What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2022-03-14 compared with 2021-03-08 · 362 added, 351 removed, 56 unchanged (93% of the section changed)

1A – RISK FACTORS

should carefully consider the following risk factors and all the other information contained in this annual report and our other

filings in evaluating our business and investment in our common stock.

We have not disclosed general risk factors that may be

applicable to any for-profit organization, such as general economic conditions, interest rates, labor supply and technological

Investors are cautioned to take into consideration the specific risk factors we have disclosed below and general risk

factors before making an investment decision.

should carefully consider the following risk factors and all the other information contained in this annual report and our other filings

in evaluating our business and investment in our common stock.

We have not disclosed general risk factors that may be applicable to any

for-profit organization, such as general economic conditions, interest rates, labor supply and technological changes.

Investors are cautioned

to take into consideration the specific risk factors we have disclosed below and general risk factors before making an investment decision.

Relating to Our Business – Sales and Competition

are primarily dependent on one product line for most of our sales.

of the Company’s sales are derived from the sale of TracPipe ® and CounterStrike ® flexible

gas piping systems, including Autoflare ® and AutoSnap ® fittings and a variety of accessories.

of our flexible metal hose for other applications represent a small portion of our overall sales and income.

Any event or circumstance

that adversely affects our TracPipe ® or CounterStrike ® flexible gas piping could have a greater

impact on our business and financial results than if our business were more evenly distributed across several different product

The effects of such an adverse event or circumstance would be magnified in terms of our Company as a whole as compared

to one or more competitors whose product lines may be more diversified, or who are not as reliant on the sales generated by their

respective flexible gas piping products.

Therefore, risks relating to our TracPipe ® and CounterStrike ®

flexible gas piping business – in particular loss of distributors or sales channels, technological changes, loss of

our key personnel involved in the flexible gas piping product line, increases in commodity prices, particularly in stainless steel

and polyethylene – could damage our business, competitive position, results of operations or financial condition.

of the Company’s sales are derived from the sale of TracPipe ® and CounterStrike ® flexible gas piping

systems, including Autoflare ® and AutoSnap ® fittings and a variety of accessories.

Sales of our flexible

metal hose for other applications represent a small portion of our overall sales and income.

Any event or circumstance that adversely

affects our TracPipe ® or CounterStrike ® flexible gas piping could have a greater impact on our business

and financial results than if our business were more evenly distributed across several different product lines.

The effects of such an

adverse event or circumstance would be magnified in terms of our Company as a whole as compared to one or more competitors whose product

lines may be more diversified, or who are not as reliant on the sales generated by their respective flexible gas piping products.

risks relating to our TracPipe ® and CounterStrike ® flexible gas piping business – in particular loss

of distributors or sales channels, technological changes, loss of our key personnel involved in the flexible gas piping product line,

increases in commodity prices, particularly in stainless steel and polyethylene – could damage our business, competitive position,

results of operations or financial condition.

face intense competition in all of our markets.

markets for flexible metal hose are intensely competitive.

There are a number of competitors in all markets in which we operate,

and generally none of these markets have one dominant competitor – rather a large number of competitors exist, each having

a proportion of the total market.

One or more of our competitors may develop technologies and products that are more effective

or which may cost less than our current or future products, or could potentially render our products noncompetitive or obsolete.

Our prior success has been due to our ability to develop new products and product improvements, and establish and maintain an

effective distribution network which to some extent came at the expense of several competing manufacturers.

Our business, competitive

position, results of operations or financial condition could be negatively impacted if we are unable to maintain and develop our

competitive products.

There are a number of competitors in all markets in which we operate, and

generally none of these markets have one dominant competitor – rather a large number of competitors exist, each having a proportion

of the total market.

One or more of our competitors may develop technologies and products that are more effective, or which may cost

less than our current or future products, or could potentially render our products noncompetitive or obsolete.

Our prior success has

been due to our ability to develop new products and product improvements, and establish and maintain an effective distribution network

which to some extent came at the expense of several competing manufacturers.

Our business, competitive position, results of operations

or financial condition could be negatively impacted if we are unable to maintain and develop our competitive products.

may not retain our independent sales organizations.

2 unchanged sentences

or sales representatives are geographically dispersed in certain territorial markets across the U.S., Canada and elsewhere.

outside sales organizations are independent of us, and are typically owned by the individual principals of such firms.

into agreements with such outside sales organizations for the exclusive representation or distribution of our products, but such

agreements are generally for terms of one year or less.

At the expiration of the agreement, the agent or distributor may elect

to represent a different manufacturer.

As a result, we have no ability to control which flexible metal hose manufacturer any such

sales organization may represent or carry.

The competition to retain quality outside sales organizations is also intense between

manufacturers of flexible metal hose since it is these sales organizations that generally can direct the sales volume to distributors

and, ultimately, contractors and installers in important markets across the country, and in other countries in which we operate.

The failure to obtain the best outside sales organization within a particular geographic market can limit our ability to generate

sales of our products.

While we currently have a fully developed sales and distribution network of superior outside sales organizations,

there can be no assurance that any one or more of the outside sales organizations will elect to remain with us, or that our competitors

will not be able to disrupt our distribution network by causing one or more of our sales representatives to drop our product lines.

Our business, competitive position, results of operation or financial condition could be negatively impacted if we cannot maintain

adequate sales and distribution networks.

These outside

sales organizations are independent of us and are typically owned by the individual principals of such firms.

We enter into agreements

with such outside sales organizations for the exclusive representation or distribution of our products, but such agreements are generally

for terms of one year or less.

At the expiration of the agreement, the agent or distributor may elect to represent a different manufacturer.

As a result, we have no ability to control which flexible metal hose manufacturer any such sales organization may represent or carry.

The competition to retain quality outside sales organizations is also intense between manufacturers of flexible metal hose since it is

these sales organizations that generally can direct the sales volume to distributors and, ultimately, contractors and installers in important

markets across the country, and in other countries in which we operate.

The failure to obtain the best outside sales organization within

a particular geographic market can limit our ability to generate sales of our products.

