NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES: Revenue Recognition (Policies)

9 Months Ended

Sep. 30, 2025

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. Those sales predominantly contain a single delivery element, and revenue is recognized at a single point in time when ownership and risks transfer (i.e. the performance obligation has been satisfied). In general, ownership and risk 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.

Disaggregation of Revenue

The following tables present Omnitek’s revenues disaggregated by region and product type:

		For the three-month period ended September 30, 2025			For the three-month period ended September 30, 2024
		Consumer			Consumer
Segments		Products	Total		Products	Total
Domestic	$	94,293	94,293	$	90,324	90,324
International		202,320	202,320		187,041	187,041
	$	296,613	296,613	$	277,365	277,365

Filters	$	219,433	219,433	$	161,877	161,877
Components		77,180	77,180		115,488	115,488
	$	296,613	296,613	$	277,365	277,365

		For the nine-month period ended September 30, 2025			For the nine-month period ended September 30, 2024
		Consumer			Consumer
Segments		Products	Total		Products	Total
Domestic	$	267,730	267,730	$	276,225	276,225
International		994,035	994,035		505,187	505,187
	$	1,261,765	1,261,765	$	781,412	781,412

Filters	$	580,242	580,242	$	370,173	370,173
Components		681,523	681,523		411,239	411,239
Engineering Services		-	-		-	-
	$	1,261,765	1,261,765	$	781,412	781,412

Omnitek Engineering Corp 10-Q