What changed in this filing

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Item 1A. Risk Factors

2024-03-11 compared with 2023-03-10 · 210 added, 229 removed, 175 unchanged (71% of the section changed)

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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.

If any of these risks occur, our business,

financial condition, results of operations and prospects could be materially and adversely affected.

In that case, the market price of

our common stock could decline and you could lose all or part of your investment.

Additional risks and uncertainties not presently known

to us or that we currently deem immaterial may also materially harm our business, operating results and financial condition and could

result in a complete loss of your investment.

If any of these risks occur, our business, financial condition, results of operations and

prospects could be materially and adversely affected.

In that case, the market price of our common stock could decline and you could

lose all or part of your investment.

Additional risks and uncertainties not presently known to us or that we currently deem immaterial

may also materially harm our business, operating results and financial condition and could result in a complete loss of your investment.

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.

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, copper, and polyethylene – could damage our business, competitive

position, results of operations or financial condition.

of our sales are derived from the sale of TracPipe ® and CounterStrike ® flexible gas piping systems, including

Autoflare ® 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.

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, copper,

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

face intense competition in all our markets.

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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.

generally none of these markets have one dominant competitor.

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

Volumes of competing low price imports has increased, and may continue to increase, negatively affecting our earnings.

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.

all the Company’s products and product lines are sold by outside sales organizations.

These independent sales organizations or

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

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

terminable on short notice.

all our products and product lines are sold by outside sales organizations.

These independent sales organizations or sales representatives

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

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 terminable on

short notice.

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.

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 operations or financial condition could be negatively impacted

if we cannot maintain adequate sales and distribution networks.

are dependent on wholesale distribution 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

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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 ®

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

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

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business may be subject to the impact of Brexit.

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

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.

main operating subsidiary outside of the U.S., Omega Flex Limited, is headquartered in Banbury, England in the U.K.

from the European Union (“Brexit”) in 2020.

While an agreement with the European Union was reached in 2021, 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

Most of the business of Omega Flex Limited is within 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.

However, most of the business of Omega Flex Limited is within the U.K.

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.

However, it is not expected that increased costs,

logistical delays, nor possible economic declines in those markets would be material to the Company.

To mitigate these impacts of Brexit, the Company formed a legal entity in France in 2022.

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 our products in those markets.

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

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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

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

However, we do not believe that increased tariffs

will materially affect our 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.

to Europe, Asia and Africa are primarily handled from our U.K and France facilities, 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.

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

2022, we derived 5% 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 is 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.

2023 and 2022, we derived 4% to 5% 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 is 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 are subject 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;

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;

with laws and regulations imposed on foreign operations, including the U.S.

Foreign Corrupt Practices Act, the U.K.

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.

Foreign Corrupt

Practices Act, the U.K.

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 continuing conflict between Russia and Ukraine, the U.S.

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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.

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

Relating to Our Business – Manufacturing and Operations

manufacturing plants may be damaged, destroyed or disrupted.

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.

scale the Company also manufactures products 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 or otherwise disrupted for more than a short time, 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

majority of our 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 lease a manufacturing facility.

On a smaller scale we

also have manufacturing operations 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 or otherwise

disrupted for more than a short time, 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 at our manufacturing facilities, and we also have 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 .

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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

We have identified multiple qualified vendors to produce or manufacture our critical purchase requirements.

The Company does,

however, tend to rely on one to three 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.

contracts typically represent a significant portion of our annual planned usage and are set at a designated fixed price or a range of

These agreements sometimes require us 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 our discretion.

We have identified multiple

qualified vendors to produce or manufacture our critical purchase requirements.

Although we tend to rely on more than one source for

each or our primary components to leverage the relationship and pricing, there is no assurance that we 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 members of our senior management team, we may not be able to execute our business strategy.

future success depends in large part upon the continued service of key members of our senior management team.

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strive to educate and develop other layers of staff for succession planning purposes, and the recent retirement of senior executives

and transition of their roles has gone smoothly, the loss of any of our senior management could seriously harm our business.

and transition of their roles has gone smoothly, the loss of any members of our current senior management could seriously harm our business.

