# UNITED STATES SECURITIES
AND EXCHANGE COMMISSION    Washington, D.C. 20549

# FORM 10-Q

(Mark One)

(X)    
          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
          OF 1934

For the quarterly
period ended June 30, 2005

(     )
   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934

For     the
transition period from ________________________ to ______________________

Commission File Number
000-51372

# Omega Flex, Inc.

(Exact name of
registrant as specified in its charter)

|Pennsylvania                                                   | 23-1948942                          
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)

|451 Creamery Way, Exton, PA              | 19341     
|---------------------------------------- | ----------
|(Address of principal executive offices) | (Zip Code)

# (610) 524-7272

Registrants
telephone number, including area code

(Former name, former
address and former fiscal year, if changed since last report)

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past 90 days.                      
                     
                         
     
                  
Yes { } No {x}

Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of
the Exchange Act).       Yes { } No {x}

The
number of shares of the registrants common stock issued and outstanding as of
September 1, 2005 was 10,153,633.

Page 1

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# OMEGA FLEX, INC.

# QUARTERLY REPORT ON
FORM 10-QFOR THE SIX-MONTHS ENDED JUNE 30, 2005

# INDEX

|PART I - FINANCIAL INFORMATION                                       | Page No.
|-------------------------------------------------------------------- | --------
|
|Item 1 - Financial Statements                                        |         
|Condensed consolidated balance sheets at June 30, 2005 (unaudited)  
|and December 31, 2004 (audited)                                      | 3       
|Condensed consolidated statements of operations for the             
|three-months ended June 30, 2005 and 2004 and the                   
|six-months ended June 30, 2005 and 2004 (unaudited)                  | 4       
|Condensed consolidated statements of cash flows for the             
|six-months ended June 30, 2005 and 2004(unaudited)                   | 5       
|Notes to the condensed consolidated financial statements (unaudited) | 6-10    
|Item 2- Management's Discussion and Analysis of Financial Condition 
|and Results of Operations                                            | 11-16   
|Item 3 - Quantitative and Qualitative Information About Market Risks | 16      
|Item 4 - Controls and Procedures                                     | 16      
|PART II - OTHER INFORMATION                                         
|Item 1 - Legal Proceedings                                           | 16      
|Item 3 - Default on Senior Securities                                | 17      
|Item 6 - Exhibits and Reports on Form 8-K                            | 17-18   
|SIGNATURE                                                            | 19      

Page 2

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# PART I 
FINANCIAL INFORMATION

# Item 1  Financial
Statements

# OMEGA FLEX, INC.CONSOLIDATED BALANCE SHEETS

|                                                    | June 30,
2005
(unaudited) | December 31
2004
|--------------------------------------------------- | ------------------------- | ----------------
|
|ASSETS                                              |                           |                 
|Current Assets                                     
|Cash and Cash Equivalents                           | $1,022                    | $280            
|Accounts Receivable - less allowances of           
|$75 and $69 respectively                            | 8,440                     | 8,780           
|Inventories                                         | 6,496                     | 5,432           
|Intercompany Receivable from Parent Company         | 6,246                     | 16,572          
|Other Current Assets                                | 196                       | 235             
|Total Current Assets                                | 22,400                    | 31,299          
|Property and Equipment - net                        | 5,902                     | 5,697           
|Goodwill                                            | 3,526                     | 3,526           
|Total Assets                                        | $31,828                   | $40,522         
|LIABILITIES AND SHAREHOLDERS' EQUITY               
|Current Liabilities:                               
|Current Portion of Long-Term Debt                   | $186                      | $186            
|Accounts Payable                                    | 1,678                     | 1,847           
|Accrued Compensation                                | 1,224                     | 1,936           
|Common Stock Subject to Put Obligation (see Note 5) | 2,657                     | 3,465           
|Accrued Commissions                                 | 399                       | 346             
|Other Accrued Liabilities                           | 3,021                     | 5,060           
|Total Current Liabilities                           | 9,165                     | 12,840          
|Long-Term Debt                                      | 3,318                     | 3,411           
|Deferred Taxes                                      | 178                       | 235             
|Other Liabilities                                   | 222                       | 36              
|Total Liabilities                                   | 12,883                    | 16,522          
|Minority Interests                                  | 17                        | 4               
|Shareholders' Equity:                              
|Common Stock - 10,153,633 shares issued             | 52                        | 52              
|Paid in Capital                                     | 9,046                     | 9,046           
|Retained Earnings                                   | 9,464                     | 14,437          
|Accumulated Other Comprehensive Income              | 366                       | 461             
|Total Shareholders' Equity                          | 18,928                    | 23,996          
|Total Liabilities and Shareholders' Equity          | $31,828                   | $40,522         
|                                                   

See Accompanying Notes to Consolidated Financial Statements.

Page 3

# OMEGA FLEX, INC.CONSOLIDATED STATEMENTS OF OPERATIONS

|                                            | For the three-months ended
June 30, | For the six-months ended
June 30,
|------------------------------------------- | ----------------------------------- | ---------------------------------
|
|
|Net Sales                                   | $15,241                             | $11,040                          
|Cost of Goods Sold                          | 7,712                               | 5,464                            
|Gross Profit                                | 7,529                               | 5,576                            
|Selling Expense                             | 2,370                               | 2,099                            
|General and Administrative Expense          | 1,962                               | 1,134                            
|Engineering Expense                         | 311                                 | 500                              
|Operating Profit                            | 2,886                               | 1,843                            
|Interest Income, Net                        | 23                                  | 65                               
|Other Income, Net                           | 1                                   | 5                                
|Income Before Income Taxes                  | 2,910                               | 1,913                            
|Income Tax Expense                          | 1,230                               | 811                              
|Net Income                                  | $1,680                              | $1,102                           
|Basic Earnings per Common Share:           
|Net Income                                  | $0.17                               | $0.13                            
|Basic Weighted Average Shares Outstanding   | 10,154                              | 8,732                            
|Diluted Earnings per Common Share:         
|Net Income                                  | $0.17                               | $0.11                            
|Diluted Weighted Average Shares Outstanding | 10,154                              | 10,154                           
|Dividends Declared per Share                | ---                                 | ---                              

See Accompanying Notes to Consolidated Financial Statements.

