What changed in this filing

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Item 1. Business

2022-03-14 compared with 2021-03-08 · 450 added, 462 removed, 35 unchanged (96% of the section changed)

NOTE REGARDING FORWARD-LOOKING STATEMENTS

statements in this Annual Report on Form 10-K that are not historical facts — but rather reflect our current expectations

concerning future results and events — constitute forward-looking statements.

The words “believes,” “expects,”

“intends,” “plans,” “anticipates,” “intend,” “estimate,” “potential,”

“continue,” “hopes,” “likely,” “will,” and similar expressions, or the negative

of these terms, identify such forward-looking statements.

Such forward-looking statements involve known and unknown risks, uncertainties

and other important factors that could cause the actual results, performance or achievements of Omega Flex, Inc., or industry

results, to differ materially from future results, performance or achievements expressed or implied by such forward-looking statements.

are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s view only as of

the date of this annual report statement.

We undertake no obligation to update the result of any revisions to these forward-looking

statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated

events, conditions or circumstances.

statements in this Annual Report on Form 10-K that are not historical facts — but rather reflect our current expectations concerning

future results and events — constitute forward-looking statements.

The words “believes,” “expects,” “intends,”

“plans,” “anticipates,” “intend,” “estimate,” “potential,” “continue,”

“hopes,” “likely,” “will,” and similar expressions, or the negative of these terms, identify such

forward-looking statements.

Such forward-looking statements involve known and unknown risks, uncertainties and other important factors

that could cause the actual results, performance or achievements of Omega Flex, Inc., or industry results, to differ materially from

future results, performance or achievements expressed or implied by such forward-looking statements.

are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s view only as of the date

of this annual report statement.

We undertake no obligation to update the result of any revisions to these forward-looking statements

which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, conditions,

or circumstances.

OF OUR BUSINESS

of the Company

Company’s business is controlled as a single operating segment that consists of the manufacture and sale of flexible metal

hose (also described as corrugated tubing), as well as the sale of the Company’s related proprietary fittings and a vast

array of accessories.

Company is a leading manufacturer of flexible metal hose, which is used in a variety of ways to carry gases and liquids within

their particular applications.

Company’s business is controlled as a single operating segment that consists of the manufacture and sale of flexible metal hose

(also described as corrugated tubing), as well as the sale of the Company’s related proprietary fittings and a vast array of accessories.

Company is a leading manufacturer of flexible metal hose, which is used in a variety of ways to carry gases and liquids within their

particular applications.

Some of the more prominent uses include:

fuel gases within residential and commercial buildings;

gasoline and diesel gasoline products (both above and below the ground) in a double containment piping to contain any possible

leaks, which is used in automotive and marina refueling, and fueling for back-up generation;

copper-alloy corrugated piping in medical or health care facilities to carry medical gases (oxygen, nitrogen, vacuum) or pure

gases for pharmaceutical applications;

applications where the customer requires the piping to have both a degree of flexibility and/or an ability to carry corrosive

compounds or mixtures, or to carry at both very high and very low (cryogenic) temperatures.

Company manufactures flexible metal hose at its facilities in Exton, Pennsylvania, and Houston, Texas in the United States (U.S.),

and in Banbury, Oxfordshire in the United Kingdom (U.K.), and primarily sells its products through distributors, wholesalers and

to original equipment manufacturers (“OEMs”) throughout North America and Europe, and to a lesser extent other global

flexible metal hose industry is highly fragmented and diverse, with more than 10 companies producing flexible metal hose in the

United States, and at least that many in Europe and Asia.

Because of its simple and ubiquitous nature, flexible metal hose can

be applied and has been applied to a number of different applications across a broad range of industries.

gasoline and diesel gasoline products (both above and below the ground) in a double containment piping to contain any possible leaks,

which is used in automotive and marina refueling, and fueling for back-up generation;

copper-alloy corrugated piping in medical or health care facilities to carry medical gases (oxygen, nitrogen, vacuum) or pure gases

for pharmaceutical applications;

applications where the customer requires the piping to have both a degree of flexibility and/or an ability to carry corrosive compounds

or mixtures, or to carry at both very high and very low (cryogenic) temperatures.

Company manufactures flexible metal hose at its facilities in Exton, Pennsylvania, and Houston, Texas in the United States (U.S.), and

in Banbury, Oxfordshire in the United Kingdom (U.K.), and primarily sells its products through distributors, wholesalers and to original

equipment manufacturers (“OEMs”) throughout North America and Europe, and to a lesser extent other global markets.

flexible metal hose industry is highly fragmented and diverse, with more than 10 companies producing flexible metal hose in the U.S.,

and at least that many in Europe and Asia.

Because of its simple and ubiquitous nature, flexible metal hose can be applied and has been

applied to a number of different applications across a broad range of industries.

major market categories for flexible metallic hose include (1) automotive, (2) aerospace, (3) residential, commercial, and institutional

2 unchanged sentences

The residential

and commercial construction markets utilize corrugated stainless steel tubing (CSST) primarily for flexible gas piping, double

containment piping for conveying diesel fuel and gasoline from a storage tank to a dispenser or back-up generator.

utilizes corrugated copper tubing for medical gases in medical care facilities, including hospitals, clinics, dental and veterinary

offices and long-term care facilities.

The general industrial market includes all of the processing industries, the most important

of which include primary steel, petrochemical, pharmaceutical, and specialty applications for the transfer of fluids at both extremely

low and high temperatures, (such as the conveying of cryogenic liquids) and a highly fragmented OEM market, as well as the maintenance

and repair market.

and commercial construction markets utilize corrugated stainless steel tubing (CSST) primarily for flexible gas piping, double containment

piping for conveying diesel fuel and gasoline from a storage tank to a dispenser or back-up generator.

The Company utilizes corrugated

copper tubing for medical gases in medical care facilities, including hospitals, clinics, dental and veterinary offices, and long-term

care facilities.

The general industrial market includes all of the processing industries, the most important of which include primary

steel, petrochemical, pharmaceutical, and specialty applications for the transfer of fluids at both extremely low and high temperatures,

(such as the conveying of cryogenic liquids) and a highly fragmented OEM market, as well as the maintenance and repair market.

of our competitors appear to be dominant in more than one market.

We are a leading supplier of flexible metal hose in each of

the markets in which we participate.

We are a leading supplier of flexible metal hose in each of the markets

in which we participate.

Our assessment of our overall competitive position is based on several factors.

gas piping market in the U.S.

The flexible gas piping market

is currently concentrated in the residential housing market.

Based on the reports issued by the

national trade groups on housing construction, the level of acceptance of flexible gas piping in the construction market, and

the average usage of flexible gas piping in a residential building, we believe that we are able to estimate with a reasonable

level of accuracy the size of the total gas piping market.

In addition, the Company is a member of an industry trade group comprised

of the largest manufacturers of CSST in the U.S., which compiles and distributes sales volume statistics for its members relative

to flexible gas piping.

Based on our sales and the statistics described above, the Company believes it can estimate its position

within that market.

For other applications, industry trade groups collect and report data related to these markets, and we can

then compare and estimate our status within that group as a whole.

In addition, the customer base for the products that we sell,

and the identity of the manufacturers aligned with those customers is fairly well known, which again allows the Company to extract

information and estimate its market position.

Lastly, the term “leading” implies a host of factors other than sales

volume and market share position.

It includes the range and capability of the product line, history of product development and

new product launches, all of which information is in the public domain.

Based on all of this information, the Company is reasonably

confident that it is indeed a leader in the major market segments in which it participates.

in 1975 under the name of Tofle America, Inc., the Company was originally established as the subsidiary of a Japanese manufacturer

of flexible metal hose.