While we currently have a fully developed sales

and distribution network of superior outside sales organizations, there can be no assurance that any one or more of the outside sales

organizations will elect to remain with us, or that our competitors will not be able to disrupt our distribution network by causing one

or more of our sales representatives to drop our product lines.

Our business, competitive position, results of operation or financial

condition could be negatively impacted if we cannot maintain adequate sales and distribution networks.

are dependent on certain sales channels for a significant portion of our business.

the various sales channels that we use to sell our products, a significant portion of such sales are made through our wholesale

stocking distributors.

These and other distributors purchase our products, and stock the goods in warehouses for resale, either

to their own local branches or to end-users.

Because of the breadth and penetration of the distribution networks, and the range

of complementary products they offer for sale, these wholesale distributors are able to sell large amounts of our products to

end users across the U.S.

The decision by a major wholesaler distributor to stop distributing our products such as

TracPipe ® and CounterStrike ® flexible gas piping, and to distribute a competitive flexible gas piping

product, could significantly affect our business, competitive position, results of operations or financial condition.

the various sales channels that we use to sell our products, a significant portion of such sales are made through our wholesale stocking

distributors.

These and other distributors purchase our products, and stock the goods in warehouses for resale, either to their own local

branches or to end-users.

Because of the breadth and penetration of the distribution networks, and the range of complementary products

they offer for sale, these wholesale distributors are able to sell large amounts of our products to end users across the U.S.

The decision by a major wholesaler distributor to stop distributing our products such as TracPipe ® and CounterStrike ®

flexible gas piping, and to distribute a competitive flexible gas piping product, could significantly affect our business, competitive

position, results of operations or financial condition.

of our competitors may have greater resources, or they may acquire greater resources.

of our competitors have substantially more resources than are available to us as a stand-alone company.

For example, in the CSST

market, two of our competitors are divisions of large corporations with revenues measured in the billions of dollars.

These competitors

may be able to devote substantially greater resources to the development, manufacture, distribution and sale of their products

than would be available to us as a stand-alone company.

One or more competitors may acquire several other competitors, or may

be acquired by a larger entity, and through a combination of resources be able to devote additional resources to their businesses.

These additional resources could be devoted to product development, reduced costs in an effort to obtain market share, greater

flexibility in terms of profit margin as part of a larger business organization, increased investment in plant, machinery, distribution

and sales concessions.

As a stand-alone company, the resources that may be devoted by us to meet any potential developments by

larger, well-financed competitors may be limited.

For example, in the CSST market,

two of our competitors are divisions of large corporations with revenues measured in the billions of dollars.

These competitors may be

able to devote substantially greater resources to the development, manufacture, distribution, and sale of their products than would be

available to us as a stand-alone company.

One or more competitors may acquire several other competitors, or may be acquired by a larger

entity, and through a combination of resources be able to devote additional resources to their businesses.

These additional resources

could be devoted to product development, reduced costs in an effort to obtain market share, greater flexibility in terms of profit margin

as part of a larger business organization, increased investment in plant, machinery, distribution and sales concessions.

As a stand-alone

company, the resources that may be devoted by us to meet any potential developments by larger, well-financed competitors may be limited.

business may be subject to the impact of Brexit.

Company’s main operating subsidiary, Omega Flex Limited, is headquartered in Banbury, England in the U.K.

The result of

the referendum held by the U.K.

to withdraw from the European Union (“Brexit”) had created a level of uncertainty

regarding the final terms of that withdrawal for a number of years, until an agreement was reached on December 24, 2020 by the

The result of the referendum

held by the U.K.

to withdraw from the European Union (“Brexit”) had created a level of uncertainty regarding the final terms

of that withdrawal for a number of years, until an agreement was reached on December 24, 2020, by the U.K.

and the European Union.

While an agreement was reached, uncertainty still exists, and adherence to the new rules regarding

border and customs controls could increase costs on materials imported into the U.K.

an agreement was reached, uncertainty still exists, and adherence to the new rules regarding border and customs controls could increase

costs on materials imported into the U.K.

and finished goods exported from the U.K.

In addition, it is possible that logistical delays created by those controls could delay shipments of materials and supplies into

the Banbury manufacturing plant, and could also affect our ability to ship goods to customers outside of the U.K., into the European

Union, Africa, and the Near East.

Most of the business of Omega Flex Limited is domestic, and should therefore not be unduly disrupted.

However, the macroeconomic effects of Brexit on the economies of the U.K.

and the European Union remain partially unknown, and

those effects could dampen economic activity and the overall demand for the Company’s products in those markets.

it is not expected that increased costs, logistical delays, nor possible economic declines in those markets would be material

to the Company.

In addition, it is possible that logistical delays

created by those controls could delay shipments of materials and supplies into the Banbury manufacturing plant and could also affect

our ability to ship goods to customers outside of the U.K., into the European Union, Africa, and the Near East.

Most of the business

of Omega Flex Limited is domestic and should therefore not be unduly disrupted.

However, the macroeconomic effects of Brexit on the economies

and the European Union remain partially unknown, and those effects could dampen economic activity and the overall demand

for the Company’s products in those markets.

However, it is not expected that increased costs, logistical delays, nor possible

economic declines in those markets would be material to the Company.

business may be subject to macroeconomic effects caused by increased trade tariffs and reduced international trade.

2 unchanged sentences

may cause the cost of materials to rise and may add additional expense on exported goods.

However, the company does not believe

that increased tariffs will materially affect the company’s sales or gross profits, as most of the raw materials and supplies

used to manufacture our products are sourced domestically in the U.S..

Further, exports of our flexible gas piping products from

our Exton, Pennsylvania facility are primarily to Canada, which recently agreed to a revised North American trade treaty, and

to a lesser extent to the Caribbean and South America.

Sales to Europe, Asia and Africa are primarily handled from our Banbury,

England facility, which are not affected by U.S.

trade tariffs and retaliatory tariffs, but may be subject to other constraints

as discussed in the Brexit risk factor, above.