Page 4

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# OMEGA FLEX, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                              | For the six -months ended
June 30,
|----------------------------------------------------------------------------- | ----------------------------------
|
|
|Cash Flows from Operating Activities:                                         |                                   
|Net Income                                                                    | $   3,068                         
|Adjustments to Reconcile Net Income to                                       
|Net Cash Provided by Operating Activities:                                   
|Depreciation and Amortization                                                 | 334                               
|Stock Based Compensation Expense                                              | 501                               
|Provision for Losses on Accounts Receivable, net of write-offs and recoveries | 6                                 
|Change in Minority Interests                                                  | 13                                
|Changes in Assets and Liabilities:                                           
|Accounts Receivable                                                           | 196                               
|Inventory                                                                     | (1,152)                           
|Accounts Payable                                                              | (165)                             
|Accrued Compensation                                                          | (712)                             
|Intercompany Receivable from Mestek, Inc.                                     | 10,326                            
|Intercompany with Foreign Subsidiary                                          | 98                                
|Other Liabilities                                                             | (1,782)                           
|Other Assets                                                                  | 147                               
|Net Cash Provided by Operating Activities                                     | 10,865                            
|Cash Flows from Investing Activities:                                        
|Capital Expenditures                                                          | (539)                             
|Net Cash Used in Investing Activities                                         | (539)                             
|Cash Flows from Financing Activities:                                        
|Principal Payments Under Long Term Debt Obligations                           | (93)                              
|Proceeds from Issuance of Long Term Debt                                      | ---                               
|Dividends paid (see Note 6)                                                   | (1,309)                           
|Intercompany Dividends Paid (see Note 6)                                      | (8,041)                           
|Net Cash Provided by (Used In) Financing Activities                           | (9,443)                           
|Net Increase in Cash and Cash Equivalents                                     | 883                               
|Translation effect on cash                                                    | (141)                             
|Cash and Cash Equivalents - Beginning of Period                               | 280                               
|Cash and Cash Equivalents - End of Period                                     | $1,022                            

See Accompanying Notes to Consolidated Financial Statements.

Page 5

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# OMEGA FLEX, INC.

# NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

# (Unaudited)

# Note 1  Basis of
Presentation

The
Company is a leading manufacturer of flexible metal hose, which is used in a variety of
applications to carry gases and liquids within their particular applications, including
carrying liquefied gases in certain processing applications, fuel gases within residential
and commercial buildings, vibration absorbers in high vibration applications, and other
types of gases and fluids in a number of industrial applications where the customer
requires the piping to have both a degree of flexibility and/or an ability to carry
corrosive compounds or mixtures, or to carry at both very high and very low (cryogenic)
temperatures.

The
Company manufactures flexible metal hose at its facility in Exton, Pennsylvania, and sells
its product through distributors, wholesalers and to original equipment manufacturers
(OEMs) throughout North America, and in certain European markets.

The
accompanying consolidated financial statements include the accounts of Omega Flex, Inc.
(Omega) and its subsidiaries (collectively the Company). The Companys
unaudited consolidated financial statements for the quarter ended June 30, 2005 have been
prepared in accordance with generally accepted accounting principles for interim financial
information, and with the instructions of Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and notes that may be required by
generally accepted accounting principles for complete financial statements. All material
inter-company accounts and transactions have been eliminated in consolidation. In the
opinion of management, the financial statements include all material adjustments necessary
for a fair presentation of the Companys financial position, results of operations
and cash flows. Other than its subsidiaries, Exton Ranch, Inc., a Delaware corporation,
and Omega Flex, Limited, a British corporation, the Company has no equity or debt
investments in any other entities.

# Accounting Policies

Use of Estimates

The
preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and liabilities
at the dates of the financial statements and the reported amounts of revenues and expenses
during the reporting periods. The most significant estimates and assumptions related to
revenue recognition, accounts receivable valuations, inventory valuations, goodwill
valuation, intangible asset valuations, warranty costs, investments, accounting for income
taxes and the realization of deferred tax assets. Actual amounts could differ
significantly from these estimates.

Revenue Recognition

The
Companys revenue recognition activities relate almost entirely to the manufacture
and sale of flexible metal hose and pipe. Under generally accepted accounting principles,
revenues are considered to have been earned when the Company has substantially
accomplished what it must do to be entitled to the benefits represented by the revenues.
The following criteria represent preconditions to the recognition of revenue:

|o | Persuasive evidence of an arrangement for the sale of product or services must exist.
|- | -------------------------------------------------------------------------------------

|o | Delivery has occurred or services rendered.
|- | -------------------------------------------

|o | The sales price to the customer is fixed or determinable.
|- | ---------------------------------------------------------

|o | Collection is reasonably assured.
|- | ---------------------------------

Page 6

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The
Company generally recognizes revenue upon shipment in accordance with the above
principles.

Earnings per Common Share

Basic
earnings per share have been computed using the weighted average number of common shares
outstanding. Stock options to purchase 1,421,508 shares of the Companys common stock
(as more fully described in Note 5) were considered in the computation of diluted earnings
per share, except when such effect would be antidilutive. Basic and diluted weighted
average shares outstanding have been adjusted for all periods to give retroactive effect
to the stock split which was completed on June 23, 2005, as more fully described in Note
2.

Stock Based
Compensation

The
Company has adopted the provisions of Statement of Financial Accounting Standards No. 123,
Accounting for Stock-Based Compensation, (FAS No. 123). As permitted by the
accounting standard, the Company has chosen to continue to account for stock-based
compensations using the intrinsic value method as prescribed by Accounting Principles
Board Opinion No. 25. Accordingly, no compensation expense has been recognized for its
stock-based compensation plan, except as explained in Note 5.