Relating to Our Business – Legal

Susceptibility

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 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 and material impact on the Company’s business, competitive position, results of operations or financial condition.

to litigation and significant legal costs or settlements.

the ordinary and normal conduct of our business, we are subject to periodic lawsuits, investigations, and claims (collectively, the “Claims”).

We have continued to receive repeat pattern Claims relating to our flexible gas piping products, although the pace of new Claims has

generally declined.

While we do not believe the Claims have legal merit, and have successfully defended against

such Claims, we cannot predict whether the pace of Claims will increase or subside.

Any significant increase in the number of Claims,

the financial magnitude of Claims brought against us, the costs of defending the Claims, particularly under higher retentions of our

current product liability insurance policies, could have a detrimental and material impact on our business, competitive position, results

of operations or financial condition.

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

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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.

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.

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

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, we needed to protect our company and resort to legal action, in one instance regarding a trade secret, and other instances

where we sued flexible gas pipe competitors for infringement of 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.

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

Although we 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

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

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

Several municipalities in the U.S.

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.

Some states and several municipalities

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 our 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.

that proposals to limit or eliminate the use of fossil fuels could adversely impact our financial results, perhaps materially.

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

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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 6, Line of Credit and Other Borrowings, to the Consolidated Financial Statements included in this report.

are currently not carrying any long-term debt, although we have a line of credit facility available for use as described in Note 6, Line

of Credit and Other Borrowings, 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.

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 incur.

Lack of access to financing or to reasonable terms could damage our business, competitive

position, results of operations or financial condition.

in the method pursuant to which the SOFR rates are determined and potential phasing out of LIBOR and adoption of SOFR after 2022 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 2022, 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.

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

we may incur.

Lack of access to financing or to reasonable terms could damage our business, competitive position, results of operations

or financial condition.

credit facility bears a variable rate of interest that is based on the Secured Overnight Financing Rate (“SOFR”), which may

have consequences for us that cannot be reasonably predicted and may adversely affect our liquidity, financial condition, and earnings.

under our credit facility bear interest at a rate per annum of either, at our election, (i) Term SOFR plus a margin or (ii) the Prime

Rate plus a margin, with the applicable margin depending on specified financial ratios.

Since the initial publication of SOFR, daily

changes in the rate have, on occasion, been more volatile than daily changes in comparable benchmark or market rates, and SOFR over time

may bear little or no relation to the historical actual or historical indicative data.

As of December 31, 2023, we had no outstanding

borrowings under this credit facility.

If we were to borrow under this credit facility, it is possible that the volatility of SOFR could

result in higher borrowing costs for us and could adversely affect our liquidity, financial condition, or earnings.

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

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business may be subject to the impact of currency volatility.

Company has operations in the U.K.

have operations in the U.K.

and France, and does business transactions elsewhere in the world outside of the U.S.

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notable impact due to currency volatility, but going forward, it is possible that the BP, Euro, and other currencies that we engage in

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

cyber security incident or other technology disruption could harm us.

face certain security threats and technology disruptions, including threats to our information technology (“IT”) infrastructure,

attempts to gain access to our or our customers’ proprietary or confidential information, threats of terrorism events, and failures

of our technology tools and systems.

Our IT networks and related systems are critical to the operation of our business and essential

to our ability to successfully perform day-to-day operations.

Cybersecurity threats, which include, but are not limited to, computer

viruses, spyware, and malware, attempts to access information, denial of service attacks and other electronic security breaches, are

persistent and evolve quickly.

may materially impact our financial position, operations, or liquidity.

cybersecurity incident or other technology disruption could harm us.

face certain cybersecurity threats and technology disruptions, including threats to our information technology (“IT”) infrastructure,

attempts to gain access to our or our customers’ proprietary or confidential information, and failures of our technology tools

Our IT networks and related systems are critical to the operation of our business and essential to our ability to successfully

perform day-to-day operations.

Cybersecurity threats, which include, but are not limited to, computer viruses, spyware, and malware,

attempts to access information, denial of service attacks and other electronic security breaches, are persistent and evolve quickly.

In general, such threats have increased in frequency, scope, and potential impact in recent years.

a variety of technological tools and systems, including both company-owned IT and technological services provided by outside parties,

support our critical functions.