However, the Company does not believe that

increased tariffs will materially affect the Company’s sales or gross profits, as most of the raw materials and supplies used to

manufacture our products are sourced domestically in the U.S.

Further, exports of our flexible gas piping products from our Exton, Pennsylvania

facility are primarily to Canada, which recently agreed to a revised North American trade treaty, and to a lesser extent to the Caribbean

and South America.

Sales to Europe, Asia and Africa are primarily handled from our Banbury, England facility, which are not affected

trade tariffs and retaliatory tariffs but may be subject to other constraints as discussed in the Brexit risk factor,

international sales subject us to additional risks that can adversely affect our business, operating results, and financial condition.

2021, we derived 7% of our revenue from sales to customers located outside the U.S.

Our ability to convince customers to expand their

use of our products or renew their agreements with us are directly correlated to our direct engagement with such customers.

To the extent

that we are unable to engage with non-U.S.

customers effectively, we may be unable to grow sales to international customers to the same

degree we have experienced in the past.

international operations subject it to a variety of risks and challenges, including:

economic or geopolitical conditions in each country or region;

effects of a widespread outbreak of an illness or disease, or any other public health crisis, including the COVID-19 pandemic, in

each country or region;

uncertainty around the world;

laws and regulations imposed by other countries on foreign operations, including the Foreign Corrupt Practices Act, the

Bribery Act, import and export control laws, tariffs, trade barriers, economic sanctions and other regulatory or contractual

limitations on our ability to sell our products in certain foreign markets, and the risks and costs of non-compliance.

example, in response to the rapidly developing conflict between Russia and Ukraine, the U.S.

has imposed and may further impose, and

other countries may additionally impose, broad sanctions or other restrictive actions against governmental and other entities in Russia,

and such sanctions or actions could cut off or impede the flow of raw materials for our products, including minerals that are used in

our stainless steel and copper alloys.

Additionally, further escalation of geopolitical tensions could have a broader impact that extends

into other markets where we do business.

Any of these risks could adversely affect our international sales, reduce our international

revenues, or increase our operating costs, adversely affecting our business, financial condition, and operating results.

Relating to Our Business – Manufacturing and Operations

manufacturing plant(s) may be damaged or destroyed.

majority of the company’s manufacturing capacity is currently located in Exton, Pennsylvania, where we own two manufacturing

facilities which are in close proximity to each other, and in Banbury, England in the U.K.

majority of the Company’s manufacturing capacity is currently located in Exton, Pennsylvania, where we own two manufacturing facilities

which are in close proximity to each other, and in Banbury, England in the U.K.

where we rent a manufacturing facility.

On a smaller scale the Company also manufactures product in Houston, Texas.

We do not have any operational manufacturing capacity

for flexible metal hose outside of these locations.

We cannot replicate our manufacturing methods at a supplier’s facility

due to the confidential and proprietary nature of our manufacturing process.

If one of the manufacturing facilities were destroyed

or damaged in a significant manner, we would likely experience a delay or some interruption of our flexible metal hose operations.

This could lead to a reduction in sales volume if customers were to purchase their requirements from our competitors, claims for

breach of contract by certain customers with contracts for delivery of flexible metal hose by a certain date, and costs to replace

our destroyed or damaged manufacturing capacity.

The fittings and accessories for the flexible metal hose are manufactured for

us by suppliers not located in Exton, Pennsylvania, and the Company also has outside warehouses which contain finished goods inventory.

Disruption of or damage to our supply of these items could damage our business, competitive position, results of operations or

financial condition.

scale the Company also manufactures product in Houston, Texas.

We do not have any operational manufacturing capacity for flexible metal

hose outside of these locations.

We cannot replicate our manufacturing methods at a supplier’s facility due to the confidential

and proprietary nature of our manufacturing process.

If one of the manufacturing facilities were destroyed or damaged in a significant

manner, we would likely experience a delay or some interruption of our flexible metal hose operations.

This could lead to a reduction

in sales volume if customers were to purchase their requirements from our competitors, claims for breach of contract by certain customers

with contracts for delivery of flexible metal hose by a certain date, and costs to replace our destroyed or damaged manufacturing capacity.

The fittings and accessories for the flexible metal hose are manufactured for us by suppliers not located in Exton, Pennsylvania, and

the Company also has outside warehouses which contain finished goods inventory.

Disruption of or damage to our supply of these items

could damage our business, competitive position, results of operations or financial condition.

are dependent on certain raw materials and supplies that could be subject to volatile price escalation .

a manufacturer of flexible metal hose, we must use certain raw materials in the manufacture of the hose.

The primary raw material

is stainless steel that is used in the forming of the hose, and various other steel products used in the wire braid overlay over

some flexible metal hoses for additional strength and durability, as well as copper alloy for MediTrac ® CMT.

also use polyethylene in pellet form for the forming and extrusion of a polyethylene jacket over CSST for use in fuel gas applications,

underground installations, and other installations that require that the metal hose be isolated from the environment.

we also purchase our proprietary brass and stainless steel fittings used with the flexible metal hose that provide a mechanical

means of attaching the hose to an assembly or junction.

We attempt to limit the effects of volatile raw material prices, and to

ensure adequate and timely supply of material, by committing to annual purchase contracts for the bulk of our steel and polyethylene

requirements, and for our fitting requirements.

The contracts typically represent a significant portion of the Company’s

annual planned usage, and are set at a designated fixed price or a range of prices.

These agreements sometimes require the Company

to accept delivery of the commodity in the quantities committed, at the agreed upon prices.

Transactions in excess of the pre-arranged

commitments are conducted at current market prices at the Company’s discretion.

The Company has identified multiple qualified

vendors to produce or manufacture our critical purchase requirements.

The Company does however tend to rely on one or two sources

for each or our primary components to leverage the relationship and pricing.

Therefore, there is no assurance that the Company

would be able to eliminate all or most of the adverse effects of a sudden increase in the cost of materials or key components,

or that the loss of one or more of our key sources would not lead to higher costs or a disruption in our business, which could

damage our business, competitive position, results of operations or financial condition.