The
Company made no option grants, modifications of option grants, or settlement of option
grants in the three- and six-months ended June 30, 2005 and 2004 and accordingly, there
was no compensation expense impact or pro forma adjustments to Net Income, Basic earnings
per share or Diluted earnings per share.

Currency Translation

Assets
and liabilities denominated in foreign currencies are translated into U.S. dollars at
exchange rates prevailing on the balance sheet date. The Statement of Operations is
translated at average exchange rates. Net foreign currency transactions are reported in
the results of operations in U.S. dollars at average exchange rates. 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.

Income Taxes

The
Company has elected in 2004 and prior years to file its federal income tax return as part
of the Mestek, Inc. parent company, consolidated return. Mestek and the Company account
for the Companys federal tax liabilities on the separate company basis
method in accordance with FAS 109, Accounting for Income Taxes. Under this method the
Company records tax expense and related deferred taxes and tax benefits in a manner
comparable to that which it would record if it were not affiliated with Mestek.

Deferred
tax assets and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date. A valuation allowance is provided for
deferred tax assets if it is more likely than not that these items will either expire
before the Company is able to realize the benefit, or that future deductibility is
uncertain.

The
difference between the effective tax rate and the statutory tax rate is primarily
attributable to the exclusion of a portion of the compensation expense related to the
stock options previously granted by the Company (see Note 5).

Other Comprehensive
(Loss) Income

For
the year ended December 31, 2004, and the quarter ended June 30, 2005 respectively, the
components of Other Comprehensive (Loss) Income consisted solely of foreign currency
translation adjustments.

Page 7

Recent Accounting
Pronouncements

In
December 2004, the FASB issued SFAS No. 123(R), Share-Based Payment. SFAS No. 123(R)
amends SFAS No. 123 to require that companies record as expense the effect of equity-based
compensation, including stock options over the applicable vesting period. We currently
disclose the effect on income that stock options would have were they recorded as expense.
SFAS No. 123(R) also requires more extensive disclosures concerning stock options than
required under current standards. The new rule applies to option grants made after a
companys adoption of the standard, as well as options that are not vested at the
date of adoption. SFAS No. 123(R) becomes effective in our case not later than the
beginning of the fiscal year that begins after December 15, 2005. We do not currently
expect to elect early adoption of this standard and have not determined whether we will
apply this new standard prospectively in the first quarter of 2006, retroactively from the
beginning of 2006, or on a restated basis for all prior periods on a comparable basis. We
do not expect that the adoption of SFAS No. 123(R) will have a material impact on our
future results of operations.

In
May 2005, the FASB issued FASB Statement No. 154, Accounting Changes and Error
Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3 (SFAS No.
154). Previously, APB No. 20, Accounting Changes and SFAS No. 3,
Reporting Accounting Changes in Interim Financial Statements required the
inclusion of the cumulative effect of changes in accounting principle in net income of the
period of the change. SFAS No. 154 requires companies to recognize a change in accounting
principle, including a change required by a new accounting pronouncement when the
pronouncement does not include specific transition provisions, retrospectively to prior
periods financial statements. The Company will assess the impact of a retrospective
application of a change in accounting principle in accordance with SFAS No. 154 when such
a change arises after the effective date of January 1, 2006.

# Note 2 
Distribution from Mestek, Inc.

On January 19, 2005, Mestek, Inc.,
the Companys former majority shareholder, announced plans to distribute its 86%
equity interest in the Company, pro rata, to all of Mesteks shareholders as
of a record date, which was subsequently established at June 23, 2005 (the
Spin-Off). The Spin-Off was preceded by an amendment to the Companys
articles of incorporation to authorize a maximum of 20 million shares of common stock, and
a share split of 1 to 10,153.633 to effect a 1 for 1 share distribution under the
Spin-Off. In conjunction with the Spin-Off, the Company filed several preliminary
registration statements on Form 10 with the Securities and Exchange Commission under the
Securities Exchange Act of 1934. On July 22, 2005, the Company filed its definitive
registration statement on Form 10 with the Securities and Exchange Commission and
completed the Spin-Off on July 29, 2005. The Companys common shares began trading on
the NASDAQ National Market under the trading symbol OFLX on August 1, 2005.

# Note 3  Inventories

|                | June 30,
2005
(unaudited) | December 31,
2004
(audited)
|--------------- | ------------------------- | ---------------------------
|
|
|Finished Goods  | $4,555                    | $3,856                     
|Raw materials   | 1,941                     | 1,576                      
|Total Inventory | $6,496                    | $5,432                     

Page 8

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# Note 4 
Commitments, Contingencies and Warranties

Commitments:

The
Company is obligated under indemnity agreements executed on behalf of 11 of the
Companys officers and directors. Under the terms of the agreements, the Company is
contingently liable for costs which may be incurred by the officers and directors in
connection with claims arising by reason of these individuals roles as officers and
directors.

As
disclosed in Note 7, the Company has guaranteed the debt incurred by its wholly-owned
subsidiary, Exton Ranch, Inc., for the purchase of the facility at 451 Creamery Way in
which the Company conducts its manufacturing operations, and which the Company continues
to lease from Exton Ranch, Inc.

Contingencies:

The
Company retains significant obligations under its commercial insurance policies. For
losses occurring in the policy years ending October 1, 2004 and October 1, 2005, the
Company retained liability for the first $2,000,000 per occurrence of commercial general
liability claims (including products liability claims), subject to an agreed aggregate.
For losses occurring in the policy year ended October 31, 2003, the Company retained
liability for the first $500,000 per occurrence of commercial general liability claims
(including product liability), subject to an agreed aggregate. In addition, for all the
three years the Company retained liability for the first $250,000 per occurrence of
workers compensation coverage, subject to an agreed aggregate. The Company maintains
reserves for its obligations under these various policies based on claim experience and
the reserves established by the insurers in relation to these claims. The reserve balances
at December 31, 2003 and 2004 were not material in amount.