For a number of years, we were a manufacturer of flexible metal hose that was sold primarily to customers

Based on the reports issued by the national trade groups on

housing construction, the level of acceptance of flexible gas piping in the construction market, and the average usage of flexible gas

piping in a residential building, we believe that we are able to estimate with a reasonable level of accuracy the size of the total gas

piping market.

In addition, the Company is a member of an industry trade group comprised of the largest manufacturers of CSST in the

U.S., which compiles and distributes sales volume statistics for its members relative to flexible gas piping.

Based on our sales and

the statistics described above, the Company believes it can estimate its position within that market.

For other applications, industry

trade groups collect and report data related to these markets, and we can then compare and estimate our status within that group as a

In addition, the customer base for the products that we sell, and the identity of the manufacturers aligned with those customers

is fairly well known, which again allows the Company to extract information and estimate its market position.

Lastly, the term “leading”

implies a host of factors other than sales volume and market share position.

It includes the range and capability of the product line,

history of product development and new product launches, all of which information is in the public domain.

Based on all of this information,

the Company is reasonably confident that it is indeed a leader in the major market segments in which it participates.

in 1975 under the name of Tofle America, Inc., the Company was originally established as the subsidiary of a Japanese manufacturer of

flexible metal hose.

For a number of years, the Company was a manufacturer of flexible metal hose that was sold primarily to customers

using the hose for incorporation into finished assemblies for industrial applications.

We later changed our name to Omega Flex,

Inc., and in 1996, we were acquired by Mestek, Inc.

The Company later changed its name to Omega Flex,

Inc., and in 1996, the Company was acquired by Mestek, Inc.

January 2005, Mestek announced its intention to distribute its equity ownership in our common stock to the Mestek shareholders.

A registration statement for the Omega Flex common stock was filed with the Securities and Exchange Commission and the registration

statement was declared effective on July 22, 2005.

We also listed our common stock on the NASDAQ National Market (now the NASDAQ

Global Market) under the stock symbol “OFLX”, and began public trading of our common stock on August 1, 2005.

the years, most of the Company’s business has been generated from Omega Flex, Inc., and concentrated in North America, but

the Company also has foreign subsidiaries located in the U.K., which are largely focused on European and other international markets.

The Company also has a local subsidiary which owns the Company’s Exton, Pennsylvania real estate.

A registration

statement for the Omega Flex common stock was filed with the Securities and Exchange Commission and the registration statement was declared

effective on July 22, 2005.

The Company also listed its common stock on the NASDAQ National Market (now the NASDAQ Global Market) under

the stock symbol “OFLX” and began public trading of the common stock on August 1, 2005.

the years, most of the Company’s business has been generated from Omega Flex, Inc., and concentrated in North America, but the

Company also has foreign subsidiaries located in the U.K., which are largely focused on European and other international markets.

Company also has a local subsidiary which owns the Company’s Exton, Pennsylvania real estate.

of Current Business

Company’s strategy has been and continues to be focused on its core strengths in the development, manufacture, and sale

of flexible metal hose for use in a variety of applications.

The Company is uniquely situated to exploit its capabilities in this

area due to its long experience in engineering and bringing new products to market, and its proprietary rotary process, which

permits the Company to manufacture flexible metal hose with superior quality and efficiency as compared to its competitors.

Company’s strategy is to develop flexible metal products in new and developing markets that would recognize and compensate

for the value-added propositions that each product brings to that industry.

Typically, this would involve a new flexible metal

hose that replaces traditional rigid products, and thereby improve the quality of the installed product, increase installation

efficiency, and provide an overall cost and time savings.

Examples of such new products would be our flexible gas piping sold

under the TracPipe ® CounterStrike ® trademarks, our new MediTrac ® corrugated medical

gas tubing, and our DoubleTrac ® double-containment piping.

In each instance, the products we bring to market offers

customers superior quality, expanded applications due to the product’s flexibility, and reduced total costs.

seeks to protect its investments in product develop by seeking and obtaining patent protection for new and unique features of

its products.

Company’s business is managed as a single operating segment that consists of the manufacture and sale of flexible metal

hose, fittings and accessories.

Company’s strategy has been, and continues to be, focused on its core strengths in the development, manufacture, and sale of flexible

metal hose for use in a variety of applications.

The Company is uniquely situated to exploit its capabilities in this area due to its

long experience in engineering and bringing new products to market, and its proprietary rotary process, which permits the Company to

manufacture flexible metal hose with superior quality and efficiency as compared to its competitors.

The Company’s strategy is

to develop flexible metal products in new and developing markets that would recognize and compensate for the value-added propositions

that each product brings to that industry.

Typically, this would involve a new flexible metal hose that replaces traditional rigid products,

and thereby improve the quality of the installed product, increase installation efficiency, and provide an overall cost and time savings.

Examples of such new products are our flexible gas piping sold under the TracPipe ® CounterStrike ® trademarks,

our new MediTrac ® corrugated medical gas tubing, and our DoubleTrac ® double-containment piping.

instance, the products we bring to market offers customers superior quality, expanded applications due to the product’s flexibility,

and reduced total costs.

The Company seeks to protect its investments in product development by seeking and obtaining patent protection

for new and unique features of its products.

Products and Customers

Company’s business is managed as a single operating segment that consists of the manufacture and sale of flexible metal hose, fittings,

and accessories.

sell our products to customers scattered across a wide and diverse set of industries ranging from construction to pharmaceutical with

close to 10,100 customers on record.

These sales channels include sales through independent sales representatives, distributors, OEM,

direct sales, and sales through our website on the internet.

We utilize various distribution companies in the sale of our TracPipe ®

and Counterstrike ® flexible gas piping, and these distribution customers in the aggregate represent a significant

portion of our business.

In particular, the Company has one significant customer, whose various branches had sales in the range of 13%

to 14% of total sales during the periods of 2019 to 2021 and was in the range of 7% to 18% of the Company’s accounts receivable

balance over the last two years.

All of this business is done on a purchase order basis for immediate resale commitments or stocking,

and there are no long-term purchase commitments.

In the event we were to lose an account, we would not expect any long-term reduction

in our sales due to the broad end-user acceptance of our products.

We would anticipate that in the event of a loss of any one or more

distributors, that after an initial transition period, the sale of our products would resume at or near their historical levels.

in the case of certain national distribution chains, which is the case regarding the Company’s largest customer noted above, and

other distributors, it is possible that there would continue to be purchasing activity from one or more regional or branch distribution

We sell our products within North America, primarily in the U.S.

and Canada, and we also sell our products internationally,

primarily in Europe through our manufacturing facility located in Banbury, U.K.

Our sales outside of North America were in the range

of 7% to 11% of our total sales during the last three years, with most of the sales occurring in the U.K.

and elsewhere in Europe.

do not have a material portion of our long-lived assets located outside of the U.S.

mentioned previously, we sell our products primarily through independent outside sales organizations, including independent sales representatives,

distributors, fabricating distributors, wholesalers, and OEMs.

We have a limited internal sales function that sells our products to key

accounts, including OEMs and distributors of bulk hose.

We believe that within each geographic market in which the independent sales

representative, distributor or wholesaler is located that our outside sales organizations are the first or second most successful outside

sales organization for the particular product line within that geographic area.

Company has had the most success within the residential construction industry with its flexible gas piping products, TracPipe ® ,

which was introduced in 1997, and its more robust counterpart TracPipe ® CounterStrike ® , which came

to market in 2004.

