Omnitek Engineering Corp. Files Q1 2024 10-Q

TL;DR

Omnitek Engineering Corp. filed its Q1 2024 10-Q. Financials and operations detailed.

AI Summary

Omnitek Engineering Corp. filed its 10-Q for the period ending March 31, 2024. The filing details financial performance and operational updates for the first quarter of 2024. Specific financial figures and business developments are outlined within the report.

Why It Matters

This filing provides investors with the latest financial health and operational status of Omnitek Engineering Corp., crucial for making informed investment decisions.

Risk Assessment

Risk Level: low — This is a standard quarterly filing with no immediate red flags or significant negative news indicated in the provided header information.

Key Players & Entities

• Omnitek Engineering Corp. (company) — Filer of the 10-Q
• 20240331 (date) — End of the reporting period
• 20240517 (date) — Filing date
• 760-591-0089 (phone_number) — Business phone number

FAQ

Key Financial Figures

• $53,499 — et cash used in operating activities of $53,499. Management believes that based on its
• $37,290 — enses included in operating expenses of $37,290. Future minimum payments for monthly b
• $1,325 — December 31, 2023, the Company was owed $1,325 and $1,304, respectively, by an entity
• $1,304 — , 2023, the Company was owed $1,325 and $1,304, respectively, by an entity controlled
• $1,050 — lls for monthly installment payments of $1,050 commencing on July 4, 2021. The unpaid
• $7,940 — ransfer the unpaid principal balance of $7,940 to the Working Capital Promissory Note.
• $10,000 — r 4, 2023 the Company made a payment of $10,000 reducing the outstanding balance to $10
• $15,000 — ransfer the unpaid principal balance of $15,000 to the Working Capital Promissory Note.
• $20,000 — O, with an Initial Principal Balance of $20,000, and to evidence any future additional
• $10,970 — of March 31, 2024, accrued interest was $10,970. Current monthly payments are applied t
• $0 — e to be recognized in future periods is $0. On September 11, 2015, the Board of D

Filing Documents

• omtk-20240331.htm (10-Q) — 411KB
• omtk_ex31z1.htm (EX-31.1) — 8KB
• omtk_ex31z2.htm (EX-31.2) — 8KB
• omtk_ex32.htm (EX-32) — 6KB
• omtkex31z1_1.jpg (GRAPHIC) — 3KB
• omtkex31z2_1.jpg (GRAPHIC) — 3KB
• omtkex32_1.jpg (GRAPHIC) — 3KB
• 0001096906-24-001175.txt ( ) — 2867KB
• omtk-20240331_cal.xml (EX-101.CAL) — 28KB
• omtk-20240331_def.xml (EX-101.DEF) — 65KB
• omtk-20240331_lab.xml (EX-101.LAB) — 173KB
• omtk-20240331_pre.xml (EX-101.PRE) — 154KB
• omtk-20240331.xsd (EX-101.SCH) — 35KB
• omtk-20240331_htm.xml (XML) — 353KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements 3 Condensed Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023 3 Condensed Statements of Operations for the three months ended March 31, 2024 and March 31, 2023 (unaudited) 4 Condensed Statements of Cash Flows for the three months ended March 31, 2024 and March 31, 2023 (unaudited) 5 Condensed Statements of Stockholders' Deficit as of March 31, 2024 and March 31, 2023 (unaudited) 6 Notes to the Unaudited Condensed Financial Statements 7

Management's Discussion and Analysis of the Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of the Financial Condition and Results of Operations 15

