OMNITEK ENGINEERING CORP.

(Exact name of registrant as specified in its charter)

Trademarks :

The protection of proprietary rights relating to the Company's products and expertise is critical for the Company's business. The Company intends to file additional patent applications for each product as it is developed to protect technology and improvements that are considered important to the development of its 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.

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 products such as the Company’s, are generally uncertain and involve complex legal and factual questions. Consequently, the Company does not know whether any of the patent applications that it has and will consider filing will result in the issuance of any patents, or whether they 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, the Company 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 the Company is unable to obtain licenses where it may have infringed on other patents, it could encounter delays in product market introductions while it attempts to design around such intellectual property rights, or could find that the development, manufacture or sale of products requiring such licenses could be prevented. In addition, the Company could incur substantial costs in defending suits brought against it 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 the Company. See “Competitors.”

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The Company intends to rely upon 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 the Company's trade secrets or disclose such technology, or that the Company can meaningfully protect its rights to its unpatented trade secrets. The Company intends to require each of its employees, consultants and advisors to execute confidentiality agreements either upon the commencement of an employment or consulting relationship with the Company or at a later time. There can be no assurance, however, that these agreements will provide meaningful protection for the Company's trade secrets in the event of unauthorized use or disclosure of such information.

The Company does not believe that any of its products or other proprietary rights infringe upon the rights of third parties. However, it cannot assure that others may not assert infringement claims against the Company in the future and recognize that any such assertion may require the Company to incur legal and other defense costs, enter into compromise royalty arrangements, or terminate the use of some technologies. Further, the Company may be required to incur legal and other costs to protect its proprietary rights against infringement by third parties.

Licenses and Royalty Agreements

The Company has not entered into any license and royalty agreements which result in royalty payments

Other Agreements

The Company has entered into the following agreements:

Omnitek Stationary Agreement - On February 23, 2010, Omnitek Engineering Corporation appointed Omnitek Stationary, Inc., a Texas corporation as its exclusive distributor and installer of conversion technology for irrigation engines and other select applications, and received an initial order for 40 conversion systems. Omnitek Engineering Corp. acquired a 5% minority ownership position in Omnitek Stationary, Inc. in exchange for granting a license to use the trademarked Omnitek name and logo, but is not involved in any day to day operations.

Omnitek Peru - On August 5, 2009, Omnitek Engineering Corporation and Omnitek Peru entered into an agreement under which Omnitek Peru is to be the exclusive representative of Omnitek products in Peru. Omnitek Peru was formed to convert diesel engines to operate on natural gas, as well as provide services to re-power diesel trucks and buses utilizing Omnitek's natural gas engines. Omnitek Peru S.A.C. based in Lima, Peru, has plans to expand to other locations throughout the country. Omnitek Engineering Corp., received a 20% ownership in Omnitek Peru in exchange for granting a license to use the trademarked Omnitek name and logo, but is not involved in any day to day operations.

Omnitek Thailand - On December 21, 2007, Omnitek Engineering Corporation and Omnitek Thailand entered into a joint venture agreement, which has since been amended and converted into a distribution agreement under which Omnitek Thailand is as distributor and installer of diesel-to-natural gas conversion technology in Thailand. Omnitek Engineering Corp. received a 15% minority ownership interest in Omnitek Thailand in exchange for granting a license to use the trademarked Omnitek name and logo and ongoing technical support from Omnitek Engineering Corp., but is not involved in any day to day operations.

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(9)

Need of any governmental approval of principal products or services .

The Company's products are presently sold to commercial users. The Company’s technology as applied in the United States is subject to approval from the US Environmental Protection Agency (“EPA”) as well as state agencies such as the California Air Resources Board (“CARB”). As such, the Company currently does limited business in the United States. It is the intent of the Company to seek approval of any and all products with the appropriate governmental agencies if and when the costs justify the benefits which the Company will inure from such approval.

(10)

Effect of existing or probable governmental regulations on the business .

The Company’s technology as applied in the United States is subject to approval from the US Environmental Protection Agency (“EPA”) as well as state agencies such as the California Air Resources Board (“CARB”). As such, the Company currently does limited business in the United States.

The Company has voluntarily filed this Registration Statement on Form 10 in order to register its common stock pursuant to Section 12(g) of the Securities Exchange Act of 1934. As a result of the effectiveness of this Registration Statement, the Company shall be subject to Regulation 14A of the Securities Exchange Act of 1934, as amended (the “1934 Act”), which regulates proxy solicitations. Section 14(a) requires all companies with securities registered pursuant to Section 12(g) thereof to comply with the rules and regulations of the Commission regarding proxy solicitations, as outlined in Regulation 14A. Matters submitted to stockholders of the Company at a special or annual meeting thereof or pursuant to a written consent will require the Company to provide its stockholders with the information outlined in Schedules 14A or 14C of Regulation 14; preliminary copies of this information must be submitted to the Commission at least 10 days prior to the date that definitive copies of this information are forwarded to stockholders.

The Company will also be required to file annual reports on Form 10-K and quarterly reports on Form 10-Q with the Commission on a regular basis, and will be required to timely disclose certain events (e.g., changes in corporate control; acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business; and bankruptcy) in a Current Report on Form 8-K.

The Company’s Management believes that it is in the Company’s best interest to become subject to the periodic reporting requirements as set forth above, in order to provide a mechanism for the disclosure and publication of material information about the Company and its financial condition to its shareholders and the financial community. In the event that the Company’s obligation to file periodic reports is suspended under the Securities Exchange Act, it is the intention of the Company to continue to voluntarily file period reports as if so required to do so.

Management believes that these reporting obligations will increase the Company’s annual legal and accounting costs, but it is expected that revenues will be sufficient to meet these costs.

Other than as set forth above, the Company 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 business of the Company.

(11)

Research and Development .

Research and development expenditures for the last two fiscal years, 2009 and 2008, totaled $623,048, and were comprised of certain equipment, parts and the cost of personnel in the development of products and services.

In some cases, a foreign customer will send an engine to our location in California and pay to have a conversion kit developed for this specific engine and/or application. In this case we require an up-front payment from the customer of at least 50% of the development cost.

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(12)

Costs and effects of compliance with environmental laws .

At this time the Company’s business activities are not subject to any environmental laws or governmental regulation nor does it anticipate that its future business activities will subject the Company to any environmental compliance regulations.

(13)

Number of total employees and number of full-time employees .

At the present time the Company employs a total of eight persons, all of which are full time employees. These full time employees include, Werner Funk and Janice Quigley who are also officers and directors of the Company. We believe we have a good working relationship with our employees, who are not represented by a collective bargaining organization, and there exist no organized labor agreements or union agreements between the Company and any employees.

The Company is additionally outsourcing certain services that are not proprietary in nature. We are anticipating a substantial change in the number of employees required to conduct future operations.

We intend to continue to use the services of independent consultants and contractors to perform various professional services. 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 Company is not currently required to deliver an annual report to security holders but as part of its best practices philosophy has, on an annual basis, prepared and distributed an annual report with audited financial statements to its shareholders

Upon effectiveness of this Registration Statement, the Company will file reports with the SEC. The Company will be a reporting company and will comply with the requirements of the Securities Exchange Act of 1934.