Partnered with the development of our AutoFlare ® and AutoSnap ® patented fittings

and accessories, both have enjoyed wide acceptance due to their reliability and durability.

Within the residential construction

industry, the flexible gas piping products that we offer and similar products offered by our competitors have sought to overcome

the use of black iron pipe that has traditionally been used by the construction industry in the United States and Canada for the

piping of fuel gases within a building.

Prior to the introduction of the first CSST system in 1989, nearly all construction in

the United States and Canada used traditional black iron pipe for gas piping.

However, the advantages of CSST in areas subject

to high incidence and likelihood of seismic events had been first demonstrated in Japan.

In seismic testing, the CSST was shown

to withstand the stresses on a piping system created by the shifting and movement of an earthquake better than rigid pipe.

advantages of CSST over the traditional black iron pipe also include lower overall installation costs because it can be installed

in long uninterrupted lines within the building.

which was introduced in 1997, and its more robust counterpart TracPipe ® CounterStrike ® , which came to market

Partnered with the development of our AutoFlare ® and AutoSnap ® patented fittings and accessories,

both have enjoyed wide acceptance due to their reliability and durability.

Within the residential construction industry, the flexible

gas piping products that we offer and similar products offered by our competitors have sought to overcome the use of black iron pipe

that has traditionally been used by the construction industry in the U.S.

and Canada for the piping of fuel gases within a building.

Prior to the introduction of the first CSST system in 1989, nearly all construction in the U.S.

and Canada used traditional black iron

pipe for gas piping.

However, the advantages of CSST in areas subject to high incidence and likelihood of seismic events had been first

demonstrated in Japan.

In seismic testing, the CSST was shown to withstand the stresses on a piping system created by the shifting and

movement of an earthquake better than rigid pipe.

The advantages of CSST over the traditional black iron pipe also include lower overall

installation costs because it can be installed in long uninterrupted lines within the building.

flexibility of the tube allows it to be bent by hand without any tools when a change in direction in the line is required.

contrast, black iron pipe requires that each bend in the pipe have a separate fitting attached.

This requires the installer to

thread the ends of the black iron pipe, apply an adhesive to the threads, and then screw on the fitting, all of which is labor

intensive and costly, including testing and rework if the work is not done properly.

As a result of these advantages, the Company

estimates that CSST now commands slightly over one-half of the market for fuel gas piping in new and remodeled residential construction

in the United States, and the use of rigid iron pipe, and to a lesser degree copper tubing, accounts for the remainder of the

The Company plans to continue its growth trend by demonstrating its advantages against other technologies, in both the

residential and commercial markets, in both the United States and overseas in geographic areas that have access to natural gas

distribution systems.

black iron pipe requires that each bend in the pipe have a separate fitting attached.

This requires the installer to thread the ends

of the black iron pipe, apply an adhesive to the threads, and then screw on the fitting, all of which is labor intensive and costly,

including testing and rework if the work is not done properly.

As a result of these advantages, the Company estimates that CSST now commands

over one-half of the market for fuel gas piping in new and remodeled residential construction in the U.S., and the use of rigid iron

pipe, and to a lesser degree copper tubing, accounts for the remainder of the market.

The Company plans to continue its growth trend

by demonstrating its advantages against other technologies, in both the residential and commercial markets, in both the U.S.

in geographic areas that have access to natural gas distribution systems.

previously mentioned, in 2004, the Company introduced a new brand of flexible gas piping sold under the registered trademark “CounterStrike ®” .

1 unchanged sentence

This feature is particularly

desirable in areas that are subject to high levels of lightning strikes, such as the Southeast and Ohio Valley sections of the

In a lightning strike, the electrical energy of the lightning can energize all metal systems and components in a building.

This electrical energy, in attempting to reach ground, may arc between metal systems that have different electrical resistance,

and arcing can cause damage to the metal systems.

In standard CSST systems, an electrical bond between the CSST and the building’s

grounding electrode would address this issue, but lightning is an extremely powerful and unpredictable force.

CounterStrike ®

CSST is designed to be electrically conductive and therefore disperse the energy of any electrical charge over the entire

surface of the CounterStrike ® line.

In 2007, the Company introduced a new version of CounterStrike ® CSST

that was tested to be even more resistant to damage from electrical arcing than the original version, and substantially more effective

than standard CSST products.

As a result of its robust performance, the new version of CounterStrike ® has been

widely accepted in the market, and thus during 2011, the Company made the decision to sell exclusively CounterStrike ®

within the U.S..

This move demonstrated the Company’s commitment to innovation and safety, and further enhanced our

leadership in the marketplace.

desirable in areas that are subject to high levels of lightning strikes, such as the Southeast and Ohio Valley sections of the U.S.

a lightning strike, the electrical energy of the lightning can energize all metal systems and components in a building.

This electrical

energy, in attempting to reach ground, may arc between metal systems that have different electrical resistance, and arcing can cause

damage to the metal systems.

In standard CSST systems, an electrical bond between the CSST and the building’s grounding electrode

would address this issue, but lightning is an extremely powerful and unpredictable force.

CounterStrike ® CSST is designed

to be electrically conductive and therefore disperse the energy of any electrical charge over the entire surface of the CounterStrike ®

In 2007, the Company introduced a new version of CounterStrike ® CSST that was tested to be even more resistant

to damage from electrical arcing than the original version, and substantially more effective than standard CSST products.

of its robust performance, the new version of CounterStrike ® has been widely accepted in the market, and thus during 2011,

the Company made the decision to sell exclusively CounterStrike ® within the U.S.

This move demonstrated the Company’s

commitment to innovation and safety, and further enhanced our leadership in the marketplace.

2008, the Company introduced its first double containment piping product – DoubleTrac ® .

double containment piping has earned stringent industry certifications for its ability to safely contain and convey liquid

DoubleTrac ® received certification from Underwriters Laboratory, the testing and approval agency, that our

product is fully compliant with UL971A, which is the product standard in the U.S.

for metallic underground fuel piping, ULc S667

which is the product standard in Canada for metallic underground fuel piping, as well as approvals from other relevant state agencies

that have more stringent testing procedures for the product.

Similar to our flexible gas piping, DoubleTrac ® provides

advantages over older rigid pipe technologies.

DoubleTrac ® is made and can be installed in long continuous runs,

eliminating the need for manually assembling rigid pipe junctions at the end of a pipe or at a turn in direction.

DoubleTrac ® has superior performance in terms of its ability to safely convey fuel from the storage tank to the

dispenser, primarily because DoubleTrac ® is essentially a zero permeation piping system, far exceeding the most

stringent government regulations.

Originally designed for applications involving automotive fueling stations running from the

storage tank to the fuel dispenser, the ability of DoubleTrac ® to handle a variety of installation challenges has

broadened its applications to include refueling at marinas, fuel lines for back-up generators, and corrosive liquids at waste

treatment plants.

In short, in applications where double containment piping is required to handle potentially contaminating fluids

or corrosive fluids, DoubleTrac ® is engineered to handle those demanding applications.

double containment piping has earned stringent industry certifications for its ability to safely contain and convey liquid fuels.

received certification from Underwriters Laboratory, the testing and approval agency, that our product is fully compliant with

UL971A, which is the product standard in the U.S.

for metallic underground fuel piping, ULc S679 which is the product standard in Canada

for metallic underground fuel piping, as well as approvals from other relevant state agencies that have more stringent testing procedures

for the product.

Additionally, DoubleTrac® is fully complaint to UL 1369, which is the bi-national USA and Canada standard for aboveground

piping for flammable and combustible liquids.

DoubleTrac® is one of a select few piping systems having listings and approvals for

both belowground and aboveground piping systems.

