Omnitek Engineering Corp

General Development of Business

Omnitek Engineering, Corp., a California corporation, began operations on October 10, 2001, and was a spin-off from Nology Engineering, Inc., a manufacturer in the automotive aftermarket parts industry and the developer/manufacturer of the patented “HotWires” spark plug wires. Our business is located at 1345 Specialty Dr. #E, Vista, California, 92081, which consists of approximately 11,751 square feet of industrial space. Omnitek has never filed for bankruptcy and has never been subject to receivership or similar proceedings.

Business of Issuer

Omnitek develops and sells proprietary technology to convert diesel engines to an alternative fuel, new alternative fuel engines and complementary products. Omnitek products are available for stationary applications and the global transportation markets -- including light commercial vehicles, buses, heavy-duty trucks, as well as rail and marine applications. The technology can be applied for compressed natural gas (“CNG”), liquefied natural gas (“LNG”), renewable natural gas (“Biogas” or “RNG”), or Hydrogen (“H2”), as well as liquid petroleum gas (“Propane” or LPG”).

Omnitek’s technology enables the conversion of most diesel engines to operate on alternative fuels at a cost lower than that required to purchase a new alternative fuel engine.

Engine conversions in the United States are subject to U.S. Environmental Protection Agency (“EPA”) or California Air Resources Board (“CARB”) approvals. Engine conversions in certain foreign countries may require additional or different approvals. With fuel cost being the primary market driver, the Company anticipates the majority of its business will be generated in markets where diesel fuel is more expensive than gaseous fuels for the foreseeable future. Additionally, it is expected that the 200-nation “Paris Agreement on Climate Change” and other local regulations designed to lower air pollution, will further increase demand for Omnitek’s technology.

Omnitek is able to also deliver complete new natural gas engines when local emission standards, or other conditions, require the use of new engines.

Principal Products or Services.

Omnitek’s current product line includes:

·A kit for converting diesel engines to run on an alternative fuel;

·New complete natural gas engines;

·A high-pressure natural gas coalescing filter; and

·Natural gas engine components.

Conversion Kits - Omnitek offers a solution to convert most diesel engines to operate on an alternative fuel, including CNG, LNG, RNG, H2 or LPG. This product is packaged in kit form and is offered in two basic variations. One is designed to work on engines equipped with a turbocharger and the other is designed to work on engines without a turbocharger.

Diesel engines have a service life of up to 20 years and require regular engine overhauls. A diesel engine conversion is not unlike an engine overhaul. Therefore, the Company’s engine conversion system enables a fleet to “overhaul/convert” its diesel engines into an alternative fuel during a regularly scheduled engine overhaul, thereby reducing overall operating costs and emissions.

Diesel-to-natural gas engine conversions offer fleet operators the opportunity to secure their investment and capitalize on the long service life of diesel engines.

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At this time the Company has received US, EPA approval for the Navistar DT466E and DT530E engine models, and a Certificate of Conformity for the Mack E7, Detroit Diesel Series 60 and Caterpillar 3406E/C15 engine models, as well as EURO VI certification from the European Union for the OT13 heavy-duty 13-liter natural gas engine.

In addition to the Conversion Kits, Omnitek sells individual replacement parts for the conversion kits and a high-pressure natural gas coalescent filter.

The key to the success of Omnitek’s technology is performance and reliability, which is achieved using the Company’s patented fuel-mixing device and an electronic control unit (ECU) which senses engine parameters in real time and instantly adjusts to deliver the correct amount of fuel and the correct ignition timing.

Omnitek does not perform installations of the conversion kits directly, but rather trains dealers and sub-dealers around the world to perform the engine conversions using the Omnitek technology.

Most diesel engines can be converted using Omnitek’s technology, however, there is no assurance that diesel vehicle owners will elect to convert their diesel engines to an alternative fuel. Additionally, while the Company is not aware of any other company offering engine conversion solutions for most heavy-duty diesel engines that can compete with our patented technology at this time, competitors could develop such technology and there are no guarantees that the owners of the engines would choose the Omnitek conversion technology over our competitors’ technology to convert their engines.