The
Company was obligated as a guarantor with respect to the debt of Mestek, Inc. under it
primary commercial bank line of credit. As of the effective date of the distribution of
the Companys common stock by Mestek, Inc. to its shareholders (as disclosed in Note
2), the guaranty was cancelled and is no longer in effect.

The
Company is subject to several legal actions and proceedings in which various monetary
claims are asserted. Management, after consultation with its corporate legal department
and outside counsel, does not anticipate that any ultimate liability arising out of all
such litigation and proceedings will have a material adverse effect on the financial
condition of the Company.

Warranty Commitments:

Gas
transmission products, such as those made by the Company, carry potentially serious
personal injury risks in the event of failures in the field. As a result, the Company has
extensive internal testing and other quality control procedures and historically the
Company has not had a meaningful failure rate in the field due to the extensive nature of
these quality controls. Accordingly, the Company does not maintain a warranty reserve
beyond a nominal amount as of June 30, 2005, or December 31, 2004.

# Note 5 
Termination of Put Rights

In
1996, The Company had previously adopted a stock option plan (Plan) that provided for the
granting of both Incentive and Non-Qualified Stock Options (as those terms are defined in
the Internal Revenue Code) of up to 2,030,726 shares (on a post-split basis) of the
Companys common stock to certain employees of the Company at fair market value as of
the date of grant. Options to purchase an aggregate of 1,421,508 shares (on a post-split
basis) of the common stock of the Company, representing a 14% equity share in the Company
were granted to two executives, Kevin Hoben, President and Mark Albino, Senior Vice
President, effective July 1, 1996. All of the options granted subsequently vested in
accordance with the terms of the Plan, and were exercised on October 13, 2004. The Company
received the $1,260,000 exercise price. Upon the exercise of the outstanding options by
the two management shareholders, the Plan was terminated.

Through
a separate agreement, the option holders (now shareholders in the Company) had a put right
after exercise which allowed them to sell their shares to the Company at an amount based
upon book value and the Company had a corresponding call option at an amount based upon
book value. Under the terms of the agreement, the put right expired with the registration
of the Companys securities under federal securities laws. In accordance with APB 25,
the Company has reflected pre-tax charges to earnings as of June 30, 2004 and June 30,
2005 of $349 and $501, respectively, for the compensation value in those periods of the
options granted. These charges, which reflect the potential obligations of the Company
relative to the put rights, have been credited to Common Stock Subject to Put Obligation
which is reflected in the accompanying financial statements in Current Liabilities. The
cumulative balance accrued by the Company in the form of stock based compensation expense
in respect of the put rights as of June 30, 2005 is $2,657,000. As of July 29, 2005, the
effective date of the Spin-off (as disclosed in Note 4), the put right of the
two management shareholders was terminated. The remaining liability relating to the
put rights has been reclassified to Paid In Capital.

Page 9

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# Note 6  Dividends

On
October 8, 2004, the Companys board of directors declared two dividends to the
Companys then current shareholders of record (i.e., prior to the Spin-off). The
first dividend was in the total aggregate amount of $9,000,000 and was paid in October
2004. The second dividend was paid in January 2005 in the total aggregate amount of $
9,350,000, of which $8,041,000 was charged against Retained Earnings and $1,309,000 was
charged against Common Stock Subject To Put Obligations.

# Note 7  Purchase
of Exton Facility

On April
16, 2004, the Companys subsidiary Exton Ranch, Inc. purchased from a third party the
facility at 451 Creamery Way in which the Company conducts its manufacturing operations,
and which the Company continues to lease from Exton Ranch, Inc. To finance this purchase,
Exton Ranch borrowed $3,720,000 from Sovereign Bank evidenced by a mortgage note payable
to the bank. The mortgage note bears interest at LIBOR, plus 1.75% and matures on April
16, 2014. The mortgage note is amortized on a twenty-year schedule, but matures ten years
after the date of the mortgage note. The monthly payments include a fixed principal
payment of $15,500 per month and a variable interest payment based on the above formula.
The mortgage note is secured by a first priority Open End Mortgage and Security Agreement
on the property.

# Note 8  Segment
and Geographic Information

To
date, the Company has viewed its operations and manages its business as principally one
segment, the manufacture and sale of flexible metal hose and accessories. The financial
information disclosed herein represents all of the material financial information related
to the Companys principal operating segment in accordance with SFAS No. 131,Disclosures About Segments of an Enterprise and Related Information.

Total
revenues from international sources were $1,421,000 and $ 2,463,000 for the three-months
and six-months ended June 30, 2005, respectively, and $835,000 and $ 1,600,000 for the
three-months and six-months ended June 30, 2004, respectively. The Companys revenues
from international sources were primarily generated from customers located in Canada and
Europe.

# Note 9 
Intercompany Receivable

Upon
the effective date of the Spin-off, Mestek was indebted to the Company in an approximate
amount of $3.25 million, as a result of the prior intercompany financial relationship
between the Company as a subsidiary and Mestek as the corporate parent. This indebtedness
has been converted into a formal promissory note payable in three years and bearing
interest at the then prevailing three year U.S. Treasury note yield plus 100 basis points

Page 10

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# Item 2 
Managements Discussion and Analysis of Financial Condition and Results of Operations

This
report contains forward-looking statements, which are subject to inherent uncertainties.
These uncertainties include, but are not limited to, variations in weather, changes in the
regulatory environment, customer preferences, general economic conditions, increased
competition, the outcome of outstanding litigation, and future developments effecting
environmental matters. All of these are difficult to predict, and many are beyond the
ability of the Company to control.

