(Mark
one)
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ý
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Annual
Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934
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For
The Fiscal Year Ended December 31, 2007.
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o
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Transition
Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934
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For
the transition period from ____________ to
____________.
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Commission
File Number 000-29649
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FLEXIBLE SOLUTIONS INTERNATIONAL,
INC.
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(Name
of Small Business Issuer in Its
Charter)
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Nevada
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91-1922863
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(State
of Incorporation)
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(IRS
Employer Identification No.)
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615
Discovery Street
Victoria,
British Columbia, CANADA
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V8T
5G4
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(Issuer’s
Telephone Number)
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Page
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PART
I
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Item
1.
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1
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Item
2.
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11
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Item
3.
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11
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Item
4.
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12
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PART
II
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Item
5.
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13
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Item
6.
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14
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Item
7.
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17
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Item
8.
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18
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Item 8A.
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18
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Item 8B.
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18
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PART
III
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Item
9.
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19
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Item
10.
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21
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Item
11.
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24
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Item
12.
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25
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Item
13.
|
26
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Item
14.
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26
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27
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Item
1.
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●
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Reduces
daily water evaporation as much as
54%
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●
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Reduces
monthly water evaporation as much as
37%
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●
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Is
odorless
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●
|
Has
no effect on invertebrates or
vertebrates
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●
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Has
no anticipated effect on any current drinking water treatment processes
and
|
●
|
Is
biodegradable
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●
|
Easier
Application. WATER$AVR® may be applied directly to the
water surface by hand or machine. Our competition requires
premixing to dilute the product to usable strength, followed by extensive
pumping.
|
●
|
Cost. In
order to achieve comparable water savings levels, other products cost more
than WATER$AVR®.
|
●
|
Biodegradability
compared to competing oil field
chemicals;
|
●
|
Cost-effectiveness
for crop enhancement compared to increased fertilizer
use;
|
●
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Environmental
considerations, ease of formulation and increased crop yield opportunities
in irrigation scale markets; and
|
●
|
Biodegradability
compared to poly-acrylic acid for
detergents.
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●
|
demand
for and market acceptance of our
products;
|
●
|
competitive
pressures resulting in lower selling
prices;
|
●
|
adverse
changes in the level of economic activity in regions in which we do
business;
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●
|
adverse
changes in industries, such as swimming pool construction, on which we are
particularly dependent;
|
●
|
changes
in the portions of our revenue represented by various products and
customers;
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●
|
delays
or problems in the introduction of new
products;
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●
|
the
announcement or introduction of new products, services or technological
innovations by our competitors;
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●
|
variations
in our product mix;
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●
|
the
timing and amount of our expenditures in anticipation of future
sales;
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●
|
increased
costs of raw materials or supplies;
and
|
●
|
changes
in the volume or timing of product
orders.
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●
|
accurately
anticipate customer needs;
|
●
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innovate
and develop new products and
applications;
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●
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successfully
commercialize new products in a timely
manner;
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●
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price
our products competitively and manufacture and deliver our products in
sufficient volumes and on time; and
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●
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differentiate
our products from our competitors’
products.
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●
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changes
in foreign currency exchange rates;
|
●
|
changes
in a country or region’s political or economic conditions, particularly in
developing or emerging markets;
|
●
|
longer
payment cycles of foreign customers and difficulty of collecting
receivables in foreign
jurisdictions;
|
●
|
trade
protection measures and import or export licensing
requirements;
|
●
|
differing
tax laws and changes in those laws;
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●
|
difficulty
in staffing and managing widespread
operations;
|
●
|
differing
protection of intellectual property and changes in that protection;
and
|
●
|
differing
regulatory requirements and changes in those
requirements.
|
Item
2.
|
Item
3.