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 a.m. to 3 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 at http://www.sec.gov . Moreover, the Company maintains a website at http://www.omnitekcorp.com that contains important information about the Company, including biographies of key management personnel, as well as information about the Company’s business. This information is publicly available (i.e., not password protected) and is updated regularly.

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ITEM 1A.

RISK FACTORS

FORWARD-LOOKING STATEMENTS

This registration statement contains statements that constitute “forward-looking statements.” These forward-looking statements can be identified by the use of predictive, future-tense or forward-looking terminology like “believes,” “anticipates,” “expects,” “estimates,” “envision” or similar terms. These statements appear in a number of places in this registration statement and include statements regarding our intent, belief or current expectations and those of our directors or officers with respect to, among other things: (i) trends affecting our financial condition or results of operations, (ii) our business and growth strategies, and (iii) our financing plans. You are cautioned that any forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Factors that could adversely affect actual results and performance include, among others, the effect of inflation and other negative economic trends and developments on the business of our customers and other barriers, government regulation and competition. The accompanying information contained in this registration statement, including, without limitation, the information set forth under the items “Business” and “Risk Factors” identifies important additional factors that could materially adversely affect actual results and performance. All forward-looking statements attributable to us are expressly qualified in their entirety by the foregoing cautionary statement.

The following risk factors are qualified in their entirety by reference to the more detailed information and financial statements, including the notes thereto, in this registration statement.

The global economic crisis could result in decreases in customer spending

The Company operates in competitive and evolving markets locally, nationally and globally. These markets are subject to rapid technological change and changes in demand. In seeking market acceptance, the Company will encounter competition from many sources, including other well-established and dominant larger providers such as Bosch, Siemens, Cummings, Volvo and Mercedes. Many of these competitors have substantially greater financial, marketing and other resources than does Omnitek. The Company’s revenue could be materially adversely affected if it is unable to compete successfully with these other providers. The current economic climate has resulted in a decrease in customer spending and the Company as a result is facing more competition.

There is uncertainty relating to the ability of the company to enforce its rights under the content partner agreements

Many of the partner agreements are with foreign entities and are governed by the laws of foreign jurisdictions. If a partner breaches a partner agreement, then the Company will incur the additional costs of determining its rights and obligations under the agreement, under applicable foreign laws, and enforcing the agreement in a foreign jurisdiction. Many of the jurisdictions to which partner agreements are subject do not have sophisticated and/or impartial legal systems and the Company may face practical difficulties in enforcing any of its rights in such jurisdictions. The Company may not be able to enforce such rights or may determine that it would be too costly to enforce such rights. In addition, some of the partner agreements contain arbitration provisions that govern disputes under the agreements and there is uncertainty with respect to the enforceability of such arbitration provisions under the laws of related foreign jurisdictions. If a dispute were to arise under a partner agreement and the related arbitration provision was not effective, then the Company would be exposed to the additional costs of settling the dispute through traditional legal avenues rather than through an arbitration process.

The Company May Be Subject To Other Third-Party Intellectual Property Rights Claims

Companies in our industries often own large numbers of patents, copyrights, trademarks and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. As The Company faces increasing competition, the possibility of intellectual property rights claims against it grows. The Company’s technologies may not be able to withstand third-party claims or rights against their use. Intellectual property claims, whether having merit or otherwise, could be time consuming and expensive to litigate or settle and could divert management resources and attention. In addition, many of the Company’s agreements require the Company to indemnify them for third-party intellectual property infringement claims, which could increase the Company’s costs as a result of defending such claims and may require that the Company pay the damages if there were an adverse ruling in any such claims. If litigation is successfully brought by a third party against the Company in respect of intellectual property, the Company may be required to cease distributing or marketing certain products or obtain licenses from the holders of the intellectual property at material cost, redesign affected products in such a way as to avoid infringing intellectual property rights, any or all of which could materially adversely affect the Company’s business, financial condition and results of operations. If those intellectual property rights are held by a competitor, the Company may be unable to obtain the intellectual property at any price, which could also adversely affect the Company’s competitive position. An adverse determination could also prevent the Company from offering its products. Any of these results could harm The Company’s business, financial condition and results of operations.

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The Company is subject to foreign business, political and economic disruption risks

The Company contracts with various entities from around the world. As a result, The Company is exposed to foreign business, political and economic risks, which could adversely affect the Company’s financial position and results of operations, including:

·

difficulties in managing partner relationships from outside of a partner’s jurisdiction;

·

political and economic instability;

·

less developed infrastructures in newly industrializing countries;

·

susceptibility to business interruption in foreign areas due to war, terrorist attacks, medical epidemics, changes in political regimes, and general interest rate and currency instability;

·

exposure to possible litigation or claims in foreign jurisdictions; and,

·

competition from foreign-based providers and the existence of protectionist laws and business practices that favor such providers.

Early Stage of the Company and Its Products

The Company is a development stage company that has been in existence as a California Corporation since 2001. 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. Development stage companies frequently face cash flow and other problems as they grow. Frequently such companies require substantial additional capital to reach a point where cash flow becomes positive. Additionally, it may therefore encounter problems in the future that it has not yet encountered. To date, the Company's development efforts have been focused primarily on the research, design, development, manufacturing and marketing of its products. A very limited number of Company products are currently in the marketplace. However, to achieve profitable operations, the Company, alone or with others, must successfully initiate and maintain sales and distribution of its products. The time frame necessary to achieve market success for any individual product is uncertain. As the Company's products are used by consumers, the Company will have to continue to develop additional products to sustain its market position and growth. There can be no assurance that the Company's research and development efforts will be successful, that any of the Company's products will prove to meet the anticipated levels of approval or effectiveness, or that the Company will be able to obtain and sustain customer as well as distribution approval.

Omnitek’s future will depend on its ability to bring this unique technology to the market place. This requires the careful balancing of development to provide a product that meets customer standards, while not spending needless funds to create the perfect solution.

Due to the risks inherent in introducing new products, Omnitek must accurately forecast both the volume and the configuration of its product offerings. Omnitek must be able to raise the capital and have in place the management expertise to accomplish the objectives and mission outlined in this plan.

The Company’s results can also be affected by the ability of competition to introduce new products that have advantageous technology or the competition's ability to adjust its pricing to reduce our competitive advantage. Results will also be affected by strategic decisions made by the management regarding product volume, mix, and timing of orders received during operations. See “Business.”

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Uncertainty of Future Profitability

The development of the Company's products and market share will require the commitment of substantial resources to increase its advertising, marketing and distribution of its existing products. Additionally, the Company must complete the development of its new products which includes the testing, manufacturing, marketing and distribution of said new products. While the Company believes that the additional advertising, marketing and distribution will further enhance the Company's profitability, there can be no assurance the Company's products will meet the expectations and effectiveness required to be competitive in its market place, that the Company will enter into arrangements for product development and commercialization, market successfully its products, or achieve customer acceptance.

Future Capital Requirements; Uncertainty of Future Funding

Substantial expenditures will be required to enable the Company to conduct existing and planned product research, design, development, manufacturing, marketing and distribution of its products and Intellectual Property. The 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 until the Company has sufficient assets, capital, and inventory or accounts receivable, it is not anticipated that the Company will secure any bank financing in the near future. Therefore, it is likely that the Company may need to seek additional financing through subsequent future public or private sales of its securities, including equity securities. The Company may also seek funding for the development, manufacturing, and marketing of its 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 the Company, if at all. Any such additional financing may result in significant dilution to existing stockholders. If adequate funds are not available, the Company may be required to curtail one or more of its research and development programs. The Company's future cash requirements will be affected by the revenue generated from the sale of its products, the costs of development, production and marketing of additional products, as well as relationships with corporate partners, changes in the focus and direction of the Company's research and development programs, competitive and technological advances, and other factors.

