NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Revenue Recognition (Policies)

6 Months Ended

Jun. 30, 2025

Policies

Revenue Recognition

Revenue Recognition

In general, revenue is recognized when control of the promised goods is transferred to our customers, in an amount that reflects the consideration to which we expect to be entitled in exchange for the goods or services. In order to achieve that core principle, a five-step approach is applied: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue allocated to each performance obligation when we satisfy the performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition.

We recognize revenue on various products and services as follows:

Products - The Company recognizes revenue from the sale of products as performance obligations are satisfied. This type of revenue is primarily generated from the sale of finished product to customers. Those sales predominantly contain a single delivery element and revenue is recognized at a single point in time when ownership, risks and rewards transfer (i.e., the performance obligation has been satisfied). Control passes FOB shipping point, or as negotiated.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to a customer and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of Omnitek’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct.

Assurance-type warranties are the only warranties provided by the Company and, as such, Omnitek does not recognize revenue on warranty-related work. Omnitek generally provides a one-year warranty for products that it sells. Warranty claims historically have been insignificant.

Assurance-type warranties are the only warranties provided by the Company and, as such, Omnitek does not recognize revenue on warranty-related work. Omnitek generally provides a one-year warranty for products that it sells. Warranty claims historically have been insignificant.

Disaggregation of Revenue

The following table presents Omnitek’s revenues disaggregated by region and product type:

		For the three months ended June 30, 2025			For the three months ended June 30, 2024
Segments		Products	Total			Products	Total
Domestic	$	62,179	62,179	$		105,493	105,493
International		543,228	543,228			161,478	161,478
	$	605,407	605,407	$		266,971	266,971
Filters	$	200,716	200,716	$		139,909	139,909
Components		404,691	404,691			127,062	127,062
Engineering Services		-	-			-	-
	$	605,407	605,407	$		266,971	266,971

The following table presents Omnitek’s revenues disaggregated by region and product type:

		For the six months ended June 30, 2025			For the six months ended June 30, 2024
Segments		Products	Total		Products	Total
Domestic	$	174,212	174,212	$	185,901	185,901
International		790,941	790,941		318,146	318,146
	$	965,153	965,153	$	504,047	504,047
Filters	$	360,809	360,809	$	208,296	208,296
Components		604,344	604,344		295,751	295,751
Engineering Services		-	-		-	-
	$	965,153	965,153	$	504,047	504,047