Omnitek Engineering Corp 10-Q for FY2023 Q2

Omnitek Engineering Corp (OMTK)

10-Q 2023-08-21 For: 2023-06-30

Added on April 06, 2026

About this 10-Q

Omnitek Engineering Corp filed this 10-Q on August 21, 2023, covering the quarter ended June 30, 2023 (FY2023 Q2).

Headline figures

Quarter ended June 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $251.72K; up 12.2% from $224.44K a year earlier
Net loss: $76.91K; compared with a net loss of $63.38K a year earlier

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

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

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

TABLE OF CONTENTS
	Page
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements	4

Condensed Balance Sheets as of June 30, 2023 (unaudited) and December 31, 2022	4

Condensed Statements of Operations for the three and six months ended June 30, 2023 and June 30, 2022 (unaudited)	5

Condensed Statements of Cash Flows for the six months ended June 30, 2023 and June 30, 2022 (unaudited)	6

Condensed Statements of Stockholders’ Deficit for the three and six months ended June 30, 2023 and June 30, 2022 (unaudited)	7

Notes to the Unaudited Condensed Financial Statements	8

Item 2. Management's Discussion and Analysis of the Financial Condition and Results of Operations	17

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 4. Mine Safety Disclosure	21

Item 5. Other Information	21

Item 6. Exhibits	22

	June 30,	December 31,
	2023	2022
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash	`$9,601`	`$56,379`
Accounts receivable, net	`38,686`	`10,180`
Accounts receivable – related parties	`1,251`	`2,252`
Inventories, net	`468,281`	`543,353`
Deposits	`8,492`	`7,657`
Total Current Assets	`526,311`	`619,821`

LONG-TERM ASSETS
Property & Equipment, net	`6,539`	`7,412`
Operating lease – right-of-use asset	`409,633`	`472,342`
Long-term deposit	`13,514`	`13,514`
Total Long-Term Assets	`429,686`	`493,268`

TOTAL ASSETS	`$955,997`	`$1,113,089`

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses	`$359,868`	`$353,591`
Accrued management compensation	`635,158`	`635,158`
Accounts payable - related parties	`134,053`	`127,192`
Notes payable - related parties	`42,940`	`15,000`
Convertible notes payable – related party	`20,000`	`32,827`
Customer deposits	`230,940`	`231,418`
Operating lease liabilities - current	`121,719`	`118,756`
Total Current Liabilities	`1,544,678`	`1,513,942`
LONG-TERM LIABILITIES
Loans payable – SBA, net of current portion	`199,000`	`199,000`
Operating lease liabilities – long-term	`324,597`	`386,207`
Total Long-term Liabilities	`523,597`	`585,207`
Total Liabilities	`2,068,275`	`2,099,149`

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	`12,062,333`	`12,051,795`
Accumulated deficit	`(21,781,697)`	`(21,644,941)`
Total Stockholders' Deficit	`(1,112,278)`	`(986,060)`

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	`$955,997`	`$1,113,089`

	For the Three	For the Three	For the Six	For the Six
	Months Ended	Months Ended	Months Ended	Months Ended
	June 30, 2023	June 30, 2022	June 30, 2023	June 30, 2022

REVENUES	`$251,719`	`$224,438`	`$476,925`	`$483,289`
COST OF GOODS SOLD	`150,258`	`135,306`	`280,675`	`305,911`
GROSS MARGIN	`101,461`	`89,132`	`196,250`	`177,378`

OPERATING EXPENSES

General and administrative	`155,917`	`130,326`	`286,649`	`269,022`
Research and development	`15,197`	`15,383`	`33,136`	`31,635`
Depreciation and amortization	`436`	`752`	`873`	`1,504`

