What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-03-12 compared with 2025-03-07 · 415 added, 330 removed, 654 unchanged (53% of the section changed)

1 unchanged sentence

to Consolidated Financial Statements

Report of Independent Registered

Public Accounting Firm – Financial Statements (PCAOB ID:

Report of Independent Registered

Public Accounting Firm – Internal Control over Financial Reporting

Financial Statements:

Consolidated Balance

Sheets as of December 31, 2024 and 2023

Statements of Operations for the years ended December 31, 2024 and 2023

Statements of Comprehensive Income for the years ended December 31, 2024 and 2023

Statements of Shareholders’ Equity for the years ended December 31, 2024 and 2023

Statements of Cash Flows for the years ended December 31, 2024 and 2023

Notes to the Consolidated

Financial Statements

Report of Independent Registered Public Accounting Firm – Financial Statements (PCAOB ID:

Report of Independent Registered Public Accounting Firm – Internal Control over Financial Reporting (PCAOB ID:

Consolidated Balance Sheets as of December 31, 2025 and 2024

Consolidated Statements of Income for the years ended December 31, 2025 and 2024

Consolidated Statements of Comprehensive Income for the years ended December 31, 2025 and 2024

Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2025 and 2024

Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024

Notes to the Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Shareholders and the Board of Directors of Omega Flex, Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheets of Omega Flex, Inc.

and its subsidiaries (the Company) as of December 31, 2024

and 2023, the related consolidated statements of operations, comprehensive income, shareholders’ equity and cash flows for each

of the two years in the period ended December 31, 2024, and the related notes to the consolidated financial statements (collectively,

the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position

of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the

period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s

internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated

Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated March 7, 2025,

expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent

with respect to the Company in accordance with U.S.

federal securities laws and the applicable rules and regulations of the Securities

and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud,

and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts

and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates

made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a

reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated

or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

liability claims

described in Notes 2 and 7 of the financial statements, the Company is subject to periodic lawsuits, investigations and claims, primarily

relating to potential lightning damage to its flexible gas piping products (the “Claims”).

The Company accrues an estimated

product liability reserve related to the resolution cost of the Claims for which management believes a loss is probable of occurring,

and the amount of the loss is reasonably estimable and also discloses the aggregate maximum exposure for all open Claims.

As of December

31, 2024, the Company accrued a product liability reserve of $706,000 and disclosed that the aggregate maximum exposure for all current

open Claims is estimated not to exceed $3,620,000.

Due to the uncertainty of potential costs to be incurred related to the Claims, and

the uncertainty of the ultimate outcome of each of the individual Claims, management applies significant judgments and estimates in determining

the probability that a loss has been incurred and the amount to accrue for such loss.

identified the accrual and disclosure of the Claims as a critical audit matter due to the significant judgments made by management when

assessing the probability of a loss as well as the ultimate resolution costs of the Claims.

Auditing management’s estimates and

assumptions required a high degree of auditor judgment and increased audit effort due to the impact these assumptions have on the accrued

product liability reserves and disclosures.

To the Shareholders and the Board of Directors of Omega Flex, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance

sheets of Omega Flex, Inc.

and its subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of

income, comprehensive income, shareholders’ equity and cash flows for each of the two years in the period ended December 31, 2025,

and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the financial

statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results

of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles

generally accepted in the United States of America.

We have also audited, in accordance with the standards

of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting

as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring

Organizations of the Treadway Commission in 2013, and our report dated March 12, 2026, expressed an unqualified opinion on the effectiveness

of the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material

misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures

included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation

of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a

matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the

audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially

challenging, subjective or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the

financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion

on the critical audit matter or on the accounts or disclosures to which it relates.

Product Liability Reserves

As described in Notes 2 and 7 of the financial statements,

the Company is subject to periodic lawsuits, investigations and claims, primarily relating to potential lightning or other electrical

damage to its flexible gas piping products (the Claims).

The Company accrues an estimated product liability reserve related to the resolution

cost of the Claims for which management believes a loss is probable of occurring and the amount of the loss is reasonably estimable and

also discloses the aggregate maximum exposure for all open Claims.

As of December 31, 2025, the Company accrued a product liability reserve

of $703,000 and disclosed that the aggregate maximum exposure for all current open Claims is estimated not to exceed $1,041,000.

the uncertainty of potential costs to be incurred related to the Claims, and the uncertainty of the ultimate outcome of each of the individual

Claims, management applies significant judgments and estimates in determining the probability that a loss has been incurred and the amount

to accrue for such loss.

We identified the accrual and disclosure of the Claims

as a critical audit matter due to the significant judgments made by management when assessing the probability of a loss as well as the

ultimate resolution costs of the Claims.

Auditing management’s estimates and assumptions required a high degree of auditor judgment

and increased audit effort due to the impact these assumptions have on the accrued product liability reserves and disclosures.

audit procedures related to the Claims included the following, among others:

obtained an understanding of the relevant controls related to management’s evaluation of the Claims for accrual and disclosure

and tested such controls for design and operating effectiveness, including controls around management’s evaluation of the probability

that a loss has been incurred and management’s estimate of the amount of the loss.

tested the accuracy and completeness of the underlying data that served as the basis for management’s estimates of the probability

that a loss has been incurred and the amount of the loss, including payment activity, relevant insurance coverage, lawsuit or claim

status, and any settlement activity.

evaluated the methods and assumptions used by management to develop the estimate of the probability a loss has been incurred on individual

product liability claims and the amount of such loss through consideration of historical claim and loss experience as well as current

claim status.

performed confirmation procedures with the Company’s external legal counsel to corroborate management’s assertions regarding

claim information, claim status, the probability the Company has incurred a loss, and the estimated amount of any potential loss.

confirmation procedures were also used to test the completeness and accuracy of the underlying source data that served as the basis

of management’s estimates.

tested claim and settlement payment activity occurring subsequent to year-end to assess the reasonableness of management’s

estimates and disclosures.

