Item 9A. Controls and Procedures
Item
9A – CONTROLS AND PROCEDURES
(a) Evaluation
of Disclosure Controls and Procedures.
We
evaluated, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness
of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934 (“Exchange Act”), as amended, as of December 31, 2021, the end of the period covered by this report
on Form 10-K. Based on this evaluation, our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal
financial officer) have concluded that our disclosure controls and procedures were effective as of December 31, 2021. Disclosure controls
and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the
Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms
and (ii) is accumulated and communicated to management, including the chief executive officer and chief financial officer, as appropriate,
to allow timely decisions regarding required disclosures.
(b) Management’s
Report on Internal Control Over Financial Reporting.
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over
financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act and is a process designed by, or under
the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other
personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
●
Pertain
to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
●
Provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with
authorizations of our management and directors; and
●
Provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s
assets that could have a material effect on the financial statements.
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Our
management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021. In making
this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations (COSO) in Internal
Control-Integrated Framework (2013) .
Based
on the assessment, management has concluded that the Company maintained effective internal control over financial reporting as of December
31, 2021 based on criteria in the Internal Control-Integrated Framework (2013) issued by COSO.
- 52 -
The
Company’s independent registered public accounting firm, RSM US LLP, audited the effectiveness of the Company’s internal
control over financial reporting as of December 31, 2021. RSM US LLP’s report on the effectiveness of the Company’s internal
control over financial reporting as of December 31, 2021, is included herein on page 32.
(d)
Changes in Internal Control over Financial Reporting.
There
were no changes on our internal control over financial reporting during the most recent quarter ended December 31, 2021, that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item
9B – OTHER INFORMATION
None.
PART
III
With
respect to Items 10 through 14, the Company will file with the Securities and Exchange Commission, within 120 days after December
31, 2021, a definitive proxy statement relating to the Company’s annual meeting of shareholders (the “2022 Proxy Statement”).
Item
10 – DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information
regarding directors of the Company will be set forth in the 2022 Proxy Statement, under the caption “Current Directors and Nominees
for Election – Background Information”, and to the extent required and except as set forth therein, is incorporated herein
by reference.
Information
regarding executive officers of the Company will be set forth under the caption “Executive Officers” in the 2022 Proxy Statement,
and to the extent required and except as set forth therein, incorporated herein by reference.
Information
regarding the Company’s Audit Committee and its “Audit Committee Financial Expert” will be set forth in the 2022 Proxy
Statement, under the caption “Board Committees”, and incorporated herein by reference. Information concerning any delinquent
filings under Section 16(a) of the Securities Exchange Act of 1934 will be set forth in the Company’s proxy statement also, under
the Caption “Delinquent Section 16(a) Reports” incorporated herein by reference.
The
Company has adopted a Code of Business Ethics (“Code”) applicable to its principal executive officer and principal financial
officer, its directors and all other employees generally. A copy of the Code may be found at the Company’s website www.omegaflex.com.
Any changes to or waivers from this Code will be disclosed on the Company’s website as well as in appropriate filings with the
Securities and Exchange Commission.
Item
11 - EXECUTIVE COMPENSATION
Information
required by Item 11 will be set forth in the 2022 Proxy Statement, under the caption “Executive Compensation” and to the
extent required and except as set forth therein, is incorporated herein by reference.
The
report of the Compensation Committee of the Board of Directors of the Company shall not be deemed incorporated by reference by any general
statement incorporating by reference the proxy statement into any filing under the Securities Exchange Act of 1934, and shall not otherwise
be deemed filed under such Act.
- 53 -
Item
12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information
required by Item 12 will be set forth in the 2022 Proxy Statement, under the caption “Security Ownership of Certain Beneficial
Owners and Management”, and to the extent required and except as set forth therein, is incorporated herein by reference.
Item
13 - CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information
required by Item 13 will be set forth in the 2022 Proxy Statement, under the caption “Certain Relationships and Related Party Transactions”
and to the extent required and except as set forth therein, is incorporated herein by reference.
Item
14 – PRINCIPAL ACCOUNTING FEES AND SERVICES
Information
required by Item 14 will be set forth in the 2022 Proxy Statement, under the caption “Principal Accounting Fees and Services”,
and to the extent required, and except as set forth therein, is incorporated herein by reference.
PART
IV
Item
15 – EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES
(a)
The
following documents are filed as part of this Form 10-K:
1.
Exhibits.
See Index to Exhibits on pages 56 through 59.
2.
Consolidated
Financial Statements. See Index to Consolidated Financial Statements on page 29.
EXHIBIT
INDEX
Those
documents followed by a parenthetical notation are incorporated herein by reference to previous filings with the Securities and Exchange
Commission, under Commission File No. 000-51372, as set forth below.
Exhibit
No.
Description
Reference
Key
3.1
Articles of Incorporation of Omega Flex, Inc., as amended
(A)
3.2
Amended and Restated By-laws of Omega Flex, Inc.
(A)
4.1
Description of Common Stock
(B)
10.1
Indemnity and Insurance Matters Agreement dated July 29, 2005 between Omega Flex, Inc. and Mestek, Inc.
(A)
10.2
*
Form of Indemnification Agreements entered into between Omega Flex, Inc. and its Directors and Officers and the Directors of its wholly-owned subsidiaries.
(C)
10.3
*
Schedule of Directors/Officers with Indemnification Agreement
**
- 54 -
10.4
*
Employment Agreement dated December 15, 2008 between Omega Flex, Inc. and Kevin R. Hoben
(D)
10.5
*
Amendment No. 1 to the Employment Agreement dated January 1, 2014 between Omega Flex, Inc. and Kevin R. Hoben
(E)
10.6
*
Employment Agreement dated December 15, 2008 between Omega Flex, Inc. and Mark F. Albino
(D)
10.7
*
Amendment No. 1 to the Employment Agreement dated January 1, 2014 between Omega Flex, Inc. and Mark F. Albino
(E)
10.8
Amended and Restated Committed Revolving Line of Credit Note dated December 1, 2017 by Omega Flex, Inc. to Santander Bank, N.A. in the principal amount of $15,000,000.