Similar to our flexible gas piping, DoubleTrac ® provides advantages over

older rigid pipe technologies.

DoubleTrac ® is made and can be installed in long continuous runs, eliminating the need

for manually assembling rigid pipe junctions at the end of a pipe or at a turn in direction.

In addition, DoubleTrac ®

has superior performance in terms of its ability to safely convey fuel from the storage tank to the dispenser, primarily because DoubleTrac ®

is essentially a zero permeation piping system, far exceeding the most stringent government regulations.

Originally designed for

applications involving automotive fueling stations running from the storage tank to the fuel dispenser, the ability of DoubleTrac ®

to handle a variety of installation challenges has broadened its applications to include refueling at marinas, fuel lines for back-up

generators, and corrosive liquids at waste treatment plants.

In short, in applications where double containment piping is required to

handle potentially contaminating fluids or corrosive fluids, DoubleTrac ® is engineered to handle those demanding applications.

a complementary product which is very similar to DoubleTrac ® , was brought to the marketplace in 2011.

piping is specifically engineered to handle the demanding requirements for diesel emissions fluid (DEF).

Federal regulations

require all diesel engines to use DEF to reduce the particulate contaminants from the diesel combustion process.

is highly corrosive and cannot be pre-mixed with the diesel fuel.

This requires that new diesel trucks and automobiles must have

separate tanks built into the vehicle so that the diesel emissions fluid can be injected into the catalytic converter after the

point of combustion.

Similarly, a large portion of fueling stations carrying diesel fuel are now also selling DEF through a separate

In addition to being highly corrosive, DEF also has a high freezing temperature, requiring a heat trace in the piping

in applications in northern areas of the U.S..

DEF-Trac ® flexible piping is uniquely suited to handle all of these

challenges, as the stainless steel inner core is corrosion resistant, and DEF-Trac ® also comes with options for

heat trace that is extruded directly into the wall of the product.

In summary, DEF-Trac ® provides a complete solution

to the demanding requirements of this unique application, as such, DEF-Trac ® has been met with enormous acceptance

from the industry that was searching for a solution to the new environmental requirement.

The advantageous market position of

DEF-Trac ® has leveraged the penetration of DoubleTrac ® into the broader market for automotive fueling

Federal regulations require

all diesel engines to use DEF to reduce the particulate contaminants from the diesel combustion process.

However, DEF is highly corrosive

and cannot be pre-mixed with the diesel fuel.

This requires that new diesel trucks and automobiles must have separate tanks built into

the vehicle so that the diesel emissions fluid can be injected into the catalytic converter after the point of combustion.

a large portion of fueling stations carrying diesel fuel are now also selling DEF through a separate dispenser.

In addition to being

highly corrosive, DEF also has a high freezing temperature, requiring a heat trace in the piping in applications in northern areas of

DEF-Trac ® flexible piping is uniquely suited to handle all of these challenges, as the stainless steel inner

core is corrosion resistant, and DEF-Trac ® also comes with options for heat trace that is extruded directly into the wall

of the product.

In summary, DEF-Trac ® provides a complete solution to the demanding requirements of this unique application,

as such, DEF-Trac ® has been met with enormous acceptance from the industry that was searching for a solution to the new

environmental requirement.

The advantageous market position of DEF-Trac ® has leveraged the penetration of DoubleTrac ®

into the broader market for automotive fueling applications.

September 2013, the Company announced that it would be releasing a newly developed fitting, AutoSnap ® , as part of its

flexible gas piping product line.

After successfully completing all required testing by independent testing agencies, as well as extensive

field trials across the U.S.

by trained TracPipe ® CounterStrike ® installers, AutoSnap ® was

officially introduced to the market in January 2014 to wide acceptance.

With its patent-pending design, the product simplified the installation

process, and addressed installer preferences for both speed and ease of installation.

The AutoSnap ® fitting now commands

a significant portion of the Company’s fittings demand.

2019, the Company commercialized MediTrac ® , corrugated medical tubing (“CMT”), following its 2018 launch with

several beta sites.

Developed for the healthcare industry, the product can be used in hospitals, ambulatory care centers, dental, physician

and veterinary clinics, laboratories, and any facility that uses medical gases (oxygen, nitrogen, carbon dioxide, etc.).

copper alloy with an exterior fire-retardant jacket, MediTrac ® is made and sold in long continuous-length rolls.

flexible nature and storage in rolls allows it to be transported to and installed in health care facilities much more easily and quickly

than traditional medical grade rigid copper pipe, which comes in 20 foot long sections.

MediTrac ® is unrolled from a spool

and installed in a medical facility in one long continuous length and is bent by hand when a change in direction is needed.

lengths and ability to change direction with ease eliminates labor that would otherwise be needed to braze connections to straight sections

of copper pipe or elbows or tees for changes in direction, while increasing installation efficiency and operational safety and minimizing

downtime for healthcare facilities.

Easy to assemble axial swaged brass fittings connect with all K, L and DWV medical tubing that is

sized from ½” to 2” in diameter and provides a leak-tight seal using ordinary hand tools.

The patent-pending fitting

also prevents tampering or disassembly through the use of a tamper-proof sleeve that is required by the Health Care Facilities Code (NFPA

99 – 2018 edition).

Rated for 185 psig, MediTrac ® can deliver the necessary volume of gas wherever it is needed

across a facility.

A recent case study comparing the installation of rigid copper pipe and MediTrac ® showed that MediTrac ®

increases installation efficiency by a factor of five (i.e., a 500% increase in efficiency).

By reducing the number of joints and

brazed connections, MediTrac ® also reduces possible contamination into the medical gas system along with the fire risk

associated with brazing.

MediTrac ® is currently listed to UL 1365 and has an ASTM E84 rating of 25/50 and meets all 2018

requirements of the Health Care Facilities Code (NFPA 99 – 2018).

2020, the MediTrac ® product line experienced significant growth in use and acceptance in the marketplace resulting from

its ability to be quickly and safely installed to meet the unprecedented crisis caused by the COVID-19 pandemic.

Numerous medical institutions

and emergency medical centers used MediTrac ® CMT to quickly install medical gas lines in tent hospitals or in converted

facilities to handle the surging demand.

For example, MediTrac ® medical gas piping was installed in a NYC temporary hospital

located in Central Park and in the Cleveland Clinic for patients with COVID-19 infections and in need of supplemental oxygen treatments.

On September 25, 2020, the Centers for Medicare & Medicaid Services (CMS) issued a waiver allowing the use of CMT in new and existing

healthcare facilities based on the provisions in NFPA 99 – 2018, allowing MediTrac ® to be installed in all facilities

addition to the flexible gas piping and other previously described markets, our flexible metal hose is used in a wide variety of other

applications.

September 2013, the Company announced that it would be releasing a newly developed fitting, AutoSnap ® , as part

of its flexible gas piping product line.

After successfully completing all required testing by independent testing agencies, as

well as extensive field trials across the U.S.

by trained TracPipe ® CounterStrike ® installers, AutoSnap ®

was officially introduced to the market in January 2014 to wide acceptance.

With its patent-pending design, the product

simplified the installation process, and addressed installer preferences for both speed and ease of installation.

The AutoSnap ®

fitting now commands a significant portion of the Company’s fittings demand.

2019, the Company commercialized MediTrac ® , corrugated medical tubing (“CMT”), following its 2018 launch

with several beta sites.

