Value at Mar. 31, 2021	$ 8,578,210		$ 12,024,581	$ (21,466,036)	$ (863,245)
Stockholders' Equity, end of period, Shares at Mar. 31, 2021	21,600,189

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NOTE 1 - CONDENSED FINANCIAL STATEMENTS

3 Months Ended

Mar. 31, 2021

Disclosure Text Block [Abstract]

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at March 31, 2021 and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2020 audited financial statements. The results of operations for the periods ended March 31, 2021 and 2020 are not necessarily indicative of the operating results for the full years.

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2021

Disclosure Text Block [Abstract]

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

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

We recognize revenue on various products and services as follows:

Products - 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).

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.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to a customer and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority

of Omnitek’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct.

Performance Obligations Satisfied Over Time

Revenues for Omnitek’s long-term contracts that satisfy the criteria for over time recognition (formerly known as percentage-of-completion method) is recognized as the work progresses. The majority of the revenue is derived from long-term engine development agreements that typically span between 12 to 24 months. Omnitek’s long-term contracts will continue to be recognized over time because our typical contract is for a customized asset with no alternative use and generally the Company has a right to payment for work completed to date. Under the new revenue standard, the cost-to-cost measure of progress continues to best depict the transfer of control of assets to the customer, which occurs as the Company incurs costs. Contract costs include labor and material. Revenue from products and services transferred to customers over time accounted for 0% and 0% of revenue for the periods ended March 31, 2021 and 2020, respectively.

Performance Obligations Satisfied at a Point in Time

Revenue from product sales is recognized at a point in time. These sales predominantly contain a single delivery element and revenue is recognized at a single point in time when ownership, risk and rewards transfer. Upon fulfilment of the performance obligation, the customer is provided an invoice demonstrating transfer of control to the customer. Revenue from goods and services transferred to customers at a point in time accounted for 100% and 100% of revenue for the periods ended March 31, 2021 and 2020, respectively.

Assurance-type warranties are the only warranties provided by the Company and, as such, Omnitek does not recognize revenue on warranty-related work. Omnitek generally provides a one-year warranty for products that it sells. Warranty claims historically have been insignificant.

Pre-contract costs are generally not incurred by the Company.

Contract Estimates

Accounting for long-term contracts involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, Omnitek estimates the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognizes that profit over the life of the contract.

Variable Consideration

The transaction price for contracts may include variable consideration, which includes increases to transaction price for approved and unapproved change orders, claims and incentives, and reductions to transaction price for liquidated damages. Variable consideration historically has been insignificant.

Disaggregation of Revenue

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

	For the three months ended March 31,			For the three months ended March 31,
	2021			2020
Segments	Consumer Products	Long-term Contract	Total	Consumer Products	Long-term Contract	Total
Domestic	$ 132,782	-	132,782	$ 178,753	-	178,753
International	85,331	-	85,331	52,184	-	52,184
	$ 218,113	-	218,113	$ 230,937	-	230,937
Filters	$ 104,356	-	104,356	$ 112,042	-	112,042
Components	105,287	-	105,287	118,895	-	118,895
Engineering Services	8,470	-	8,470	-	-	-
	$ 218,113	-	218,113	$ 230,937	-	230,937

Inventory

Inventory is stated at the lower of cost or market.  The Company’s inventory consists of finished goods and raw material and is located in Vista, California, consisting of the following:

Location : Vista, CA		March 31, 2021		December 31, 2020
Raw materials	$	914,131	$	917,567
Finished goods		951,423		962,608
Work in progress		-		-
Allowance for obsolete inventory		(1,083,210)		(1,058,309)
Total	$	782,344	$	821,866

The Company has established an allowance for obsolete inventory.  Expense for obsolete inventory was $24,901 and $25,052, for the periods ended March 31, 2021 and March 31, 2020, respectively.

Property and Equipment

Property and equipment at March 31, 2021 and December 31, 2020 consisted of the following:

	March 31,		December 31,
	2021		2020
Production equipment	$	64,673	$	64,673
Computers/Office equipment		28,540		28,540
Tooling equipment		12,380		12,380
Leasehold Improvements		42,451		42,451
Less: accumulated depreciation		(146,913)		(146,778)
Total	$	1,131	$	1,266

Depreciation expense for the periods ended March 31, 2021 and March 31, 2020 was $135 and $135, respectively.