|
High
|
Low
|
||||||||
Year Ended December 31, 2006 | First Quarter | $ | 3.55 | $ | 2.25 | ||||
Second Quarter | 4.30 | 2.45 | |||||||
Third Quarter | 3.25 | 2.50 | |||||||
Fourth Quarter | 4.12 | 2.80 |
High
|
Low
|
||||||||
Year Ended December 31, 2007 | First Quarter | 3.55 | 2.25 | ||||||
Second Quarter | 4.30 | 2.45 | |||||||
Third Quarter | 3.25 | 2.50 | |||||||
Fourth Quarter | 4.12 | 2.80 |
Number
Of
Shares
|
Note
Reference
|
|||||||
Shares
issuable upon the exercise of warrants
held
by private investors
|
1,455,470 |
A
|
||||||
Shares
issuable upon exercise of options granted
to
our officers, directors, employees, consultants,
and
third parties
|
1,912,440 |
B
|
Shares
Issuable
Upon
Exercise
Of
Warrants
|
Issue
Date
|
Exercise
Price
|
Expiration
Date
|
|||
900,000
|
4/14/05
|
$ 4.50
|
4/14/09
|
|||
87,400
|
6/08/05
|
$ 4.50
|
6/08/09
|
|||
468,070
|
5/03/07
|
$ 4.50 |
5/03/10
|
Item |
Increase
(I) or
Decrease
(D)
|
Reason | ||
Sales
|
|
|
||
EWCP
products
|
D
|
Poor
execution by the Ecosavr swimming pool sales team resulted in market
share loss to competing products.
|
||
BPCA
products
|
D
|
Maintenance
shutdowns in the oil extraction industry during 2007 reduced sales of BPCA
products.
|
||
Administrative
salaries and benefits
|
D
|
In
2006, we granted 5 year stock options to a few key
employees. The expense for financial reporting purposes added
$369,992 to administrative salaries in 2006 but only $204,602 in
2007.
|
||
Professional
fees
|
D
|
Resolution
of several legal proceedings in the year 2007 reduced our
costs.
|
||
Consulting
|
D
|
The
expense, for financial reporting purposes, of stock options granted in
2006 to consultants that did not reoccur in 2007.
|
||
Commissions
|
D
|
Decreased
sales led to a decrease in commission costs.
|
||
Gain
on sale of property
|
I
|
One-time
gain on sale of unused land at our plant in
Illinois.
|
Item |
Increase
(I) or
Decrease
(D)
|
Reason | ||
Sales
|
|
|||
EWCP
products
|
I
|
Increased
product recognition in the market place led to increased
sales.
|
||
BPCA
products
|
I
|
High
oil prices encouraged the oil companies to increase production,
limit shutdowns and need additional BPCA
products.
|
||
Wages
|
I
|
In
2005 we were not required to record the expense of stock
options. The expense, for financial reporting purposes for
employee stock options, added $131,517 to wages in
2006.
|
Administrative
salaries and benefits
|
I
|
In
2005 we were not required to record the expense of stock
options. The expense, for financial reporting purposes for
employee stock options, added $369,992 to administrative salaries in
2006.
|
||
Investor
relations and transfer agent fee
|
D
|
Upon
the closing of our private placements in 2005, some stock options granted
in 2004 vested and incurred expenses in this category by
$422,500.
|
||
Insurance
|
I
|
Increase
is comparable to what others are experiencing in the
industry.
|
||
Consulting
|
I
|
The
expense, for financial reporting purposes, of stock option grants in 2006
to consultants.
|
||
Research
|
I
|
Increased
spending on development.
|
Cash
provided by operations
|
$ | 242,451 | ||
Patent
development
|
(60,680 | ) | ||
Equipment
purchases
|
(586,127 | ) | ||
Sale
of common stock
|
3,164,481 | |||
Exchange
rate changes
|
142,990 | |||
Other
|
(1,981 | ) |
Cash
provided by operations
|
$ | 17,539 | ||
Collection
of loan
|
35,228 | |||
Patent
development
|
(29,116 | ) | ||
Equipment
purchases
|
(37,160 | ) | ||
Sale
of common stock
|
15,285 | |||
Exchange
rate changes
|
(22,152 | ) | ||
Other
|
(2,147 | ) | ||
Cash
on hand at January 1, 2006
|
22,523 |
2008
|
186,906 | |||
2009
|
134,192 | |||
2010
|
16,962 | |||
2011
|
16,962 |
Item
7.