Markets

Worldwide

The Company has the ability to sell and deliver its products anywhere in the world through its network of distributors, system integrators, fleet operators and engine conversion companies. The Company's conversion technology has been used to convert heavy-duty diesel engines to operate on natural gas worldwide since 2001 and has been successfully adapted to work with many different engine designs and configurations. More than 5,000 engines have been converted worldwide utilizing the Omnitek technology.

The governments of many countries with an indigenous supply of natural gas encourage the use of their domestic fuel supply and may offer incentives to convert vehicles currently running on diesel, which is expected to increase demand for our product in those regions.

When contacted, we approach the issue of “converting or replacing” high-polluting diesel engines by offering two main options, which in large part is influenced by the level of technological capabilities within the country, emission requirements, and financial feasibility.

The first option is focused on collaborating with local companies in an effort to convert diesel engines to an alternative fuel.

To achieve the conversions, we can supply engineering support to convert the engines locally. This offers an economic benefit to the local economy by keeping the rebuild work in the community.

In the second scenario, we would supply new low-polluting, alternative fuel engines. This may be a better option when the existing engines are based on old and outdated technology and/or strict emissions standards are in place.

Regulations

Engine conversions in the United States are subject to regulations imposed by the U.S. Environmental Protection Agency (“EPA”), and in California, the California Air Resources Board (“CARB”). At this time, the Company has received U.S. EPA approval for the Navistar DT466E and DT530E engine models, and a Certificate of Conformity for the Mack E7, Detroit Diesel Series 60 and Caterpillar 3406E/C15 engine models.

Engine conversions in Europe, and certain other regions, are subject to regulations imposed by the European Union (“EU”), or other local authorities. The Company has received EURO VI certification from the EU for the OT13 heavy-duty 13-liter natural gas engine.

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Distribution Methods of the Products or Services

Omnitek has distributors worldwide to market and distribute its products. The Company is continuously seeking additional global distribution partners to expand its distribution network. In certain markets, the Company competes against other companies with greater resources, more established distribution channels and other competitive advantages, and the success of these competitors may hinder our ability to generate revenues. Please see the section entitled “Competition” and also the relevant Risk Factors in ITEM 1A below.

Distribution Agreements. From time-to time, Omnitek may enter into exclusive or non-exclusive distribution agreements with its dealers, distributors or authorized diesel-to-natural gas engine conversion kit installation centers (“AIC”).

Internet. Information on products and services we offer, as well as information regarding new product introductions and company news, is available online at our website, www.omnitekcorp.com.

Company information and status of any publicly announced projects, new product developments, or services

Additional corporate information and disclosures regarding Omnitek Engineering Corp. can be found on the SEC website at http://www.sec.gov, which should be read in conjunction with this Annual Report. Additional information relating to the status of any publicly announced projects, new product developments, or services are available on our website at http://www.omnitekcorp.com/news.htm.

Competitive business conditions and the Company’s competitive position in the industry and methods of competition

We believe our products have many important advantages, some of which are performance, ease of use, and competitive cost. We compete in a small segment of the transportation and energy arena. Most of the larger multinational corporations do not offer a complete solution for the markets the Company serves. We believe that competition in these markets is principally based on the quality of the product, performance, reliability, and price. Because of the Company’s limited financial resources, Omnitek could be at a competitive disadvantage compared with other suppliers offering competing products.

Competition - Diesel-to-Natural Gas Engine Conversions

The Company encounters competing products in countries with no enforced emission standards, and where low-tech systems are still being used. These systems can be used to convert low-power diesel engines found in these countries. However, converting emissions controlled high-power engines, as currently found in most countries, requires a sophisticated engine management system, like the one Omnitek offers.