Developed for the healthcare industry, the product can be used in hospitals, ambulatory care centers,

dental, physician and veterinary clinics, laboratories, and any facility that uses medical gases (oxygen, nitrogen, carbon dioxide,

Made from a copper alloy with an exterior fire-retardant jacket, MediTrac ® is made and sold in long continuous-length

MediTrac’s flexible nature and storage in rolls allows it to be transported to and installed in health care facilities

much more easily and quickly than traditional medical grade rigid copper pipe, which comes in 20 foot long sections.

is unrolled from a spool and installed in a medical facility in one long continuous length, and is bent by hand when a change

in direction is needed.

The long lengths and ability to change direction with ease eliminates labor that would otherwise be needed

to braze connections to straight sections of copper pipe or elbows or tees for changes in direction, while increasing installation

efficiency and operational safety and minimizing downtime for healthcare facilities.

Easy to assemble axial swaged brass fittings

connect with all K, L and DWV medical tubing that is sized from ½” to 2” in diameter, and provides a leak-tight

seal using ordinary hand tools.

The patent-pending fitting also prevents tampering or disassembly through the use of a tamper-proof

sleeve that is required by the Health Care Facilities Code (NFPA 99 – 2018 edition).

Rated for 185 psig, MediTrac ®

can deliver the necessary volume of gas wherever it is needed across a facility.

A recent case study comparing the installation

of rigid copper pipe and MediTrac ® showed that MediTrac ® increases installation efficiency by a

factor of five (i.e., a 500% increase in efficiency).

By reducing the number of joints and brazed connections, MediTrac ®

also reduces possible contamination into the medical gas system along with the fire risk associated with brazing.

is currently listed to UL 1365 and has an ASTM E84 rating of 25/50, and meets all 2018 requirements of the Health Care Facilities

Code (NFPA 99 – 2018).

2020, the MediTrac ® product line experienced significant growth in use and acceptance in the marketplace resulting

from its ability to be quickly and safely installed to meet the unprecedented crisis caused by the COVID-19 pandemic.

medical institutions and emergency medical centers used MediTrac ® CMT to quickly install medical gas lines in tent

hospitals or in converted facilities to handle the surging demand.

For example, MediTrac ® medical gas piping was

installed in a NYC temporary hospital located in Central Park and in the Cleveland Clinic for patients with COVID-19 infections

and in need of supplemental oxygen treatments.

On September 25, 2020, the Centers for Medicare & Medicaid Services (CMS) issued

a waiver allowing the use of CMT in new and existing healthcare facilities based on the provisions in NFPA 99 – 2018, allowing

MediTrac ® to be installed in all facilities in the U.S.

addition to the flexible gas piping and other previously described markets, our flexible metal hose is used in a wide variety

of other applications.

Our involvement in these markets is important because just as the flexible gas piping applications have

sprung from our expertise in manufacturing annular metal hose, other applications may also evolve from our participation in the

Flexible metal hose is used in a wide variety of industrial and processing applications where the characteristics of

the flexible hose in terms of its flexibility, and its ability to absorb vibration and thermal expansion and contraction, have

substantial benefits over rigid piping.

For example, in certain pharmaceutical processing applications, the process of developing

the specific pharmaceutical may require rapid freezing of various compounds through the use of liquefied gases, such as liquefied

nitrogen, helium or Freon.

The use of flexible metal tubing is particularly appropriate in these types of applications.

metal hose can accommodate the thermal expansion caused by the liquefied gases carried through the hose, and the total length

of the hose will not significantly vary.

In contrast, fixed or rigid metal pipe would expand and contract along its length as

the liquid gases passed through it, causing stresses on the pipe junctions that would over time cause fatigue and failure.

Alternatively,

within certain industrial or commercial applications using steam, either as a heat source or in the industrial process itself,

the pumps used to transfer the liquid or steam within the system are subject to varying degrees of vibration.

Additionally, flexible

metal hoses can also be used as connections between the pump and the intake of the fluids being transferred to eliminate the vibration

effects of the pumps on the piping transfer system.

All of these areas provide opportunities for the flexible metal hose arena,

and thus the Company continues to participate in these markets, as it seeks new innovative solutions which will generate additional

revenue streams for the future.

Manufacturing

each instance, whether the application is for CSST for fuel gases, flexible metal hose for handling specialty chemicals or gases,

flexible double containment piping, unique industrial applications requiring the ability to withstand wide variations in temperature

and vibration, or copper alloyed CMT for medical facilities, all of our success rests on our metal hose.

Most of our flexible

metal hoses range in diameter from 1/4” to 2” while certain applications require diameters of up to 16”.

of our smaller diameter pipe (2” inner diameter and smaller) is made by a proprietary process that is known as the rotary

The proprietary process that we use to manufacture our annular hose is the result of a long-term development effort begun

Through continuous improvement over the years, we have developed and fine-tuned the process so that we can manufacture

annular flexible metal hose on a high speed, continuous process.

We believe that our own rotary process for manufacturing annular

corrugated metal hose is the most cost efficient method in the industry, and that our rotary process provides us with a significant

advantage in many of the industries in which we participate.

Our involvement in these markets is important because just as the flexible gas piping applications have sprung from our

expertise in manufacturing metal hose, other applications may also evolve from our participation in the industry.

Flexible metal hose

is used in a wide variety of industrial and processing applications where the characteristics of the flexible hose in terms of its flexibility,

and its ability to absorb vibration and thermal expansion and contraction, have substantial benefits over rigid piping.

in certain pharmaceutical processing applications, the process of developing the specific pharmaceutical may require rapid freezing of

various compounds through the use of liquefied gases, such as liquefied nitrogen, helium or Freon.

The use of flexible metal tubing is

particularly appropriate in these types of applications.

Flexible metal hose can accommodate the thermal expansion caused by the liquefied

gases carried through the hose, and the total length of the hose will not significantly vary.

In contrast, fixed or rigid metal pipe

would expand and contract along its length as the liquid gases passed through it, causing stresses on the pipe junctions that would over

time cause fatigue and failure.

Alternatively, within certain industrial or commercial applications using steam, either as a heat source

or in the industrial process itself, the pumps used to transfer the liquid or steam within the system are subject to varying degrees

of vibration.

Additionally, flexible metal hoses can also be used as connections between the pump and the intake of the fluids being

transferred to eliminate the vibration effects of the pumps on the piping transfer system.

All of these areas provide opportunities for

the flexible metal hose arena, and thus the Company continues to participate in these markets, as it seeks new innovative solutions which

will generate additional revenue streams for the future.

each instance, whether the application is for CSST for fuel gases, flexible metal hose for handling specialty chemicals or gases, flexible

double containment piping, unique industrial applications requiring the ability to withstand wide variations in temperature and vibration,

or copper alloyed CMT for medical facilities, all of our success rests on our metal hose.

Most of our flexible metal hoses range in diameter

from 1/4” to 2” while certain applications require diameters of up to 16”.

All of our smaller diameter pipe (2”

inner diameter and smaller) is made by a proprietary process that is known as the rotary process.

The proprietary process that we use

to manufacture our annular hose is the result of a long-term development effort begun in 1995.

Through continuous improvement over the

years, we have developed and fine-tuned the process so that we can manufacture annular flexible metal hose on a high speed, continuous

We believe that our own rotary process for manufacturing annular corrugated metal hose is the most cost efficient method in

the industry, and that our rotary process provides us with a significant advantage in many of the industries in which we participate.

As a result, we are able to provide our product on a demand basis.

Over the years, the Company has had great success in achieving on-time delivery performance to the scheduled ship date.

inventory turnover reduces our costs for in-process inventory, and further contributes to our gross profit levels.

improved our productivity on a historical basis.

use various materials in the manufacture of our products, primarily stainless steel for our flexible metal hose and plastics for

our jacketing material on TracPipe ® CounterStrike ® flexible gas piping and DoubleTrac ®

double containment piping, as well as a copper alloy for our MediTrac ® CMT.