The primary raw material is

stainless steel that is used in the forming of the hose, and various other steel products used in the wire braid overlay over some flexible

metal hoses for additional strength and durability, as well as copper alloy for MediTrac ® CMT.

We also use polyethylene

in pellet form for the forming and extrusion of a polyethylene jacket over CSST for use in fuel gas applications, underground installations,

and other installations that require that the metal hose be isolated from the environment.

Finally, we also purchase our proprietary

brass and stainless steel fittings used with the flexible metal hose that provide a mechanical means of attaching the hose to an assembly

We attempt to limit the effects of volatile raw material prices, and to ensure adequate and timely supply of material, by

committing to annual purchase contracts for the bulk of our steel and polyethylene requirements, and for our fitting requirements.

contracts typically represent a significant portion of the Company’s annual planned usage and are set at a designated fixed price

or a range of prices.

These agreements sometimes require the Company to accept delivery of the commodity in the quantities committed,

at the agreed upon prices.

Transactions in excess of the pre-arranged commitments are conducted at current market prices at the Company’s

The Company has identified multiple qualified vendors to produce or manufacture our critical purchase requirements.

does however tend to rely on one or two sources for each or our primary components to leverage the relationship and pricing.

there is no assurance that the Company would be able to eliminate all or most of the adverse effects of a sudden increase in the cost

of materials or key components, or that the loss of one or more of our key sources would not lead to higher costs or a disruption in

our business, which could damage our business, competitive position, results of operations or financial condition.

we were to lose the services of one or more of our senior management team, we may not be able to execute our business strategy

1 unchanged sentence

The senior executives

are critical to the development of our products and our strategic direction, and have a keen knowledge of business operations

and processes.

are critical to the development of our products and our strategic direction and have a keen knowledge of business operations and processes.

Their unique abilities, experience and expertise cannot be easily duplicated or replaced.

As much as possible,

senior executives strive to educate and develop other layers of staff and succession planning, but the loss of any of our senior

management could seriously harm our business.

As much as possible, senior executives strive

to educate and develop other layers of staff and succession planning, but the loss of any of our senior management could seriously harm

our business.

Relating to Our Business – Legal

1 unchanged sentence

of litigation and significant legal costs or settlements.

the ordinary and normal conduct of the Company’s business, it is subject to periodic lawsuits, investigations and claims

(collectively, the “Claims”).

The Company has continued to receive repeat pattern Claims relating to our flexible

gas piping products, although the pace of the new Claims has generally declined over the last several years.

While the Company

does not believe the Claims have legal merit, and has successfully defended itself vigorously against such Claims, there is no

guarantee that the pace of claims will not increase or subside.

Any significant increase in the number of Claims, the financial

magnitude of Claims brought against the Company, the costs of defending the Claims, particularly under higher retentions of the

Company’s current product liability insurance policies, could have a detrimental impact on the Company’s business,

competitive position, results of operations or financial condition, perhaps materially.

the ordinary and normal conduct of the Company’s business, it is subject to periodic lawsuits, investigations, and claims (collectively,

the “Claims”).

The Company has continued to receive repeat pattern Claims relating to our flexible gas piping products, although

the pace of the new Claims has generally declined over the last several years.

While the Company does not believe the Claims have legal

merit, and has successfully defended itself vigorously against such Claims, there is no guarantee that the pace of claims will not increase

Any significant increase in the number of Claims, the financial magnitude of Claims brought against the Company, the costs

of defending the Claims, particularly under higher retentions of the Company’s current product liability insurance policies, could

have a detrimental impact on the Company’s business, competitive position, results of operations or financial condition, perhaps

we are not able to protect our intellectual property rights, we may not be able to compete as effectively.

possess a wide array of intellectual property rights, including patents, trademarks, copyrights, and applications for the above,

as well as trade secrets, manufacturing know-how, and other proprietary information.

Certain of these intellectual property rights

form the basis of our competitive advantage in the market place through a superior product design, a superior business process,

superior manufacturing methods or other features that provide an advantage over our competitors.

The intellectual property rights

are sometimes subject to infringement or misappropriation by other organizations, and failing an amiable resolution, we may be

forced to resort to legal proceedings to protect our rights in such intellectual property.

the past, the Company has needed to protect itself and resort to legal action, in one instance regarding a trade secret, and other

instances where we sued flexible gas pipe competitors for infringement on one or more of our U.S.

patents covering our various

piping and/or fitting products.

In each instance, the Company received favorable rulings, thus solidifying the validity of our

intellectual property.

Although the Company has had past success, the results we may obtain from resorting to any such legal proceedings

are never assured, and it is possible that an adverse decision may be delivered in any particular proceeding.

As a result, we

may not be able to retain the exclusive rights to utilize and practice such intellectual property rights, and one or more of our

competitors could utilize and practice such intellectual property rights.

This development may lessen our competitive advantage

vis-à-vis one or more competitors, and lead to a reduction in sales volume in one or more product lines, a reduction in

profit margin in such product lines, or both, which would damage our business, competitive position, results of operations or

financial condition.

possess a wide array of intellectual property rights, including patents, trademarks, copyrights, and applications for the above, as well

as trade secrets, manufacturing know-how, and other proprietary information.

Certain of these intellectual property rights form the basis

of our competitive advantage in the marketplace through a superior product design, a superior business process, superior manufacturing

methods or other features that provide an advantage over our competitors.

The intellectual property rights are sometimes subject to infringement

or misappropriation by other organizations, and failing an amiable resolution, we may be forced to resort to legal proceedings to protect

our rights in such intellectual property.

the past, the Company has needed to protect itself and resort to legal action, in one instance regarding a trade secret, and other instances

where we sued flexible gas pipe competitors for infringement on one or more of our U.S.

patents covering our various piping and/or fitting

In each instance, the Company received favorable rulings, thus solidifying the validity of our intellectual property.

the Company has had past success, the results we may obtain from resorting to any such legal proceedings are never assured, and it is

possible that an adverse decision may be delivered in any particular proceeding.

As a result, we may not be able to retain the exclusive

rights to utilize and practice such intellectual property rights, and one or more of our competitors could utilize and practice such

intellectual property rights.

