10-K: Omnitek Engineering Corp. Reports Annual Results for Fiscal Year 2024

Sentiment:

Annual Results 15 April 2025 5:18 PM

📋All filings for Omnitek Engineering CORP

Omnitek Engineering Corp. reports a slight decrease in revenue and a reduced net loss for the fiscal year ended December 31, 2024, while acknowledging ongoing concerns about its ability to continue as a going concern.

Delay expectedThe trial date for the legal proceedings is set for December 8, 2025.

Capital raiseThe company may need to raise additional capital to facilitate growth and support its long-term product development, manufacturing, and marketing programs.The Company has no established bank-financing arrangements, and it is not anticipated that we will secure any bank financing in the near future.Therefore, it is likely that we may need to seek additional financing through subsequent future public or private sales of its 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.

Worse than expectedThe company's revenue decreased slightly compared to the previous year.The company has a negative working capital.The company acknowledges substantial doubt about its ability to continue as a going concern.The company identified material weaknesses in internal control over financial reporting.

Summary

Omnitek Engineering Corp. reported revenues of $1,019,726 for 2024, a slight decrease of 3.4% compared to $1,055,314 in 2023.
The cost of goods sold decreased to $561,853 in 2024 from $644,660 in 2023.
Gross margin increased to $457,873 in 2024 from $410,654 in 2023, with gross margin as a percentage of sales increasing to 45% from 39%.
Operating expenses remained relatively stable at $606,373 in 2024 compared to $606,794 in 2023.
The net loss decreased to $167,137, or ($0.01) per share, in 2024 from $215,406, or ($0.01) per share, in 2023.
The company realized positive cash flow from operations of $30,077 for the year ended December 31, 2024, compared with positive cash flow of $17,211 for the year ended December 31, 2023.
As of December 31, 2024, the Company had a negative working capital of $1,296,277.
The company acknowledges substantial doubt about its ability to continue as a going concern.

Sentiment

Score: 4

Explanation: The document presents a mixed picture. While the company has reduced its net loss and improved its gross margin, it faces significant challenges, including negative working capital, going concern uncertainties, and material weaknesses in internal controls. The overall sentiment is cautiously negative.

Positives

Gross margin improved to 45% in 2024 from 39% in 2023, indicating improved efficiency or pricing.
Net loss decreased to $167,137 in 2024 from $215,406 in 2023, suggesting improved cost management or revenue generation.
Positive cash flow from operations increased to $30,077 in 2024 from $17,211 in 2023, indicating better cash management.
The company is actively developing remediation plans to address material weaknesses in internal control over financial reporting.

Negatives

Revenue slightly decreased to $1,019,726 in 2024 from $1,055,314 in 2023.
The company had a negative working capital of $1,296,277 as of December 31, 2024.
The company acknowledges substantial doubt about its ability to continue as a going concern.
The company identified material weaknesses in internal control over financial reporting as of December 31, 2024, related to a lack of segregation of duties.

Risks

An overall economic downturn could negatively impact earnings.
Increases in the wholesale price of natural gas could reduce earnings.
Climate change, carbon neutral or energy efficiency legislation or regulations could restrict market opportunities.
A downturn in the trucking industry could materially adversely impact results of operations.
Unpredictability in the adoption, implementation and enforcement of increasingly stringent emission standards by multiple jurisdictions around the world could adversely affect the business.
The market for alternative fuel engines may not continue to develop according to expectations.
New products, including new engines developed, may not achieve widespread adoption.
The company maintains a significant investment in inventory, and a decline in customers purchases could lead to a decline in sales and profitability and cause the company to accumulate excess inventory.
The company could suffer warranty claims or be subject to product liability claims.
The price of the company's stock may be volatile and may decline in value.
The company is subject to foreign business, political and economic disruption risks.
The company may be subject to intellectual property rights claims.
The company has generated limited revenue from operations and may not generate any significant or sufficient revenue from its current operations to continue future operations.
Substantial expenditures will be required to enable Omnitek to conduct product research, manufacturing, marketing and distribution of its products.
An important element of Omniteks strategy for the marketing and release of its products is to enter into various arrangements with distribution and retail partners.
Approximately four suppliers accounted for 78% of products purchased for the year ended December 31, 2024.
The company operates in an ever-evolving field and is subject to the risk of technological obsolescence and competition.
Creditworthiness of distributors is an ongoing concern.
There is currently a limited public market for the Common Stock and there can be no assurance that an active trading market will develop or, if one does develop, that it will be maintained.
The company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934, which require the company to incur audit fees and legal fees in connection with the preparation of such reports.
The company may be exposed to potential risks resulting from requirements under Section 404 of the Sarbanes-Oxley Act of 2002.
The company's success in developing marketable products and achieving a competitive position will depend, in part, on its ability to retain qualified engineers, management and marketing personnel and in particular, to retain the services of Mr. Werner Funk.