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Page
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F-1
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F-2
|
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F-3
|
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F-4
|
|
F-5
|
|
F-6
|
|
F-7
|
December
31, 2007
|
December
31, 2006
|
|||||||
Assets
|
||||||||
Current
|
||||||||
Cash
and cash equivalents
|
$ | 3,355,854 | $ | 450,759 | ||||
Accounts
receivable (Note 3)
|
1,051,056 | 1,319,575 | ||||||
Inventories
(see Note 4)
|
2,361,270 | 1,904,315 | ||||||
Prepaid
expenses
|
115,353 | 124,360 | ||||||
6,883,533 | 3,799,009 | |||||||
Property,
equipment and leaseholds, net (see Note 5)
|
4,612,571 | 4,100,553 | ||||||
Patents
(see Note 6)
|
230,438 | 169,758 | ||||||
Investment
(see Note 7)
|
- | 369,000 | ||||||
Long
term deposits (see Note 8)
|
48,034 | 47,220 | ||||||
Total
Assets
|
$ | 11,774,576 | $ | 8,485,540 | ||||
Liabilities
|
||||||||
Current
|
||||||||
Accounts
payable and accrued liabilities
|
$ | 385,792 | $ | 423,030 | ||||
Deferred
revenue
|
9,870 | 20,559 | ||||||
395,662 | 443,589 | |||||||
Mortgage
(Note 15)
|
452,018 | - | ||||||
847,680 | 443, 589 | |||||||
Stockholders’
Equity
|
||||||||
Capital
stock (Note 14)
|
||||||||
Authorized
|
||||||||
50,000,000
common shares with a par value of $0.001 each
|
||||||||
1,000,000 preferred
shares with a par value of $0.01 each
|
||||||||
Issued
and outstanding:
|
||||||||
14,057,567
(2006: 13,058,427) common shares
|
14,058 | 13,058 | ||||||
Capital
in excess of par value
|
15,914,303 | 12,370,418 | ||||||
Other
comprehensive income (see Note 9)
|
394,289 | 131,002 | ||||||
Accumulated
Deficit
|
(5,395,754 | ) | (4,472,527 | ) | ||||
Total
Stockholders’ Equity
|
10,926,895 | 8,041,951 | ||||||
Total
Liabilities and Stockholders’ Equity
|
$ | 11,774,576 | $ | 8,485,540 | ||||
Commitments,
Contingencies and Subsequent events
|
(See
Notes 16, 17 & 18)
|
Years
Ended December 31,
|
||||||||
2007
|
2006
|
|||||||
Sales
|
$ | 7,431,791 | $ | 8,373,597 | ||||
Cost
of sales
|
4,738,143 | 5,401,350 | ||||||
Gross
profit
|
2,693,648 | 2,972,247 | ||||||
Operating
Expenses
|
||||||||
Wages
|
1,094,799 | 1,069,736 | ||||||
Administrative
salaries and benefits
|
447,516 | 666,542 | ||||||
Advertising
and promotion
|
63,126 | 45,215 | ||||||
Investor
relations and transfer agent fee
|
302,401 | 258,072 | ||||||
Office
and miscellaneous
|
201,810 | 157,755 | ||||||
Insurance
|
230,656 | 209,864 | ||||||
Interest
expense
|
10,605 | 3,136 | ||||||
Rent
|
227,431 | 232,820 | ||||||
Consulting
|
338,728 | 383,965 | ||||||
Professional
fees
|
233,701 | 324,359 | ||||||
Travel
|
134,011 | 136,049 | ||||||
Telecommunications
|