This development may lessen our competitive advantage vis-à-vis one or more competitors, and lead

to a reduction in sales volume in one or more product lines, a reduction in profit margin in such product lines, or both, which would

damage our business, competitive position, results of operations or financial condition.

Relating to Our Business – General and Macroeconomic

business may be subject to the supply and availability of fuel gas supplies and infrastructure.

increasing debate on the effect of human activities on climate change, there has been a focus on transitioning energy and heating

in buildings away from fossil fuels, such as natural gas and liquid propane.

increasing debate on the effect of human activities on climate change, there has been a focus on transitioning energy and heating in

buildings away from fossil fuels, such as natural gas and liquid propane.

Several municipalities in the U.S.

have announced

policy decisions to move away from fossil fuel applications in the future, including prohibiting the new installation of appliances

fueled by natural gas or liquid propane.

Although there are significant technical and economic hurdles, it is possible that a

large scale movement, in individual cities and states or on a federal level, away from fossil fuels may increase in the future.

Such moves could reduce the demand for our flexible gas piping products that carry natural gas or liquid propane from the building’s

meter to the gas-fired appliance, which represent a major part of the company’s sales and net profits.

As a result, it is

possible in the future that proposals to limit or eliminate the use of fossil fuels could adversely impact the financial results

of the company, perhaps materially.

TracPipe ® and CounterStrike ® flexible gas piping products are used to convey fuel gas, primarily

natural gas, but also propane, within a building from the exterior wall of the building to any gas-fired appliances within the

Because those products are used in the transmission of fuel gas, the applications are limited to geographic areas where

such fuel gas is available.

have announced policy decisions

to move away from fossil fuel applications in the future, including prohibiting the new installation of appliances fueled by natural

gas or liquid propane.

Although there are significant technical and economic hurdles, it is possible that a large scale movement, in

individual cities and states or on a federal level, away from fossil fuels may increase in the future.

Such moves could reduce the demand

for our flexible gas piping products that carry natural gas or liquid propane from the building’s meter to the gas-fired appliance,

which represent a major part of the Company’s sales and net profits.

As a result, it is possible in the future that proposals to

limit or eliminate the use of fossil fuels could adversely impact the financial results of the Company, perhaps materially.

TracPipe ® and CounterStrike ® flexible gas piping products are used to convey fuel gas, primarily natural

gas, but also propane, within a building from the exterior wall of the building to any gas-fired appliances within the building.

those products are used in the transmission of fuel gas, the applications are limited to geographic areas where such fuel gas is available.

Certain geographic areas of the U.S.

and other countries do not have the infrastructure to make natural

gas available.

Other types of fuel gas may be used in areas where there are no natural gas pipelines, but these alternate fuel

gas sources have other distribution issues that may constrict their availability.

Our prospects for future growth of the TracPipe ®

and CounterStrike ® products are largely limited to those areas that have natural gas transmission lines available

for use in residences and commercial buildings.

and other countries do not have the infrastructure to make natural gas available.

Other types of

fuel gas may be used in areas where there are no natural gas pipelines, but these alternate fuel gas sources have other distribution

issues that may constrict their availability.

Our prospects for future growth of the TracPipe ® and CounterStrike ®

products are largely limited to those areas that have natural gas transmission lines available for use in residences and commercial

may substantially increase our debt in the future or be restricted from accessing funds.

are currently not carrying any long-term debt, although the Company has a line of credit facility available for use as described

in Note 5, Line of Credit, to the Consolidated Financial Statements included in this report.

We may consider borrowing funds for

purposes of working capital, capital purchases, research and development, potential acquisitions and business development.

we do use credit facilities, interest costs associated with any such borrowings and the terms of the loan could potentially adversely

affect our profitability.

Additionally, the current line of credit has debt covenants associated with it which may restrict the

level of borrowing the Company may take on.

Lack of access to financing, or desirable terms or at all, could damage our business,

competitive position, results of operations or financial condition.

in the method pursuant to which the LIBOR rates are determined and potential phasing out of LIBOR after 2021 may affect our financial

are currently not carrying any long-term debt, although the Company has a line of credit facility available for use as described in Note

5, Line of Credit, to the Consolidated Financial Statements included in this report.

We may consider borrowing funds for purposes of

working capital, capital purchases, research and development, potential acquisitions, and business development.

If we do use credit facilities,

interest costs associated with any such borrowings and the terms of the loan could potentially adversely affect our profitability.

Additionally,

the current line of credit has debt covenants associated with it which may restrict the level of borrowing the Company may take on.

of access to financing, or desirable terms or at all, could damage our business, competitive position, results of operations or financial

in the method pursuant to which the LIBOR rates are determined and potential phasing out of LIBOR and adoption of SOFR after 2021 may

affect our financial results.

under our line of credit facility bear interest at variable rates based on LIBOR.

The U.K.’s Financial Conduct Authority,

which regulates LIBOR, has announced that it intends to stop encouraging or requiring banks to submit rates for the calculation

of LIBOR rates after 2021, and it is unclear if LIBOR will cease to exist or if new methods of calculating LIBOR will evolve.

Currently, the Federal Reserve Bank is considering options and transitioning away from LIBOR, and as such, has formed the Alternative

Rates Committee (ARRC).

The ARRC selected the Secured Overnight Financing Rate (SOFR) as an appropriate replacement.

SOFR is based

on transactions in the overnight repurchase markets, which reflects a transaction-based rate on a large number of transactions,

better reflecting current financing costs.

If LIBOR ceases to exist or if the methods of calculating LIBOR change from their current

form, or if new methods are implemented such as SOFR, interest rates on our current or future debt obligations may be adversely

The U.K.’s Financial Conduct Authority, which

regulates LIBOR, has announced that it intends to stop encouraging or requiring banks to submit rates for the calculation of LIBOR rates

after 2021, and it is unclear if LIBOR will cease to exist or if new methods of calculating LIBOR will evolve.

The Federal Reserve Bank

formed the Alternative Rates Committee (ARRC) to consider options for transitioning away from LIBOR.