Dependence on Others; Manufacturing Capabilities and Limited Distribution Capabilities

An important element of the Company's strategy for the marketing and release of its products is to enter into various arrangements with distribution and retail partners. The success and commercialization of the Company's products will be dependent, in part, upon the Company's ability to enter into such arrangements and upon the ability of these third parties to perform their responsibilities. Although the Company believes that parties to any such arrangements would have an economic motivation to succeed in performing their contractual responsibilities, the amount and timing of resources to be devoted to these activities may not be within the control of the Company. There can be no assurance that any such arrangements will be available on terms acceptable to the Company, if any at all, and that such parties will perform their obligations as expected, or that any revenue will be derived from such arrangements. If the Company is not able to enter into such arrangements, it could encounter delays in introducing its products into the market. See “Business.”

The Company plans to assemble its product line in-house after receiving components from outside vendors. Other products or components for future products may be produced or manufactured by outside companies for the Company. Therefore, the Company may be dependent on contract manufacturers for the production and manufacturing of certain products or components for products. In the event that the company is unable to obtain or retain the necessary manufacturers for components or products on acceptable terms, it may not be able to continue to commercialize and market its products as planned. The manufacture of the Company's products will be subject to current good manufacturing practices (“GMP”) requirements prescribed by the Company in order to meet the specifications and other standards prescribed by Company to satisfy the anticipated and appropriate levels of operations and effectiveness when in use. There can be no assurance that the Company will be able to i) obtain adequate supplies of its products in a timely fashion at acceptable quality and prices, ii) enter into arrangements for the manufacture of its products with manufacturers whose facilities and procedures comply with the Company's GMP or other regulatory requirements, should any such regulatory requirements arise, iii) or that manufacturers will continue to comply with such standards, or iv) that such manufacturers will be able to adequately supply the Company with its product needs. The Company's dependence upon others for the manufacture of its proposed products may adversely affect the Company's ability to develop and deliver products on a timely and competitive basis.

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In addition, the Company does not now have, nor does it have current plans to acquire or obtain, the facilities, or personnel necessary to conduct its own full-scale distribution of its products. Consequently, the Company will have to rely on existing commercial distribution channels for the sale of its products. There can be no assurance that the Company will be able to secure sufficient distribution of any of its products on acceptable terms.

Risk of Technological Obsolescence and Competition

The Company operates in an ever evolving field. Developments are expected to continue at a rapid pace in the industry in general. Competition from other large companies, joint ventures, research and academic institutions and others is intense and expected to increase. Many of these companies and institutions have substantially greater capital resources, research and development staffs and facilities than the Company, and many have substantially greater experience in conducting testing, manufacturing and marketing of products. These entities represent significant long-term competition for the Company. There can be no assurance that developments by others will not render the Company's technologies and future products obsolete or noncompetitive. In addition, the Company's competitors might succeed in developing or purchasing technologies and products that are more effective than those that are being developed by the Company or that would render the Company's technology and products obsolete or noncompetitive. See “Business – Competition.”

Dependence Upon Key Personnel

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 Werner Funk, whose services the Company is totally reliant on for the development of products for the Company. Additionally, Janice Quigley provides financial management expertise. If any of these people should die, become incapacitated, or leave the Company for any reason, the Company would experience severe problems and may not survive without them. The proprietary technology of the Company products has been developed primarily by Mr. Funk.

Changes of Prices for Products

While the prices of the Company's products are projected to be in line with those from market competitors, there can be no assurance that they will not decrease in the future. Competition may cause the Company to lower prices in the future. Moreover, it is difficult to raise prices even if internal costs increase.

Creditworthiness of Distributors is an Ongoing Concern

The Company may not always be able to collect all of the funds owed to it by its distributors.

C Corporation Tax Status

The Company is presently a C Corporation under the Internal Revenue Code of 1986. All items of income and loss of the Company are taxed first at the corporate level and any dividends distributed to shareholders are taxed at the shareholder level as well.

Limited Current Sales and Marketing Capability

Though the Company has key personnel with experience in sales, marketing and distribution to market its products, the Company must either retain and hire the necessary personnel to distribute and market its products or enter into collaborative arrangements or distribution agreements with third parties who will market such products or develop their own marketing and sales force with technical expertise and supporting distribution capability. There can be no assurance that the Company will be able to retain or hire the personnel with sufficient experience and knowledge to distribute and market its products or be able to enter into collaborative or distribution arrangements or develop its own sales force, or that such sales and marketing efforts, including the efforts of the companies with which the Company has entered into collaborative agreements, will be successful.

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Trading and Limited Market

At the present time, the Company’s common stock is traded on the Prime OTCQX under the symbol OMTK. 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. However, should such a market arise, the possibility or actual sale into the market of shares of the Company's Common Stock as permitted under Rule 144 of the Securities Act of 1933 may adversely affect prevailing market prices, if any, for the Company's Common Stock and could impair the Company's ability to raise capital through the sale of its equity securities. In order to qualify for unrestricted resale of Common Stock under Rule 144, certain holding periods must be met and a legal opinion setting forth the exemption from registration must be provided. Further, there is no assurance that Rule 144 will be applicable to the Company and investors may not be able to rely on its provisions now or in the future. In addition, sales of significant amounts of Common Stock by the Company subsequent to this offering could have an adverse effect on the market price, if any, for the Company's securities.

No Dividends

No cash dividends have been paid. Payment of dividends on the Common Stock is within the discretion of the Board of Directors, is subject to state law, and will depend upon the Company's earnings, if any, its capital requirements, financial condition and other relevant factors.

Possible Volatility of Stock Price

The market price of the Company’s securities, like that of the common stock of many other development-stage companies, is likely to be highly volatile. Factors such as the market acceptance of the Company's products, success of distribution channels or its competitors, announcements of technological innovations or new commercial products by the Company or its competitors, developments in trademark, patent or other proprietary rights of the Company or its competitors, and fluctuations in the Company's operating results may have a significant effect on the market price of the Common Stock. In addition, the stock market has experienced and continues to experience extreme price and volume fluctuations which have affected the market price of many development-stage companies and which have often been unrelated to the operating performance of these companies. These broad market fluctuations, as well as general economic and political conditions, may adversely affect the market price, if a market develops, of the Common Stock. See “Description of Capital Stock.”

Penny Stock Regulations

If the Company's stock is below $5.00 per share, or the Company does not have $2,000,000 in net tangible assets, or is not listed on an exchange or on the NASDAQ National Market System, among other conditions, the Company's shares may be subject to a rule promulgated by the Securities and Exchange Commission (the “SEC”) that imposes additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and institutional accredited investors. For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser's written consent to the transaction prior to the sale. Furthermore, if the price of the Company's stock is below $5.00, and does not meet the conditions set forth above, sales of the Company's stock in the secondary market will be subject to certain additional new rules promulgated by the SEC. These rules generally require, among other things, that brokers engaged in secondary trading of stock provide customers with written disclosure documents, monthly statements of the market value of penny stocks, disclosure of the bid and asked prices, and disclosure of the compensation to the broker-dealer and disclosure of the sales person working for the broker-dealer. These rules and regulations may affect the ability of broker-dealers to sell the Company's securities, thereby limiting the liquidity of the Company's securities. They may also affect the ability of shareholders to resell their securities in the secondary market.