● We obtained an understanding of the relevant controls related to management’s

evaluation of the Claims for accrual and disclosure and tested such controls for design and operating effectiveness, including controls

around management’s evaluation of the probability that a loss has been incurred and management’s estimate of the amount of

We tested the accuracy

and completeness of the underlying data that served as the basis for management’s estimates of the probability that a loss has been

incurred and the amount of the loss, including payment activity, relevant insurance coverage, lawsuit or claim status, and any settlement

We evaluated the methods

and assumptions used by management to develop the estimate of the probability a loss has been incurred on individual product liability

claims and the amount of such loss through consideration of historical claim and loss experience as well as current claim status.

We performed confirmation

procedures with the Company’s external legal counsel to corroborate management’s assertions regarding claim information, claim

status, the probability the Company has incurred a loss, and the estimated amount of any potential loss.

These confirmation procedures

were also used to test the completeness and accuracy of the underlying source data that served as the basis of management’s estimates.

● We tested claim and settlement payment activity occurring subsequent

to year-end to assess the reasonableness of management’s estimates and disclosures.

have served as the Company’s auditor since 2010.

3 unchanged sentences

on the Internal Control Over Financial Reporting

have audited Omega Flex, Inc.’s (the Company) internal control over financial reporting as of December 31, 2024, based on criteria

established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway

Commission in 2013.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting

as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the Committee

of Sponsoring Organizations of the Treadway Commission in 2013.

have audited Omega Flex, Inc.

and its subsidiaries’ (the Company) internal control over financial reporting as of December 31,

2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations

of the Treadway Commission in 2013.

In our opinion, the Company maintained, in all material respects, effective internal control over

financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the

Committee of Sponsoring Organizations of the Treadway Commission in 2013.

have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2025

51 unchanged sentences

Accrued Compensation

Accrued Commissions

and Sales Incentives

Accrued Commissions and

Sales Incentives

Dividends Payable

4 unchanged sentences

Deferred Taxes

Taxes Payable Long Term

Other Long Term Liabilities

6 unchanged sentences

10,153,633 shares issued and 10,094,322 shares outstanding as of December 31, 2025 and December 31,

2023, respectively

Treasury Stock

9 unchanged sentences

AND SUBSIDIARIES

STATEMENTS OF OPERATIONS

STATEMENTS OF INCOME

the years ended December 31,

9 unchanged sentences

Income Tax Expense

Net Loss – Noncontrolling Interest

Loss – Noncontrolling Interest

Net Income attributable

9 unchanged sentences

Currency Translation Adjustment

Other Comprehensive Income

Other Comprehensive (Loss)

Comprehensive Income

14 unchanged sentences

Cumulative Translation Adjustment

Equity Based Compensation

Dividends Declared

8 unchanged sentences

Net Cash Provided by Operating

Adjustments to Reconcile Net Income to Net Cash Provided by Operating

to Reconcile Net Income to Net Cash Provided by Operating Activities:

Non-Cash Compensation Expense

2 unchanged sentences

Provision for Losses on

Receivable, net of write-offs

and recoveries

Provision for Losses on

Accounts Receivable, net of write-offs

and recoveries

Accounts Receivable, net of write-offs and recoveries

Deferred Taxes

21 unchanged sentences

Cash paid for Income

Cash paid for Interest

Cash received from Income

Declared Dividend

Additions to Right-Of-Use

Assets obtained from new operating Lease

Assets obtained from new operating Lease Liabilities

accompanying Notes which are an integral part of the Consolidated Financial Statements.

36 unchanged sentences

● Identification

of the contract, or contracts, with a customer — a contract with a customer exists when the Company enters into an enforceable

contract with a customer, typically a purchase order initiated by the customer, that defines each party’s rights regarding

the goods to be transferred and identifies the payment terms related to these goods.

of the contract, or contracts, with a customer — a contract with a customer exists

when the Company enters into an enforceable contract with a customer, typically a purchase

order initiated by the customer, that defines each party’s rights regarding the goods

to be transferred and identifies the payment terms related to these goods.

● Identification

of the performance obligations in the contract — performance obligations promised in a contract are identified based on

the goods that will be transferred to the customer that are distinct, whereby the customer can benefit from the goods on their own

or together with other resources that are readily available from third parties or from us.

Persuasive evidence of an arrangement

for the sale of product must exist.

The Company ships products in accordance with the purchase order and standard terms as reflected

within the Company’s order acknowledgments and sales invoices.

of the performance obligations in the contract — performance obligations promised

in a contract are identified based on the goods that will be transferred to the customer

that are distinct, whereby the customer can benefit from the goods on their own or together

with other resources that are readily available from third parties or from us.

evidence of an arrangement for the sale of product must exist.

The Company ships products

in accordance with the purchase order and standard terms as reflected within the Company’s

order acknowledgments and sales invoices.

● Determination

of the transaction price — the transaction price is determined based on the consideration to which the Company will be

entitled in exchange for transferring goods to the customer.

This would be the agreed upon quantity and price per product type in

accordance with the customer purchase order, which is aligned with the Company’s internally approved pricing guidelines.

of the transaction price to the performance obligations in the contract — if the contract contains a single performance

obligation, the entire transaction price is allocated to the single performance obligation.

This applies to the Company as there

is only one performance obligation to ship the goods.

of revenue when, or as, the Company satisfies a performance obligation — the Company satisfies performance obligations

at a point in time when control of the goods transfers to the customer.

Determining the point in time when control transfers requires

Indicators considered in determining whether the customer has obtained control of a good include:

of the transaction price — the transaction price is determined based on the consideration

to which the Company will be entitled in exchange for transferring goods to the customer.

This would be the agreed upon quantity and price per product type in accordance with the

customer purchase order, which is aligned with the Company’s internally approved pricing

of the transaction price to the performance obligations in the contract — if the

contract contains a single performance obligation, the entire transaction price is allocated

to the single performance obligation.