The ARRC selected the Secured Overnight

Financing Rate (SOFR) as an appropriate replacement.

SOFR is based on transactions in the overnight repurchase markets, which reflects

a transaction-based rate on a large number of transactions, better reflecting current financing costs.

If LIBOR ceases to exist or if

the methods of calculating LIBOR change from their current form, or if new methods are implemented such as SOFR, interest rates on our

current or future debt obligations may be adversely affected.

business may be subject to varying demands based on market interest rates.

TracPipe ® and CounterStrike ® flexible gas piping products are used in the construction industry,

both in residential, commercial and industrial segments, for the piping of fuel gas within a building.

The demand for new or remodeled

construction in the construction industry – and in particular the residential construction industry – is susceptible

to fluctuations in interest rates charged by banks and other financial institutions as well as consumer demand.

The purchasers

of new or remodeled construction generally finance the construction or acquisition of the residential, commercial or industrial

buildings, and any increase in the interest rates on such financing will raise the acquisition cost of the potential purchaser.

While interest rates are currently low, there is no guarantee that will remain the case in the future.

If costs increase significantly,

a higher amount of potential buyers may not be able to support the level of financing under a higher interest rate environment.

Increased acquisition costs may lead to a decline in the demand for new or remodeled construction, and as a result may also lead

to a reduced demand for our products used in construction industry, which could damage our business, competitive position, results

of operations or financial condition.

TracPipe ® and CounterStrike ® flexible gas piping products are used in the construction industry, both in

residential, commercial, and industrial segments, for the piping of fuel gas within a building.

The demand for new or remodeled construction

in the construction industry – and in particular the residential construction industry – is susceptible to fluctuations in

interest rates charged by banks and other financial institutions as well as consumer demand.

The purchasers of new or remodeled construction

generally finance the construction or acquisition of the residential, commercial, or industrial buildings, and any increase in the interest

rates on such financing will raise the acquisition cost of the potential purchaser.

While interest rates are currently low, there is

no guarantee that will remain the case in the future.

If costs increase significantly, a higher amount of potential buyers may not be

able to support the level of financing under a higher interest rate environment.

Increased acquisition costs may lead to a decline in

the demand for new or remodeled construction, and as a result may also lead to a reduced demand for our products used in construction

industry, which could damage our business, competitive position, results of operations or financial condition.

business may be subject to cyclical demands.

demand for our products may be subject to cyclical demands in the markets in which we operate.

Our customers who use our products

in industrial and commercial applications are generally manufacturing capital equipment for their customers.

Our customers who use our products in

industrial and commercial applications are generally manufacturing capital equipment for their customers.

Similarly, our TracPipe ®

3 unchanged sentences

our growth rate would likely be impacted.

To the extent that interest rates increase, in conjunction with an economic cycle or

as part of the general economic conditions in the U.S.

or abroad, the demand for our products in such applications may decrease

as well, which could damage our business, competitive position, results of operations or financial condition.

To the extent that interest rates increase, in conjunction with an economic cycle or as part

of the general economic conditions in the U.S.

or abroad, the demand for our products in such applications may decrease as well, which

could damage our business, competitive position, results of operations or financial condition.

business may be subject to seasonal or weather related factors.

demand for our products may be affected by factors relating to seasonal demand for the product, or a decline in demand due to

inclement weather.

Our TracPipe ® and CounterStrike ® flexible gas piping products are installed in

new or remodeled buildings, including homes, apartment buildings, office buildings, warehouses, and other commercial or industrial

Generally, the rate of new or remodeled buildings in the U.S.

and in the other geographic markets in which we are present

decline in the winter months due to the inability to dig foundations, problems at the job site relating to snow, or generally

due to low temperatures and stormy weather.

As the rate of construction activity declines during the winter, the demand for our

corrugated stainless steel tubing may also decrease or remain static.

demand for our products may be affected by factors relating to seasonal demand for the product, or a decline in demand due to inclement

Our TracPipe ® and CounterStrike ® flexible gas piping products are installed in new or remodeled

buildings, including homes, apartment buildings, office buildings, warehouses, and other commercial or industrial buildings.

the rate of new or remodeled buildings in the U.S.

and in the other geographic markets in which we are present decline in the winter

months due to the inability to dig foundations, problems at the job site relating to snow, or generally due to low temperatures and stormy

As the rate of construction activity declines during the winter, the demand for our corrugated stainless steel tubing may also

decrease or remain static.

business may be subject to the impact of currency volatility.

Company has operations in the U.K., and does business transactions elsewhere in the world outside of the U.S.

While the magnitude of

these transactions outside of the U.S.

have thus far not been significant, and typically not in currencies of high volatility, it is

possible that they could be material.

Events such as Brexit, as described above, or other instances of political and economic turmoil

or uncertainty, could create a weakened British Pound (“BP”) in comparison to other currencies.

A weakened BP would in turn

have a direct negative impact on the Company’s financial statements, as we would experience losses when settling transactions in

other currencies, and experience unfavorable results due to the translation of financial statements with a lower exchange rate.

2020 and 2021 there was not any notable impact due to currency volatility on the financial statements, but going forward, it is possible

that the BP, other currencies that we engage in, or even the U.S.

Dollar may weaken, and materially impact the financial position, operations,

and liquidity of the Company.

cyberattack or other computer system breach could harm us.

recent years, the topic of cybersecurity, or the lack thereof, has been an issue of high concern.

The Company currently maintains a robust

firewall and other safeguards to either prevent or detect against nefarious actors looking to breach or infiltrate our data and has backup

systems in place.

The Company’s website is housed and maintained by a third party who maintain their own controls.

currently has a very low volume of sales coming through the internet, and processes very few credit card transactions.

While it currently

appears that the Company has a low level of risk related to cybercrime, the vulnerability still exists and could affect the Company negatively.

COVID-19 pandemic affected and may continue to affect the business.

ongoing global outbreak of coronavirus, which was declared a pandemic by the World Health Organization on March 11, 2020, and a national

emergency by the President of the U.S.

on March 13, 2020, has caused and is continuing to cause business slowdowns and shutdowns and

turmoil in the financial markets both in the U.S.