Basic and Diluted Loss per Share

The computation of basic earnings per share of common stock is based on the weighted average number of shares outstanding during the periods presented. The computation of fully diluted earnings per share includes common stock equivalents outstanding at the balance sheet date. The Company had 2,998,889 and 2,857,223 stock options and warrants that would have been included in the fully diluted earnings per share as of March 31, 2021 and March 31, 2020, respectively.  However, the common stock equivalents were not included in the computation of the loss per share computation because they are anti dilutive.

Income Taxes

The Company accounts for income taxes in accordance with Accounting Standards Codification Topic 740, Income Taxes ("Topic 740"), which requires the recognition of deferred tax liabilities and assets at currently enacted tax rates for the expected future tax consequences of events that have been included in the financial statements or tax returns. A valuation allowance is recognized to reduce the net deferred tax asset to an amount that is more likely than not to be realized.

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 March 31, 2021 and December 31, 2020 the Company had no accrued interest or penalties related to uncertain tax positions. The Company files an income tax return in the U.S. federal jurisdiction and the state of California. With few exceptions, the Company is no longer subject to U.S. federal, state, and local, or non-U.S. income tax examinations by tax authorities for years before 2012.

Liquidity and Going Concern

Historically, the Company has incurred net losses and negative cash flows from operations.  As of March 31, 2021, the Company had an accumulated deficit of $21,466,036 and total stockholders’ deficit of $863,245.  At March 31, 2021, the Company had current assets of $931,795 including cash of $59,890, and current liabilities of $1,526,073, resulting in negative working capital of $(594,278). For the three months ended March 31, 2021, the Company reported a net loss of $395 and net cash used in operating activities of $100,839. Management believes that based on its operating plan, the projected sales for 2021, combined with funds available from its working capital will be sufficient to fund operations for the next twelve months.  However, there can be no assurance that operations and operating cash flows will continue at the current levels or improve in the near future. Whether, and when, the Company can attain profitability and positive cash flows from operations is uncertain. The Company is also uncertain whether it can raise additional capital. These uncertainties cast substantial doubt upon the Company’s ability to continue as a going concern. Our financial statements have been prepared on a going concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of operations. The financial statements do not include any adjustments relating to the recoverability or classification of recorded asset amounts or the amounts or classification of liabilities should we be unable to continue as a going concern.     

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.

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NOTE 3 - CONTRACT ASSETS AND LIABILITIES

3 Months Ended

Mar. 31, 2021

Disclosure Text Block [Abstract]

NOTE 3 - CONTRACT ASSETS AND LIABILITIES

NOTE 3 – CONTRACT ASSETS AND LIABILITIES

The timing of revenue recognition, billings and cash collections results in billed accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) on the balance sheet. For Omnitek’s long-term contracts, amounts are generally billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, Omnitek sometimes receives advances or deposits from its customers, before revenue is recognized, resulting in billings in excess of costs and estimated earnings on uncompleted contracts (contract liabilities).

The table below reconciles the net excess billings to the amounts included in the balance sheets at those dates:

	March 31,		December 31,
	2021		2020
Contract assets	$	13,221	$	13,221
Contract liabilities	$	(75,000)	$	(75,000)
Net amount of contract liabilities in excess of
Contract assets	$	(61,779)	$	(61,779)

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NOTE 4 - COMMITMENTS

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

NOTE 4 - COMMITMENTS

NOTE 4 – COMMITMENTS

Effective September 1, 2019, the Company entered into the Fourth Amendment to the Lease for its facility, reducing the size of the leased space to 21,786 square feet and extending the lease term to August 31, 2020, at which time the lease expired. As of March 31, 2021, no new lease has been negotiated. The current lease payment is $14,161 per month, plus common area maintenance expenses (CAM). Under the amended lease, past due rent is payable at monthly installments of $10,000, until such time as the past due rent has been paid in full. The lease is not subject to the right-of-use asset rules under ASU 2016-2 because it qualifies for the short-term lease exception under that pronouncement.

As of March 31, 2021 the outstanding balance of back rent, included in accounts payable, was $54,361 and the security deposit of $14,280 remained the same.

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NOTE 5 - RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2021

Disclosure Text Block [Abstract]

NOTE 5 - RELATED PARTY TRANSACTIONS

NOTE 5 - RELATED PARTY TRANSACTIONS

Accounts Receivable – Related Parties

As of March 31, 2021 and December 31, 2020, the Company was owed $22,325 and $17,345, respectively, by a entity controlled by the Company’s CEO for the purchase of products and services.

Accounts Payable – Related Parties

The Company regularly incurs expenses that are paid to related parties and purchases goods and services from related parties. As of March 31, 2021 and December 31, 2020, the Company owed a board member’s company for such services in the amounts of $123,360 and $121,527, respectively.