These technologies, as well as our products, are subject to failure and the user’s inability to

have such technologies properly supported, updated, expanded, or integrated into other technologies and, in certain cases, may contain

open source and third-party software which may unbeknownst to us contain defects or viruses that pose unintended risks.

if not effectively mitigated or controlled, could materially harm our business or reputation.

While we believe that we have implemented

appropriate measures and controls, there can be no assurance that such actions will be sufficient to prevent disruptions to critical

systems, unauthorized release of confidential information or corruption of data.

Further, a variety of technological

tools and systems, including both company-owned IT and technological services provided by outside parties, support our critical functions.

These technologies are subject to failure and the user’s inability to have such technologies properly supported, updated, expanded,

or integrated into other technologies and, in certain cases, may contain open source and third-party software which may unbeknownst to

us contain defects or viruses that pose unintended risks.

These risks, if not effectively mitigated or controlled, could materially harm

our business or reputation.

While we believe that we have implemented appropriate measures and controls, there can be no assurance that

such actions will be sufficient to prevent disruptions to critical systems, unauthorized release of confidential information or corruption

security measures we have implemented may become subject to third-party security breaches, employee error, malfeasance, faulty password

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Such an event could require significant management attention and resources, negatively impact our reputation among our customers and

the public, which could have a material adverse effect on our business, financial condition, and results of operations.

ongoing COVID-19 pandemic may adversely affect the business.

Company has not yet seen a material impact from the COVID-19 pandemic on its business, financial position, liquidity, or ability to service

customers or maintain critical operations.

However, some parts of the world are continuing to see a rise in COVID-19 cases and hospitalizations,

and it is possible that new, more virulent strains and variants of COVID-19 may emerge and lead governments and private sectors to re-institute

quarantine and trade restrictions, which could adversely impact market conditions.

The Company will continue to monitor 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 Company could face liquidity shortages, weaker product demand from its customers, disruptions in its supply

chain, and/or staffing shortages in its workforce in the future due to the direct and indirect effects of the COVID-19 pandemic.

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

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.

the public, which could have a material adverse effect on our business, financial condition, or results of operations.

pandemic, like COVID-19 pandemic, may adversely affect our business.

COVID-19 pandemic created significant uncertainty and adversely impacted many industries throughout the global economy.

Although we have

not seen a material impact from the COVID-19 pandemic on our business, financial position, liquidity, or ability to service customers

or maintain critical operations, the extent to which a future pandemic may impact our business is difficult to predict, and it is dependent

on many factors over which we have no control.

Such factors include, but are not limited to, the duration and severity of the pandemic;

government restrictions on businesses and individuals;

potential significant adverse impacts on our employees, customers, suppliers,

or service providers;

the impact on U.S.

and global economies, and the timing and rate of economic recovery.

case of a future pandemic, we could face liquidity shortages, weaker product demand from our customers, disruptions in our supply chain,

and/or staffing shortages in our workforce due to the direct and indirect effects of a pandemic.

other general and macroeconomic issues may impact the business.

wars, natural disasters, infectious disease outbreaks (see COVID-19 pandemic above), active shooter or other workplace violence, or terrorist

wars, natural disasters, infectious disease outbreaks (such as COVID-19 pandemic), active shooter or other workplace violence, or terrorist

acts could also cause significant damage or disruption to our operations, employees, facilities, systems, suppliers, supply chain, distributors,

7 unchanged sentences

Reed, Stewart B.

Reed, Kevin R.

Reed currently serves as Vice Chairman of the Board of Directors.

Hoben and Mr.

Albino also serve

on the Board of Directors, with Mr.

Hoben being the Chairman of the Board and Chief Executive Officer 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.

Reed, and Kevin

Reed currently serves as Vice Chairman of the Board of Directors, and Mr.

Hoben serves as the Executive Chairman

of the Board.

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 approval by our shareholders, including

1 unchanged sentence

This concentration also could have the effect of

delaying, preventing, or deterring a change in control of the Company.

1B – UNRESOLVED STAFF COMMENTS

delaying, preventing, or deterring a change in control of our company.

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