Currently, the Company is not aware of any direct competitors offering a similar and extensive range of engine conversion kits for heavy-duty diesel engines -- though some companies may supply parts to original equipment engine manufacturers, but they do not offer complete systems to convert diesel engines.

There are numerous companies supplying natural gas components for use on gasoline cars and small trucks. These technologies have been on the market for many years and millions of vehicles have been converted worldwide using these technologies. However, these technologies are not suitable to convert heavy-duty diesel engines and not in direct competition with Omnitek’s technology. At this time, Omnitek is not planning to compete in the small-engine market.

Competition - Dual Fuel Technology

Dual-fuel technology, where both diesel and natural gas fuels are used at the same time, offers minimal cost-savings potential and is not considered a competing technology.

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Competition - New Natural Gas Engines

Under certain conditions, it is not cost effective, or technologically feasible, to convert certain old diesel engines to operate on natural gas. Emission standards sometimes dictate the use of highly sophisticated technology that cannot be easily retrofitted onto an older engine. For these situations, Omnitek offers purpose-built new engines which can be used in buses, trucks, generators and other mobile and stationary applications.

Sources and availability of Raw Materials and Principal Suppliers

Omnitek does not utilize any specialized raw materials. We rely on non-affiliated suppliers for various standard and customized components and on manufacturers of assemblies that are incorporated into our products. We do not have long-term supply or manufacturing agreements with suppliers of raw materials, components, and assemblies. In certain instances, alternative sources may be limited. If these suppliers or manufacturers experience financial, operational, manufacturing capacity, or quality assurance difficulties, or cease production and sale of such products, or if there is any other disruption in our relationships with these suppliers or manufacturers, we will be required to locate alternative sources of supply. Our inability to obtain sufficient quantities of these components, if and as required in the future, may subject us to:

·delays in delivery or shortages in components that could interrupt and delay manufacturing and result in cancellations of orders for our products;

·increased component prices and supply delays as we establish alternative suppliers; inability to develop alternative sources for product components;

·required modifications of our products, which may cause delays in product shipments, increased manufacturing costs, and increased product prices; and,

·increased inventory costs as we hold more inventory than we otherwise might in order to avoid problems from shortages or discontinuance, which may result in write-offs if we are unable to use all such products in the future.

During the year ended December 31, 2024, two suppliers accounted for 83% of products purchased compared with the year ended December 31, 2023, where four suppliers accounted for 78% of products purchased.

Dependence on one or few major customers

The Company believes that the diversity of the product line offered alleviates the dependence on any customer. Through widespread use of our product line, Omnitek is striving to develop a wide base of customers. During the year ended December 31, 2024 four customers accounted for approximately 72% of sales. During the year ended December 31, 2023, eight customers accounted for approximately 91% of sales.

Patents, trademarks, licenses, franchises, concessions, royalty agreements or labor contracts, including duration

Omnitek owns the following Patents and Trademarks:

US Patents:

Trademarks:

The protection of proprietary rights relating to Omnitek’s products and expertise is critical for the business. Omnitek intends to file additional patent applications to protect certain technology and improvements considered important to the development of the Company’s business. The Company also intends to rely upon trade secrets, know-how, continuing technological innovation and licensing opportunities to develop and maintain its competitive position.

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Although the Company intends to seek patent protection for its proprietary technology and products in the United States and in foreign countries, the patent positions of our products are generally uncertain and involve complex legal and factual questions. Consequently, we do not know whether any of the patent applications that we have and will consider filing will result in the issuance of any patents, or whether such patent applications will be circumvented or invalidated. There can be no assurance that all United States patents that may pose a risk of infringement can or will be identified. Additionally, Omnitek has not sought to identify foreign patent applications that might affect existing patent applications currently on file with the Unites States Patent and Trademark Office. If we are unable to obtain licenses where we may have infringed on other patents, we could encounter delays in product market introductions while attempting to design around such intellectual property rights, or we could find that the development, manufacture or sale of products requiring such licenses could be prevented. In addition, we could incur substantial costs in defending suits brought against us on such intellectual property rights or prosecuting suits which the Company brings against other parties to protect its intellectual property rights. Competitors or potential competitors may have filed applications for or have received patents and may obtain additional patents and proprietary rights relating to compounds or processes competitive with those of Omnitek. See “Competitive business conditions and the Company’s competitive position in the industry and methods of competition.”