Accrued Management Compensation

For the periods ended March 31, 2021 and December 31, 2020, the Company’s president was due amounts for services performed for the Company.

As of March 31, 2021 and December 31, 2020 the accrued management fees consisted of the following:

	March 31,			December 31,
	2021			2020
Amounts due to the president		$	603,235		$	595,158
Total		$	603,235		$	595,158

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NOTE 6 - NOTES PAYABLE - RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2021

Disclosure Text Block [Abstract]

NOTE 6 - NOTES PAYABLE - RELATED PARTY TRANSACTIONS

NOTE 6 – NOTES PAYABLE - RELATED PARTY

On January 19, 2017 the Company issued a promissory note for $15,000 to a related party. The note has an annual interest rate of 5% and is unsecured. The principal amount of the note and all accrued interest is due and payable on or before January 19, 2022.

As of March 31, 2021, and December 31, 2020 Note Payable – Related Party consisted of the following:

	March 31,			December 31,
	2021			2020
Note payable, related party, current portion		$	15,000		$	15,000
Total		$	15,000		$	15,000

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NOTE 7 - DEBT

3 Months Ended

Mar. 31, 2021

Disclosure Text Block [Abstract]

NOTE 7 - DEBT

NOTE 7 – DEBT

Loans payable – SBA

Economic Injury Disaster Loan

On April 21, 2020, the Company obtained a loan (the “SBA EIDL Loan”) under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the U.S. Small Business Administration. The Company received total proceeds of $199,000 from the SBA EIDL loan.

The SBA EIDL Loan is evidenced by a Loan Authorization and Agreement, a Secured Promissory Note (the “Note” and Security Agreement. Interest on the unpaid principal balance of the Note shall accrue at the rate of three and 75/100 percent (3.75%) per annum. Pursuant to the terms of the Note, commencing May 21, 2021 (i.e., twelve (12) months from the Note date), the Company shall make principal and interest payments in the amount of $970 every month, with any unpaid principal and accrued interest due and payable on April 21, 2050. The obligations under the Loan Authorization and Agreement, and the Note shall be secured pursuant to the Security Agreement and a first position lien and security interest in the Collateral (as defined in the Security Agreement). The collateral in which the security interest is granted includes all tangible and intangible personal property, including, but not limited to: (a) inventory, and (b) equipment.

Payroll Protection Program

On May 28, 2020, the Company received funds pursuant to a Paycheck Protection Program loan (the “SBA PPP Loan”) from Riverview Bank, under recently enacted CARES Act administered by U.S. Small Business Administration. The Company received total proceeds of $100,000 from the SBA PPP Loan. In accordance with the requirements of the CARES Act, the Company will use proceeds from the SBA PPP Loan primarily for payroll costs. The SBA PPP Loan is scheduled to mature on May 22, 2022 and has a 1.00% interest rate and is subject to the terms and conditions applicable to loans administered by the SBA under the CARES Act. If certain conditions are met, as provided for under section 1106 of the CARES Act, as amended by the PPP Flexibility Act the loan may be forgiven in its entirety. On January 30, 2021, the Company was notified by the SBA that the loan had been forgiven in its entirety, including outstanding principal of $100,000 and accrued interest of $655.

On March 3, 2021 the Company received funds pursuant to the Paycheck Protection Program loan (the “PPP loan”) from LIBERTY CP2, SPV, LP, under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the SBA. The Company received total proceeds of $100,000 from the PPP loan. The loan carries an interest rate of 1.00%. Pursuant to the terms of the note, the first payment shall be determined based on the deferment period and time required to process any application for forgiveness. The Note shall be due on March 1, 2026, or as determined by the Small Business Administration and Department of the Treasury.

As of March 31, 2021, and December 31, 2020 Debt consisted of the following:

	March 31,			December 31,
	2021			2020
Loan payable – SBA EIDL		$	199,000		$	199,000
Loan payable – SBA PPP			100,000			100,000
Less current portion			(14,622)			(69,551)
Total debt, net of current portion		$	284,378		$	229,449

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NOTE 8 - STOCK OPTIONS AND WARRANTS

3 Months Ended

Mar. 31, 2021

Disclosure Text Block [Abstract]

NOTE 8 - STOCK OPTIONS AND WARRANTS

NOTE 8 - STOCK OPTIONS AND WARRANTS

During the three months ended March 31, 2021 and 2020, the Company granted 400,000 and 150,000 options for services, respectively. During the three months ended March 31, 2021 and 2020, the Company recognized expense of $11,283 and $10,408, respectively, for options that vested during the periods pursuant to ASC Topic 718. As of March 31, 2021 total remaining amount of compensation expense to be recognized in future periods is

$22,745.