This applies to the Company as there is only one performance

obligation to ship the goods.

● Recognition

of revenue when, or as, the Company satisfies a performance obligation — the Company

satisfies performance obligations at a point in time when control of the goods transfers

to the customer.

Determining the point in time when control transfers requires judgment.

Indicators considered in determining whether the customer has obtained control of a good

Company has a present right to payment

15 unchanged sentences

customer purchase order) include sales commissions.

Under Topic 606, these costs may

be expensed as incurred for contracts with a duration of one year or less.

The majority of the Company’s customer purchase

orders are fulfilled (e.g.

Under Topic 606, these costs may be expensed as incurred for contracts with a duration of

one year or less.

The majority of the Company’s customer purchase orders are fulfilled

goods are shipped) within two days of receipt.

- the Company does not offer a warranty as a separate component for customers to purchase.

A warranty is generally included with

each purchase, providing assurance that the goods comply with agreed-upon specifications, and the cost is therefore accrued accordingly,

but contracts do not include any requirement for additional distinct services.

Therefore, there is not a separate performance obligation,

and there is no impact of warranties under Topic 606 upon the financial reporting of the Company.

Goods - from time to time, the Company provides authorization to customers to return goods.

If deemed to be material, the Company

would record a “right of return” asset for the cost of the returned goods which would reduce cost of sales.

Rebates (Promotional Incentives) - volume rebates are variable (dependent upon the volume of goods purchased by our eligible

customers) and, under Topic 606, must be estimated and recognized as a reduction of revenue as performance obligations are satisfied

upon shipment of goods).

Also under Topic 606, to ensure that the related revenue recognized would not be probable of a significant

reversal, the four following factors are considered:

A warranty is generally included with each purchase, providing assurance that the goods comply

with agreed-upon specifications, and the cost is therefore accrued accordingly, but contracts

do not include any requirement for additional distinct services.

Therefore, there is not

a separate performance obligation, and there is no impact of warranties under Topic 606 upon

the financial reporting of the Company.

Goods - from time to time, the Company provides authorization to customers to return

If deemed to be material, the Company would record a “right of return”

asset for the cost of the returned goods which would reduce cost of sales.

Rebates (Promotional Incentives) - volume rebates are variable (dependent upon the volume

of goods purchased by our eligible customers) and, under Topic 606, must be estimated and

recognized as a reduction of revenue as performance obligations are satisfied (e.g.

shipment of goods).

Also under Topic 606, to ensure that the related revenue recognized would

not be probable of a significant reversal, the four following factors are considered:

amount of consideration is highly susceptible to factors outside the Company’s influence.

uncertainty about the amount of consideration is not expected to be resolved for a long period of time.

uncertainty about the amount of consideration is not expected to be resolved for a long period

Company’s experience with similar types of contracts is limited.

3 unchanged sentences

upon estimates of the eligible products expected to be sold.

Accounts receivable, net of allowances, was $17,503,000 as of January 1, 2023.

receivable, net of allowances, was $15,361,000 as of January 1, 2024.

disaggregated revenue disclosures, as previously noted, the Company’s business is controlled as a single operating segment that

55 unchanged sentences

Based Compensation Plans

2006, the Company adopted a Phantom Stock Plan (the “Plan”), which allows the Company to grant phantom stock units (“Units”)

to certain key employees, officers, or directors.

The Units each represent a contractual right to payment of compensation in the future

based upon the market value of the Company’s common stock and are accordingly recorded as liabilities.

The Units follow a vesting

schedule over three years from the grant date and are then paid upon maturity.

In accordance with FASB ASC Topic 718, Compensation

- Stock Compensation , the Company uses the Black-Scholes option pricing model as its method for determining the fair value of the

The liabilities for the Units are adjusted to market value over time from the grant dates to the related maturity dates.

recognizes the reversal of any previously recognized compensation expense on forfeited nonvested Units in the period the Units are forfeited.

Plan has been amended and restated, for all grants made starting January 1, 2023, to set the vesting method to three-year cliff vesting

following the grant date, with payment upon maturity.

Additionally, for grants made starting January 1, 2023, upon retirement at age

67 or greater, and with one year of continuous service prior to retirement, vesting of the issued grant(s) would accelerate on a pro-rata

basis, 1/3 per year from the grant date.

details of the Plan are provided in Note 8, Stock Based Compensation Plans, of the Consolidated Financial Statements included in this

2006, the Company adopted a Phantom Stock Plan (the “Phantom Plan”), which allows the Company to grant phantom stock units

(“Units”) to certain key employees, officers, or directors.

The Units each represent a contractual right to payment of compensation

in the future based upon the market value of the Company’s common stock and are accordingly recorded as liabilities.

follow a vesting schedule over three years from the grant date and are then paid upon maturity.

In accordance with FASB ASC Topic 718,

Compensation - Stock Compensation , the Company uses the Black-Scholes option pricing model as its method for determining the fair

value of the Units.

The liabilities for the Units are adjusted to market value over time from the grant dates to the related maturity

The Company recognizes the reversal of any previously recognized compensation expense on forfeited nonvested Units in the period

the Units are forfeited.

Phantom Plan has been amended and restated, for all grants made starting January 1, 2023, to set the vesting method to three-year cliff

vesting following the grant date, with payment upon maturity.

Additionally, for grants made starting January 1, 2023, upon retirement

at age 67 or greater, and with one year of continuous service prior to retirement, vesting of the issued grant(s) would accelerate on

a pro-rata basis, 1/3 per year from the grant date.

Incentive Plan

2024, the Flex-Trac, Inc.

2025 Equity Incentive Plan (the “Equity Incentive Plan”) was adopted to provide directors, officers,

employees, contractors and consultants of Flex-Trac, Inc.

or its affiliates an equity-based incentive to maintain and enhance the performance

and profitability of Flex-Trac, Inc.