38,163 | 34,041 | ||||||
Shipping
|
67,834 | 41,517 | ||||||
Research
|
120,817 | 123,254 | ||||||
Commissions
|
119,790 | 171,380 | ||||||
Registration
rights penalty
|
- | 326,710 | ||||||
Bad
debt expense
|
2,310 | 90,747 | ||||||
Currency
exchange
|
43,568 | (23,417 | ) | |||||
Utilities
|
25,996 | 18,064 | ||||||
Total
operating expenses
|
3,703,262 | 4,266,809 | ||||||
Gain on sale of property | (195,442 | ) | - | |||||
Operating
income (loss)
|
(814,172 | ) | (1,294,562 | ) | ||||
Write
down of investment
|
(98,000 | ) | - | |||||
Other
expenses
|
(15,051 | ) | - | |||||
Interest
income
|
3,996 | 3,114 | ||||||
Loss
before income tax
|
(923,227 | ) | (1,291,448 | ) | ||||
Income
tax (recovery)
|
- | (127,049 | ) | |||||
Loss
for the year
|
$ | (923,227 | ) | $ | (1,164,369 | ) | ||
Net
loss per share (basic and diluted)
|
$ | (0.07 | ) | $ | (0.09 | ) | ||
Weighted
average number of common shares (basic and diluted)
|
13,823,654 | 12,994,430 |
Three
Months Ended December 31,
|
||||||||
2007
|
2006
|
|||||||
(unaudited)
|
(unaudited)
|
|||||||
Sales
|
$ | 1,701,359 | $ | 1,700,806 | ||||
Cost
of sales
|
1,162,160 | 1,155,807 | ||||||
Gross
profit
|
$ | 539,199 | $ | 544,999 | ||||
Operating
Expenses
|
||||||||
Wages
|
294,363 | 217,991 | ||||||
Administrative
salaries and benefits
|
71,436 | 190,561 | ||||||
Advertising
and promotion
|
21,355 | 9,381 | ||||||
Investor
relations and transfer agent fee
|
50,319 | 112,064 | ||||||
Office
and miscellaneous
|
57,790 | 30,050 | ||||||
Insurance
|
62,677 | 48,814 | ||||||
Interest
expense
|
7,731 | 1,161 | ||||||
Rent
|
57,213 | 55,841 | ||||||
Consulting
|
60,217 | 93,106 | ||||||
Professional
fees
|
102,192 | 111,922 | ||||||
Travel
|
33,475 | 54,832 | ||||||
Telecommunications
|
10,883 | 9,598 | ||||||
Shipping
|
8,815 | 7,682 | ||||||
Research
|
42,032 | 21,195 | ||||||
Commissions
|
31,258 | 41,184 | ||||||
Bad
debt expense
|
249 | 90,557 | ||||||
Currency
exchange
|
(27,456 | ) | (28,695 | ) | ||||
Utilities
|
6,715 | 4,806 | ||||||
890,634 | 1,072,050 | |||||||
Loss
before other items and income tax
|
$ | (351,435 | ) | $ | (527,051 | ) | ||
Write
down of investment
|
(98,000 | ) | - | |||||
Interest
income
|
600 | 430 | ||||||
Loss
before income tax
|
$ | (448,835 | ) | $ | (526,621 | ) | ||
Income
tax (recovery)
|
- | - | ||||||
Loss
for the three months
|
$ | (448,835 | ) | $ | (526,621 | ) | ||
Net
loss per share (basic and diluted)
|
$ | (0.03 | ) | $ | (0.04 | ) | ||
Weighted
average number of shares (basic and diluted)
|
14,156,480 | 13,010,514 |
Years
Ended December 31,
|
||||||||
2007
|
2006
|
|||||||
Operating
activities
|
||||||||
Net
loss
|
$ | (923,227 | ) | $ | (1,164,369 | ) | ||
Adjustments
to reconcile net loss to net cash