Total Operating Expenses	`171,550`	`146,461`	`320,658`	`302,161`

LOSS FROM OPERATIONS	`(70,089)`	`(57,329)`	`(124,408)`	`(124,783)`

OTHER EXPENSE

Interest expense	`(6,017)`	`(5,253)`	`(11,548)`	`(10,307)`

Total Other Expense	`(6,017)`	`(5,253)`	`(11,548)`	`(10,307)`

LOSS BEFORE INCOME TAXES	`(76,106)`	`(62,582)`	`(135,956)`	`(135,090)`
INCOME TAX EXPENSE	`800`	`800`	`800`	`800`

NET LOSS	`$(76,906)`	`$(63,382)`	`$(136,756)`	`$(135,890)`

BASIC AND DILUTED LOSS PER SHARE	`$(0.00)`	`$(0.00)`	`$(0.01)`	`$(0.01)`

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING -BASIC AND DILUTED	`21,948,091`	`21,948,091`	`21,948,091`	`21,948,091`

				Additional				Total
	Common Stock			Paid-In		Accumulated		Stockholders’
	Shares	Amount		Capital		Deficit		Deficit

Balance, December 31, 2022	21,948,091	$	8,607,086	$	12,051,795	$	(21,644,941)	$	(986,060)

Value of options and warrants	-		-		2,562		-		2,562

Net loss for the three months ended March 31, 2023	-		-		-		(59,850)		(59,850)

Balance, March 31, 2023	21,948,091	$	8,607,086	$	12,054,357	$	(21,704,791)	$	(1,043,348)

Value of options and warrants	-		-	7,976			-	7,976

Net loss for three months ended June 30, 2023	-		-	-			(76,906)	(76,906)

Balance, June 30, 2023	21,948,091	$	8,607,086	$	12,062,333	$	(21,781,697)	$	(1,112,278)

		For the three months ended June 30, 2023				For the three months ended June 30, 2022
		Consumer	Long-term				Consumer	Long-term
Segments		Products	Contract	Total			Products	Contract	Total
Domestic	$	`81,559`	`-`	`81,559`	$		`91,324`	`-`	`91,324`
International		`170,160`	`-`	`170,160`			`133,114`	`-`	`133,114`
	$	`251,719`	`-`	`251,719`	$		`224,438`	`-`	`224,438`

Filters	$	`108,123`	`-`	`108,123`	$		`78,646`	`-`	`78,646`
Components		`143,596`	`-`	`143,596`			`145,792`	`-`	`145,792`
Engineering Services		`-`	`-`	`-`			`-`	`-`	`-`
	$	`251,719`	`-`	`251,719`	$		`224,438`	`-`	`224,438`

		For the six months ended June 30, 2023				For the six months ended June 30, 2022
		Consumer	Long-term			Consumer	Long-term
Segments		Products	Contract	Total		Products	Contract	Total
Domestic	$	`173,336`	`-`	`176,336`	$	`206,693`	`-`	`206,693`
International		`303,589`	`-`	`303,589`		`276,596`	`-`	`276,596`
	$	`476,925`	`-`	`476,925`	$	`483,289`	`-`	`483,289`

Filters	$	`263,543`	`-`	`263,543`	$	`226,164`	`-`	`226,164`
Components		`213,382`	`-`	`213,382`		`257,125`	`-`	`257,125`
Engineering Services		`-`	`-`	`-`		`-`	`-`	`-`
	$	`476,925`	`-`	`476,925`	$	`483,289`	`-`	`483,289`

Location : Vista, CA		June 30, 2023		December 31, 2022
Raw materials	$	825,379	$	836,833
Finished goods		570,683		634,275
Allowance for obsolete inventory		(927,781)		(927,755)
Total	$	468,281	$	543,353

Years ending December 31,
2023 (remaining)	`$70,518`
2024	`148,074`
2025	`176,268`
2026	`88,134`
Total lease payments	`$482,994`
Less: Imputed interest	`(36,678)`
Total lease liability	`446,316`
Less: current lease liability	`(121,719)`
Long-term lease liability	`$324,597`
Weighted average discount rate:
Operating leases	`4.94%`