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 March 31, 2021 the Company has a total of 75,000 options issued under the 2011 Plan. On September 11, 2015 the Board of Directors adopted the Omnitek Engineering Corp. 2015 Long Term Incentive Plan (the “2015 Plan”), under which 2,500,000 shares of the Company’s Common Stock were reserved for issuance of both Incentive Stock Options to employees only and Non-Qualified Stock Options to employees and consultants at its discretion. As of March 31, 2021 the Company has a total of 1,915,556 options issued under the 2015 Plan. In October 2017, the Company’s shareholders approved its 2017 Long-Term Incentive Plan (the “2017 Plan”). Under the 2017 plan, the Company may issue up to 5,000,000 shares of both Incentive Stock Options to employees only and Non-Qualified Stock Options to employees and consultants at its discretion. As of March 31, 2021, the

Company has a total of 1,008,333 options issued under the 2017 Plan. During the three months ended March 31, 2021 and 2020 the Company issued -0- and -0- warrants, respectively.

The Company recognizes compensation expense for stock-based awards expected to vest on a straight-line basis over the requisite service period of the award based on their grant date fair value.  The Company estimates the fair

value of stock options using a Black-Scholes option pricing model which requires management to make estimates for certain assumptions regarding risk-free interest rate, expected life of options, expected volatility of stock and expected dividend yield of stock. When determining expected volatility, the Company considers the historical performance of the Company’s stock, as well as implied volatility. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant, based on the options’ expected term. The expected term of the options is based on the Company’s evaluation of option holders’ exercise patterns and represents the period of time that options are expected to remain unexercised. The Company uses historical data to estimate the timing and amount of forfeitures.

The following table presents the assumptions used to estimate the fair values of the stock options granted:

	March 31, 2021	March 31, 2020
Expected volatility	201 %	159 %
Expected dividends	0 %	0 %
Expected term	7 Years	7 Years
Risk-free interest rate	1.2 %	0.60 %

A summary of the status of the options and warrants granted at March 31, 2021 and December 31, 2020 and changes during the periods then ended is presented below:

	March 31,			December 31,
	2021			2020
			Weighted-Average			Weighted-Average
	Shares		Exercise Price	Shares		Exercise Price
Outstanding at beginning of year	2,890,556	$	0.20	2,940,556	$	0.25
Granted	400,000		0.11	150,000		0.06
Exercised	-		-	-		-
Expired or cancelled	-		-	(200,000)		0.87
Outstanding at end of period	3,290,556		0.19	2,890,556		0.20
Exercisable	2,998,889	$	0.19	2,882,223	$	0.20

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

Range of Exercise Prices	Number Outstanding	Weighted-Average Remaining Contractual Life	Number Exercisable	Weighted-Average Exercise Price
$0.01-0.99	3,290,556	3.71 years	2,998,889	0.19

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NOTE 9 - SUBSEQUENT EVENT

3 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

NOTE 9 - SUBSEQUENT EVENT

NOTE 9 - SUBSEQUENT EVENT

The fourth amendment to the Company’s lease for approximately 21,786 square feet of space at 1333 Keystone Way, Suite 101, Vista, CA expired on August 31, 2020. No lease extension was negotiated at the time and the Company is currently occupying the space on a month-to-month basis. Management is now considering downsizing the facility and has commenced the search for a new space. In agreement with the landlord, a move-out date of July 15, 2021 is targeted.

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2021

Policy Text Block [Abstract]

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

Revenue Recognition

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

We recognize revenue on various products and services as follows:

Products - 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).

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.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to a customer and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority

of Omnitek’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct.

Performance Obligations Satisfied Over Time

Revenues for Omnitek’s long-term contracts that satisfy the criteria for over time recognition (formerly known as percentage-of-completion method) is recognized as the work progresses. The majority of the revenue is derived from long-term engine development agreements that typically span between 12 to 24 months. Omnitek’s long-term contracts will continue to be recognized over time because our typical contract is for a customized asset with no alternative use and generally the Company has a right to payment for work completed to date. Under the new revenue standard, the cost-to-cost measure of progress continues to best depict the transfer of control of assets to the customer, which occurs as the Company incurs costs. Contract costs include labor and material. Revenue from products and services transferred to customers over time accounted for 0% and 0% of revenue for the periods ended March 31, 2021 and 2020, respectively.