We also purchase all of our proprietary

fittings for use with the TracPipe ® and CounterStrike ® flexible gas piping, DoubleTrac ®

double containment piping, and MediTrac ® CMT.

Although we have multiple sources qualified for all of our

major raw materials and components, we have historically used only one or two sources of supply for such raw materials and components.

Our current orders for stainless steel and fittings are each placed with one or two suppliers.

If any one of these sources of

supply were interrupted for any reason, then we would have to devote additional time and expense in obtaining the same volume

of supply from our other qualified sources.

This potential transition, if it were to occur, could affect our operations and financial

results during the period of such transition.

During 2020, the commodity prices of nickel and copper were higher compared to last

Nickel is a prime material in stainless steel which the Company utilizes to manufacture CSST, and copper is a key component

of the Company’s brass fittings and our MediTrac ® CMT.

Fortunately, the Company was able to maintain reasonably

stable margins during 2020.

This was partially accomplished by implementing our own pricing actions to help offset the upward

movements in the respective material markets.

The supply of our main raw materials appears to be sufficient with ample volume.

We believe that with our purchase commitments for stainless steel, polyethylene and for our proprietary fittings, we have adequate

sources of supply for these raw materials and components.

We have not had difficulty in obtaining the raw materials, component

parts or finished goods from our suppliers.

We believe that the supply sufficiency of stainless steel will continue until there

is a reduction in global capacity, such as mine closures, which would then cause a constriction.

Over the years, the Company has had great success in achieving on-time

delivery performance to the scheduled ship date.

The quick inventory turnover reduces our costs for in-process inventory, and further

contributes to our gross profit levels.

We have also improved our productivity on a historical basis.

and Competition

are approximately 10 manufacturers of flexible metal hose in the U.S., and approximately that number in Europe and Asia.

manufacturers

include Titeflex Corporation, Ward Manufacturing, Microflex, Hose Master, Pennflex, and several smaller privately held companies.

one manufacturer, as a general rule, participates in more than two of the major market categories, automotive, aerospace, residential

and commercial construction, and general industrial, with most concentrating in just one.

We estimate that we are at or near the top

position of the two major categories in which we participate in regards to market share.

In the flexible gas piping market, the U.S.

market is currently concentrated in the residential housing market.

Based on the reports issued by the national trade groups on housing

construction, the level of acceptance of flexible gas piping in the construction market, and the average usage of flexible gas piping

in a residential building, as well as through our sales position within that market, we are able to estimate with a high level of accuracy

the size of the total gas piping market.

In addition, the Company is a member of an industry trade group, which compiles and distributes

sales statistics for its members relative to flexible gas piping.

For other applications, industry trade groups collect and report on

the size of the relevant market, and we can estimate our percentage of the relevant market based on our sales as compared to the market

The larger of our two markets, the construction industry, has seen a modest increase in the number of residential housing

starts in 2021, as compared to the previous year.

As discussed elsewhere, black iron pipe or copper tubing was historically used by all

builders of commercial and residential buildings until the advent of flexible gas piping and changes in the relevant building codes.

Since that time, flexible gas piping has taken an increasing share of the total amount of fuel gas piping used in construction.

to the number of applications in which flexible metal hose may be used, and the number of companies engaged in the manufacture and sale

of flexible metal hose, the general industrial market is very fragmented, and we estimate that no one company has a predominant market

share of the business over other competitors.

In the market for double containment piping, we compete primarily against rigid pipe systems

that are more costly to install than DoubleTrac ® double containment piping.

For medical tubing applications, the main

competitor is medical grade (Type K or Type L) rigid copper pipe.

MediTrac ® is the only corrugated medical tubing in the

that is approved to the stringent requirements of UL 1365.

The general industrial markets within Europe are very mature and tend

to offer opportunities that are interesting to us in niche markets or during periods in which a weak dollar increases the demand for

our products on a competitive basis.

Such has been the case for several years and has created new relationships for us.

Currently, we

are not heavily engaged in the manufacture of flexible metal hose for the aerospace or automotive markets, but we continue to review

opportunities in all markets for our products to determine appropriate applications that will provide growth potential and high margins.

In some cases, where the product offering is considered a commodity, price is the overriding competing factor.

In other cases, a proprietary

product offering or superior performance will be the major factors with pricing being secondary, and in some cases, a non-factor.

majority of our sales are to distributors and wholesalers, and our relationships with these customers are on an arms-length basis in

that neither we, nor the customers are so dependent on the other to yield any significant business advantage.

From our perspective, we

are able to maintain a steady demand for our products due to broad acceptance of our products by end users, regardless of which distributor

or wholesaler sells the product.

and Raw Materials

use various materials in the manufacture of our products, primarily stainless steel for our flexible metal hose and plastics for our

jacketing material on TracPipe ® CounterStrike ® flexible gas piping and DoubleTrac ® double

containment piping, as well as a copper alloy for our MediTrac ® CMT.

We also purchase all of our proprietary fittings

for use with the TracPipe ® and CounterStrike ® flexible gas piping, DoubleTrac ® double containment

piping, and MediTrac ® CMT.

Although we have multiple sources qualified for all of our major raw materials and components,

we have historically used only one or two sources of supply for such raw materials and components.

Our current orders for stainless steel

and fittings are each placed with one or two suppliers.

If any one of these sources of supply were interrupted for any reason, then we

would have to devote additional time and expense in obtaining the same volume of supply from our other qualified sources.

This potential

transition, if it were to occur, could affect our operations and financial results during the period of such transition.

the commodity prices of nickel and copper were higher compared to last year.

Nickel is a prime material in stainless steel which the

Company utilizes to manufacture CSST, and copper is a key component of the Company’s brass fittings and our MediTrac ®

Fortunately, the Company was able to maintain reasonably stable margins during 2021.

This was mainly accomplished by implementing

our own pricing actions to help offset the upward movements in the respective material markets.

We believe that with our purchase commitments

for stainless steel, polyethylene and for our proprietary fittings, we have adequate sources of supply for these raw materials and components.

Like most other manufacturers, we had sporadic supply chain issues in 2021, but we believe our multiple suppliers have sufficient raw

materials and capacity minimizing any potential disruption.

We believe that the supply sufficiency of stainless steel will continue until

there is a reduction in global capacity, such as mine closures, which would then cause a constriction.

Volatility in the commodities

marketplace and competitive conditions in the sale of our products could potentially restrict us from passing along raw materials

or component part price increases to our customers.

marketplace and competitive conditions in the sale of our products could potentially restrict us from passing along raw materials or

component part price increases to our customers.

demand for our flexible piping products that are related to construction activity including TracPipe ® , Counterstrike ® ,

1 unchanged sentence

tightens during the winter months of each year due to cold and inclement weather.

Accordingly, sales are usually higher in the

spring, summer and fall.

sell our products to customers scattered across a wide and diverse set of industries ranging from construction to pharmaceutical

with close to 9,800 customers on record.

These sales channels include sales through independent sales representatives, distributors,

OEM, direct sales, and sales through our website on the internet.

We utilize various distribution companies in the sale of our

TracPipe ® and Counterstrike ® flexible gas piping, and these distribution customers in the aggregate

represent a significant portion of our business.

In particular, the Company has one significant customer, whose various branches

had sales in the range of 13% to 14% of total sales during the periods of 2018 to 2020, and was in the range of 18% to 24% of

the Company’s accounts receivable balance over the last two years.