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OTCQX Requirements

At the present time, the Company’s common stock is traded on the Prime OTCQX under the symbol OMTK. The OTCQX listing requirements support a transparent marketplace with high quality issuers, financial information disclosure and efficient trading for U.S. investors. The OTCQX has a baseline set of listing requirements for U.S. corporations, which are as follows:

·

Ongoing operations (no shells, blank check or special purpose acquisition companies);

·

A minimum bid price of $0.10 (for preceding 90 business days);

·

The company may not be subject to any bankruptcy or reorganization proceedings;

·

The company must be duly organized, validly existing and in good standing under the laws of each jurisdiction in which the company is organized;

·

At least 50 beneficial shareholders, each owning at least 100 shares of the Company's common stock;

·

Ongoing quarterly and audited annual financial reports posted on OTCQX.com, a premier website for qualifying companies (SEC Registered issuers can use EDGAR);

·

Inclusion in the Standard & Poor's Corporation Records or Mergent Manuals (fka Moody's Manuals), which satisfies the Blue Sky requirements for secondary transactions in many states, together with a list of any other states in which the security is Blue Sky compliant and eligible to be sold by brokers in those states; and,

·

DAD Letter of Introduction upon application process completion and quarterly and annually thereafter to Pink OTC Markets Inc., confirming that the issuer has made adequate current information publicly available and meets the tier inclusion requirements.

If the Company fails to meet the criteria set forth by the OTCQX we may be dropped from the OTCQX.

ITEM 2.

FINANCIAL INFORMATION

Selected Financial Data

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.

Management’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 Form 10 for Registration of Securities. 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 children’s book and education sector 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.

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.

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A.

Management’s Plan of Operation

RESULTS OF OPERATIONS

Our sales declined to $1,325,757 in 2009 from $3,359,953 in 2008. The decrease of 61% was the result of the general economic down turn world-wide. It was also the result of lower energy prices during 2009 which decreased the demand for alternative energy sources. We expect our sales to rebound in 2010 as economic conditions improve and energy prices rise to meet increased demand.

Similarly our cost of sales fell to $933,788 in 2009 from $2,297,680 in 2008. Our Gross Margin was 30% in 2009 compared to 32% in 2008. We expect that our gross margin will continue in the 30% range until our operations grow sufficiently to allow us to negotiate better pricing for our components.

Our operating expenses for 2009 were $1,397,345 compared to $2,229,830 in 2008. Because of the decline in sales we implemented a severe cost cutting program. We were successful in decreasing general and administrative expenses by $869,258 from 2008 to 2009. We increased our research and development outlays to $329,881 from $293,167 in 2008. We made the decision to develop new products despite the difficult economic situation so that we could be ready when the economy improved.

Our net loss for the year ended December 31, 2009 was $1,357,695 compared to $1,220,701 in 2008. Our loss increased despite our cost cutting efforts because we determined to impair the tax benefit of our net operating loss carryovers by $403,324. This impairment was a one-time event. Also included in our net loss was the value of options and warrants granted to key individuals. We recorded an expense of $411,585 and $1,232,611 during 2009 and 2008, respectively. We also recorded a $232,395 impairment of our inventory during 2009 for items determined to be obsolete. We do not expect such an impairment to occur in 2010.

Excluding these non cash expenses our net loss would have been $310,391 and a net income of $11,910 during 2009 and 2008, respectively. We expect that we will continue to grant options and warrants to obtain the services we require as a way to reduce cash expenditures.

B.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Cash Requirements

We believe that we have sufficient cash to meet our operating requirements for the proximate 12 months.

Liquidity and Capital Resources

Overview

We have historically incurred significant losses which have resulted in a total retained deficit of $4,826,705 at December 31, 2009. In particular we incurred a loss of $1,357,695 and $1,220,701 during the years ended December 31, 2009 and 2008, respectively.

At December 31, 2009 our current liabilities totaled $677,476 and our current assets totaled $1,375,311. This leaves a net of $697,835 to cover possible negative cash flows in 2010.

Operating Activities

We have realized a negative cash flow from operations of $60,163 for the year ended December 31, 2009 compared to a positive cash flow of $46,728 during the year ended December 31, 2008. Included the net loss are non cash expenses which are not a drain on our capital resources. During 2009, these expenses include the value of options and warrants granted in the amount of $411,585, contributed interest of $21,261, impairment of inventory of $232,395, depreciation and amortization of $96,853 and the impairment of the deferred tax asset in the amount of $403,324. Excluding these non cash amounts, the net loss would have been $192,547 for the year ended December 31, 2009 and a net income for the year ended December 31, 2008.

15

Financing Activities

During 2009 we received $110,000 in proceeds from notes payable. We repaid $15,842 and $15,000 in notes payable during 2009 and 2008, respectively.

Off-Balance Sheet Arrangements

None.

Critical Accounting Policies   and Estimates

The Company's financial statements are prepared using the accrual method of accounting.

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. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received.

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

The Company recognizes revenue from the sale of new engines for use with compressed natural gas and engine components to convert existing engines to compressed natural gas use. Revenue is recognized upon shipment of the products, and when collection is reasonably assured.

Accounting for 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.

At the adoption date of November 1, 2007, the Company had no unrecognized tax benefit which would affect the effective tax rate if recognized.

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 December 31, 2009, the Company had no accrued interest or penalties related to uncertain tax positions.

16

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 2006.

At December 31, 2008, the Company had a deferred tax asset of $403,324 which the Company anticipated applying against future taxable income based on anticipated future income. However, due to unexpected ongoing losses in 2009, management reevaluated the Company’s net operating loss carry forwards and determined that a valuation allowance for the same amount of the deferred tax asset is warranted.

At December 31, 2009, the Company had net operating loss carry forwards of approximately $500,000 through 2029. No tax benefit has been reported in the December 31, 2009 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.

Recently Issued Accounting Pronouncement

During the year ended December 31, 2009 the Company adopted the following accounting pronouncements, which had no impact on the financial statements or results of operation:

In January 2010, the FASB issued Accounting Standards Update 2010-02, Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary. This amendment to Topic 810 clarifies, but does not change, the scope of current US GAAP. It clarifies the decrease in ownership provisions of Subtopic 810-10 and removes the potential conflict between guidance in that Subtopic and asset derecognition and gain or loss recognition guidance that may exist in other US GAAP. An entity will be required to follow the amended guidance beginning in the period that it first adopts FAS 160 (now included in Subtopic 810-10). For those entities that have already adopted FAS 160, the amendments are effective at the beginning of the first interim or annual reporting period ending on or after December 15, 2009. The amendments should be applied retrospectively to the first period that an entity adopted FAS 160. The Company does not expect the provisions of ASU 2010-02 to have a material effect on the financial position, results of operations or cash flows of the Company.