Performance Obligations Satisfied at a Point in Time

Revenue from product sales is recognized at a point in time. These sales predominantly contain a single delivery element and revenue is recognized at a single point in time when ownership, risk and rewards transfer. Upon fulfilment of the performance obligation, the customer is provided an invoice demonstrating transfer of control to the customer. Revenue from goods and services transferred to customers at a point in time accounted for 100% and 100% of revenue for the periods ended March 31, 2021 and 2020, respectively.

Assurance-type warranties are the only warranties provided by the Company and, as such, Omnitek does not recognize revenue on warranty-related work. Omnitek generally provides a one-year warranty for products that it sells. Warranty claims historically have been insignificant.

Pre-contract costs are generally not incurred by the Company.

Contract Estimates

Accounting for long-term contracts involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, Omnitek estimates the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognizes that profit over the life of the contract.

Variable Consideration

The transaction price for contracts may include variable consideration, which includes increases to transaction price for approved and unapproved change orders, claims and incentives, and reductions to transaction price for liquidated damages. Variable consideration historically has been insignificant.

Disaggregation of Revenue

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

	For the three months ended March 31,			For the three months ended March 31,
	2021			2020
Segments	Consumer Products	Long-term Contract	Total	Consumer Products	Long-term Contract	Total
Domestic	$ 132,782	-	132,782	$ 178,753	-	178,753
International	85,331	-	85,331	52,184	-	52,184
	$ 218,113	-	218,113	$ 230,937	-	230,937
Filters	$ 104,356	-	104,356	$ 112,042	-	112,042
Components	105,287	-	105,287	118,895	-	118,895
Engineering Services	8,470	-	8,470	-	-	-
	$ 218,113	-	218,113	$ 230,937	-	230,937

Inventory

Inventory

Inventory is stated at the lower of cost or market.  The Company’s inventory consists of finished goods and raw material and is located in Vista, California, consisting of the following:

Location : Vista, CA		March 31, 2021		December 31, 2020
Raw materials	$	914,131	$	917,567
Finished goods		951,423		962,608
Work in progress		-		-
Allowance for obsolete inventory		(1,083,210)		(1,058,309)
Total	$	782,344	$	821,866

The Company has established an allowance for obsolete inventory.  Expense for obsolete inventory was $24,901 and $25,052, for the periods ended March 31, 2021 and March 31, 2020, respectively.

Property and Equipment

Property and Equipment

Property and equipment at March 31, 2021 and December 31, 2020 consisted of the following:

	March 31,		December 31,
	2021		2020
Production equipment	$	64,673	$	64,673
Computers/Office equipment		28,540		28,540
Tooling equipment		12,380		12,380
Leasehold Improvements		42,451		42,451
Less: accumulated depreciation		(146,913)		(146,778)
Total	$	1,131	$	1,266

Depreciation expense for the periods ended March 31, 2021 and March 31, 2020 was $135 and $135, respectively.

Basic and Diluted Loss Per Share

Basic and Diluted Loss per Share

The computation of basic earnings per share of common stock is based on the weighted average number of shares outstanding during the periods presented. The computation of fully diluted earnings per share includes common stock equivalents outstanding at the balance sheet date. The Company had 2,998,889 and 2,857,223 stock options and warrants that would have been included in the fully diluted earnings per share as of March 31, 2021 and March 31, 2020, respectively.  However, the common stock equivalents were not included in the computation of the loss per share computation because they are anti dilutive.

Income Taxes

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 March 31, 2021 and December 31, 2020 the Company had no accrued interest or penalties related to uncertain tax positions. The Company files an income tax return in the U.S. federal jurisdiction and the state of California. With few exceptions, the Company is no longer subject to U.S. federal, state, and local, or non-U.S. income tax examinations by tax authorities for years before 2012.

Liquidity and Going Concern

Liquidity and Going Concern

Historically, the Company has incurred net losses and negative cash flows from operations.  As of March 31, 2021, the Company had an accumulated deficit of $21,466,036 and total stockholders’ deficit of $863,245.  At March 31, 2021, the Company had current assets of $931,795 including cash of $59,890, and current liabilities of $1,526,073, resulting in negative working capital of $(594,278). For the three months ended March 31, 2021, the Company reported a net loss of $395 and net cash used in operating activities of $100,839. Management believes that based on its operating plan, the projected sales for 2021, combined with funds available from its working capital will be sufficient to fund operations for the next twelve months.  However, there can be no assurance that operations and operating cash flows will continue at the current levels or improve in the near future. Whether, and when, the Company can attain profitability and positive cash flows from operations is uncertain. The Company is also uncertain whether it can raise additional capital. These uncertainties cast substantial doubt upon the Company’s ability to continue as a going concern. Our financial statements have been prepared on a going concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of operations. The financial statements do not include any adjustments relating to the recoverability or classification of recorded asset amounts or the amounts or classification of liabilities should we be unable to continue as a going concern.     