All of this business is done on a purchase order basis

for immediate resale commitments or stocking, and there are no long-term purchase commitments.

In the event we were to lose an

account, we would not expect any long-term reduction in our sales due to the broad end-user acceptance of our products.

anticipate that in the event of a loss of any one or more distributors, that after an initial transition period, the sale of our

products would resume at or near their historical levels.

Furthermore, in the case of certain national distribution chains, which

is the case regarding the Company’s largest customer noted above, and other distributors, it is possible that there would

continue to be purchasing activity from one or more regional or branch distribution customers.

We sell our products within North

America, primarily in the U.S.

and Canada, and we also sell our products internationally, primarily in Europe through our manufacturing

facility located in Banbury, U.K.

Our sales outside of North America were in the range of 10% to 11% of our total sales during

the last three years, with most of the sales occurring in the U.K.

and elsewhere in Europe.

We do not have a material portion

of our long-lived assets located outside of the U.S.

mentioned previously, we sell our products primarily through independent outside sales organizations, including independent sales

representatives, distributors, fabricating distributors, wholesalers, and OEMs.

We have a limited internal sales function that

sells our products to key accounts, including OEMs and distributors of bulk hose.

We believe that within each geographic market

in which the independent sales representative, distributor or wholesaler is located that our outside sales organizations are the

first or second most successful outside sales organization for the particular product line within that geographic area.

are approximately 10 manufacturers of flexible metal hose in the U.S., and approximately that number in Europe and Asia.

manufacturers include Titeflex Corporation, Ward Manufacturing, Microflex, United Flexible, Hose Master and several smaller privately

held companies.

No one manufacturer, as a general rule, participates in more than two of the major market categories, automotive,

aerospace, residential and commercial construction, and general industrial, with most concentrating in just one.

We estimate that

we are at or near the top position of the two major categories in which we participate in regards to market share.

In the flexible

gas piping market, the U.S.

market is currently concentrated in the residential housing market.

Based on the reports issued by

the national trade groups on housing construction, the level of acceptance of flexible gas piping in the construction market,

and the average usage of flexible gas piping in a residential building, as well as through our sales position within that market,

we are able to estimate with a high level of accuracy the size of the total gas piping market.

In addition, the Company is a member

of an industry trade group, which compiles and distributes sales statistics for its members relative to flexible gas piping.

other applications, industry trade groups collect and report on the size of the relevant market, and we can estimate our percentage

of the relevant market based on our sales as compared to the market as a whole.

The larger of our two markets, the construction

industry, has seen a modest increase in the number of residential housing starts in 2020, as compared to the previous year.

discussed elsewhere, black iron pipe or copper tubing was historically used by all builders of commercial and residential buildings

until the advent of flexible gas piping and changes in the relevant building codes.

Since that time, flexible gas piping has taken

an increasing share of the total amount of fuel gas piping used in construction.

to the number of applications in which flexible metal hose may be used, and the number of companies engaged in the manufacture

and sale of flexible metal hose, the general industrial market is very fragmented, and we estimate that no one company has a predominant

market share of the business over other competitors.

In the market for double containment piping, we compete primarily against

rigid pipe systems that are more costly to install than DoubleTrac ® double containment piping.

For medical tubing

applications, the main competitor is medical grade (Type K or Type L) rigid copper pipe.

MediTrac ® is the only

corrugated medical tubing in the U.S.

that is approved to the stringent requirements of UL 1365.

The general industrial markets

within Europe are very mature and tend to offer opportunities that are interesting to us in niche markets or during periods in

which a weak dollar increases the demand for our products on a competitive basis.

Such has been the case for several years and

has created new relationships for us.

Currently, we are not heavily engaged in the manufacture of flexible metal hose for the

aerospace or automotive markets, but we continue to review opportunities in all markets for our products to determine appropriate

applications that will provide growth potential and high margins.

In some cases, where the product offering is considered a commodity,

price is the overriding competing factor.

In other cases, a proprietary product offering or superior performance will be the major

factors with pricing being secondary, and in some cases, a non-factor.

The majority of our sales are to distributors and wholesalers,

and our relationships with these customers are on an arms-length basis in that neither we, nor the customers are so dependent

on the other to yield any significant business advantage.

From our perspective, we are able to maintain a steady demand for our

products due to broad acceptance of our products by end users, regardless of which distributor or wholesaler sells the product.

does not believe that backlog figures are material to an understanding of our business because most products are shipped promptly

after the receipt of orders.

have a comprehensive portfolio of intellectual property, including approximately 217 patents issued in various countries around

The patents cover (a) the fittings used by the flexible gas piping to join the piping to a junction or assembly, (b)

pre-sleeved CSST for use in underground applications, (c) an electrically conductive jacket for flexible gas piping that we sell

under the trademark CounterStrike ® , (d) a tubing containment system for our DoubleTrac ® double containment

piping, and (e) fittings for use with our MediTrac® corrugated medical tubing.

Our AutoSnap ® fitting is a prominently

used product with flexible gas piping because it offers a metal-to-metal seal between the fitting and the tubing, and because

of its robustness and ease of use.

The metal-to-metal contact provides for a longer lasting and more reliable seal than fittings

which use gaskets or sealing compounds that can deteriorate over time.

In applications involving fuel gases in a building, the

ability to maintain the seal and prevent the leaking of such gases over long periods of time is valued by our customers.

the AutoSnap ® fitting provides the installer with greater ease of use by preassembling all the securing elements

inside the body of the fitting.

We also have received a patent for the composition of the polyethylene jacket used in our CounterStrike ®

flexible gas piping product, which has increased ability to dissipate electrical energy in the event of a nearby lightning

The tubing containment system of our DoubleTrac ® double containment piping, which is also patented in the

and in other countries, allows for the monitoring and collection of any liquids that may leak from the stainless steel containment

We have filed patent applications for the MediTrac ® fittings to cover the unique requirements in the U.S.

for fittings that permanently affix the fitting to the CMT system, and provides a tamper-proof connection to the CMT system.

expiration dates for the several patent covering the Counterstrike ® patent will expire in 2025.

We currently have

several patent applications pending in the U.S.

and internationally covering improvements to our AutoFlare ® fittings

and our CounterStrike ® polyethylene jacket, and also have a patent pending on our MediTrac ® fitting.

Finally, and as mentioned above, our unique rotary process for manufacturing flexible metal hose has been developed over a number

of years, and constitutes a valuable trade secret.

In 2007, a Pennsylvania court issued a ruling that confirms our proprietary

rotary manufacturing process does constitute a “trade secret” under Pennsylvania law, and is entitled to protection

against unauthorized disclosure or misappropriation.

Regulations including Environmental

Accordingly, sales are usually higher in the spring,

summer, and fall.

Regulations including Environmental Regulations

Company believes that its businesses and operations, including its manufacturing plants and equipment, are in substantial compliance

with all applicable government laws and regulations, including those related to environmental, consumer protection, international

trade, labor and employment, human rights, tax, anti-bribery and competition matters.

Any additional measures to maintain compliance

are not expected to materially affect the Company’s capital expenditures (including expenditures for environmental control

facilities), competitive position, financial position or results of operations.

legislative and administrative regulations applicable to the Company in the matters noted above have become effective or are under

consideration in many parts of the world.

with all applicable government laws and regulations, including those related to environmental, consumer protection, international trade,

labor and employment, human rights, tax, anti-bribery, and competition matters.

Any additional measures to maintain compliance are not

expected to materially affect the Company’s capital expenditures (including expenditures for environmental control facilities),

competitive position, financial position, or results of operations.

legislative and administrative regulations applicable to the Company in the matters noted above have become effective or are under consideration

in many parts of the world.