In January 2010, the FASB issued Accounting Standards Update 2010-01, Equity (Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Cash (A Consensus of the FASB Emerging Issues Task Force). This amendment to Topic 505 clarifies the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a limit on the amount of cash that will be distributed is not a stock dividend for purposes of applying Topics 505 and 260. Effective for interim and annual periods ending on or after December 15, 2009, and would be applied on a retrospective basis. The Company does not expect the provisions of ASU 2010-01 to have a material effect on the financial position, results of operations or cash flows of the Company.

In December 2009, the FASB issued Accounting Standards Update 2009-17, Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities. This Accounting Standards Update amends the FASB Accounting Standards Codification for Statement 167. (See FAS 167 effective date below.)

In December 2009, the FASB issued Accounting Standards Update 2009-16, Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets. This Accounting Standards Update amends the FASB Accounting Standards Codification for Statement 166. (See FAS 166 effective date below)

In October 2009, the FASB issued Accounting Standards Update 2009-15, Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing. This Accounting Standards Update amends the FASB Accounting Standard Codification for EITF 09-1. (See EITF 09-1 effective date below.)

17

In October 2009, the FASB issued Accounting Standards Update 2009-14, Software (Topic 985): Certain Revenue Arrangements That Include Software Elements. This update changed the accounting model for revenue arrangements that include both tangible products and software elements. Effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15,2010. Early adoption is permitted. The Company does not expect the provisions of ASU 2009-14 to have a material effect on the financial position, results of operations or cash flows of the Company.

In October 2009, the FASB issued Accounting Standards Update 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements. This update addressed the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than a combined unit and will be separated in more circumstances that under existing US GAAP. This amendment has eliminated that residual method of allocation. Effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. The Company does not expect the provisions of ASU 2009-13 to have a material effect on the financial position, results of operations or cash flows of the Company.

In September 2009, the FASB issued Accounting Standards Update 2009-12, Fair Value Measurements and Disclosures (Topic 820): Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). This update provides amendments to Topic 820 for the fair value measurement of investments in certain entities that calculate net asset value per share (or its equivalent). It is effective for interim and annual periods ending after December 15, 2009. Early application is permitted in financial statements for earlier interim and annual periods that have not been issued. The Company does not expect the provisions of ASU 2009-12 to have a material effect on the financial position, results of operations or cash flows of the Company.

In July 2009, the FASB ratified the consensus reached by EITF (Emerging Issues Task Force) issued EITF No. 09-1, (ASC Topic 470) "Accounting for Own-Share Lending

Arrangements in Contemplation of Convertible Debt Issuance" ("EITF 09-1"). The provisions of EITF 09-1, clarifies the accounting treatment and disclosure of share-lending arrangements that are classified as equity in the financial statements of the share lender. An example of a share-lending arrangement is an agreement between the Company (share lender) and an investment bank (share borrower) which allows the investment bank to use the loaned shares to enter into equity derivative contracts with investors. EITF 09-1 is effective for fiscal years that beginning on or after December 15, 2009 and requires retrospective application for all arrangements outstanding as of the beginning of fiscal years beginning on or after December 15, 2009. Share-lending arrangements that have been terminated as a result of counterparty default prior to December 15, 2009, but for which the entity has not reached a final settlement as of December 15, 2009 are within the scope. Effective for share-lending arrangements entered into on or after the beginning of the first reporting period that begins on or after June 15, 2009. The Company does not expect the provisions of EITF 09-1 to have a material effect on the financial position, results of operations or cash flows of the Company.

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 3.

PROPERTIES

The Company owns no real property and currently has a lease for its principal executive offices and related engineering and assembly facilities located in approximately 10,000 square feet of space at 1945 S. Rancho Santa Fe Road, San Marcos, California, 92078. We are currently on a year to year arrangement with our landlord.

18

⁽¹⁾ This amount includes currently vested options to purchase 1,200,000 shares of Common Stock

⁽²⁾ This amount includes currently vested options to purchase 600,000 shares of Common Stock

⁽¹⁾ This amount includes currently vested options to purchase 1,200,000 shares of Common Stock

⁽²⁾ This amount includes currently vested options to purchase 360,000 shares of Common Stock

19

Changes in Control

To the best of the Company’s knowledge there are no present arrangements or pledges of the Company's securities, which may result in a change in control.

All of the Company’s directors hold office until the next annual general meeting of the shareholders or until their successors are elected and qualified. The officers are appointed by our Board of Directors and hold office until their earlier death, retirement, resignation or removal.

 Significant Employees

There are no significant employees other than Mr. Funk and Ms. Quigley.

Family Relationships

There are no family relationships between any directors or executive officers of the Company, either by blood or by marriage.

Business Experience

The business experience during the past five years of each of the persons presently listed above as an Officer or Director of the Company or a Significant Employee is as follows:

Werner Funk – Mr. Funk was born in Germany. He has been a Director and the CEO of Omnitek since its formation in May of 2001. Mr. Funk has over 26 years experience in international business, manufacturing, engineering, marketing and internet commerce. He is responsible for management, marketing and new product design. His extensive knowledge of technology, marketing and international business has been largely responsible for the Company’s growth and international market penetration. Mr. Funk was educated in Germany where he attended high school and vocational college for automotive technology and graduated with honors receiving a bachelor degree in automotive technology. While living in Germany, he worked for Mercedes-Benz and was the assistant crew chief of a Porsche factory sponsored racing team. Mr. Funk moved to the United States in 1978, where upon he started several successful businesses including Nology Engineering Inc., a California Corporation, which designs, manufactures and markets automotive products for the performance aftermarket. Mr. Funk is currently the CEO of Nology and Performance Stores. Mr. Funk is also the inventor of 7 registered and pending patents.

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Janice M. Quigley – Mrs. Quigley was appointed as a Director and Chief Financial Officer of the Company on August 26, 2003, and is responsible for the financial reporting and personnel management of the Company. Mrs. Quigley, a native of San Francisco, California, had worked in the electronics industry for 27 years prior to relocating to San Diego in 1992. Mrs. Quigley joined Advantage Lift Systems, Inc. (a manufacturer of heavy-duty vehicle hoists) in 1993 as its controller. She was promoted to Chief Financial Officer in 1997 when the company acquired Globe Lifts (a manufacturer of light-duty vehicle hoists). She remained in that position until October of 2000 when the company was sold. Mrs. Quigley is also the CFO for Nology Engineering, Inc.

Directorships

No Director of the Company or person nominated or chosen to become a Director holds any other directorship in any company with a class of securities registered pursuant to section 12 of the Exchange Act or subject to the requirements of section 15(d) of such Act or any other company registered as an investment company under the Investment Company Act of 1940.

Involvement in Certain Legal Proceedings

During the past five years, no present or former director, executive officer or person nominated to become a director or an executive officer of the Company:

(1)

was a general partner or executive officer of any business against which any bankruptcy petition was filed, either at the time of the bankruptcy or two years prior to that time;

(2)

was convicted in a criminal proceeding or named subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

(3)

was subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

(4)

was found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a Federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

Promoters and Control Persons

None.

21

⁽¹⁾ Includes $50,000 and $51,923 of accrued but unpaid salary in 2009 and 2008, respectively.

⁽²⁾ Includes $37,500 and $31,250 of accrued but unpaid salary in 2009 and 2008, respectively.

⁽³⁾ Mr. Petersen resigned from the Company effective January 15, 2010.