(F)
10.9
Loan and Security Agreement dated December 17, 2009 between Omega Flex, Inc. and Sovereign Bank, N.A.
(G)
10.10
First Amendment dated December 30, 2010 to the Loan and Security Agreement between Omega Flex, Inc. and Sovereign Bank, N.A.
(H)
10.11
Second Amendment dated December 29, 2014 to the Loan and Security Agreement between Omega Flex, Inc. and Santander Bank, N.A., (as successor in interest to Sovereign Bank, N.A.)
(I)
10.12
Third Amendment dated December 1, 2017 to the Loan and Security Agreement between Omega Flex, Inc. and Santander Bank, N.A., (as successor in interest to Sovereign Bank, N.A.)
(F)
10.13
*
Phantom Stock Plan dated December 11, 2006.
(J)
10.14
*
First Amendment to the Omega Flex, Inc. 2006 Phantom Stock Plan
(G)
10.15
*
Form of Phantom Stock Agreement entered into between Omega Flex, Inc. and its directors, officers and employees.
(J)
10.16
*
Schedule
of Phantom Stock Agreements between Omega Flex, Inc. and its directors and officers as of December 31, 2021.
**
10.17
*
Form of Non-Employee Director Restricted Stock Unit Award Agreement entered into between Omega Flex, Inc. and certain non-employee directors.
(K)
10.18
*
Form
of Change of Control Agreement entered into between Omega Flex, Inc. and certain officers and employees.
(B)
10.19
*
Schedule
of Change of Control Agreements between Omega Flex, Inc. and certain officers and employees as of December 31, 2021.
**
- 55 -
21.1
List of Subsidiaries
**
23.1
Consent of RSM US LLP
**
31.1
Certification of Chief Executive Officer of Omega Flex, Inc. pursuant to Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended
**
31.2
Certification of Chief Financial Officer of Omega Flex, Inc. pursuant to Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended
**
32.1
Certification of Chief Executive Officer and Chief Financial Officer of Omega Flex, Inc. pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
***
101.1NS
Inline XBRL
Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the
Inline XBRL document)
**
101.SCH
Inline XBRL
Taxonomy Extension Schema Document
**
101.CAL
Inline
XBRL Taxonomy Extension Calculation Linkbase Document
**
101.DEF
Inline XBRL
Taxonomy Extension Definition Linkbase Document
**
101.LAB
Inline
XBRL Taxonomy Extension Label Linkbase Document
**
101.PRE
Inline XBRL
Taxonomy Extension Presentation Linkbase Document
**
104
Cover
Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document and included in Exhibit 101).
Reference
Key
(A)
Filed
as an Exhibit to the Registration Statement on Form 10-12G filed on June 22, 2005.
(B)
Filed
as an Exhibit to the Annual Report on Form 10-K filed March 9, 2020.
(C)
Filed
as an Exhibit to the Quarterly Report on Form 10-Q filed May 4, 2020.
(D)
Filed
as an Exhibit to the Annual Report on Form 10-K filed March 18, 2009.
(E)
Filed
as an Exhibit to the Current Report on Form 8-K/A filed July 24, 2014.
(F)
Filed
as an Exhibit to the Current Report on Form 8-K filed December 5, 2017.
(G)
Filed
as an Exhibit to the Annual Report on Form 10-K filed March 17, 2010.
(H)
Filed
as an Exhibit to the Annual Report on Form 10-K filed March 10, 2011.
(I)
Filed
as an Exhibit to the Current Report on Form 8-K filed December 29, 2014.
(J)
Filed
as an Exhibit to the Annual Report on Form 10-K filed April 2, 2007.
(K)
Filed
as an Exhibit to the Registration Statement on Form S-8 filed December 13, 2018.
*
Management
contract, compensatory plan, or arrangement
**
Filed
herewith
***
Furnished
herewith
Item
16 – Form 10-K Summary
None.
- 56 -
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has caused this report be signed on
its behalf by the undersigned, thereunto duly authorized.
OMEGA FLEX, INC.
Date:
March 14, 2022
By:
/S/
Kevin R. Hoben
Kevin
R. Hoben, Chairman and
Chief
Executive Officer (Principal Executive Officer)
Date:
March 14, 2022
By:
/S/
Matthew F. Unger
Matthew
F. Unger, Vice President Finance,
Chief
Financial Officer (Principal Financial Officer)
Date:
March 14, 2022
By:
/S/
Luke S. Hawk
Luke
S. Hawk
Financial
Controller
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date:
March 14, 2022
By:
/S/
Mark F. Albino
Mark
F. Albino, Director
Date:
March 14, 2022
By:
/S/
James M. Dubin
James
M. Dubin, Director
Date:
March 14, 2022
By:
/S/
David K. Evans
David
K. Evans, Director
Date:
March 14, 2022
By:
/S/
J. Nicholas Filler
J.
Nicholas Filler, Director
Date:
March 14, 2022
By:
/S/
Derek W. Glanvill
Derek
W. Glanvill, Director
Date:
March 14, 2022
By:
/S/
Kevin R. Hoben
Kevin
R. Hoben, Director
Date:
March 14, 2022
By:
/S/
Bruce C. Klink
Bruce
C. Klink, Director
Date:
March 14, 2022
By:
/S/
Stewart B. Reed
Stewart
B. Reed, Director
- 57 -