|
||||||||
Stock
compensation expense
|
651,405 | 858,585 | ||||||
Shares
issued for services
|
- | 74,306 | ||||||
Depreciation
|
526,127 | 597,170 | ||||||
Write
down of investment
|
98,000 | - | ||||||
Changes
in non-cash working capital items:
|
||||||||
(Increase)
Decrease in accounts receivable
|
300,065 | (553,174 | ) | |||||
(Increase)
Decrease in inventories
|
(337,532 | ) | 410,664 | |||||
(Increase)
Decrease in prepaid expenses
|
16,852 | 12,955 | ||||||
Increase
(Decrease) in accounts payable
|
(78,550 | ) | (268,075 | ) | ||||
Increase
(Decrease) deferred revenue
|
(10,689 | ) | 20,559 | |||||
Increase
(Decrease) in income taxes
|
- | 28,918 | ||||||
Cash
provided by (used in) operating activities
|
242,451 | 17,539 | ||||||
Investing
activities
|
||||||||
(Increase)
Decrease in long term deposits
|
1,981 | (2,147 | ) | |||||
(Increase)
Decrease in loan receivable
|
- | 35,228 | ||||||
(Increase)
Decrease in development of patents
|
(60,680 | ) | (29,116 | ) | ||||
(Increase)
Decrease in acquisition of equipment
|
(586,127 | ) | (37,160 | ) | ||||
Cash
provided by (used in) investing activities
|
(644,826 | ) | (33,195 | ) | ||||
Financing
activities
|
||||||||
Proceeds
from issuance of common stock
|
3,164,481 | 15,285 | ||||||
Cash
provided by financing activities
|
3,164,481 | 15,285 | ||||||
Effect
of exchange rate changes on cash
|
142,990 | (22,152 | ) | |||||
Inflow
(outflow) of cash
|
2,905,096 | (22,523 | ) | |||||
Cash
and cash equivalents, beginning
|
450,759 | 473,282 | ||||||
Cash
and cash equivalents, ending
|
$ | 3,355,854 | $ | 450,759 | ||||
Supplemental
disclosure of cash flow information:
|
||||||||
Registration
rights penalty
|
$ | - | $ | (326,710 | ) | |||
Interest
paid
|
10,605 | 3,136 | ||||||
Non
Cash Investing Activities:
|
||||||||
Mortgage
assumed for acquisition of property
|
$ | 452,018 | $ | - |
Capital
in
|
Accumulated
|
Other
|
Total
|
|||||||||||||||||||||
Excess
of
|
Earnings
|
Comprehensive
|
Stockholders’
|
|||||||||||||||||||||
Shares
|
Par
Value
|
Par
Value
|
(Deficiency)
|
Income
(Loss)
|
Equity
|
|||||||||||||||||||
Balance
December 31, 2005
|
12,981,316 | $ | 12,981 | $ | 11,422,218 | $ | (3,308,158 | ) | $ | 153,254 | $ | 8,280,295 | ||||||||||||
Translation
adjustment
|
— | — | — | — | (22,495 | ) | (22,495 | ) | ||||||||||||||||
Net
loss
|
— | — | — | (1,164,369 | ) | — | (1,164,369 | ) | ||||||||||||||||
Comprehensive
income
|
— | — | — | — | — | (1,210,081 | ) | |||||||||||||||||
Shares
issued:
|
||||||||||||||||||||||||
Exercise
of stock options
|
46,000 | 46 | 64,354 | — | — | 64,400 | ||||||||||||||||||
Issue
of stock for services
|
31,111 | 31 | 74,306 | — | — | 74,337 | ||||||||||||||||||
Private
placement
|