Subject to adjustment as provided in the Equity Incentive Plan, up to 818,458 shares of the common

stock, par value $ 0.01 per share, of Flex-Trac, Inc.

(“FTI Common Stock”), or 7.5 % of the fully-diluted shares of FTI Common

Stock, may be issued pursuant to the Equity Incentive Plan with respect to awards.

January 2, 2025, 420,000 shares of restricted stock in the aggregate, or 4 % of the shares of FTI Common Stock, were granted and issued

to certain eligible participants under the Equity Incentive Plan (the “Awards”).

The Awards cliff vest after eight years

of continuous service or earlier upon the grantee’s death, disability or retirement, or a change of control, as defined and further

described in the Equity Incentive Plan.

accordance with FASB ASC Topic 718, Compensation - Stock Compensation , the Company values the Awards at fair value at grant date

and recognizes compensation expense over the vesting period.

The Company recognizes the reversal of any previously recognized compensation

expense on forfeited nonvested Awards in the period the Awards are forfeited.

details of the Phantom Plan and Equity Incentive Plan are provided in Note 8, Stock Based Compensation Plans, of the Consolidated Financial

Statements included in this report.

Liability Reserves

liability reserves represent the estimated unpaid amounts under the Company’s insurance policy deductibles or self-insured retention

limits, with respect to existing claims.

The Company uses the most current available data to estimate claims.

As explained more fully

under Note 7, Commitments and Contingencies, to the Consolidated Financial Statements included in this report for various product liability

claims covered under the Company’s general liability insurance policies, the Company must pay certain defense and settlement costs

within its deductible or self-insured retention limits, ranging primarily from $ 250,000 to $ 3,000,000 per claim, depending on the terms

of the policy and the applicable policy year, up to an aggregate amount.

The Company is vigorously defending against all known claims.

for most product liability claims made for its yellow-jacketed TracPipe ® CSST on or after September 1, 2025, for which

the Company decided to self-insure (the “Self-Insured Claims”), product liability reserves represent the estimated unpaid

amounts under the Company’s insurance policy retentions, with respect to existing claims.

The Company uses the most current available

data to estimate claims.

As explained more fully under Note 7, Commitments and Contingencies, to the Consolidated Financial Statements

included in this report for various product liability claims covered under the Company’s general liability insurance policies,

the Company must pay certain defense and settlement costs within its insurance policy retentions, ranging primarily from $ 250,000 to

$ 3,000,000 per claim, depending on the terms of the policy and the applicable policy year, up to an aggregate amount.

The Company is

vigorously defending against all known claims.

There are no open Self-Insured Claims as of December 31, 2025.

Company applies the requirements of FASB ASC Topic 842, Leases which defines a lease as any contract that conveys the right to

3 unchanged sentences

lease transfers ownership of the underlying asset to the lessee by the end of the lease term.

lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise.

lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably

certain to exercise.

lease term is for the major part of the remaining economic life of the underlying asset.

present value of the sum of lease payments and any residual value guaranteed by the lessee equals or exceeds substantially all of

the fair value of the underlying asset.

underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease

present value of the sum of lease payments and any residual value guaranteed by the lessee

equals or exceeds substantially all of the fair value of the underlying asset.

underlying asset is of such a specialized nature that it is expected to have no alternative

use to the lessor at the end of the lease term.

any leases that do not meet the criteria identified above for finance leases, the Company treats such leases as operating leases.

33 unchanged sentences

Company’s reporting unit in its annual impairment test as described in the FASB ASC Topic 350, Intangibles - Goodwill and Other

costs are charged to operations as incurred and are included in selling expenses in the accompanying Consolidated Statements of Operations.

and Level 3 inputs to value the Awards under the Equity Incentive Plan.

Refer to Note 8, Stock Based Compensation Plans, of the Consolidated

Financial Statements for additional details.

costs are charged to operations as incurred and are included in selling expenses in the accompanying Consolidated Statements of Income.

Such charges aggregated $ 1,025,000 and $ 900,000 for the years ended December 31, 2025 and 2024, respectively.

2 unchanged sentences

Such charges totaled $ 1,283,000 and $ 301,000 for the years ended December

31, 2024 and 2023, respectively and are included in engineering expenses in the accompanying Consolidated Statements of Operations.

costs are included in selling expenses in the accompanying Consolidated Statements of Operations.

31, 2025 and 2024, respectively and are included in engineering expenses in the accompanying Consolidated Statements of Income.

costs are included in selling expenses in the accompanying Consolidated Statements of Income.

The expenses relating to shipping were

9 unchanged sentences

subsidiary whose functional currency

is the British Pound, the U.K.

subsidiary’s France subsidiary whose functional currency is the Euro, and cash and accounts receivable

denominated in Canadian dollars.

The Consolidated Statements of Operations are translated into U.S.

dollars at average exchange rates

for the period.

Adjustments resulting from the translation of financial statements are excluded from the determination of income and

are accumulated in a separate component of shareholders’ equity.

Exchange gains and losses resulting from foreign currency transactions

are included in the statements of operations in the period in which they occur.

is the British Pound and the U.K.

subsidiary’s France subsidiary whose functional currency is the Euro.

The Consolidated Statements

of Income are translated into U.S.

dollars at average exchange rates for the period.

Adjustments resulting from the translation of financial

statements are excluded from the determination of income and are accumulated in a separate component of shareholders’ equity.

gains and losses resulting from foreign currency transactions are included in the statements of income in the period in which they occur.

Company accounts for tax liabilities in accordance with the FASB ASC Topic 740, Income Taxes .

14 unchanged sentences

to be recognized in the financial statements.

Company follows the provisions of FASB ASC Subtopic 740-10 relative to accounting for uncertainties in tax positions.

These provisions

provide guidance on the recognition, de-recognition and measurement of potential tax benefits associated with tax positions.