	June 30, 2023			December 31, 2022
Convertible Note payable, related parties		$	20,000		32,827
Less current portion			(20,000)		(32,827)
Total		$	-		-

	June 30, 2023	June 30, 2022
Expected volatility	206%	207 %
Expected dividends	0%	0 %
Expected term	7 Years	7 Years
Risk-free interest rate	3.63%	2.95%

	June 30, 2023			December 31, 2022
			Weighted-Average			Weighted-Average
	Shares		Exercise Price	Shares		Exercise Price
Outstanding at beginning of year	3,265,556	$	0.15	3,290,556	$	0.19
Granted	150,000		0.04	150,000		0.05
Exercised	-		-	-		-
Expired or cancelled	670,000		0.28	(175,000)		0.77
Outstanding at end of period	2,745,556		0.11	3,265,556		0.15
Exercisable	2,720,556	$	0.11	3,140,556	$	0.15

Range of Exercise Prices	Number Outstanding	Weighted-Average Remaining Contractual Life	Number Exercisable	Weighted-Average Exercise Price

$0.01-1.00	2,745,556	2.54 years	2,720,556	0.11

	For the Six	For the Six
	Months Ended	Months Ended
	June 30, 2023	June 30, 2022
OPERATING ACTIVITIES
Net loss	`$(136,756)`	`$(135,890)`
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization and depreciation expense	`873`	`1,504`
Stock option expense	`10,538`	`13,103`
Amortization of ROU asset	`62,709`	`60,024`
Write-off of contract asset	`-`	`13,221`
Bad Dept Expense	`-`	`(41,000)`
Change in Inventory reserve	`27`	`18`
Changes in operating assets and liabilities:
Accounts receivable	`(28,506)`	`29,525`
Accounts receivable–related parties	`1,001`	`(1,212)`
Deposits	`(835)`	`(4,496)`
Inventory	`75,045`	`70,733`
Accounts payable and accrued expenses	`7,325`	`(2,914)`
Customer deposits	`(477)`	`60,549`
Contract liabilities	`-`	`(75,000)`
Operating lease liability	`(58,646)`	`(52,421)`
Accounts payable-related parties	`5,811`	`4,629`
Accrued management compensation	`-`	`11,923`
Net Cash Used in Operating Activities	`(61,891)`	`(47,703)`

INVESTING ACTIVITIES
Net Cash Used in Investing Activities	`-`	`-`

FINANCING ACTIVITIES
Proceeds from (payments on) notes payable-related party	`15,113`	`(5,441)`
Payments on related party note payable	`-`	`-`
Net Cash (Used in) Provided by Financing Activities	`15,113`	`(5,441)`

NET CHANGE IN CASH	`(46,778)`	`(53,144)`
CASH AT BEGINNING OF YEAR	`56,379`	`59,674`

CASH AT END OF PERIOD	`$9,601`	`$6,530`
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS
CASH PAID FOR:
Interest	`11,830`	`5,048`

	June 30,		December 31,
	2023		2022
Production equipment	$	68,456	$	68,456
Leasehold Improvements		4,689		4,689
Less: accumulated depreciation		(66,606)		(65,733)
Total	$	6,539	$	7,412

Exhibit Number		Description of Exhibit

3.1		Amended and Restated Articles of Incorporation(1)
3.2		Amended and Restated By-Laws Adopted July 12, 2012(2)
31.01		CEO certification pursuant to Section 302 of the Sarbanes – Oxley Act of 2002 (3)
31.02		CFO certification pursuant to Section 302 of the Sarbanes – Oxley Act of 2002 (3)
32.01		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 June 30, 2023 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.

	Omnitek Engineering Corp.


Dated: August 21, 2023	/s/ Werner Funk
	By: Werner Funk
	Its: Chief Executive Officer Principal Executive Officer


Dated: August 21, 2022	/s/ Werner Funk
	By: Werner Funk Its: Chief Financial Officer Principal Financial Officer


Dated: August 21, 2023	___________________________
	By: Werner Funk
	Its: President and Secretary