What changed in this filing

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Item 1. Business

2023-03-10 compared with 2022-03-14 · 227 added, 231 removed, 254 unchanged (64% 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.

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

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

Company’s business is managed 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 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.

in Banbury, Oxfordshire in the United Kingdom (U.K.).

The Company 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.

Because of its simple and ubiquitous nature, flexible metal hose 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

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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.

The general industrial market includes all 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.

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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.

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

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.

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 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

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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.

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

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.

statement for the Omega Flex common stock was filed with the Securities and Exchange Commission (the “SEC”) 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 concentrated in North America, but the Company also has foreign subsidiaries

located in the U.K.

and France, which are largely focused on European and other international markets.

The Company also has a U.S.

which owns the Company’s Exton, Pennsylvania real estate.

of Current Business

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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

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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 direct sales.

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 distribution customer, whose various branches had sales in the range of 12% to 13% of total sales during the periods

of 2020 to 2022 and was in the range of 7% to 19% of the Company’s accounts receivable balance over the last two years.

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 sales 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 5% to 7% 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.

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,

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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.

Partnered with the development of our AutoFlare ® and AutoSnap ® 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.

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 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.

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

CounterStrike ®

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

CounterStrike ® is designed to be more resistant to damage from transient electrical arcing.

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 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.

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.

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 its leadership in the marketplace.

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

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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.

Additionally, DoubleTrac® is fully compliant with 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 ®

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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.

and cannot be pre-mixed with 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 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 the U.S.

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.

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

has been met with wide acceptance from the industry that was searching for a solution to the new environmental requirement.

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

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

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

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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

also prevents tampering or disassembly using 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.

Rated at 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).

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 at 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).

MediTrac ® also meets Canadian standard Z7396.1, Medical Gas

Pipeline Systems.

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

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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

For example, MediTrac ® medical gas piping was installed in a City of New York

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.

Market Applications

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

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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.

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

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

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All of our smaller diameter pipe (2”

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

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

The proprietary process that we use

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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.

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

contributes to our gross profit levels.

As a result, we can 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.

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.

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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.

include Titeflex Corporation, Ward Manufacturing, Microflex Inc., Hose Master, Pennflex, 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 on 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.

position of the two major categories in which we participate regarding 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.

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 can 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 as a whole.

of our two markets, the construction industry, has seen a modest decrease in the number of residential housing starts in 2022, 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

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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

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.

See Note 2, Significant Accounting Policies,

under Significant Concentrations, to the Consolidated Financial Statements included in this report for additional details.

From our perspective,

we can 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.

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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.

we have historically used only one to three 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 to obtain 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 ®

the commodity price of nickel was significantly higher, and copper was lower 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 2022.

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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.

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

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

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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.

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

The Company fosters a collaborative,

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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.

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

metal hose products on the market.

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

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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.

employees of similar functions to those in the U.S., but on a much smaller scale, as well as 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.

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

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have a comprehensive portfolio of intellectual property, including approximately 123 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.

During 2022, the Company allowed some patents to lapse in countries where warranted by market conditions, in particular, where the likelihood

of entering the market is remote.

Our active patents cover (a) pre-sleeved CSST for use in underground applications, (b) an electrically

conductive jacket for flexible gas piping that we sell under the trademark CounterStrike ® , (c) a tubing containment system

for our DoubleTrac ® double containment piping, and (d) fittings for use with our MediTrac® corrugated medical tubing.

Our patent-pending 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.

We also have a patent for the composition of the polyethylene jacket used in

the prior version of 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 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.

Several patents covering the prior version of the Counterstrike ® jacket will expire in 2024.

have several patent applications pending in the U.S.

and internationally covering our AutoSnap ® fittings and improvements

to our CounterStrike ® polyethylene jacket.

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.

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

Among other things, you can access our filings with the

SEC on our website free of charge.

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

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All of these reports

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

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

In addition, we have made

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or waivers to our Code of Business Ethics.

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

The SEC maintains a website at www.sec.gov that also contains the Company’s various

reports, proxy, and information statements and other filings.

The information contained on or accessible through the websites referred

to above is not incorporated by reference in, or otherwise a part of, this annual report, and any references to these websites are intended

to be inactive textual references only.

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