Certain
statements in this Quarterly Report on Form 10-Q that are not historical facts but rather
reflect the Companys current expectations concerning future results and events
constitute forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. The words believes, expects,
intends, plans, anticipates, hopes,
likely, will, and similar expressions identify such
forward-looking statements. Such forward-looking statements involve known and unknown
risks, uncertainties and other important factors that could cause the actual results,
performance or achievements of the Company, or industry results, to differ materially from
future results, performance or achievements expressed or implied by such forward-looking
statements.

Readers
are cautioned not to place undue reliance on these forward-looking statements, which
reflect managements view only as of the date of this Form 10-Q. The Company
undertakes no obligation to update the result of any revisions to these forward-looking
statements which may be made to reflect events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events, conditions or circumstances.

# OVERVIEW

As
disclosed in Note 2 to the Financial Statements, the Company is a former subsidiary of
Mestek, Inc. On July 29, 2005, Mestek, Inc. effected a distribution of its 86% ownership
of the Companys common stock to the Mestek record shareholders. This distribution
was preceded by the filing on July 22, 2005 of a definitive registration statement of the
Companys common stock on Form 10 with the Securities and Exchange Commission. The
Companys common shares began trading on the NASDAQ National Market under the trading
symbol OFLX on August 1, 2005. Certain effects of the distribution are
reflected in the changes of financial condition of the Company for the quarter ended June
30, 2005.

The
Company is a leading manufacturer of flexible metal hose, and is currently engaged in a
number of different markets, including construction, manufacturing, transportation,
petrochemical, pharmaceutical and other industries.

The
Companys business is controlled as a single operating segment that consists of the
manufacture and sale of flexible metal hose and accessories. The Companys products
are concentrated in residential and commercial construction, and general industrial
markets. The Companys primary product line, TracPipe® flexible gas piping, is
used for gas piping within residential and commercial buildings. Through its flexibility
and ease of use with patented fittings distributed under the trademark, AutoFlare®,
the TracPipe® flexible gas piping allows users to substantially cut the time required
to install the gas piping, as compared to traditional methods. All of the Companys
annular hose products are manufactured at the Companys Exton, Pennsylvania facility.
A majority of the Companys sales across all industries are generated through
independent outside sales organizations such as sales representatives, wholesalers and
distributors, or a combination of both. The Company has a broad distribution network in
North America and to a lesser extent in other global markets.

# CHANGES IN FINANCIAL
CONDITION

Cash and
cash equivalents increased from $280,000 at December 31, 2004 to $1,022,000 at June 30,
2005. This increase is primarily the result of cash generated by its subsidiary, Omega
Flex Limited. The inter-company receivable from parent decreased by $10,326,000, primarily
as a result of a dividend paid by the Company to its then current shareholders, including
the Companys then current corporate parent, Mestek, Inc. The dividend was declared
in October 2004, and paid in January 2005 in the amount of $ 9,350,000 of which $8,041,000
was charged against retained earnings and $1,309,000 was charged against common stock
subject to put obligations. The payment of this dividend also reduced the Companys
retained earnings, although the Companys continued earnings during the first
six-months of 2005 dampened the overall impact of the dividend on retained earnings.

Page 11

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As
disclosed in Note 5 to the Financial Statements, the Company has recorded the contingent
liability represented by the put rights of the two management shareholders
under Common Stock Subject to Put Obligation. The dividends paid by the Company in 2004
and 2005 also had the effect of reducing this liability due to the reduction of the
Companys net worth. However, with the Spin-off now completed, this liability will
subsequently be reclassified to Paid In Capital.

Other
accrued liabilities decreased $2,039,000 from $5,060,000 at December 31, 2004 to
$3,021,000 at June 30, primarily reflecting the payment of year-end customer rebates for
the year 2004.

# RESULTS OF OPERATIONS

Three-months ended
June 30, 2005 vs. June 30, 2004

The Company reported comparative
results from continuing operations for three-months period ended June 30, 2005 and 2004 as
follows:

|                                   | Three-months ended June 30,
|---------------------------------- | ---------------------------
|
|
|Net Sales                          | $15,241                    
|Gross Profit                       | $7,529                     
|Operating Profits                  | $2,886                     
|Average Net Assets Employed (ANAE) | $17,385                    
|Return on ANAE - Annualized        | 42.49%                     

The
Companys sales increased $4,201,000 (38.1%) from $11,040,000 in the three-months
period ended June 30, 2004 vs. $15,241,000 in the three-months period ended June 30, 2005
due to continued strong sales of the Companys flagship TracPipe®
flexible gas piping product and its patented connection system. TracPipe®
is a corrugated stainless steel tubing product developed especially for use in the piping
and installation of gas appliances. Sales of TracPipe® were sustained by
relatively strong single family and multi-family residential construction activity driven
by historically low interest rates. The $4,201,000 increase in sales from three-months
period ended June 30, 2004 to three-months period ended June 30, 2005 reflects volume
increases of $2,365,000 and net price increases of $1,836,000.

The
Companys gross profit margins were down slightly from 50.5% in the three-months
period ended June 30, 2004 to 49.4% in the three-months period ended June 30, 2005
indicative of inflationary pressures affecting stainless steel and other commodities,
softened somewhat by manufacturing efficiencies.

Reflecting
the factors mentioned above, Operating Profit margins, increased by 2.2 percentage points
from $1,843,000 in the three-months period ended June 30, 2004 to $2,886,000 in the
three-months period ended June 30, 2005.

Selling
Expenses. Selling expenses consist primarily of employee salaries and associated overhead
costs, commissions, and the cost of marketing programs such as advertising, trade shows
and related communication costs. Selling expense was $2,370,000 and $2,099,000 for the
three-months ended June 30, 2005 and 2004, respectively. The $271,000 increase in selling
expenses is due to increased sales commissions and costs of additional personnel in the
sales force. Sales expense as a percentage of sales declined from 19.0% for the
three-months ended June 30, 2005 to 15.6% for the three-months ended June 30, 2004.