To date, such developments have not had a substantial adverse impact on the Company.

However, if new or amended laws or regulations impose significant operational restrictions and compliance requirements upon the

Company or its products, the Company’s business, capital expenditures, results of operations, financial condition and competitive

position could be negatively impacted.

Refer to Item 1A.

However, if new or amended

laws or regulations impose significant operational restrictions and compliance requirements upon the Company or its products, the Company’s

business, capital expenditures, results of operations, financial condition and competitive position could be negatively impacted.

Risk Factors for further information.

believe that our employees are the foundation of the innovative ideas necessary for the advancement of our products, and success

of our Company.

Our employees are the conduits to successful relationships with our customers, vendors and various business partners,

as well as the custodians of a safe and efficient operation of our assets ending with a highly satisfied customer.

fosters a collaborative, inclusive, and safety-minded work environment, with a focus on ingenuity.

We seek to identify the most

highly qualified talent for our organization, enabling us to execute on our strategic objectives of providing the most innovative

and technologically advanced flexible metal hose products in the market.

To attract and retain employees, the Company offers competitive

wages across all levels, and maintains a superior package of employee benefits, including medical insurance, life insurance, and

retirement and savings programs, for all employees, as well as executive compensation plans as described in our proxy statement.

believe that our employees are the foundation of the innovative ideas necessary for the advancement of our products, and success of our

Our employees are the conduits to successful relationships with our customers, vendors, and various business partners, as well

as the custodians of a safe and efficient operation of our assets ending with a highly satisfied customer.

The Company fosters a collaborative,

inclusive, and safety-minded work environment, with a focus on ingenuity.

We seek to identify the most highly qualified talent for our

organization, enabling us to execute on our strategic objectives of providing the most innovative and technologically advanced flexible

metal hose products in the market.

To attract and retain employees, the Company offers competitive wages across all levels, and maintains

a superior package of employee benefits, including medical insurance, life insurance, and retirement and savings programs, for all employees,

as well as executive compensation plans as described in our proxy statement.

of December 31, 2021, the Company had 170 employees.

Most of our employees are located in our manufacturing facilities in Exton,

Pennsylvania, which contain our factory personnel, engineering, finance, human resources and most of our sales staff.

workforce in Exton, Pennsylvania, is not party to a collective bargaining agreement.

A small number of employees work at our facility

in Houston, Texas.

We also maintain an office in Middletown, Connecticut where certain management, sales and administrative personnel

are assigned.

A number of individual sales personnel are also scattered across the U.S..

We also maintain a manufacturing facility

in Banbury, U.K., which contains employees of similar functions to those in the U.S., but on a much smaller scale, including a

small presence in France.

The sales personnel in England and France handle all sales and service for our products in Europe, most

notably the U.K., and the majority of our transactions with other international territories.

Most of our employees are located in our manufacturing facilities in Exton, Pennsylvania,

which contain our factory personnel, engineering, finance, human resources and most of our sales staff.

Our factory workforce in Exton,

Pennsylvania, is not party to a collective bargaining agreement.

A small number of employees work at our facility in Houston, Texas.

We also maintain an office in Middletown, Connecticut where certain management, sales and administrative personnel are assigned.

of individual sales personnel are also scattered across the U.S.

We also maintain a manufacturing facility in Banbury, U.K., which contains

employees of similar functions to those in the U.S., but on a much smaller scale, including a small presence in France.

The sales personnel

in England and France handle all sales and service for our products in Europe, most notably the U.K., and the majority of our transactions

with other international territories.

are committed to fostering a work environment in which all employees treat each other with dignity and respect.

This commitment

extends to providing equal employment and advancement opportunities based on merit and experience.

We continually strive to attract

a diverse workforce by partnering with local organizations to identify potential candidates to advance and strengthen our human

capital management program.

This commitment extends

to providing equal employment and advancement opportunities based on merit and experience.

We continually strive to attract a diverse

workforce by partnering with local organizations to identify potential candidates to advance and strengthen our human capital management

have a comprehensive portfolio of intellectual property, including approximately 247 patents issued in various countries around the world.

The patents cover (a) the fittings used by the flexible gas piping to join the piping to a junction or assembly, (b) pre-sleeved CSST

for use in underground applications, (c) an electrically conductive jacket for flexible gas piping that we sell under the trademark CounterStrike ® ,

(d) a tubing containment system for our DoubleTrac ® double containment piping, and (e) fittings for use with our MediTrac®

corrugated medical tubing.

Our AutoSnap ® fitting is a prominently used product with flexible gas piping because it offers

a metal-to-metal seal between the fitting and the tubing, and because of its robustness and ease of use.

The metal-to-metal contact provides

for a longer lasting and more reliable seal than fittings which use gaskets or sealing compounds that can deteriorate over time.

In applications

involving fuel gases in a building, the ability to maintain the seal and prevent the leaking of such gases over long periods of time

is valued by our customers.

In addition, the AutoSnap ® fitting provides the installer with greater ease of use by preassembling

all the securing elements inside the body of the fitting.

We also have received a patent for the composition of the polyethylene jacket

used in our CounterStrike ® flexible gas piping product, which has increased ability to dissipate electrical energy in

the event of a nearby lightning strike.

The tubing containment system of our DoubleTrac ® double containment piping, which

is also patented in the U.S.

and in other countries, allows for the monitoring and collection of any liquids that may leak from the stainless

steel containment layer.

We have filed patent applications for the MediTrac ® fittings to cover the unique requirements

for fittings that permanently affix the fitting to the CMT system, and provides a tamper-proof connection to the CMT system.

The expiration dates for the several patents covering the Counterstrike ® patent will expire in 2025.

We currently have

several patent applications pending in the U.S.

and internationally covering improvements to our AutoFlare ® fittings and

our CounterStrike ® polyethylene jacket, and also have a patent pending on our MediTrac ® fitting.

and as mentioned above, our unique rotary process for manufacturing flexible metal hose has been developed over a number of years and

constitutes a valuable trade secret.

may learn more about our Company by visiting our website at www.omegaflexcorp.com.

Among other things, you can access our filings

with the Securities and Exchange Commission, which maintains a website at www.sec.gov that contains the Company’s

various reports, proxy and information statements.

These filings include proxy statements, annual reports (Form 10-K), quarterly

reports (Form 10-Q), and current reports (Form 8-K), as well as Section 16 reports filed by our officers and directors (Forms

All of these reports will be available on the website as soon as reasonably practicable after we file the reports

with the SEC.

In addition, we have made available on our website under the heading “Compliance Policies” the charters

for the Audit, Compensation and Nominating/Governance Committees of our Board of Directors and our Code of Business Ethics.

intend to make available on our website any future amendments or waivers to our Code of Business Ethics.

The information on our

website is not part of this report.

Among other things, you can access our filings with

the Securities and Exchange Commission, which maintains a website at www.sec.gov that contains the Company’s various reports,

proxy, and information statements.

These filings include proxy statements, annual reports (Form 10-K), quarterly reports (Form 10-Q),

and current reports (Form 8-K), as well as Section 16 reports filed by our officers and directors (Forms 3, 4 and 5).

All of these reports

will be available on the website as soon as reasonably practicable after we file the reports with the SEC.

In addition, we have made

available on our website under the heading “Compliance” the charters for the Audit, Compensation and Nominating/Governance

Committees of our Board of Directors and our Code of Business Ethics.

We intend to make available on our website any future amendments

or waivers to our Code of Business Ethics.

The information on our website is not part of this report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business