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 18

Controls and Procedures

Item 4. Controls and Procedures 18

- OTHER INFORMATION

PART II - OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 19

Risk Factors

Item 1A. Risk Factors 19

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 19

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 19

Mine safety disclosures

Item 4. Mine safety disclosures 19

Other Information

Item 5. Other Information 19

Exhibits

Item 6. Exhibits 20 Page 2 PART I FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS OMNITEK ENGINEERING CORP. Condensed Balance Sheets March 31, 2024 December 31, 2023 (Unaudited) ASSETS CURRENT ASSETS Cash $ 20,204 $ 73,703 Accounts receivable, net 17,301 12,233 Accounts receivable – related parties 1,325 1,304 Inventories , net 326,637 370,838 Deposits 161,258 24,443 Total Current Assets 526,725 482,521 LONG-TERM ASSETS Property & Equipment, net 5,230 5,667 Operating lease – right-of-use asset 312,813 345,459 Long-term deposit 13,514 13,514 Total Long-Term Assets 331,557 364,640 TOTAL ASSETS $ 858,282 $ 847,161 LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES Accounts payable and accrued expenses $ 326,055 $ 323,236 Accrued management compensation 638,042 635,158 Accounts payable - related parties 132,520 131,285 Notes payable - related parties 37,940 37,940 Convertible notes payable – related party 10,000 10,000 Customer deposits 409,318 310,025 Operating lease liabilities - current 142,347 131,868 Total Current Liabilities 1,696,222 1,579,512 LONG-TERM LIABILITIES Loans payable – SBA, net of current portion 199,000 199,000 Operating lease liabilities – long-term 213,245 254,339 Total Long-term Liabilities 412,245 453,339 Total Liabilities 2,108,467 2,032,851 STOCKHOLDERS' DEFICIT Common stock, 125,000,000 shares authorized; no par value; 21,948,091 and 21,948,091 shares, respectively issued and outstanding 8,607,086 8,607,086 Additional paid-in capital 12,069,534 12,067,571 Accumulated deficit ( 21,926,805 ) ( 21,860,347 ) Total Stockholders' Deficit ( 1,250,185 ) ( 1,185,690 ) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 858,282 $ 847,161 The accompanying notes are an integral part of these financial statements. Page 3 OMNITEK ENGINEERING CORP. Condensed Statements of Operations (unaudited) For the Three Months Ended March 31, 2024 For the Thr

Notes to Financial Statements

Notes to Financial Statements March 31, 2024 (unaudited) NOTE 1 - CONDENSED FINANCIAL STATEMENTS The accompanying condensed 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, 2024, 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, 2023, audited financial statements. The results of operations for the periods ended March 31, 2024, and March 31, 2023, 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) al

Notes to Financial Statements

Notes to Financial Statements March 31, 2024 (unaudited) NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. Disaggregation of Revenue The following table presents Omnitek's revenues disaggregated by region and product type: For the three months ended For the three months ended March 31, 2024 March 31, 2023 Segments Consumer Products Total Consumer Products Total Domestic $ 80,409 80,409 $ 90,319 90,139 International 156,668 156,668 134,885 134,885 $ 237,077 237,077 $ 225,204 225,204 Filters $ 68,388 68,388 $ 155,418 155,418 Components 168,689 168,689 69,291 69,291 Engineering Services - - 495 495 $ 237,077 237,077 $ 225,204 225,204 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, December 31, 2024 2023 Raw materials $ 782,652 $ 799,642 Finished goods 467,737 494,074 Total $ 1,250,389 $ 1,293,716 Allowance for obsolete inventory Opening allowance 922,878 927,755 Additional allowance 874 84,068 Earlier year allowance write back 0 ( 88,945 ) Closing allowance 923,752 922,878 Total $ 326,637 $ 370,838 The Company has established an allowance for obsolete inventory. Expense for obsolete inventory was $ 0.00 and $ 0.00 , for the periods ended March 31, 2024, and March 31, 2023, respectively. Property and Equipment Property and equipment at March 31, 2024, and December 31, 2023, consisted of the following: March 31, December 31, 2024 2023 Production equipment $ 68,456 $ 68,456

Notes to Financial Statements

Notes to Financial Statements March 31, 2024 (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 1,890,000 and 2,720,556 stock options and warrants that would have been included in the fully diluted earnings per share as of March 31, 2024, and March 31, 2023, respectively. However, the common stock equivalents were not included in the 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, 2024, and December 31, 2023, the Company had no accrued interest or penalties related to uncertain tax positions. The Company files an incom