Narrative Disclosure to Summary Compensation Table

On November 1, 2007, the Company entered into an Employment Agreement with Mr. Funk that provides for continued service in his current capacity as President and CEO for a period of five years at an initial salary of $100,000 per year. Pursuant to the terms of the Employment Agreement, Mr. Funk agreed that 50% of his salary shall be deferred for a period of 12 months at which time it will be due and payable. As set forth above, Mr. Funk has continued to defer a portion of his salary. The Employment Agreement further provides that annual bonuses shall be determined by the Company’s Board of Directors in its sole discretion in accordance with performance-based criteria applicable generally to the executive-level employees of the Company. Additionally, Mr. Funk’s Employment Agreement contains a stock option which entitles Mr. Funk the option to purchase 2,000,000 post-split adjusted shares of the Common Stock of the Company, at prices ranging from $0.5250 to $1.00 per share.

Also on November 1, 2007, the Company entered into an Employment Agreement with, Ms. Quigley that provides for continued service in her current capacity as Chief Financial Office for a period of five years at an initial salary of $60,000 per year. Pursuant to the terms of the Employment Agreement Mrs. Quigley agreed that 50% of her salary shall be deferred for a period of 12 months at which time it will be due and payable. As set forth above, Mrs. Quigley has continued to defer a portion of her salary. The Employment Agreement further provides that annual bonuses shall be determined by the Company’s Board of Directors in its sole discretion in accordance with performance-based criteria applicable generally to the executive-level employees of the Company. Additionally, Mrs. Quigley’ Employment Agreement contains a stock option which entitles Mrs. Quigley the option to purchase 600,000 post split adjusted shares of the Common Stock of the Company, at prices ranging from $0.5250 to $1.00 per share.

On November 3, 2006, the Company entered into an Employment Agreement with Peter Petersen as Vice President of Engineering for a period of four years commencing January 1, 2007 and concluding December 31, 2011, at an initial salary of $60,000 per year. The Employment Agreement further provides that annual bonuses shall be determined by the Company’s Board of Directors in its sole discretion in accordance with performance-based criteria applicable generally to the executive-level employees of the Company. Additionally, Mr. Petersen’s Employment Agreement contains a stock option which entitles Mr. Peterson the option to purchase 1,200,000 post split adjusted shares of the Common Stock of the Company, at a price of $0.475 per share. On January 4, 2010 Mr. Petersen tendered his resignation effective January 15, 2010. As part of Mr. Petersen’s separation agreement with the Company, Mr. Petersen surrendered 600,000 shares of common stock owned by him and cancelled 600,000 options.

22

We have not granted any options, stock appreciation rights, SARs, or any other similar equity awards during the last completed fiscal year to our Named Executive Officers.

No Named Executive Officer exercised any options or SARs during the last completed fiscal year or owned any unexercised options or SARs at the end of the fiscal year.

There are no agreements or understandings for any executive officer to resign at the request of another person. None of our executive officers acts or will act on behalf of or at the direction of any other person.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2009.

The following table provides information for the named executive officers on stock option holdings as of the end of 2009.

On September 1, 2006, the Board of Directors adopted the Omnitek Engineering Corp. 2006 Long-term Incentive Plan (the “2006 Plan”), under which 1,000,000 shares of Company’s Common Stock were reserved for issuance by the company to attract and retain employees and directors of the Company and to provide such persons with incentives and awards for superior performance and providing services to the Company. The 2006 Plan is administered by a committee comprised of the Board of Directors of the Company or appointed by the Board of Directors, which has broad flexibility in designing stock-based incentives. The Board of Directors determines the number of shares granted and the option exercise price, pursuant to the terms of the Plan. On November 30, 2007, the Board of Directors authorized the increase of shares available under the 2006 Plan to 10,000,000 post split adjusted shares.

23

Compensation of Directors

There was no compensation paid to any director who was not a Named Executive Officer during the year ended December 31, 2006.

Directors serve without compensation and there are no standard or other arrangements for their compensation. There are no employment contracts, compensatory plans or arrangements, including payments to be received from the Company with respect to any Director that would result in payments to such person because of his or her resignation with the Company, or its subsidiaries, any change in control of the Company. There are no agreements or understandings for any Director to resign at the request of another person. None of our Directors or executive officers acts or will act on behalf of or at the direction of any other person.

ITEM 7.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Transactions with Related Persons

Werner Funk, the President and CEO of Omnitek, is the principal shareholder and the President, CEO, Secretary and a Director of Nology Engineering, Inc., a non-public California corporation that designs, manufactures and markets automotive products for the performance aftermarket Mr. Funk is also a shareholder, the President, CEO, Secretary and a Director of Performance Stores, Inc., a Nevada corporation, which is an internet based e-commerce site selling automotive performance parts.

Jan Quigley, the CFO of Omnitek, is a shareholder and also serves as the CFO and a Director of Nology Engineering, Inc.

The Company has not been a party to any transactions between persons who were executive officers, directors, or principal stockholders of our corporation during the fiscal year ended December 31, 2009 and including the recent events of 2010.

Except as set forth above, none of the following parties have, since our date of incorporation, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us.

Review, Approval or Ratification of Transactions with Related Persons

Not Applicable.

Promoters and Certain Control Persons

There have been no material transactions, series of similar transactions, currently proposed transactions, or series of similar transactions, to which the Company or any of its subsidiaries was or is to be a party, in which the amount involved exceeded $60,000 and in which any promoter or founder, or any member of the immediate family of any of the foregoing persons, had a material interest.

Director Independence

The Board has determined that none of the Company’s Directors have met the independence requirements based upon the application of objective categorical standards adopted by the Board. In making a determination regarding a Director’s independence, the Board considers all relevant facts and circumstances, including the Director’s commercial, banking, consulting, legal, accounting, charitable and familial relationships and such other criteria as the Board may determine from time to time.

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ITEM 8.

LEGAL PROCEEDINGS

The Company is not presently a party to any litigation, claim or assessment against it, and is unaware of any unasserted claim or assessment which will have a material effect on the financial position or future operations of the Company. 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 9.

MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

The Company’s common stock has been traded on the OTCQX U.S., under the symbol “OMTK.” The CUSIP number for the Issuer’s common stock is 68215W107. The following table sets forth, in U.S. dollars the high and low bid prices for each of the calendar quarters indicated, as reported by the OTCQX. The prices in the table may not represent actual transactions and do not include retail markups, markdowns or commissions.

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. However, should such a market arise, the possibility or actual sale into the market of shares of the Company's Common Stock as permitted under Rule 144 of the Securities Act of 1933 (the “Act”) may adversely affect prevailing market prices, if any, for the Company's Common Stock and could impair the Company's ability to raise capital through the sale of its equity securities. In order to qualify for unrestricted resale of Common Stock under Rule 144, certain holding periods must be met and a legal opinion setting forth the exemption from registration must be provided. Further, there is no assurance that Rule 144 will be applicable to the Company and investors may not be able to rely on its provisions now or in the future. In addition, sales of significant amounts of Common Stock by the Company subsequent to this offering could have an adverse effect on the market price, if any, for the Company's securities.

