Item 1.01Entry into a Material Definitive Agreement.
On March 10, 2021 Omnitek entered into an Employment Agreement with Werner Funk,
the President and CEO of the Company. The term of the Employment Agreement shall
be for a period of three (3) years, with a Base Salary of $150,000 per year with
such salary reviewed on an annual basis by the Board of Directors. Additionally,
concurrent and pursuant to the Employment Agreement, the Company granted o
Werner Funk, the President and Chief Executive Officer, a stock option to
purchase 300,000 shares of common stock, at an exercise price of $0.1155
representing 110% of the closing price of the Company's common stock as of March
10, 2021. Such Options shall be exercisable for a period of seven years. The
Option shall vest and be exercisable at the rate of 1/36 per month.
The foregoing description of the Employment Agreement is qualified in its
entirety by reference to the Employment Agreement filed as Exhibits 10.1 to this
Current Report on Form 8-K, which is incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On March 1, 2021, Omnitek Engineering Corp. (the "Company") receive the fund
pursuant to a Paycheck Protection Program loan (the "PPP Loan") from LIBERTY CP2
SPV, LP, under the recently enacted Coronavirus Aid, Relief, and Economic
Security Act ("CARES Act") administered by the U.S. Small Business
Administration. The Company received total proceeds of $100,000 from the PPP
Loan. Pursuant to the terms of the Note, the first payment shall be determined
based on the deferment period and time required to process any application for
forgiveness. The Note shall be due on March 1, 2026, or as determined by the
Small Business Administration and Department of the Treasury.
Item 3.02 - Unregistered Sales of Equity Securities
As stated above, on March 10, 2021, in conjunction with and pursuant to the Mr.
Funk's Employment, the Company granted to Werner Funk, the President and Chief
Executive Officer, a stock option to purchase 300,000 shares of common stock, at
an exercise price of $0.1155 representing 110% of the closing price of the
Company's common stock as of March 10, 2021. Such Options shall be exercisable
for a period of seven years. The Option shall vest and be exercisable at the
rate of 1/36 per month. No underwriters were used. The securities were issued
pursuant to an exemption from registration provided by Section 4(a)(2) of the
Securities Act of 1933. As the founder, a Director and the CEO of the Company
Mr. Funk was intimately acquainted with the Company's business plan and proposed
activities at the time of issuance, and possessed information on the Company
necessary to make an informed investment decision.
Also on March 10, 2021, the Company granted to each of John M. Palumbo and Gary
S. Maier, the two independent directors, a non-qualified stock option to
purchase 50,000 shares of the Company's common stock at an exercise price of
$0.1050 per share representing 100% of the closing price of the Company's common
stock as of March 10, 2021. Such Options shall be exercisable for a period of
seven years. The Option shall vest and be exercisable immediately. No
underwriters were used. The securities were issued pursuant to an exemption from
registration provided by Section 4(a)(2) of the Securities Act of 1933. The
individuals receiving the options were intimately acquainted with the Company's
business plan and proposed activities at the time of issuance, and possessed
information on the Company necessary to make an informed investment decision.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits. The following exhibits are either filed as a part hereof or
are incorporated by reference. Exhibit numbers correspond to the numbering
system in Item 601 of Regulation S-K.
Exhibit
Number Description of Exhibit
10.1 Werner Funk Employment Agreement dated March 10, 2021
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