January 1, 2022, as a result of changes made by the Tax Cuts and Jobs Act of 2017, the Company is required to capitalize certain research

Company follows the provisions of FASB ASC Subtopic 740-10 relative to accounting for uncertain tax positions.

These provisions provide

guidance on the recognition, de-recognition and measurement of potential tax benefits associated with tax positions.

The Company recognizes

interest and penalties related to uncertain tax positions in income tax expense.

As of December 31, 2025 and 2024, the Company had no

unrecognized tax benefits related to various federal and state income tax matters nor any accrued interest or penalties.

January 1, 2022, as a result of changes made by the Tax Cuts and Jobs Act of 2017, the Company was required to capitalize certain research

and development expenses for tax purposes, and amortize those expenses over a five year period, resulting in a deferred tax asset for

the capitalized amounts.

Effective January 1, 2025, as a result of the changes made by the One Big Beautiful Bill Act, the previously

capitalized research and development expenses became deductible.

Comprehensive Income

5 unchanged sentences

No other customer represented more than 10% of sales or accounts

Geographically, North America accounted for 97% and 96% of the Company’s sales during 2024 and 2023, respectively.

The remaining portion of sales for each respective year was scattered among other countries, with the U.K.

being the Company’s

most dominant market outside North America.

Geographically, North America accounted for 97% of the Company’s sales during both 2025 and 2024.

The remaining portion

of sales for each respective year was scattered among other countries, with the U.K.

being the Company’s most dominant market outside

North America.

Company evaluates all events or transactions through the date of the related filing that may have a material impact on its Consolidated

2 unchanged sentences

Accounting Pronouncements

March 2020, the FASB issued Accounting Standards Update (“ASU”) No.

2020-04, Reference Rate Reform (Topic 848):

of the Effects of Reference Rate Reform on Financial Reporting, updated in December 2022 by ASU No.

2022-06, Deferral of Sunset

Date of Topic 848 .

The ASUs apply to all entities that have contracts, hedging relationships, and other transactions that reference

LIBOR or another reference rate expected to be discontinued because of reference rate reform.

The ASUs provide optional expedients and

exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain

criteria are met.

The expedients and exceptions provided by the ASUs do not apply to contract modifications made and hedging relationships

entered into or evaluated after December 31, 2024, except for hedging relationships existing as of December 31, 2024, that an entity

has elected certain optional expedients for and that are retained through the end of the hedging relationship.

ASU 2020-04, as updated

by ASU 2022-06, is effective for all entities as of March 12, 2020, through December 31, 2024.

The impact of the adoption did not have

a material impact on the Company’s Consolidated Financial Statements.

November 2023, the FASB issued ASU No.

15 unchanged sentences

after December 15, 2024.

The Company is in the process of evaluating the impact of ASU No.

2023-09 on its Consolidated Financial Statements.

In 2025, the Company adopted ASU No.

2023-09 retrospectively and reflected these improvements in Note 9.

Taxes of the Consolidated Financial Statements.

November 2024, the FASB issued ASU No.

95 unchanged sentences

the “Claims”).

The Claims generally relate to potential lightning or other electrical damage to our flexible gas piping products

The Claims generally relate to alleged lightning or other electrical damage to our flexible gas piping products

and may result in legal and product liability related expenses.

2 unchanged sentences

It is possible that the Company may incur increased litigation costs in the future due to a variety of factors, including

a higher number of Claims, higher legal and expert costs, and higher insurance deductibles or self-insured retention limits (or “retentions”).

Company has in place commercial general liability insurance policies that cover most Claims, which are subject to deductibles or retentions,

ranging primarily from $ 250,000 to $ 3,000,000 per claim (depending on the terms of the policy and the applicable policy year), up to

an aggregate amount.

Litigation is subject to many uncertainties and management is unable to predict the outcome of the pending suits

The potential liability for a given claim could range from zero to a maximum of $ 3,000,000 , depending upon the circumstances,

and insurance deductible or retention in place for the respective claim year.

The aggregate maximum exposure for all current open Claims

as of December 31, 2024 is estimated to not exceed approximately $ 3,620,000 , which represents the potential costs that may be incurred

over time for the Claims within the applicable insurance policy deductibles or retentions.

From time to time, depending upon the nature

of a particular case, the Company may decide to spend in excess of a deductible or retention to enable more discretion regarding the

defense, although this is not common.

It is possible that the results of operations or liquidity of the Company, as well as the Company’s

ability to procure reasonably priced insurance, could be adversely affected by the pending litigation, potentially materially.

is currently unable to estimate the ultimate liability, if any, that may result from the pending litigation, or potential litigation

from future claims or claims that have not yet come to our attention, and accordingly, the liability in the Consolidated Financial Statements

primarily represents an accrual for legal costs for services previously rendered, outstanding settlements for Claims not yet paid, and

anticipated, probable, settlements for Claims within the Company’s remaining retention under its insurance policies.

The liabilities

recorded in the Company’s books as of December 31, 2024 and December 31, 2023 were $ 706,000 and $ 947,000 , respectively, and are

included in Other Liabilities.

a higher number of Claims, higher legal and expert costs, higher retentions, and/or the Company’s decision to self-insure most

product liability Claims made for its yellow-jacketed TracPipe ® CSST on or after September 1, 2025 (the “Self-Insured

for the Self-Insured Claims, the Company has in place commercial general liability insurance policies that cover most Claims, which are

subject to retentions, ranging primarily from $ 250,000 to $ 3,000,000 per claim (depending on the terms of the policy and the applicable

policy year), up to an aggregate amount.

Litigation is subject to many uncertainties and management is unable to predict the outcome

of the pending suits and claims.

Except for Self-Insured Claims, the potential liability for a given claim could range from zero to a

maximum of $ 3,000,000 , depending upon the circumstances, and retentions in place for the respective claim year.

The aggregate maximum

exposure for all current open Claims as of December 31, 2025 is estimated to not exceed approximately $ 1,041,000 , which represents the

potential costs that may be incurred over time for the Claims within the applicable retentions.

