8-K: Omnitek Engineering Corp. Completes Equity Sale, Issues Warrant

Sentiment:

Current Report (8-K) 30 September 2026 12:22 PM

📋All filings for Omnitek Engineering CORP

Omnitek Engineering Corp. announced the closing of a sale of Series A Preferred Stock and the issuance of a significant warrant, impacting control and future equity.

Capital raiseThe company closed the sale of 5,000 shares of Series A Preferred Stock for $500,000.The company has an agreement for a second closing of an additional 5,000 shares of Series A Preferred Stock for $500,000 within 90 days.The company received $550,000 for the issuance of a warrant to purchase 91,666,666 shares of common stock.

Worse than expectedThe effective control transfer via super-voting preferred stock is a significant negative development for existing common shareholders.The warrant's exercise price of $0.004, combined with the potential for cashless exercise, indicates a high likelihood of substantial future dilution that could severely impact the value of existing common shares.The conversion price implied by the Series A Preferred Stock ($100 original issue price / 50,000 shares = $0.002 per share) is even lower than the warrant exercise price, highlighting the preferential terms granted to the Series A holders.

Summary

On September 29, 2026, Omnitek Engineering Corp. closed the sale of 5,000 shares of Series A Preferred Stock for $500,000.
An additional 5,000 shares are to be sold for $500,000 within 90 days of the initial closing.
The company also issued a warrant to purchase 91,666,666 shares of common stock for $550,000.
This warrant is exercisable for five years at $0.004 per share and includes a cashless exercise feature.
The issuance of Series A Preferred Stock, carrying 50,000 votes per share, grants the holder control over the board of directors.
All previously outstanding stock options (1,450,000 shares) were cancelled concurrently with the closing.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a neutral to slightly negative development due to the significant dilution potential and change in control implications, despite the capital infusion.

Positives

Secured $500,000 in immediate capital from the sale of Series A Preferred Stock.
Potential for an additional $500,000 in capital from the second tranche of Series A Preferred Stock.
Received $550,000 for the issuance of a warrant.
Cancellation of all outstanding stock options simplifies the capital structure.

Negatives

The issuance of Series A Preferred Stock with 50,000 votes per share effectively transfers control of the company.
The warrant allows for the purchase of a substantial number of common shares (91,666,666) at a very low exercise price ($0.004), indicating significant potential dilution.
The cashless exercise feature of the warrant could lead to immediate dilution without further capital injection.
The original issue price of Series A Preferred Stock is $100 per share, but it converts into 50,000 shares of common stock, implying a conversion price of $0.002 per common share, which is below the warrant exercise price.

Risks

Significant dilution of existing common shareholders' equity and voting power due to the large warrant issuance.
Potential for a change in control of the company due to the voting power of the Series A Preferred Stock.
The low exercise price of the warrant ($0.004) may not reflect the true market value of the common stock, potentially disadvantaging existing shareholders.
The cashless exercise option could exacerbate dilution without providing additional funds to the company.

Future Outlook

The company has committed to a second closing for an additional 5,000 shares of Series A Preferred Stock within 90 days. The warrant is exercisable for five years, with potential for significant future equity issuance.

Management Comments

The Board of Directors created the Series A Preferred Stock to establish its rights, preferences, privileges, and restrictions.
The issuance of Series A Preferred Stock and the warrant are intended to provide capital and facilitate future growth.

Industry Context

StockSavvy.ai notes that the issuance of high-vote preferred stock and warrants at low exercise prices is a common, albeit often dilutive, method for early-stage or distressed companies to raise capital. This strategy can lead to significant shifts in control and shareholder value.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Creation of New Stock Series	The Board of Directors created a new series of preferred stock designated as Series A Preferred Stock, with 20,000 authorized shares.	2026-09-23	Establishes a new class of stock with significant voting rights and conversion privileges, impacting corporate control and capital structure.
Voting Rights Amendment	Each share of Series A Preferred Stock is entitled to 50,000 votes, granting substantial voting power to holders.	2026-09-23	Concentrates voting power, potentially leading to a change in control and influencing future corporate decisions.
Conversion Rights Established	Series A Preferred Stock is convertible into Common Stock at a 1:50,000 ratio, with automatic conversion upon a qualifying IPO or majority vote.	2026-09-23	Provides a pathway for preferred shareholders to convert into common stock, potentially leading to significant dilution.

Stakeholder Impact

Existing common shareholders face significant dilution and a potential loss of control due to the super-voting preferred stock and the large warrant issuance.
The holder of the Series A Preferred Stock and the warrant gains substantial voting control and potential equity ownership.
Creditors and debt holders may see their position weakened due to increased equity dilution and potential changes in company strategy.

Next Steps

Complete the second closing of Series A Preferred Stock sale within 90 days.
Manage the exercise of the issued warrant over its five-year term.
Potentially amend Articles of Incorporation to increase authorized common stock if necessary for warrant exercise.

Key Dates

Date	Description
2026-09-23	Date of earliest event reported (Board of Directors created Series A Preferred Stock).
2026-09-27	Date of Preferred Stock Purchase Agreement.
2026-09-29	Tranche 1 Closing Date; Sale of Series A Preferred Stock and issuance of Warrant.
2031-09-29	Expiration Date of the Warrant.

Recommendation

sell

The issuance of super-voting preferred stock to Hard Rock Holdco, LLC, effectively transferring control, combined with the issuance of a large warrant at a very low exercise price with cashless exercise provisions, points to significant future dilution and a negative outlook for existing common shareholders. The terms suggest a distressed capital raise rather than a growth-oriented financing.

Keywords

Series A Preferred Stock, Warrant, Equity Financing, Capital Raise, Change of Control, Dilution, Unregistered Securities, Section 4(a)(2)

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