What changed in this filing

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Item 1A. Risk Factors

2025-03-07 compared with 2024-03-11 · 95 added, 107 removed, 278 unchanged (42% of the section changed)

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

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.

of our sales are derived from the sale of TracPipe ® and CounterStrike ® CSST 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.

CSST 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.

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

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

position, results of operations or financial condition.

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

results of operations or financial condition.

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

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

business may be subject to the impact of Brexit.

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 East.

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

and should therefore not be unduly disrupted.

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.

events have caused various governments around the world to impose increased trade tariffs on imported goods.

These increased tariffs

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

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.

business may be subject to macroeconomic effects caused by increased trade tariffs, changes to existing trade agreements and changes

in international trade relations.

and foreign government trade policies, including tariffs and potential modifications to existing trade agreements, and further

restrictions on free trade, are introducing uncertainty.

These increased tariffs may cause the cost of materials to rise and may add

additional expenses to exported goods.

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.

and most of our sales

of product manufactured in the U.S.

are domestic.

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

are primarily to Canada.

Sales to Europe, Asia and Africa are primarily handled from our U.K and France facilities, which are not affected

trade tariffs and retaliatory tariffs but may be subject to other border and customs controls which could increase costs and

delay incoming and outgoing shipments.

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

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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.

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.

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.

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

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Finally, we also purchase brass and stainless

steel for our proprietary fittings used with the flexible metal hose that provide a mechanical means of attaching the hose to an assembly

steel for our proprietary fittings used with the flexible metal hose that provides a mechanical means of attaching the hose to an assembly

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

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Although, as much as possible, senior executives

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 members of our current senior management could seriously harm our business.

strive to educate and develop other layers of staff for succession planning purposes, the loss of any members of our current senior management

could seriously harm our business.

Relating to Our Business – Legal

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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.

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

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

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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

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

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

Certain geographic areas of the U.S.

TracPipe ® and CounterStrike ® CSST products are used to convey fuel gas, primarily natural gas, but also

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

Because those products

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

geographic areas of the U.S.

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

Other types of

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

issues that may constrict their availability.

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

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

Other types of fuel gas

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

may constrict their availability.

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

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

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

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

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

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

The demand for new or remodeled construction

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

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

The purchasers of new or remodeled construction

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

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

TracPipe ® and CounterStrike ® CSST products are used in the construction industry, both in residential,

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

The demand for new or remodeled construction in the

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

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

The purchasers of new or remodeled construction generally

finance the construction or acquisition of the residential, commercial, or industrial buildings, and increases in the interest rates

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

Interest rates have been increasing and there is no guarantee

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Similarly, our TracPipe ® and

CounterStrike ® flexible gas piping products are used primarily in residential construction, both in single-family buildings,

and in larger multi-unit buildings.

Should there be any change in factors that affect the rate of new residential construction, our growth

rate would likely be impacted.

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

economic conditions in the U.S.

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

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

CounterStrike ® CSST products are used primarily in residential construction, both in single-family buildings, and in larger

multi-unit buildings.

Should there be any change in factors that affect the rate of new residential construction, our growth rate would

likely be impacted.

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

conditions in the U.S.

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

competitive position, results of operations or financial condition.

business may be subject to seasonal or weather related factors.

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

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

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

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

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

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

stormy weather.

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

may also decrease or remain static.

Our TracPipe ® and CounterStrike ® CSST products are installed in new or remodeled buildings, including

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

Generally, the rate of new or

remodeled buildings in the U.S.

and in the other geographic markets in which we are present decline in the winter months due to the inability

to dig foundations, challenges at the job site relating to snow, or generally due to low temperatures and stormy weather.

of construction activity declines during the winter, the demand for our corrugated stainless steel tubing may also decrease or remain

business may be subject to the impact of currency volatility.

have operations in the U.K.

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

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

While the magnitude

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is possible that they could be material.

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

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

A weakened BP or

Euro would in turn have a direct negative impact, as we would experience losses when settling transactions in other currencies, and experience

unfavorable results due to the translation of financial statements with a lower exchange rate.

During 2023 and 2022 there was not any

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 our financial position, operations, or liquidity.

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

could create a weakened British Pound (“BP”), Euro and Canadian Dollar (“CAD”) in comparison to other currencies.

A weakened BP, Euro or CAD would in turn have a direct negative impact, as we would experience losses when settling transactions in other

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

fourth quarter of 2024, the U.S.

Dollar strengthened relative to the value of the BP, Euro and CAD partly due to the results of the U.S.

This in turn had a direct negative impact on the Company’s financial statements and results.

Going forward, it is possible

that the BP, Euro, CAD, and other currencies that we engage in may materially impact on our financial position, operations, or liquidity.

cybersecurity incident or other technology disruption could harm us.

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and officers and their respective affiliates, with the largest holders being:

The Estate of John E.

Reed, Stewart B.

Reed, and Kevin

Reed Trust and other Reed family trusts, Stewart

Reed, and Kevin R.

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.

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

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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