The Company relies on certain patented and unpatented trade secrets for a significant part of its intellectual property rights, and there can be no assurance that others will not independently develop substantially equivalent proprietary information and techniques, or otherwise gain access to our trade secrets or disclose such technology, or that Omnitek can meaningfully protect its rights to its unpatented trade secrets. We intend to require each of our employees, consultants and advisors to execute confidentiality agreements either upon the commencement of an employment or consulting relationship with Omnitek or at a later time. There can be no assurance, however, that these agreements will provide meaningful protection for Omnitek’s trade secrets in the event of unauthorized use or disclosure of such information.

We do not believe that any of our products or other proprietary rights infringe upon the rights of third parties. However, there can be no assurance that others may not assert infringement claims against Omnitek in the future and we recognize that any such assertion may require us to incur legal and other defense costs, enter into compromise royalty arrangements, or terminate the use of some technologies. Further, we may be required to incur legal and other costs to protect our proprietary rights against infringement by third parties.

Licenses and Royalty Agreements

Currently, we have no license or royalty agreements which would result in royalty payments.

Other Agreements

As part of the build-out of the dealer/installer network, the Company will from time-to-time enter into agreements with various companies in the USA and around the world.

Need of governmental approvals of principal products or services

Engine conversions in the United States are subject to regulations imposed by the U.S. Environmental Protection Agency (“EPA”), and in California, the California Air Resources Board (“CARB”).

Engine conversions in Europe, and certain other regions, are subject to regulations imposed by the European Union (“EU”), or local authorities.

Effect of existing or probable governmental regulations on the business

Omnitek is subject to the requirements of Regulation 13A under the Exchange Act, which require us to file with the Securities and Exchange Commission (the “Commission”), annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and all other obligations of the Exchange Act applicable to issuers with stock registered pursuant to Section 12(g). We are also subject to Regulation 14A of the Securities Exchange Act of 1934, as amended (the “1934 Act”), which regulates proxy solicitations.

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Management believes that these reporting obligations increase the Company’s annual legal and accounting costs by an estimated $55,000.

Omnitek is not aware of any other governmental regulations now in existence or that may arise in the future that would have an effect on the Company’s business.

Research and Development

Research and development expenditures for 2024 and 2023, were $70,323 and $67,576 respectively, and were comprised of labor costs and charges for the purchase of equipment and parts for R&D.

In some cases, Omnitek is contracted to develop a specific engine or component. In these cases, Omnitek requires an up-front payment from the customer.

Costs and effects of compliance with environmental laws

Except as discussed above regarding EPA, CARB and EU emissions certification, our business activities are not subject to any environmental laws, and we do not anticipate that our future business activities will subject the Company to any environmental compliance regulations.

Number of total employees and number of full-time employees

As of the date of this report, the Company had a total of six full-time employees. We believe we have a good working relationship with our employees, who are not represented by a collective bargaining organization, and there are no organized labor agreements or union agreements between Omnitek and any employees.

On occasion we outsource certain services and intend to continue to utilize the services of independent consultants and contractors when needed. We believe that this use of third-party service providers will enhance our ability to contain general and administrative expenses.

Reports to Security Holders

The public may read and copy any materials the Company files with the SEC at the SEC’s public reference room at 100 F Street, NE, Washington D.C. 20549, on official business days during the hours of 10:00 a.m. to 3:00 p.m. Eastern time. Information may be obtained on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC athttp://www.sec.gov. Moreover, the Company maintains a website athttp://www.omnitekcorp.com that contains additional information about Omnitek. This information is publicly available and is updated regularly.