The market price of the Company’s common stock will likely fluctuate significantly in response to the following factors, some of which are beyond the Company’s control: variations in its quarterly operating results; changes in financial estimates of its revenues and operating results by securities analysts; changes in market valuations of travel companies; announcements by us of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; additions or departures of key personnel; future sales of its common stock; stock market price and volume fluctuations attributable to inconsistent trading volume levels of its stock; commencement of or involvement in litigation.

25

Holders

There were approximately 52 holders of record and 188 beneficial owners of the Company's Common Stock as of April 26, 2010.

Dividends

Common Stock - No dividends have ever been paid on the Common Stock and the Company does not currently anticipate paying any cash or other dividends on the Common Stock. Future dividend policy will be determined by the Board of Directors of the Company in light of prevailing financial need and earnings, if any, of the Company and other relevant factors.

Preferred Stock - Under our articles of incorporation, our Board of Directors is authorized, without stockholder action, to issue preferred stock in one or more series and to fix the number of shares and rights, preferences, and limitations of each series. Among the specific matters that may be determined by the Board of Directors are the dividend rate, the redemption price, if any, conversion rights, if any, the amount payable in the event of any voluntary liquidation or dissolution of our company, and voting rights, if any. As of the date of this registration statement, no shares of preferred stock were issued and outstanding.

Payment of dividends on the Common Stock and Preferred Stock is within the discretion of the Board of Directors, is subject to state law, and will depend upon the Company's earnings, if any, its capital requirements, financial condition and other relevant factors.

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ITEM 10.

RECENT SALES OF UNREGISTERED SECURITIES

During the three years preceding the filing of this registration statement, the Company has issued securities without registration under the Securities Act on the terms and circumstances described in the following paragraphs.

Since January 1, 2007, through December 31, 2009, the Company has completed the following sales of unregistered securities.

·

On March 16, 2007, the Company entered into a Convertible Promissory Note with the Garber Family Trust UTD July 30, 1998, through its trustee John Garber, for an aggregate amount in cash of $75,000, convertible at a rate of $1.87 per share of Common Stock of the Company.

·

On June 14, 2007, Omnitek issued an aggregate of 29,682 shares of its Common Stock to John Reed 401K Plan, at $1.89 per share, in exchange for cash proceeds of $56,100 pursuant to the Company’s Private Placement under Rule 506 of Regulation D and Section 4(2).

·

On June 14, 2007, the Company issued an aggregate of 13,227 shares of our Common Stock to Mario S. Yeo, at $1.89 per share, in exchange for cash proceeds of $25,000 pursuant to the Company’s Private Placement under Rule 506 of Regulation D and Section 4(2).

·

On July 2, 2007, Omnitek issued an aggregate of 2,000 shares of our Common Stock to Morgan T. Jones III and Ronna S. Reed, as Joint Tenants with Rights of Survivorship, at $1.89 per share, in exchange for cash proceeds of $3,780 pursuant to the Company’s Private Placement under Rule 506 of Regulation D and Section 4(2).

·

On September 5, 2007, the Company issued an aggregate of 5,000 shares of its Common Stock to 1992 Sheline Family Trust U/D/T 11/23/92, at $1.89 per share, in exchange for cash proceeds of $9,450 pursuant to the Company’s Private Placement under Rule 506 of Regulation D and Section 4(2).

·

On September 5, 2007, Omnitek issued an aggregate of 5,000 shares of its Common Stock to TD Ameritrade Custodian FBO Raymond K. Sheline M.D. SEP, at $1.89 per share, in exchange for cash proceeds of $9,450 pursuant to the Company’s Private Placement under Rule 506 of Regulation D and Section 4(2).

·

On September 18, 2007, the Company issued a Non-qualified stock option to Lewis Kurtz to purchase 400,000 (post forward split adjusted) shares of common stock at post forward split adjusted exercise price of $0.125 per share, for consulting and advisory services rendered to the Company. Such option was issued pursuant to the Omnitek Engineering Corp. 2006 Long-Term Incentive Plan, as amended. No underwriters were used. The securities were issued pursuant to an exemption from registration provided under Section 4(2) of the Securities Act of 1933.

·

On October 17, 2007, the Company issued 80,214 restricted shares of common stock to the Garber Family Trust in consideration of the capital contribution of $75,000 through the conversion of the unpaid principal due under that certain promissory Note dated March 16, 2007. No underwriters were used. The securities were issued pursuant to an exemption from registration provided under Rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933.

·

On November 8, 2007, the Company issued an Incentive Stock Option to Werner Funk, the President and CEO of the Company, to purchase 2,000,000 (post forward split adjusted) shares of common stock at an initial post forward split adjusted exercise price of $0.525 per share, for services rendered to the Company. Such option was issued pursuant to the terms of the Omnitek Engineering Corp. 2006 Long-Term Incentive Plan, as amended. No underwriters were used. The securities were issued pursuant to an exemption from registration provided under Section 4(2) of the Securities Act of 1933.

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·

On November 8, 2007, the Company issued an Incentive Stock Option to Jan Quigley, the CFO of the Company, to purchase 600,000 (post forward split adjusted) shares of common stock at an initial post forward split adjusted exercise price of $0.525 per share, for services rendered to the Company. Such option was issued pursuant to the terms of the Omnitek Engineering Corp. 2006 Long-Term Incentive Plan, as amended. No underwriters were used. The securities were issued pursuant to an exemption from registration provided under Section 4(2) of the Securities Act of 1933.

·

On May 31, 2008, the Company issued a Warrant to Frank Rose to purchase 100,000 shares of common stock at an exercise price of $1.00 per share, for services rendered to the Company. The warrant can be exercised for three years. No underwriters were used. The securities were issued pursuant to an exemption from registration provided under Section 4(2) of the Securities Act of 1933.

·

On August 15, 2008, the Company issued a Warrant to Merriman Curhan Ford & Co. to purchase 300,000 shares of common stock at an exercise price of $0.01 per share, which Warrant shall become effective at such time as the Company’s common stock is listed on the OTCQX. No underwriters were used. The securities were issued pursuant to an exemption from registration provided under Section 4(2) of the Securities Act of 1933.

·

On September 8, 2008, the Company issued a Warrant to George G. Chachas to purchase 50,000 shares of common stock at an exercise price of $0.125 per share, for services rendered to the Company. No underwriters were used. The securities were issued pursuant to an exemption from registration provided under Section 4(2) of the Securities Act of 1933.

·

On October 15, 2009, the Company entered into a Convertible Promissory Note with Brad Birdwell, for an aggregate amount in cash of $100,000, convertible at a rate of $0.47 per share of Common Stock of the Company. No underwriters were used in the transaction and the securities were issued pursuant to an exemption from registration provided under Section 4(2) of the Securities Act of 1933.

·

On October 15, 2009, in conjunction with the Company entering into the above referenced Convertible Promissory Note with Brad Birdwell, the Company issued a two year Warrant to Brad Birdwell to purchase 100,000 shares of common stock at an exercise price of $0.47 per share. No underwriters were used in the transaction and the securities were issued pursuant to an exemption from registration provided under Section 4(2) of the Securities Act of 1933.