Recent Accounting Pronouncements

Recent Accounting Pronouncements

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

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2021

Disclosure Text Block [Abstract]

Schedule of Disaggregation of Revenue

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

	For the three months ended March 31,			For the three months ended March 31,
	2021			2020
Segments	Consumer Products	Long-term Contract	Total	Consumer Products	Long-term Contract	Total
Domestic	$ 132,782	-	132,782	$ 178,753	-	178,753
International	85,331	-	85,331	52,184	-	52,184
	$ 218,113	-	218,113	$ 230,937	-	230,937
Filters	$ 104,356	-	104,356	$ 112,042	-	112,042
Components	105,287	-	105,287	118,895	-	118,895
Engineering Services	8,470	-	8,470	-	-	-
	$ 218,113	-	218,113	$ 230,937	-	230,937

Schedule of Inventory

Inventory is stated at the lower of cost or market.  The Company’s inventory consists of finished goods and raw material and is located in Vista, California, consisting of the following:

Location : Vista, CA		March 31, 2021		December 31, 2020
Raw materials	$	914,131	$	917,567
Finished goods		951,423		962,608
Work in progress		-		-
Allowance for obsolete inventory		(1,083,210)		(1,058,309)
Total	$	782,344	$	821,866

Schedule of Property and Equipment

Property and equipment at March 31, 2021 and December 31, 2020 consisted of the following:

	March 31,		December 31,
	2021		2020
Production equipment	$	64,673	$	64,673
Computers/Office equipment		28,540		28,540
Tooling equipment		12,380		12,380
Leasehold Improvements		42,451		42,451
Less: accumulated depreciation		(146,913)		(146,778)
Total	$	1,131	$	1,266

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NOTE 3 - CONTRACT ASSETS AND LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2021

Disclosure Text Block [Abstract]

Schedule of Costs in Excess of Billings

The table below reconciles the net excess billings to the amounts included in the balance sheets at those dates:

	March 31,		December 31,
	2021		2020
Contract assets	$	13,221	$	13,221
Contract liabilities	$	(75,000)	$	(75,000)
Net amount of contract liabilities in excess of
Contract assets	$	(61,779)	$	(61,779)

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NOTE 5 - RELATED PARTY TRANSACTIONS (Tables)

3 Months Ended

Mar. 31, 2021

Table Text Block Supplement [Abstract]

Schedule of Accrued Management Fees

As of March 31, 2021 and December 31, 2020 the accrued management fees consisted of the following:

	March 31,			December 31,
	2021			2020
Amounts due to the president		$	603,235		$	595,158
Total		$	603,235		$	595,158

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NOTE 6 - NOTES PAYABLE - RELATED PARTY TRANSACTIONS (Tables)

3 Months Ended

Mar. 31, 2021

Table Text Block Supplement [Abstract]

Schedule of Note Payable Related Party

As of March 31, 2021, and December 31, 2020 Note Payable – Related Party consisted of the following:

	March 31,			December 31,
	2021			2020
Note payable, related party, current portion		$	15,000		$	15,000
Total		$	15,000		$	15,000

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Note 7 - DEBT (Tables)

3 Months Ended

Mar. 31, 2021

Table Text Block Supplement [Abstract]

Schedule of debt

As of March 31, 2021, and December 31, 2020 Debt consisted of the following:

	March 31,			December 31,
	2021			2020
Loan payable – SBA EIDL		$	199,000		$	199,000
Loan payable – SBA PPP			100,000			100,000
Less current portion			(14,622)			(69,551)
Total debt, net of current portion		$	284,378		$	229,449

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NOTE 8 - STOCK OPTIONS AND WARRANTS (Tables)

3 Months Ended

Mar. 31, 2021

Table Text Block Supplement [Abstract]

Schedule of Assumptions Used to Estimate the Fair Values of Stock Options Granted

The following table presents the assumptions used to estimate the fair values of the stock options granted:

	March 31, 2021	March 31, 2020
Expected volatility	201 %	159 %
Expected dividends	0 %	0 %
Expected term	7 Years	7 Years
Risk-free interest rate	1.2 %	0.60 %