General
and Administrative Expenses. General and administrative expenses consist primarily of
employee salaries, benefits for administrative, executive and finance personnel, legal and
accounting, and corporate general and administrative services. General and administrative
expenses were $1,962,000 and $1,134,000 for the three-months ended June 30, 2005 and 2004,
respectively. The $828,000 increase in expenses is attributable to legal  $445,000;
management compensation  $280,000 and $46,000 associated with the
spin-off from Mestek, Inc. For the preceding reasons, general and
administrative expense, as a percentage of sales, increased from 10.3% for the
three-months ended June 30, 2004 to 12.8% for the three-months ended June 30, 2005.

---

Engineering
Expense. Development expenses associated with the development of new products and
enhancements to existing products, and manufacturing engineering costs. Engineering
expenses were $311,000 and $500,000 for the three-months ended June 30, 2005 and 2004
respectively. The $189,000 decrease in engineering expenses is due almost entirely from
decreased expenditures associated with the certification and qualification of new
products. Accordingly, engineering expenses as a percentage of sales from 4.5% for the
three-months ended June 30, 2004 to 2.0% for the three-months ended June 30, 2005.

Interest
Income-Net. Interest income-net includes interest income on intercompany notes receivable
which bears interest at LIBOR plus 1%, and interest expense associated with the commercial
bank borrowings in April 2004 related to the Companys purchase of its manufacturing
premises. The mortgage note bears interest at LIBOR plus 1.75%. Interest income was
$67,000 in the three-months period ended June 30, 2005 and $86,000 for the three-months
period ended June 30, 2004. The intercompany note decreased from $19,054,000 at June 30,
2004 to $6,246,000 at June 30, 2005. Interest Expense was $44,000 for the three-months
ended June 30, 2005 and

Income
Tax Expense for three-months period ended June 30, 2005, as a percentage of pretax income,
varied slightly from the expected income tax expense due to federal and
state income tax limitations on deductions related to Incentive Stock Options.

Average
Net Assets Employed. Average net assets employed is defined to be Net Assets from
Continuing Operations (Total Assets less Current and Non Current Liabilities-other than
Current and Non Current Portions of Long-term Debt-averaged over the relevant period.
Average net assets increased $2,357,000 from $15,028,000 to $17,385,000 for the
three-months ending June 30, 2004 and 2005 respectively, reflecting increases in Accounts
Receivable and Inventory required to support the higher level of sales, offset by a
$1,378,000 increase in liabilities. Accordingly, annualized return on average net assets
decreased 6.6 percentage points from 49.1% to 42.5% for the three-months ended June 30,
2004 and 2005, respectively

Six-months ended June
30, 2005 vs. June 30, 2004

The
Company reported comparative results from continuing operations for six-months period
ended June 30, 2005 and six-months ended June 30, 2004 as follows:

|                                   | Six-months ended June 30,
|---------------------------------- | -------------------------
|
|
|Net Sales                          | $28,492                  
|Gross Profit                       | $14,302                  
|Operating Profits                  | $5,238                   
|Average Net Assets Employed (ANAE) | $15,156                  
|Return on ANAE - Annualized        | 69.1%                    
|                                  

The
Companys sales increased $6,365,000 (28.8%) from $22,127,000 in the six-months
period ended June 30, 2004 vs. $28,492,000 in the six-months period ended June 30, 2005
due to continued strong sales of the Companys flagship TracPipe®
flexible gas piping product and its patented connection system. TracPipe®
is a corrugated stainless steel tubing product developed especially for use in the piping
and installation of gas appliances. Sales of TracPipe® were sustained by
relatively strong single family and multi-family residential construction activity driven
by historically low interest rates. The $6,365,000 increase in sales from six-months
period ended June 30, 2004 to six-months period ended June 30, 2005 reflects volume
increases of $3,057,000 and net price increases of $3,308,000.

Page 13

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The
Companys gross profit margins were increased slightly from 49.9% in the six-months
period ended June 30, 2004 to 50.2% in the six-months period ended June 30, 2005
indicative of our abilities to effectively price our products, despite inflationary
pressures affecting stainless steel and other commodities.

Selling
Expenses. Selling expense was $4,785,000 and $4,052,000 for the six-months ended June 30,
2005 and 2004, respectively. The $733,000 increase in selling expenses is due to increased
sales commissions and costs of additional personnel in the sales force at our foreign
subsidiary. Sales expense as a percentage of sales declined from 18.3% for the six-months
ended June 30, 2005 to 16.8% for the six-months ended June 30, 2004.

General
and Administrative Expenses. General and administrative expenses were $3,647,000 and
$2,239,000 for the six-months ended June 30, 2005 and 2004, respectively. The $1,408,000
increase in expenses is attributable to legal, management compensation and costs
associated with the spin-off from Mestek, Inc. For the preceding
reasons, general and administrative expense, as a percentage of sales, increased from
10.1% for the six-months ended June 30, 2004 to 12.8% for the six-months ended June 30,
2005.

Engineering
Expense. Engineering expenses were $632,000 and $905,000 for the six-months ended June 30,
2005 and 2004 respectively. The $273,000 decrease in engineering expenses is due mostly
from decreased expenditures associated with the certification and qualification of new
products. Accordingly, engineering expenses as a percentage of sales from 4.1% for the
six-months ended June 30, 2004 to 2.2% for the six-months ended June 30, 2005.

Interest
Income-Net. Interest income was $168,000 in the six-months period ended June 30, 2005 and
$166,000 for the six-months period ended June 30, 2004. Interest Expense was $82,000 for
the six-months ended June 30, 2005 and $21,000 for the three-months period ended June 30,
2004.

Income
Tax Expense for six-months period ended June 30, 2005, as a percentage of pretax income,
varied slightly from the expected income tax expense due to federal and
state income tax limitations on deductions related to Incentive Stock Options.