Future Outlook

Management believes that based on its operating plan, the projected sales, combined with funds available from its working capital will be sufficient to fund operations for the next twelve months from the date these financial statements were issued; however, there can be no assurance that operations and operating cash flows will continue at the current levels or improve in the near future.

Management Comments

Management believes that the material weaknesses set forth above did not have any effect on the Company's financial results.

Industry Context

The company competes in a small segment of the transportation and energy arena, where most larger multinational corporations do not offer a complete solution for the markets the Company serves.

Comparison to Industry Standards

The document does not provide enough information to make a detailed comparison to industry standards.
Without specific data on competitors' financial performance, market share, or product offerings, it is difficult to assess Omnitek's relative position.

Legal Proceedings

On September 16, 2022, the Company received a Summons and was named as a cross-defendant in the matter of Olson-Ecologic Engine Testing Laboratories, LLC -vMichael Naylor, Omnitek Engineering Corp., and Moto Concerto, Inc.
Olson-Ecologics cross-complaint and allegations against Omnitek are without merit and Omnitek will vigorously defend the cross-complaint.
The trial date is set for December 8, 2025.

Related Party Transactions

The company regularly incurs expenses that are paid to related parties for purchases of goods and services from related parties.
As of December 31, 2024, and December 31, 2023, the Company owed board members for such goods and services $139,834 and $131,285 respectively.
As of December 31, 2024, and December 31, 2023, the Company was owed $3,088 and $1,304, respectively, by an entity controlled by the Companys CEO for the purchase of products and services.
During the periods ended December 31, 2024, and December 31, 2023, the Companys president was due amounts for services performed for the Company.
As of December 31, 2024, and December 31, 2023 the accrued management fees consisted of the following: $636,311 and $635,158 respectively.

Stakeholder Impact

Shareholders face the risk of potential dilution if the company raises additional capital through equity offerings.
Employees face uncertainty due to the company's going concern issues.
Customers may be concerned about the company's ability to fulfill orders and provide ongoing support.
Suppliers may be concerned about the company's ability to pay its bills.
Creditors face increased risk due to the company's financial difficulties.

Next Steps

The company intends to file additional patent applications to protect certain technology and improvements considered important to the development of the Company's business.
The company is actively developing remediation plans to address material weaknesses in internal control over financial reporting.

Key Dates

Date	Description
2001-10-09	Omnitek Engineering, Corp. was incorporated.
2001-10-10	Omnitek began operations.
2012-08-03	Omnitek adopted a Code of Ethics.
2015-09-11	The Board of Directors adopted the Omnitek Engineering Corp. 2015 Long-term Incentive Plan.
2017-06-30	The Board of Directors adopted the Omnitek Engineering Corp. 2017 Long-term Incentive Plan.
2017-10	Olson-Ecologic advised Omnitek that the California Energy Commission had terminated the project.
2017-10-27	The 2017 Plan was approved by the shareholders.
2020-04-21	The Company obtained a loan (the SBA EIDL Loan) under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
2021-06-03	The Company entered into a lease for the premises located at 1345 Specialty Drive #E, Vista, CA.
2021-07-01	The lease commenced.
2022-09-16	The Company received a Summons and was named as a cross-defendant in the matter of Olson-Ecologic Engine Testing Laboratories, LLC -vMichael Naylor, Omnitek Engineering Corp., and Moto Concerto, Inc.
2024-05-03	The Company entered into new Employment Agreement with Mr. Funk.
2025-04-15	As of this date, there were 21,948,091 shares of the registrants Common Stock outstanding.
2025-12-08	The trial date is set for the legal proceedings.
2026-06-30	The lease expires.

Keywords

Omnitek, Engineering, Alternative Fuel, Engine Conversion, Financial Results, Annual Report, Diesel Engines, Net Loss, Revenue, Going Concern

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