Notes to Financial Statements

Notes to Financial Statements March 31, 2024 (unaudited) NOTE 3 – CUSTOMER DEPOSITS The customers deposit account relates to payments received from customers before product has been shipped. When the product is shipped the Company recognizes the associated revenue by reclassifying the customer deposit to the appropriate revenue account. By contrast, the Contract Liabilities account relates to long-term contracts where revenue is recognized over the term of the contract. For the periods ended March 31, 2024 and December 31, 2023, the balance due under customer deposits was $ 409,318 and $ 310,025 , respectively. NOTE 4 – OPERATING LEASE The Company's leases consist of an operating lease for general office space and warehouse facilities. The Company recognizes rent expense for this lease on a straight-line basis over the lease term. Because the lease does not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the lease Commencement Date in determining the present value of future lease payments. On June 3, 2021, the Company entered into a lease for the premises located at 1345 Specialty Drive, Vista, CA, containing approximately 11,751 square feet of rentable area. The lease commenced on July 1, 2021, and expires on June 30, 2026. The monthly base rent under the lease is $ 9,988 per month and monthly operating expenses during the term of the lease, subject to adjustment under the lease, is $ 1,175 per month. During the quarter ended March 31, 2024, cash paid for amounts included in the measurement of operating lease liabilities was $ 35,259 and the Company recorded operating lease expenses included in operating expenses of $37,290. Future minimum payments for monthly base rent due under the initial lease term are currently estimated to be as follows: Years ending December 31, 2024 (remaining) 112,815 2025 176,268 2026 88,134 Total lease payments $ 377,217 Less: Imputed int

Notes to Financial Statements

Notes to Financial Statements March 31, 2024 (unaudited) NOTE 5 - RELATED PARTY TRANSACTIONS Accounts Payable – Related Parties The Company regularly incurs expenses that are paid to related parties for purchases of goods and services from related parties. As of March 31, 2024, and December 31, 2023, the Company owed a related parties for such goods and services in the amounts of $ 132,520 and $ 131,285 , respectively. Accounts Receivable – Related Parties As of March 31, 2024, and December 31, 2023, the Company was owed $1,325 and $1,304, respectively, by an entity controlled by the Company's CEO for the purchase of products and services. Accrued Management Compensation For the periods ended March 31, 2024, and December 31, 2023, the Company's president was due amounts for services performed for the Company. As of March 31, 2024, and December 31, 2023, the accrued management fees consisted of the following: March 31, December 31, 2024 2023 Amounts due to the Company's CEO $ 638,042 $ 635,158 Total $ 638,042 $ 635,158 NOTE 6 – NOTES PAYABLE - RELATED PARTY Convertible Notes – Related Parties On June 4, 2021, the Company issued an unsecured convertible promissory note for $ 30,000 to its CEO. Simple interest at the rate of 8 % per annum accrues on the unpaid principal balance of the note. The note calls for monthly installment payments of $1,050 commencing on July 4, 2021. The unpaid principal and accrued interest was due and payable on or before June 4, 2023. On the maturity date, June 4, 2023, the lender elected to transfer the unpaid principal balance of $7,940 to the Working Capital Promissory Note. On June 4, 2021, the Company issued a convertible promissory note for $ 20,000 to a board member. The note has an annual interest rate of 8 % and is unsecured. The principal amount of the note and all accrued interest is due and payable on or before December 4, 2021. On December 14, 2021, the maturity date of convertible promissor

Notes to Financial Statements

Notes to Financial Statements March 31, 2024 (unaudited) 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, 2018. The maturity date of the note was extended annually for additional one-year period, with a current due date of January 19, 2024. On September 15, 2023, the lender elected to transfer the unpaid principal balance of $15,000 to the Working Capital Promissory Note. On March 23, 2023, the Company issued a Working Capital Promissory Note, in favor of its CEO, evidencing the additional loans to the Company by the CEO, with an Initial Principal Balance of $20,000, and to evidence any future additional loans by the CEO to the Company thereafter. Pursuant to the terms of the note, the unpaid principal and accrued simple interest at the rate of 8.0% per annum (" Applicable Rate ") shall be due and payable on or before March 22, 2024, (the " Maturity Date "). The principal amount of the note shall be increased by the amount of any additional advances of funds made by the CEO to the Company, from time-to-time, with interest thereon at the applicable Rate, from the date of such advance. On March 22, 2024 the Maturity Date of the Working Capital Promissory Note was extended to March 23, 2026. As of March 31, 2024, and December 31, 2023, Note Payable – Related Party consisted of the following: March 31, December 31, 2024 2023 Note payable, related party $ 37,940 $ 37,940 Total $ 37,940 $ 37,940 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 Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") adminitstered by the U.S. Small Business Administration. The Company received total proceeds of $ 199,000 from

Notes to Financial Statements

Notes to Financial Statements March 31, 2024 (unaudited) NOTE 8 - STOCKHOLDERS' DEFICIT (Continued) Topic 718. As of March 31, 2024, the total remaining amount of compensation expense to be recognized in future periods is $0. 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. On February 9, 2024, 855,556 option issued under the 2015 Plan expired. As of March 31, 2024, the Company has a total of 290,000 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 Compa

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