As of December 31, 2025, there are no

open Self-Insured Claims.

time to time, depending upon the nature of a particular case, the Company may decide to spend in excess of retentions to enable more

discretion regarding the defense, although this is not common.

It is possible that the results of operations or liquidity of the Company,

as well as the Company’s ability to procure reasonably priced insurance, could be adversely affected by the pending litigation,

potentially materially.

The Company is currently unable to estimate the ultimate liability, if any, that may result from the pending

litigation, or potential litigation from future claims or claims that have not yet come to our attention, and accordingly, the liability

in the Consolidated Financial Statements primarily represents an accrual for legal costs for services previously rendered, outstanding

settlements for Claims not yet paid, and anticipated, probable, settlements for Claims within the Company’s remaining retentions

under its insurance policies.

The liabilities recorded in the Company’s books as of December 31, 2025 and December 31, 2024 were

$ 703,000 and $ 706,000 , respectively, and are included in Other Liabilities.

STOCK BASED COMPENSATION PLANS

On April 1, 2006, the Company adopted the Omega Flex, Inc.

2006 Phantom Stock Plan (the “Plan”).

Plan authorizes the grant of up to one million units of phantom stock to employees, officers, or directors of the Company.

stock units (“Units”) each represent a contractual right to payment of compensation in the future based on the market value

of the Company’s common stock.

The Units are not shares of the Company’s common stock, and a recipient of the Units does

not receive any of the following:

2006 Phantom Stock Plan (the “Phantom Plan”).

The Phantom Plan authorizes the grant of up to one million units of phantom stock to employees, officers, or directors of the Company.

The phantom stock units (“Units”) each represent a contractual right to payment of compensation in the future based on the

market value of the Company’s common stock.

The Units are not shares of the Company’s common stock, and a recipient of the

Units does not receive any of the following:

interest in the Company;

■ shareholder

voting rights;

6 unchanged sentences

The Units follow a vesting schedule, with a maximum vesting of three years after the grant date.

Grants made on or after January 1, 2023, will fully vest three-years from the grant date.

Grants made on or after January 1, 2023, will cliff vest three-years from the grant date.

Upon vesting, the Units represent a contractual

1 unchanged sentence

- Stock Compensation .

The Units will be paid on their

maturity date, one year after all the Units granted in a particular award have fully vested, unless a specified event occurs under the

terms of the Plan, which would allow for earlier payment.

Units granted with value at the maturity date equal to the closing price of

the Company’s common stock as of the maturity date are defined as Full Value Units.

Unless stated otherwise, all Units described

herein are Full Value Units.

2009, the Board of Directors authorized an amendment to the Plan to pay an amount equal to the value of any cash or stock dividend declared

by the Company on its common stock to be accrued to the Units outstanding as of the record date of the common stock dividend.

equivalent will be paid at the same time the underlying Units are paid to the participant.

addition, the Plan has been amended and restated, for all grants made starting January 1, 2023, to set the vesting method to three-year

cliff vesting following the grant date, with payment upon maturity.

Additionally, for grants made starting January 1, 2023, upon retirement

at age 67 or greater, and with one year of continuous service prior to retirement, vesting of the issued grant(s) would accelerate on

a pro-rata basis, 1/3 per year from the grant date.

The Units will be paid on their maturity date, one year after all the Units granted in a particular award have

fully vested, unless a specified event occurs under the terms of the Phantom Plan, which would allow for earlier payment.

Units granted

with value at the maturity date equal to the closing price of the Company’s common stock as of the maturity date are defined as

Full Value Units.

Unless stated otherwise, all Units described herein are Full Value Units.

2009, the Board of Directors authorized an amendment to the Phantom Plan to pay an amount equal to the value of any cash or stock dividend

declared by the Company on its common stock to be accrued to the Units outstanding as of the record date of the common stock dividend.

The dividend equivalent will be paid at the same time the underlying Units are paid to the participant.

addition, the Phantom Plan has been amended and restated, for all grants made starting January 1, 2023, to set the vesting method to

three-year cliff vesting following the grant date, with payment upon maturity.

Additionally, for grants made starting January 1, 2023,

upon retirement at age 67 or greater, and with one year of continuous service prior to retirement, vesting of the issued grant(s) would

accelerate on a pro-rata basis, 1/3 per year from the grant date.

certain circumstances, the Units may be immediately vested upon the participant’s death or disability.

1 unchanged sentence

are forfeited if the participant is terminated from their relationship with the Company or its subsidiary for “cause,” which

is defined under the Plan.

If a participant’s employment or relationship with the Company is terminated for reasons other than

for “cause,” then any vested Units will be paid to the participant upon termination.

However, Units granted to certain “specified

employees” as defined in Section 409A of the Internal Revenue Code will be paid approximately 181 days after termination.

is defined under the Phantom Plan.

If a participant’s employment or relationship with the Company is terminated for reasons other

than for “cause,” then any vested Units will be paid to the participant upon termination.

However, Units granted to certain

“specified employees” as defined in Section 409A of the Internal Revenue Code will be paid approximately 181 days after termination.

As of December 31, 2024, the Company had 9,872 nonvested and unmatured Units outstanding.

On March 8, 2024, the Company

In February 2025, the Company

paid $ 53,000 for 1,206 fully vested and matured Units that were granted during 2021, including their respective earned dividend values.

On March 20, 2024, the Company granted 6,459 Units with a fair value of $ 68.05 per Unit on grant date, using historical volatility.

March 29, 2024, 244 nonvested Units were forfeited.

In September 2024, the Company paid $ 46,000 for 870 fully vested and matured Units

that were granted during 2020, including their respective earned dividend values.

On October 4, 2024, the Company paid $ 31,000 for 422

fully vested and matured Units that were granted during 2021, 2022, and 2023, including their respective earned dividend values.

December 31, 2024, the Company had 9,872 nonvested and unmatured Units outstanding.