Average
Net Assets Employed. Average net assets increased $637,000 from $14,517,000 to $15,156,000
for the six-month ending June 30, 2004 and 2005 respectively, reflecting increases in
Accounts Receivable and Inventory required to support the higher level of sales, offset by
a somewhat lesser increase in liabilities. Accordingly, annualized return on average net
assets increased 15.8 percentage points from 53.3% to 69.1% for the six-month ended June
30, 2004 and 2005, respectively.

# CRITICAL ACCOUNTING
POLICIES AND USE OF ESTIMATES

Financial
Reporting Release No. 60, released by the Securities and Exchange Commission, requires all
companies to include a discussion of critical accounting policies or methods used in the
preparation of financial statements. Note 1 of the Notes to the Consolidated Financial
Statements includes a summary of the significant accounting policies and methods used in
the preparation of our Consolidated Financial Statements. The following is a brief
discussion of the Companys more significant accounting policies.

The
preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and liabilities
at the dates of the financial statements and the reported amounts of revenues and expenses
during the reporting periods. The most significant estimates and assumptions relate to
revenue recognition, accounts receivable valuations, inventory valuations, goodwill
valuation, intangible asset valuations, product liability costs, workers compensation
claims reserves, health care claims reserves, and accounting for income taxes. Actual
amounts could differ significantly from these estimates.

Page 14

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Our
critical accounting policies and significant estimates and assumptions are described in
more detail as follows:

Revenue
Recognition

The
Companys revenue recognition activities relate almost entirely to the manufacture
and sale of flexible metal hose and pipe. Under generally accepted accounting principles,
revenues are considered to have been earned when the Company has substantially
accomplished what it must do to be entitled to the benefits represented by the revenues.
The following criteria represent preconditions to the recognition of revenue:

| | o               Persuasive
evidence of an arrangement for the sale of product or services must exist.
| | -----------------------------------------------------------------------------------------------------

| | o               Delivery
has occurred or services rendered.
| | -----------------------------------------------------------

| | o               The
sales price to the customer is fixed or determinable.
| | -------------------------------------------------------------------------

| | o               Collection
is reasonably assured.
| | -------------------------------------------------

The Company generally recognizes
revenue upon shipment in accordance with the above principles.

Accounting
for Income Taxes

The
Company has elected in 2004 and prior years to file its federal income tax return as part
of the Mestek, Inc. parent company, consolidated return. Mestek and Omega account for
Omegas federal tax liabilities on the separate company basis method in
accordance with FAS 109, Accounting for Income Taxes. Under this method Omega records tax
expense and related deferred taxes and tax benefits in a manner comparable to that which
it would record if it were not affiliated with Mestek.

The
preparation of the Companys Consolidated Financial Statements requires it to
estimate its income taxes in each of the jurisdictions in which it operates, including
those outside the United States which may be subject to certain risks that ordinarily
would not be expected in the United States. The income tax accounting process involves
estimating its actual current exposure together with assessing temporary differences
resulting from differing treatment of items, such as depreciation and stock based
compensation, for tax and accounting purposes. These differences result in the recognition
of deferred tax assets and liabilities. The Company must then record a valuation allowance
to reduce its deferred tax assets to the amount that is more likely than not to be
realized. Significant management judgment is required in determining the Companys
provision for income taxes, its deferred tax assets and liabilities and any valuation
allowance recorded against deferred tax assets. In the event that actual results differ
from these estimates or the Company adjusts these estimates in future periods, it may need
to adjust its valuation allowance which could materially impact its financial position and
results of operations.

# IMPACT OF INFLATION

Stainless
steel and other related commodities represent a significant portion of the Companys
prime costs. As such, the Companys margins are vulnerable to inflationary pressures
which affect the commodity markets from time to time. Gross profit margins were down
slightly in the three-month period ended June 30, 2005 from the comparable period in 2004,
which is indicative of inflationary pressures affecting stainless steel and other
commodities, softened somewhat by manufacturing efficiencies. However, in the six month
period ended June 30, 2005, gross profit margins were essentially unchanged from the
comparable period in 2004 due to the timely implementation of price increases to our
customers and to increased manufacturing efficiencies.

# LIQUIDITY AND CAPITAL
RESOURCES

As
of June 30, 2005 and December 31, 2004, the Company had no commercial bank line of credit
for working capital purposes. The Company had historically relied upon its former
corporate parent, Mestek, Inc. (Mestek), to provide working capital and other credit as
needed through an intercompany account relationship; however, the Company has consistently
transferred more cash to Mestek than it has borrowed resulting in cumulative intercompany
receivables from Mestek. The Company discontinued the coordination of its bank accounts
with Mestek on or about July 5, 2005, so that the Company continued to receive all of the
proceeds from the payment on account of its accounts receivable, and Mestek continued to
pay the Companys account payables until on or about July 21, 2005, at which time the
Company began paying its own accounts payable. The Companys intercompany receivable
from Mestek was fixed and documented in a written promissory note upon the consummation of
the Spin-off (as described in Note 9 to the consolidated financial statements), in the
principal amount of $3,249,615. The Mestek promissory note bears interest at a rate equal
to the U.S. Treasury 3 year note yield plus one percent, and is payable in full after
three years from the effective date of the Spin-off.

Page 15

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The
Company believes its liquidity position as of June 30, 2005 and December 31, 2004 is fully
adequate to meet foreseeable future needs. The Company also believes that it will possess
adequate cash reserves and will be able to obtain sufficient working capital lines of
credit to meet its day-to-day needs including any acquisitions or capital expenditures it
can reasonably foresee at this time.

# CONTINGENT LIABILITIES
AND GUARANTEES

See
Note 4 to the Companys financial statements.

The Company
is obligated as a guarantor for the debt incurred by its wholly-owned subsidiary, Exton
Ranch, Inc., for the purchase of the facility at 451 Creamery Way, Exton, Pennsylvania, as
disclosed in Note 7 to the financial statements.