The Company is monitoring the impact of the COVID-19 pandemic on its business,

including how it has impacted and will impact the Company’s employees, customers, suppliers, and distribution channels.

pandemic, as well as the quarantines and other governmental and non-governmental restrictions that have been imposed throughout the world

in an effort to contain or mitigate the spread of the coronavirus, has created significant volatility, uncertainty and economic disruption

which affected and may continue to affect the Company’s business.

For example, governmental authorities in several jurisdictions

have and had ordered the cessation of all business activity that is and was deemed non-essential and, although the Company’s business

has to date been deemed essential in many affected markets, there is a risk that these shutdown orders will be extended or expanded,

or that similar shutdown orders will be implemented in other regions.

Company is currently navigating through this unprecedented crisis without any government support from the U.S.

Small Business Administration’s

Paycheck Protection Program (“PPP”), and the nature and magnitude of the COVID-19 pandemic’s ultimate impact on the

Company will depend on numerous evolving factors, future developments and cascading effects of the coronavirus pandemic that the Company

is not able to predict, including:

the duration and severity of the COVID-19 pandemic and the international actions and business restrictions

that are being undertaken and implemented as a result of it;

governmental, business and other responses to the COVID-19 pandemic, including

the promotion of “social distancing,” the issuance of shelter in place orders and restrictions on the Company’s operations,

and the possibility that government officials may mandate that the Company provide products or services;

potential disruptions in the

Company’s supply chain;

the impact of the COVID-19 pandemic on the Company’s ability to execute its short-term and long-term

business strategies and initiatives;

the extent to which forced remote working arrangements reduce the Company’s ability to manage

its business effectively;

the extent to which staffing shortages due to members of the Company’s workforce being quarantined or

exposed to the coronavirus may be detrimental to the Company’s operations;

and the Company’s ability to maintain current

levels of skilled headcount without the proceeds of a loan under the PPP (a “PPP Loan”) as a source of additional liquidity.

Furthermore, while the Company timely returned the proceeds of a PPP Loan in 2020 that it initially received out of an abundance of caution

in reliance on U.S.

Treasury Department and Small Business Administration guidance that companies were able to do so without penalty,

as the COVID-19 pandemic unfolds, federal or state governments (including government agencies such as the Treasury Department, the Small

Business Administration or the Securities and Exchange Commission) could promulgate new statutes, regulations, guidance or relief measures,

or rescind or modify existing statutes, regulations, guidance or relief measures, in a way that is detrimental to the Company or its

business, including as a result of the Company’s prior application for a loan under the PPP.

addition, while the Company cannot predict the magnitude of the impact that the COVID-19 pandemic will have on its customers and suppliers

or their financial conditions, any material effect on the Company’s customers or suppliers could adversely impact the Company.

For example, the Company’s customers or suppliers may themselves assert, or attempt to terminate various agreements and arrangements

with us on the basis of, contractual force majeure provisions, and any termination of a significant commercial agreement may adversely

harm our operations.

Additionally, the COVID-19 pandemic and related travel restrictions and other containment efforts have had a significant

impact on the travel industry, which may result in reduced demand for products.

The impact of the COVID-19 pandemic may also exacerbate

other risk factors in this Item 1A, any of which could have a material effect on the Company.

For example, the risks associated with

potential cybersecurity threats may be magnified given the increase in the number of Company employees working remotely using personal

electronic devices and home internet connections.

extent of the impact of the COVID-19 pandemic on the Company’s business is highly uncertain and difficult to predict, as information

is rapidly evolving with respect to the duration and severity of the COVID-19 pandemic.

At this point, the Company cannot reasonably

estimate the duration and severity of the COVID-19 pandemic or its overall impact on the Company’s business.

other general and macroeconomic issues may impact the business

wars, natural disasters, infectious disease outbreaks (see Pandemic above) or terrorist acts could also cause significant damage or disruption

to our operations, employees, facilities, systems, suppliers, supply chain, distributors, resellers, or customers in the U.S.

and internationally

for extended periods of time and could also affect demand for our products.

Associated with Our Common Stock

concentration of ownership of our common stock could impact its market price.

December 31, 2020, approximately 71% of the issued and outstanding common stock is owned or controlled by inside affiliated parties

to the Company, with the largest being:

December 31, 2021, approximately 70% of the issued and outstanding common stock is owned or controlled by inside affiliated parties to

the Company, with the largest being:

The Estate of John E.

2 unchanged sentences

Hoben and Mark F.

Reed currently serves on the Board of Directors, where he presides as Vice Chairman.

currently serves on the Board of Directors, where he presides as Vice Chairman.

Hoben and Mr.

Albino also serve on

the Board of Directors, with Mr.

Albino also serve on the Board of Directors,

Hoben being the Chairman of the Board, and both are officers of the Company.

This concentration

of ownership may have the effect of reducing the volume of trading of the common stock on the NASDAQ.

A decrease in trading volume

could result in lower prices for the common stock because there is not a sufficient supply of shares to create a vibrant market

for our shares on the NASDAQ, or inversely could drive the common stock price higher when demand exceeds supply.

concentration of ownership of common stock could exert significant influence over matters requiring shareholder approval, including

takeover attempts.

of their significant ownership of our common stock, our officer and directors and their respective affiliates may, as a practical

matter, be able to exert influence over matters requiring approval by our shareholders, including the election of directors and

the approval of mergers or other business combinations.

This concentration also could have the effect of delaying or preventing

a change in control of the Company.

business may be subject to the impact of currency volatility.

Company has operations in the U.K., and does business transactions elsewhere in the world outside of the U.S..

While the magnitude

of these transactions outside of the U.S.

have thus far not been significant, and typically not in currencies of high volatility,

it is possible that they could be material.

Events such as Brexit, as described below, or other instances of political and economic

turmoil or uncertainty, could create a weakened British Pound (“BP”) in comparison to other currencies.

