Omnitek Engineering Corp Liquidation Value

Omnitek Engineering Corp (OMTK) is a micro-cap alternative fuel engine technology company with total assets of $754K at December 31, 2025, down from $1.12M at December 31, 2024. Under the liquidation lens, recovery to equity is deeply negative and consistent with the going-concern qualification the auditors have maintained. MFFAIS CLV is reported at negative $1.60M, LLV at negative $1.59M, and OLV at negative $1.30M, all directionally consistent with the balance sheet math below.

Liquidation asset recovery estimate (current period): Cash $14K (100% = $14K); AR $4K (95% = $4K); vendor deposits $329K — recovery uncertain, haircut likely 60-70% given counterparty concentration, call it $200K; inventory net book $296K but gross $1.34M against a $1.04M reserve already applied, suggesting management has pre-haircut-ed a large portion — at 60% of net $296K, recovery ~$178K; PP&E net $5K (50-70% = $2-4K); ROU asset $72K (0% under liquidation — landlord recaptures lease, no asset transfer); long-term deposit $14K (partial recovery, say $10K). Total gross asset recovery: roughly $410-420K.

Liabilities at face value: AP and accruals $269K; accrued management compensation $637K (due to president, contractual obligation at face); AP related parties $35K; notes payable related party $199K (CEO working capital note, matures March 2026); convertible note related party $10K; customer deposits $388K (cash received from customers, full refund obligation on liquidation); operating lease liability current $87K (remaining lease payments through June 2026, contractually obligated); SBA EIDL long-term $199K (secured against all inventory and equipment, first-priority lien). Total liabilities: $1.82M.

Equity recovery: $410-420K assets minus $1.82M liabilities = approximately negative $1.40M to negative $1.41M. This aligns directionally with MFFAIS OLV of negative $1.30M.

Key drivers of the negative recovery: (1) Accrued management compensation of $637K is the largest single liability — quasi-deferred salary to the president/CEO, classified current, extinguished at face in wind-up; (2) Customer deposits of $388K represent cash already received that would need to be refunded with no corresponding inventory asset of equivalent liquidation value to offset; (3) SBA EIDL at $199K holds a first-priority security interest over inventory and equipment, meaning proceeds from those assets flow to SBA before equity; (4) CEO working capital note at $199K grew from $45K at year-end 2024, drawing $154K in new related-party advances during 2025 to fund negative operating cash flow of $244K; (5) Cash position collapsed from $104K to $14K during 2025 despite GAAP net income of $274K — the income was heavily driven by $425K of 'Other Income' whose nature is not separately XBRL-tagged (filing discusses it in the income statement but does not provide a dedicated disclosure note beyond the non-cash activity footnote referencing forfeited customer deposit of $27K and vendor deposit write-off of $4K, which together account for only $31K of the $425K). The composition of the remaining ~$394K of Other Income is not separately tagged in XBRL and is not fully explained in the filing narrative — this is a material uncertainty for any asset recovery assessment. Additionally, outstanding purchase commitments for inventory of $824K (of which $500K are unfunded future cash outlays) represent contingent outflows that would accelerate on wind-up depending on contractual terms; the filing does not separately XBRL-tag cancellation penalties or take-or-pay provisions.