In addition, the Company granted 12,829 Units with a fair value of $ 32.35 per Unit on grant date, using historical volatility in February

In September 2025, the Company paid $ 33,000 for 808 fully vested and matured Units that were granted during 2021, including their

respective earned dividend values.

As of December 31, 2025, the Company had 23,057 nonvested and unmatured Units outstanding.

Company uses the Black-Scholes option pricing model as its method for determining fair value of the Units.

8 unchanged sentences

Company recognizes the reversal of any previously recognized compensation expense on forfeited awards in the period that the award is

For the year ended December 31, 2024, a reversal of $ 6,000 of previously recognized compensation expense was recognized on

244 nonvested forfeited Units.

For the year ended December 31, 2023, a reversal of $ 22,000 of previously recognized compensation expense

was recognized on 597 nonvested forfeited Units.

For the year ended December 31, 2025, no awards were forfeited.

For the year ended December 31, 2024, a reversal of $ 6,000

of previously recognized compensation expense was recognized on 244 nonvested forfeited Units.

total liability related to the Units as of December 31, 2025 was $ 434,000 of which $ 92,000 is included in Other Liabilities, as it is

2 unchanged sentences

of $ 271,000 was included in Other Long Term Liabilities.

to the Plan, in accordance with FASB ASC Topic 718, Compensation - Stock Compensation , the Company recorded compensation expense

of $ 54,000 and $ 292,000 for the years ended December 31, 2024 and 2023, respectively.

Compensation expense or income for a given period

largely depends upon fluctuations in the Company’s stock price.

to the Phantom Plan, in accordance with FASB ASC Topic 718, Compensation - Stock Compensation , the Company recorded compensation

expense of $ 155,000 and $ 54,000 for the years ended December 31, 2025 and 2024, respectively.

Compensation expense or income for a given

period largely depends upon fluctuations in the Company’s stock price.

following table summarizes information about the Company’s nonvested and unmatured Units as of and for the year ended December

SUMMARY OF NONVESTED PHANTOM STOCK UNITS

Average Grant Date Fair Value

OF NONVESTED AWARDS

Number of Units:

4 unchanged sentences

Expected to Vest and Mature

total unrecognized compensation costs calculated as of December 31, 2024 were $ 265,000 which will be recognized through March of 2027.

other increase of 4,165 Units reflects adjustments to conform with three-year cliff vesting in accordance with the amended and restated

Phantom Plan described above.

total unrecognized compensation costs calculated as of December 31, 2025 were $ 309,000 which will be recognized through February of 2028.

The Company will recognize the related expense over the weighted average period of 1.6 years.

tax expense consisted of the following:

Incentive Plan

2024, the Flex-Trac, Inc.

2025 Equity Incentive Plan (the “Equity Incentive Plan”) was adopted to provide directors, officers,

employees, contractors and consultants of Flex-Trac, Inc.

or its affiliates an equity-based incentive to maintain and enhance the performance

and profitability of Flex-Trac, Inc.

Subject to adjustment as provided in the Equity Incentive Plan, up to 818,458 shares of the common

stock, par value $ 0.01 per share, of Flex-Trac, Inc.

(“FTI Common Stock”), or 7.5 % of the fully-diluted shares of FTI Common

Stock, may be issued pursuant to the Equity Incentive Plan with respect to awards.

January 2, 2025, 420,000 shares of restricted stock in the aggregate, or 4 % of the shares of FTI Common Stock, were granted and issued

to certain eligible participants under the Equity Incentive Plan (the “Awards”).

The Awards cliff vest after eight years

of continuous service or earlier upon the grantee’s death, disability or retirement, or a change of control, as defined and further

described in the Equity Incentive Plan.

accordance with FASB ASC Topic 718, Compensation - Stock Compensation , the Company values the Awards at fair value at grant date

and recognizes compensation expense, on a straight-line basis, over the vesting period.

The Company recognizes the reversal of any previously

recognized compensation expense on forfeited nonvested Awards in the period the Awards are forfeited.

fair value of the Awards at the grant date of January 2, 2025 was $ 0.27 per share or $ 113,400 .

The fair value of the Awards was determined

through the income valuation approach using real option analysis which utilized the Black-Scholes option pricing model.

following table summarizes information about the nonvested Awards as of and for the year ended December 31, 2025:

OF NONVESTED AWARDS

Number of Awards:

Nonvested as of December 31, 2024

Nonvested as of December

Expected to Vest

the year ended December 31, 2025, compensation expense was $ 14,000 .

There were no forfeitures.

Company’s earnings were primarily domestic, and its effective tax rate on earnings from operations for the years ended December

31, 2025 and 2024 was 24.2 %.

The Company’s effective tax rate differed from the statutory federal corporate income tax rate primarily

because of state income taxes, net of federal income tax benefits, and a valuation allowance upon foreign deferred tax assets of one

of its foreign subsidiaries, where it was considered more likely than not that these deferred tax assets would not be realized.

of December 31, 2025, the Company’s foreign subsidiaries were in a cumulative loss position.

Accordingly, there were no undistributed

foreign earnings for which deferred income taxes would be required.