BP would in turn have a direct negative impact on the Company’s financial statements, as we would experience losses when

settling transactions in other currencies, and experience unfavorable results due to the translation of financial statements with

a lower exchange rate.

During 2019 and 2020 there was not any notable impact due to currency volatility on the financial statements,

but going forward, it is possible that the BP, other currencies that we engage in, or even the U.S.

Dollar may weaken, and materially

impact the financial position, operations and liquidity of the Company.

cyber attack or other computer system breach could harm us.

recent years, the topic of cybersecurity, or the lack thereof, has been an issue of high concern.

The Company currently maintains

a robust firewall and other safeguards to either prevent or detect against nefarious actors looking to breach or infiltrate our

data, and has backup systems in place.

The Company’s website is housed and maintained by a third party who maintain their

own controls.

The Company currently has a very low volume of sales coming through the internet, and processes very few credit

card transactions.

While it currently appears that the Company has a low level of risk related to cybercrime, the vulnerability

still exists and could affect the Company negatively.

COVID-19 pandemic has begun to affect and may continue to affect the business.

ongoing global outbreak of coronavirus, which was declared a pandemic by the World Health Organization on March 11, 2020 and a

national emergency by the President of the United States on March 13, 2020, has caused and is continuing to cause business slowdowns

and shutdowns and turmoil in the financial markets both in the United States and abroad.

The Company is monitoring the impact

of the COVID-19 pandemic on its business, including how it has impacted and will impact the Company’s employees, customers,

suppliers and distribution channels.

The COVID-19 pandemic, as well as the quarantines and other governmental and non-governmental

restrictions that have been imposed throughout the world in an effort to contain or mitigate the spread of the coronavirus, has

created significant volatility, uncertainty and economic disruption which has begun to affect and may continue to affect the Company’s

For example, governmental authorities in several jurisdictions have ordered the cessation of all business activity that

is deemed non-essential and, although the Company’s business has to date been deemed essential in many affected markets,

there is a risk that these shutdown orders will be extended or expanded or that similar shutdown orders will be implemented in

other regions.

Company is currently navigating through this unprecedented crisis without any government support from the U.S.

Small Business

Administration’s Paycheck Protection Program (“PPP”), and the nature and magnitude of the COVID-19 pandemic’s

ultimate impact on the Company will depend on numerous evolving factors, future developments and cascading effects of the coronavirus

pandemic that the Company is not able to predict, including:

the duration and severity of the COVID-19 pandemic and the international

actions and business restrictions that are being undertaken and implemented as a result of it;

governmental, business and other

responses to the COVID-19 pandemic, including the promotion of “social distancing,” the issuance of shelter in place

orders and restrictions on the Company’s operations, and the possibility that government officials may mandate that the

Company provide products or services;

potential disruptions in the Company’s supply chain;

the impact of the COVID-19 pandemic

on the Company’s ability to execute its short-term and long-term business strategies and initiatives;

the extent to which

forced remote working arrangements reduce the Company’s ability to manage its business effectively;

the extent to which

staffing shortages due to members of the Company’s workforce being quarantined or exposed to the coronavirus may be detrimental

to the Company’s operations;

and the Company’s ability to maintain current levels of skilled headcount without the

proceeds of a loan under the PPP (a “PPP Loan”) as a source of additional liquidity.

Furthermore, while the Company

timely returned the proceeds of a PPP Loan that it initially received out of an abundance of caution in reliance on U.S.

Department and Small Business Administration guidance that companies were able to do so without penalty, as the COVID-19 pandemic

unfolds, federal or state governments (including government agencies such as the Treasury Department, the Small Business Administration

or the Securities and Exchange Commission) could promulgate new statutes, regulations, guidance or relief measures, or rescind

or modify existing statutes, regulations, guidance or relief measures, in a way that is detrimental to the Company or its business,

including as a result of the Company’s prior application for a loan under the PPP.

addition, while the Company cannot predict the magnitude of the impact that the COVID-19 pandemic will have on its customers and

suppliers or their financial conditions, any material effect on the Company’s customers or suppliers could adversely impact

For example, the Company’s customers or suppliers may themselves assert, or attempt to terminate various agreements

and arrangements with us on the basis of, contractual force majeure provisions, and any termination of a significant commercial

agreement may adversely harm our operations.

Additionally, the COVID-19 pandemic and related travel restrictions and other containment

efforts have had a significant impact on the travel industry, which may result in reduced demand for products.

The impact of the

COVID-19 pandemic may also exacerbate other risk factors in this Item 1A, any of which could have a material effect on the Company.

For example, the risks associated with potential cybersecurity threats may be magnified given the increase in the number of Company

employees working remotely using personal electronic devices and home internet connections.

extent of the impact of the COVID-19 pandemic on the Company’s business is highly uncertain and difficult to predict, as

information is rapidly evolving with respect to the duration and severity of the COVID-19 pandemic.

At this point, the Company

cannot reasonably estimate the duration and severity of the COVID-19 pandemic or its overall impact on the Company’s business.

other general and macroeconomic issues may impact the business

wars, natural disasters, infectious disease outbreaks (see Pandemic above) or terrorist acts could also cause significant damage

or disruption to our operations, employees, facilities, systems, suppliers, supply chain, distributors, resellers or customers

and internationally for extended periods of time and could also affect demand for our products.

This concentration of ownership may have the effect

of reducing the volume of trading of the common stock on the NASDAQ.

A decrease in trading volume could result in lower prices for the

common stock because there is not a sufficient supply of shares to create a vibrant market for our shares on the NASDAQ, or inversely

could drive the common stock price higher when demand exceeds supply.

concentration of ownership of common stock could exert significant influence over matters requiring shareholder approval, including takeover

of their significant ownership of our common stock, our officer and directors and their respective affiliates may, as a practical matter,

be able to exert influence over matters requiring approval by our shareholders, including the election of directors and the approval

of mergers or other business combinations.

This concentration also could have the effect of delaying or preventing a change in control

of the Company.

1B – UNRESOLVED STAFF COMMENTS

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 1A. Risk Factors