Schedule of Stock Options

A summary of the status of the options and warrants granted at March 31, 2021 and December 31, 2020 and changes during the periods then ended is presented below:

	March 31,			December 31,
	2021			2020
			Weighted-Average			Weighted-Average
	Shares		Exercise Price	Shares		Exercise Price
Outstanding at beginning of year	2,890,556	$	0.20	2,940,556	$	0.25
Granted	400,000		0.11	150,000		0.06
Exercised	-		-	-		-
Expired or cancelled	-		-	(200,000)		0.87
Outstanding at end of period	3,290,556		0.19	2,890,556		0.20
Exercisable	2,998,889	$	0.19	2,882,223	$	0.20

Summary of the Status of the Options

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

Range of Exercise Prices	Number Outstanding	Weighted-Average Remaining Contractual Life	Number Exercisable	Weighted-Average Exercise Price
$0.01-0.99	3,290,556	3.71 years	2,998,889	0.19

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Revenue Recognition: Performance Obligations (Details)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Performance Obligations Satisfied Over Time [Member]
Revenue percentage	0.00%	0.00%
Performance Obligations Satisfied at a Point in Time [Member]
Revenue percentage	100.00%	100.00%

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES : Revenue Recognition: Disaggregation of Revenue (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Consumer Products	$ 218,113	$ 230,937
Long-term Contract	0	0
Revenues	218,113	230,937
Filters
Consumer Products	104,356	112,042
Long-term Contract	0	0
Revenues	104,356	112,042
Components
Consumer Products	105,287	118,895
Long-term Contract	0	0
Revenues	105,287	118,895
Engineering Services
Consumer Products	8,470	0
Long-term Contract	0	0
Revenues	8,470	0
Domestic
Consumer Products	132,782	178,753
Long-term Contract	0	0
Revenues	132,782	178,753
International
Consumer Products	85,331	52,184
Long-term Contract	0	0
Revenues	$ 85,331	$ 52,184

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Inventory (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Text Block [Abstract]
Expense for Obsolete Inventory	$ 24,901	$ 25,052

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Inventory: Schedule of Inventory (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Text Block [Abstract]
Raw materials	$ 914,131	$ 917,567
Finished goods	951,423	962,608
Work in progress	0	0
Allowance for obsolete inventory	(1,083,210)	(1,058,309)
Total	$ 782,344	$ 821,866

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Property and Equipment: Schedule of Property and Equipment (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Less: accumulated depreciation	$ (146,913)	$ (146,778)
Total	1,131	1,266
Production Equipment
Property, Plant and Equipment, Gross	64,673	64,673
Computer Equipment
Property, Plant and Equipment, Gross	28,540	28,540
Tools, Dies and Molds
Property, Plant and Equipment, Gross	12,380	12,380
Leasehold Improvements
Property, Plant and Equipment, Gross	$ 42,451	$ 42,451

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Property and Equipment (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Text Block [Abstract]
Depreciation expense	$ 135	$ 135

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Basic and Diluted Loss Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Text Block [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2,998,889	2,857,223

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Income Taxes (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Disclosure Text Block [Abstract]
Accrued interest and penalties	$ 0	$ 0

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Liquidity and Going Concern (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2019
Text Block [Abstract]
Accumulated deficit	$ (21,466,036)		$ (21,465,641)
Total Stockholders' Equity	(863,245)	$ (516,174)	(874,133)	$ (430,877)
Total Current Assets	931,795		961,226
Cash	59,890	26,817	60,729	$ 20,236
Total Current Liabilities	1,526,073		$ 1,621,456
Working Capital	(594,278)
Net loss	(395)	(126,705)
Net cash used in operating activities	$ (100,839)	$ (24,419)

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NOTE 3 - CONTRACT ASSETS AND LIABILITIES: Net excess billings (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Notes to Financial Statements
Contract assets	$ 13,221	$ 13,221
Contract liabilities	(75,000)	(75,000)
Net amount of contract liabilities in excess of Contract assets	$ (61,779)	$ (61,779)

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NOTE 4 - COMMITMENTS (Details)	3 Months Ended
	Mar. 31, 2021 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Expiration date	Aug. 31, 2020
Lease payment	$ 14,161
Security deposit	14,280
Commitments outstanding balance	$ 54,361

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NOTE 5 - RELATED PARTY TRANSACTIONS (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Text Block [Abstract]
Accounts receivable - related parties	$ 22,325	$ 17,345
Accounts payable - related parties	$ 123,360	$ 121,527