# OFF-BALANCE SHEET
ARRANGEMENTS

The
Company has no off-balance sheet arrangements.

# NEW ACCOUNTING STANDARDS

Please
refer to Note 1 to the Company Financial Statements.

# Item 3. Quantitative And
Qualitative Information About Market Risks

The
Company does not engage in the purchase or trading of market risk sensitive instruments.
The Company does not presently have any positions with respect to hedge transactions such
as forward contracts relating to currency fluctuations. No market risk sensitive
instruments are held for speculative or trading purposes. For a discussion of the risk
factors facing the Company, and the shareholders investment in the Company, please
refer to the Risk Factors set forth in the Companys final registration statement on
Form 10-12G/A, filed with the Securities and Exchange Commission on July 22, 2005.

# Item 4  Controls
And Procedures

| | (a)                        Evaluation
of Disclosure Controls and Procedures.
| | ----------------------------------------------------------------------------

At
the end of the fiscal second quarter of 2005, the Company evaluated the effectiveness of
the design and operation of its disclosure controls and procedures. The Companys
disclosure controls and procedures are designed to ensure that the Company records,
processes, summarizes and reports in a timely manner the information the Company
management, including the chief executive officer and chief financial officer, have
conducted an evaluation of the effectiveness of the design and operation of the
Companys Disclosure Controls and Procedures as defined in the Rule 13a-15(e) of
Securities Exchange Act of 1934. Based on that evaluation, the chief executive officer and
chief financial officer have concluded that, as of the date of their evaluation, the
Companys disclosure controls and procedures are effective to provide reasonable
assurance of achieving the purposes described in Rule 13a-15(e), and no changes are
required at this time.

| | (b)                        Changes
in Internal Controls.
| | --------------------------------------------------------

There
was no change in the Companys internal control over financial reporting
(as defined in rule 13a-15(f) of the Securities Exchange Act of 1934) identified in
connection with the evaluation required by Rule 13a-15(d) of the Securities Exchange Act
of 1934 that occurred during the three-month period covered by this Report on Form 10-Q
that has materially affected or is reasonable likely to materially affect the
Companys internal control over financial reporting subsequent to the date the chief
executive officer and chief financial officer completed their evaluation.

Page 16

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# PART II  OTHER
INFORMATION

# Item 1  Legal
Proceedings

The
Company is subject to several legal actions and proceedings in which various monetary
claims are asserted. Management, after consultation with its corporate legal department
and outside counsel, does not anticipate that any ultimate liability arising out of all
such litigation and proceedings will have a material adverse effect on the financial
condition of the Company except as set forth below.

Berry, et al. v. Titeflex Corp.,
et al.

Case No. CV-2004-211, Circuit Court of
Clark County, Arkansas, filed November 15, 2004.

Four
individual residents of Arkansas and an individual Texas resident have sued the top four
manufacturers of corrugated stainless steel tubing (CSST), including Omega
Flex, Inc. as the manufacturer of TracPipe® brand CSST. The complainant proposes a
national class action on behalf of all owners of installed CSST. Installed CSST is alleged
to be defective because it is alleged to be more susceptible to failure from
near-lightning strikes than traditional black iron pipe and because the manufacturers
allegedly failed to warn of CSSTs allegedly heightened susceptibility to such
damage.

The
Company has filed motions to dismiss the amended complaint and the cross-complaint of the
individual Arkansas plumber defendant, who likewise proposed a class action cross-claim on
behalf of installers of CSST. Full discovery is proceeding and disposition of the class
certification issue is expected in 2006. The Company will oppose both class certification
and any request for a national class. The Company believes it has valid defenses to the
issues of both class certification and product liability and the Company will contest
these claims vigorously. At this time the Company believes that no estimation of potential
liability in the matter can be reasonably made. It is the nature of class action
litigation in general, and, accordingly, this matter in particular, that if there should
be an adverse decision on the issue of certification of a national class of CSST owners
and an adverse decision on the issue of product liability, the financial position and
results of operation of the Company could be materially adversely affected.

# Item 3  Defaults
Upon Senior Securities

Certain
inter-company dividends paid by the Company to Mestek in 2004 and 2005, prior to the
spin-off transaction described in more detail in Note 4, caused the Company to
be in technical breach of two loan covenants relating to the mortgage note for certain
periods. The Company paid all amounts due under the mortgage note during the periods of
the above technical breaches. Based on discussions with Sovereign Bank, the Company
expects that the bank will provide a written waiver of such defaults. The Company believes
that it is in compliance with all required covenants as of June 30, 2005.

Page 17

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# Item 6  Exhibits
And Reports On Form 8-K

|Exhibit
No. | Description                                                                                             
|----------- | --------------------------------------------------------------------------------------------------------
|
|
|11.1        | Statement re: Computation of Per Share Earnings.                                                        
|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 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          

# (b) Reports on Form 8-K:

The
Company filed a Report on Form 8-K on August 15, 2005 regarding Results of Operations and
Financial Condition to report earnings for the quarter ended June 30, 2005.

The
Company filed a Report on Form 8-K on July 28, 2005 regarding the mailing to its
shareholders of record as June 23, 2005 a definitive registration statement on Form 10
regarding the spin-off by Mestek, Inc. of its 86% ownership interest in the Company.

The
Company filed a Report on Form 8-K on June 23, 2005 regarding the filing of a second
preliminary information statement on Schedule 14C regarding the spin-off by the Company of
its 86% ownership interest in Omega Flex, Inc.

Page 18

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# SIGNATURES

Pursuant to the requirements 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.

|Date: September 6, 2005 |  | OMEGA FLEX, INC. (Registrant)BY: /S/  E. Lynn Wilkinson 
   E. Lynn WilkinsonVice President - Finance and Chief Financial Officer
|----------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------