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, 2023, 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, 2023. 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 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, 2023. In making
this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations (COSO) in the
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, 2023, based on criteria in the Internal Control-Integrated Framework (2013) issued by COSO.
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, 2023. RSM US LLP’s report on the effectiveness of the Company’s internal
control over financial reporting as of December 31, 2023, is included in this annual report.
(c)
Changes in Internal Control over Financial Reporting.
There
were no changes in our internal control over financial reporting during the most recent quarter ended December 31, 2023, that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item
9B – OTHER INFORMATION
None.
Item
9C - DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not
applicable.
- 51 -
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,
2023, a definitive proxy statement relating to the Company’s annual meeting of shareholders (the “2024 Proxy Statement”).
Item
10 – DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information
required by this Item is incorporated by reference to the 2024 Proxy Statement.
The
Company has adopted a Code of Business Conduct and 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 this Item is incorporated by reference to the 2024 Proxy Statement.
Item
12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Information
required by this Item is incorporated by reference to the 2024 Proxy Statement.
Item
13 - CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information
required by this Item is incorporated by reference to the 2024 Proxy Statement.
Item
14 – PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information
required by this Item is incorporated by reference to the 2024 Proxy Statement.
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 58 through 60.
2. Consolidated
Financial Statements. See Index to Consolidated Financial Statements on page 30. Financial
statement schedules have been omitted because they are not required, not applicable, not
present in amounts sufficient to require submission of the schedule, or the required information
is otherwise included.
- 52 -
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
Amended and Restated Articles of Incorporation of Omega Flex, Inc.
(A)
3.2
Amended and Restated By-laws of Omega Flex, Inc.
(F)
4.1
Description of Common Stock
(B)
10.1
Indemnification 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 Agreements as of December 31, 2023
**
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
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.
(K)
10.7
Loan and Security Agreement dated December 17, 2009 between Omega Flex, Inc. and Sovereign Bank, N.A.
(G)
10.8
First Amendment dated December 30, 2010 to the Loan and Security Agreement between Omega Flex, Inc. and Sovereign Bank, N.A.
(H)
10.9
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)
10.10
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.)
(K)
10.11
Amended and Restated Loan Agreement dated July 3, 2023, between Omega Flex, Inc. and Santander Bank, N.A.
(N)
10.12
Second Amended and Restated Committed Revolving Line of Credit Note dated July 3, 2023, by Omega Flex, Inc. to Santander Bank, N.A.
(N)
10.13
*
Phantom Stock Plan dated December 11, 2006.
(J)
- 53 -
10.14
*
First Amendment to the Omega Flex, Inc. 2006 Phantom Stock Plan
(G)
10.15
*
Omega Flex, Inc. 2006 Phantom Stock Plan (as amended and restated effective January 1, 2023).
(L)
10.16
*
Form of Phantom Stock Agreement entered into between Omega Flex, Inc. and its directors, officers and employees (for grants made prior to January 1, 2023) .
(J)
10.17
*
Form of Phantom Stock Agreement entered into between Omega Flex, Inc. and its directors, officers and employees (for grants made on or after January 1, 2023) .
(L)
10.18
*
Schedule of Phantom Stock Agreements between Omega Flex, Inc. and its directors and officers as of December 31, 2023.
**
10.19
*
Form of Change of Control Agreement entered into between Omega Flex, Inc. and certain officers and employees .
(M)
10.20
*
Schedule of Change of Control Agreements between Omega Flex, Inc. and certain officers and employees as of December 31, 2023.
**
19.1
Insider Trading Policies and Procedures
**
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
***
97.1
Policy Relating to Recovery of Erroneously Awarded Compensation
**
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).
- 54 -
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 September 15, 2021.
(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 Current Report on Form 8-K filed December 5, 2017.
(L)
Filed
as an Exhibit to the Quarterly Report on Form 10-Q filed November 7, 2022.
(M)
Filed
as an Exhibit to the Current Report on Form 8-K filed March 1, 2019.
(N)
Filed
as an Exhibit to the Current Report on Form 8-K filed July 5, 2023.
*
Management
contract, compensatory plan, or arrangement
**
Filed
herewith
***
Furnished
herewith
Item
16 – Form 10-K Summary
None.
- 55 -
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
OMEGA FLEX, INC.
Date:
March 11, 2024
By:
/s/
Dean W. Rivest
Dean
W. Rivest
Chief
Executive Officer (Principal Executive Officer)
Date:
March 11, 2024
By:
/s/
Matthew F. Unger
Matthew
F. Unger, Vice President Finance,
Chief
Financial Officer (Principal Financial Officer)
Date:
March 11, 2024
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 11, 2024
By:
/s/
James M. Dubin
James
M. Dubin, Director
Date:
March 11, 2024
By:
/s/
David K. Evans
David
K. Evans, Director
Date:
March 11, 2024
By:
/s/
J. Nicholas Filler
J.
Nicholas Filler, Director
Date:
March 11, 2024
By:
/s/
Derek W. Glanvill
Derek
W. Glanvill, Director
Date:
March 11, 2024
By:
/s/
Kevin R. Hoben
Kevin
R. Hoben, Director
Date:
March 11, 2024
By:
/s/
Edwin B. Moran
Edwin
B. Moran, Director
Date:
March 11, 2024
By:
/s/
Stewart B. Reed
Stewart
B. Reed, Director
Date:
March 11, 2024
By:
/s/
Dean W. Rivest
Dean
W. Rivest, Director
- 56 -