(loss) before income tax expense (benefit) consisted of the following:

SCHEDULE OF INCOME BEFORE INCOME TAX

(loss) before income tax expense (benefit)

tax expense (benefit) consisted of the following:

SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT)

(in thousands)

Federal Income Tax:

State Income Tax:

Foreign Income Tax:

Income Tax Expense

income included foreign income (loss) of ($ 2,001,000 ) and $ 458,000 in 2024 and 2023, respectively.

income tax expense differed from statutory income tax expense, computed by applying the U.S.

federal income tax rate of 21 % to earnings

before income tax, as follows:

SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION

tax expense (benefit)

current tax expense (benefit)

tax expense (benefit)

deferred tax expense (benefit)

income tax expense (benefit)

following table reconciles the Company’s actual income tax expense based on the statutory federal corporate income tax rate:

OF INCOME TAX EXPENSE AND FEDERAL CORPORATE INCOME TAX RATE

before income taxes

federal statutory rate

income taxes, net of federal tax benefit (1)

in valuation allowance

foreign jurisdictions

or Nondeductible Items

(1) State taxes in

Pennsylvania and California make up the majority (greater than 50 percent) of the tax effect in this category

taxes paid, net of refunds, are as follows:

OF INCOME TAX PAID

(in thousands)

Computed Statutory Income Tax Expense

State Income Tax, Net of Federal Tax Benefit

Foreign Tax Rate Differential

Valuation Allowance

Executive Compensation Limitation

Foreign Derived Intangible Income Deduction

Research Credit

Income Tax Expense

State and Local

Total income taxes paid

Total income taxes paid,

net of refunds

(1) Income taxes paid

to individual states and local jurisdictions that are not material have been aggregated and presented

in the ‘Other’ category.

No other individual jurisdiction accounted for 5% or more of total income taxes paid during the

deferred income tax (expense) benefit results from temporary timing differences in the recognition of income and expense for income tax

22 unchanged sentences

believes it is more likely than not that the Company will have sufficient taxable income when these timing differences reverse and that

the deferred tax assets will be realized except for a carryover of foreign operating losses incurred by one of its foreign subsidiaries.

Due to the uncertainty of future income in the foreign subsidiary, the Company has recognized a valuation allowance related to the foreign

operating losses carrying forward.

Company is currently subject to audit by the Internal Revenue Service for the calendar years ended 2021 through 2023.

The Company and

its Subsidiaries’ state income tax returns are subject to audit for the calendar years ended 2020 through 2023.

of December 31, 2024, the Company had no liability for unrecognized tax benefits related to various federal and state income tax matters.

the deferred tax assets will be realized except for a carryover of foreign operating losses of $ 3,046,000 incurred by one of its foreign

subsidiaries.

Due to the uncertainty of future income in the foreign subsidiary, the Company has recognized a valuation allowance of

$ 762,000 , an increase of $ 319,000 from the previous year, related to the foreign operating losses carrying forward.

These foreign operating

losses may be carried forward indefinitely.

Company is currently subject to audit by the Internal Revenue Service for the calendar years after 2021.

The Company’s state income

tax returns are subject to audit for the calendar years after 2020.

the U.S., the Company owns its two main operating facilities located in Exton, Pennsylvania.

24 unchanged sentences

Months Ending December 31,

(in thousands)

Total Future Minimum Lease Payments

29 unchanged sentences

SCHEDULE OF REGULAR QUARTER DIVIDEND PAYMENTS

December 5, 2025

January 7, 2026

September 12, 2025

9 unchanged sentences

June 12, 2024

July 10, 2024

March 28, 2024

14 unchanged sentences

performance for the flexible metal hose segment and decides how to allocate resources based on the measures which are also reported in

the Consolidated Statements of Operations as Operating Profit and Net Income.

Segment assets are reported in the Consolidated Balance

Sheets as Total Assets.

the Consolidated Statements of Income as Operating Profit and Net Income.

Segment assets are reported in the Consolidated Balance Sheets

as Total Assets.

CODM uses Operating Profit and Net Income to evaluate performance and income generated from segment assets (return on assets) in deciding

whether to reinvest profits into the flexible metal hose segment or into other areas, such as for acquisitions or to pay dividends.

segment expense categories reviewed by the CODM are consistent with the categories reflected in the Consolidated Statements of Operations.

segment expense categories reviewed by the CODM are consistent with the categories reflected in the Consolidated Statements of Income.

GEOGRAPHIC INFORMATION

Company operates as a single reportable segment.

Geographic information regarding sales from external customers and long-lived assets

is presented below.

are attributed to geographic areas based on the location of the external customer.

Long-lived assets are attributed to geographic areas

based on the location of the assets and consist of property and equipment and right-of-use assets.

Long-lived assets exclude goodwill.

by external customer location are as follows:

SCHEDULE OF SALES FROM EXTERNAL CUSTOMER

(in thousands)

United States

United Kingdom

Other foreign countries

assets by geographic area are as follows:

SCHEDULE OF LONG LIVED ASSETS BY GEOGRAPHIC

(in thousands)

United States

United Kingdom

Other foreign countries

Total long-lived assets

RELATED PARTY TRANSACTIONS

8 unchanged sentences

SUBSEQUENT EVENTS

October 2024, the Company formed a new U.S.

subsidiary, Flex-Trac, Inc., and effective January 1, 2025, the Company contributed to Flex-Trac,

certain assets related to its MediTrac ® corrugated medical gas tubing business, in exchange for the issuance to the

Company of shares of common stock, par value $ 0.01 per share, of Flex-Trac, Inc.

(“Common Stock”).

addition, in December 2024, subject to the approval of the Company’s shareholders, the Flex-Trac, Inc.

2025 Equity Incentive Plan

(the “Plan”) was approved and adopted, to provide directors, officers, employees, contractors and consultants of Flex-Trac,

or its affiliates an equity-based incentive to maintain and enhance the performance and profitability of Flex-Trac, Inc.

to adjustment as provided in the Plan, up to 818,458 shares of Common Stock, or 7.5 % of the fully-diluted shares of Common Stock, may

be issued pursuant to the Plan with respect to awards.

January 2, 2025, 420,000 shares of restricted stock in the aggregate, or 4 % of the shares of Common Stock, were granted to certain eligible

participants under the Plan, subject to the approval of the Plan by the shareholders of the Company.

Subject to such approval, the awards

vest after eight years of continuous service or earlier upon the grantee’s death, disability or retirement, or a change of control,

as defined and further described in the Plan.

Company evaluated all events or transactions that occurred through the date of this filing.

During this period, no events came to the

Company’s attention that would impact the Consolidated Financial Statements for the year ended December 31, 2025.

9 – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

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 8. Financial Statements and Supplementary Data