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NOTE 5 - RELATED PARTY TRANSACTIONS : Schedule of Related Party Transactions (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Accrued management compensation	$ 603,235	$ 595,158
President
Accrued management compensation	$ 603,235	$ 595,158

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NOTE 6 - NOTES PAYABLE - RELATED PARTIES (Details) - Chief Executive Officer [Member] - Notes Payable Related Party	1 Months Ended
	Jan. 19, 2017 USD ($)
Promissory note	$ 15,000
Debt Instrument, Interest Rate During Period	5.00%
Debt Instrument, Maturity Date	Jan. 19, 2022

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NOTE 6 - NOTES PAYABLE - RELATED PARTIES : Schedule of Note Payable Related Party (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Notes to Financial Statements
Notes payable, related party, current portion	$ 15,000	$ 15,000
Total	$ 15,000	$ 15,000

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NOTE 7 - DEBT (Details) - USD ($)		1 Months Ended		3 Months Ended
	Mar. 01, 2021	May 28, 2020	Apr. 21, 2020	Mar. 31, 2021	Mar. 31, 2020	Mar. 03, 2021	Jan. 30, 2021
Proceeds from loan				$ 100,000	$ 0
SBA EIDL Loan
Proceeds from loan			$ 199,000
Interest rate		1.00%	3.75%
Interest payments			$ 970
Maturity date			Apr. 21, 2050
Accrued interest							$ 655
SBA PPP Loan
Proceeds from loan		$ 100,000
Maturity date		May 22, 2022
Principal amount							$ 100,000
PPP Loan
Proceeds from loan	$ 100,000
Interest rate						1.00%

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NOTE 7 - DEBT: Debt (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Less current portion	$ (14,622)	$ (69,551)
Total	284,378	229,449
SBA EIDL Loan
Loan payable	199,000	199,000
SBA PPP Loan
Loan payable	$ 100,000	$ 100,000

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NOTE 8 - STOCK OPTIONS AND WARRANTS (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	Sep. 11, 2015	Aug. 03, 2011
Granted	400,000		150,000
Expense recognized for options and warrants vested	$ 11,283	$ 10,408
Total remaining amount of compensation expense to be recognized in future periods	$ 22,745
Shares outstanding	3,290,556		2,890,556	2,940,556
Warrant
Granted	0	0
2017 Long Term Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	5,000,000
Shares outstanding	1,008,333
Employee Stock Option
Granted	400,000	150,000
Employee Stock Option | 2015 Long Term Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized					2,500,000
Shares outstanding	1,915,556
Employee Stock Option | 2011 Long-Term Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized						1,000,000
Shares outstanding	75,000

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NOTE 8 - STOCK OPTIONS AND WARRANTS : Schedule of Assumptions Used (Details)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Text Block [Abstract]
Expected volatility	201.00%	159.00%
Expected dividends	0.00%	0.00%
Expected term	7 years	7 years
Risk-free interest rate	1.20%	0.60%

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NOTE 8 - STOCK OPTIONS AND WARRANTS : Schedule of Stock Options and Warrants, Activity (Details) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Text Block [Abstract]
Outstanding at beginning of year	2,890,556	2,940,556
Outstanding, Weighted Average Exercise Price at beginning of year	$ 0.20	$ 0.25
Granted	400,000	150,000
Granted, Weighted Average Exercise Price	$ 0.11	$ 0.06
Exercises	0	0
Exercised, Weighted Average Exercise	$ 0.00	$ 0.00
Expired or cancelled	0	(200,000)
Expired or cancelled, Weighted Average Exercise Price	$ 0.00	$ 0.87
Outstanding at end of year	3,290,556	2,890,556
Outstanding, Weighted Average Exercise Price at end of year	$ 0.19	$ 0.20
Exercisable	2,998,889	2,882,223
Exercisable, Weighted Average Exercise Price	$ 0.19	$ 0.20

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NOTE 8 - STOCK OPTIONS AND WARRANTS: Summary of the Status of the Options and Warrants Outstanding (Details) - $0.01-0.99	3 Months Ended
	Mar. 31, 2021 $ / shares shares
Exercise Price Range, Lower Range Limit	$ 0.01
Exercise Price Range, Upper Range Limit	$ 0.99
Number Outstanding | shares	3,290,556
Weighted-Average Remaining Contractual Life	3 years 8 months 16 days
Number Exercisable | shares	2,998,889
Weighted-Average Exercise Price	$ 0.19