·

On November 5, 2009, the Company issued a five year Warrant to D. Edward McGawley to purchase 400,000 shares of common stock at an exercise price of $0.375 per share. Pursuant to its terms of the Warrant shall vest and be exercisable as follows: (a) with regard to 100,000 shares (i.e. 25%), immediately, on October 11, 2009; (b) with regard to 100,000 shares (i.e. 25%), at such time as 100 Richburn to Leanburn or diesel-to-natural gas conversion kits (“Kits)” have been sold as a result of the Holder’s efforts on or before April 11, 2011; (c) provided that 100 Kits have been sold as a result of the Holder’s efforts on or before April 11, 2011, then the Warrant shall vest and be exercisable with regard to 100,000 shares (i.e. 25%), at such time as 200 Kits have been sold. In the event that 100 Rich to Lean Natural Gas Conversion Kits have NOT been sold as a result of the Holder’s efforts on or before April 11, 2011, the Warrant with regard to 100,000 shares shall expire and terminate; and (d) provided that 100 Kits have been sold as a result of the Holder’s efforts on or before April 11, 2011, then the Warrant shall vest and be exercisable with regard to 100,000 shares (i.e. 25%), at such time as 500 Kits have been sold as a result of the Holder’s efforts on or before October 11, 2012. In the event that 100 Kits have NOT been sold as a result of the Holder’s efforts on or before April 11, 2011, the Warrant with regard to these 100,000 shares shall expire and terminate. No underwriters were used in the transaction and the securities were issued pursuant to an exemption from registration provided under Section 4(2) of the Securities Act of 1933.

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·

On November 5, 2009, the Company also issued a five year Warrant to Odie Lee Deck III, to purchase 400,000 shares of common stock at an exercise price of $0.375 per share. Pursuant to its terms of the Warrant shall vest and be exercisable as follows: (a) with regard to 100,000 shares (i.e. 25%), immediately, on October 11, 2009; (b) with regard to 100,000 shares (i.e. 25%), at such time as 100 Richburn to Leanburn or diesel-to-natural gas conversion kits (“Kits)” have been sold as a result of the Holder’s efforts on or before April 11, 2011; (c) provided that 100 Kits have been sold as a result of the Holder’s efforts on or before April 11, 2011, then the Warrant shall vest and be exercisable with regard to 100,000 shares (i.e. 25%), at such time as 200 Kits have been sold. In the event that 100 Rich to Lean Natural Gas Conversion Kits have NOT been sold as a result of the Holder’s efforts on or before April 11, 2011, the Warrant with regard to 100,000 shares shall expire and terminate; and (d) provided that 100 Kits have been sold as a result of the Holder’s efforts on or before April 11, 2011, then the Warrant shall vest and be exercisable with regard to 100,000 shares (i.e. 25%), at such time as 500 Kits have been sold as a result of the Holder’s efforts on or before October 11, 2012. In the event that 100 Kits have NOT been sold as a result of the Holder’s efforts on or before April 11, 2011, the Warrant with regard to these 100,000 shares shall expire and terminate. No underwriters were used in the transaction and the securities were issued pursuant to an exemption from registration provided under Section 4(2) of the Securities Act of 1933.

·

On November 17, 2009, the Company issued 21,277 restricted shares of Common Stock to the Garber Family Trust UTD July 30, 1998, at a price of $0.47 per share upon the conversion of the principal sum of $10,000 due and owing under that certain promissory note dated April 3, 2009. No underwriters were used in the transaction and the securities were issued pursuant to an exemption from registration provided under Section 4(2) of the Securities Act of 1933.

·

On January 5, 2010, the Company issued 20,000 restricted shares of Common Stock (i.e. 10,000 shares each to George G. Chachas and J. Anthony Rolfe) at a price of $0.375 per share upon the conversion of the sum of $7,500 due and owing for legal services rendered to the Company by Chachas Law Group P.C. No underwriters were used in the transaction and the securities were issued pursuant to an exemption from registration provided under Section 4(2) of the Securities Act of 1933.

ITEM 11.

DESCRIPTION OF REGISTRANT’S SECURITIES TO BE REGISTERED

The authorized capital stock of the Company is one hundred fifty million (150,000,000) in number and consists of (a) one hundred twenty five million (125,000,000) shares of Common Stock, no par value per share (the "Common Stock") and (b) twenty-five million (25,000,000) shares of preferred stock, no par value per share (the "Preferred Stock"). As of the date of this Registration Statement, the Company had 15,547,675 shares of Common Stock outstanding. No Preferred shares have been issued. The Company has reserved 10,000,000 shares of its Common Stock for issuance to certain key employees as performance incentives pursuant to the Company’s 2006 Long-Term Incentive Plan, of which options and warrants to purchase 5,270,000 shares have been issued.

The holders of Common Stock are entitled to one vote per share on all matters to be voted on by holders of Common Stock. Subject to the preferences applicable to Preferred Stock outstanding at any time, the holders of shares of Common Stock shall be entitled to receive such dividends and other distributions in cash, property or shares of stock of the Corporation as may be declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefore. The holders of Common Stock issued and outstanding have and possess the right to receive notice of shareholders’ meetings and to vote upon the election of directors or upon any other matter as to which approval of the outstanding shares of Common Stock or approval of the common shareholders is required or requested. Subject to the preferences applicable to Preferred Stock outstanding at any time, upon liquidation of the Company, the holders of Common Stock will share pro rata in the distribution of assets. The Common Stock has no preemptive or other subscription rights, and there are no conversion rights or redemption or sinking fund provisions with respect to such shares.

The Preferred Stock may be divided into such number of series as the Board of Directors may determine. The Board of Directors is authorized to determine and alter the rights, preferences, privileges and restrictions granted to and imposed upon any wholly unissued series of Preferred Stock, and to fix the number of shares of any series of Preferred Stock and the designation of any such series of Preferred Stock. The Board of Directors, within the limits and restrictions stated in any resolution or resolutions of the Board of Directors originally fixing the number of shares constituting any series, may increase or decrease (but not below the number of shares such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series.

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ITEM 12.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 317 of the California Corporations Code authorizes a court to award, or a corporation’s board of directors to grant indemnity to directors and officers in terms sufficiently broad to permit indemnification, including reimbursement of expenses incurred, under certain circumstances for liabilities arising under the Securities Act of 1933, as amended. The Company’s Articles of Incorporation eliminate the liability of the directors of the registrant for monetary damages to the fullest extent permissible under California law. In addition, the Company’s Articles of Incorporation and Bylaws provide that the registrant has the authority to indemnify the Company’s directors and officers and may indemnify its employees and agents (other than officers and directors) against liabilities to the fullest extent permitted by California law.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, or otherwise, they have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

Omnitek’s By-laws may further provide for indemnification by the Company of its officers and certain non-officer employees under certain circumstances against expenses, including attorneys fees, judgments, fines and amounts paid in settlement, reasonably incurred in connection with the defense or settlement of any threatened, pending or completed legal proceeding in which any such person is involved by reason of the fact that such person is or was an officer or employee of the Company if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to criminal actions or proceedings, if such person had no reasonable cause to believe his or her conduct was unlawful.

We may also enter into indemnification agreements with each of our directors and certain of our executive officers. These agreements may provide that we indemnify each of our directors and such officers to the fullest extent permitted under law and our by-laws, and provide for the advancement of expense to each director and each such officer. We may also obtain directors and officers insurance against certain liabilities.

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ITEM 13.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

OMNITEK ENGINEERING CORP.

FINANCIAL STATEMENTS

December 31, 2009 and 2008

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

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

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