— | — | (49,046 | ) | — | — | (49,046 | ) | ||||||||||||||||
Stock
option compensation
|
— | — | 858,585 | — | — | 882,015 | ||||||||||||||||||
Balance
December 31, 2006
|
13,058,427 | $ | 13,058 | $ | 12,370,417 | $ | (4,472,527 | ) | $ | 131,002 | $ | 8,041,950 | ||||||||||||
Translation
adjustment
|
— | — | — | — | 263,288 | 263,288 | ||||||||||||||||||
Net
loss
|
— | — | — | (923,227 | ) | — | (923,227 | ) | ||||||||||||||||
Comprehensive
income
|
— | — | — | — | — | (659,939 | ) | |||||||||||||||||
Shares
issued:
|
||||||||||||||||||||||||
Exercise
of stock options
|
163,000 | 163 | 288,837 | — | — | 289,000 | ||||||||||||||||||
Cancellation
of stock
|
(100,000 | ) | (100 | ) | (270,900 | ) | — | — | (271,000 | ) | ||||||||||||||
Private
placement
|
936,140 | 936 | 2,874,546 | — | — | 2,875,482 | ||||||||||||||||||
Stock
option compensation
|
— | — | 651,405 | — | — | 651,405 | ||||||||||||||||||
Balance
December 31, 2007
|
14,057,567 | $ | 14,058 | $ | 15,914,303 | $ | (5,395,754 | ) | $ | 394,289 | $ | 10,926,895 |
Current
assets
|
$ | 1,126,805 | ||
Property
and equipment
|
5,023,195 | |||
$ | 6,150,000 | |||
Acquisition
costs assigned to property and equipment
|
314,724 | |||
Total
assets acquired
|
$ | 6,464,724 |
Computer
hardware
|
30%
Declining balance
|
|
Furniture
and fixtures
|
20%
Declining balance
|
|
Manufacturing
equipment
|
20%
Declining balance
|
|
Office
equipment
|
20%
Declining balance
|
|
Building
|
10%
Declining balance
|
|
Leasehold
improvements
|
Straight-line
over lease term
|
2007
|
2006
|
|||||||
Accounts
receivable
|
$ | 1,052,316 | $ | 1,344,155 | ||||
Allowance
for doubtful accounts
|
(1,260 | ) | (24,580 | ) | ||||
$ | 1,051,056 | $ | 1,319,575 |
2007
|
2006
|
|||||||
Completed
goods
|
$ | 1,664,777 | $ | 970,780 | ||||
Works
in progress
|
198,172 | 397,995 | ||||||
Raw
materials
|
498,321 | 535,540 | ||||||
$ | 2,361,270 | $ | 1,904,315 |
2007
|
Accumulated
|
2007
|
||||||||||
Cost
|
Depreciation
|
Net
|
||||||||||
Buildings
|
$ | 4,011,826 | $ | 970,854 | $ | 3,040,972 | ||||||
Computer
hardware
|
75,458 | 48,284 | 27,174 | |||||||||
Furniture
and fixtures
|
21,788 | 12,154 | 9,634 | |||||||||
Office
equipment
|
32,905 | 22,035 | 10,870 | |||||||||
Manufacturing
equipment
|
2,313,363 | 1,280,943 | 1,032,420 | |||||||||
Trailer
|
3,854 | 1,863 | 1,990 | |||||||||
Leasehold
improvements
|
46,304 | 36,480 | 9,825 | |||||||||
Trade
show booth
|
8,766 | 6,212 | 2,554 | |||||||||
Land
|
477,133 | -- | 477,133 | |||||||||
$ | 6,991,397 | $ | 2,378,829 | $ | 4,612,571 |
2006
|
Accumulated
|
2006
|
||||||||||
Cost
|
Depreciation
|
Net
|
||||||||||
Buildings
|
$ | 3,144,259 | $ | 724,752 | $ | 2,419,507 | ||||||
Computer
hardware
|
60,576 | 34,200 | 26,376 | |||||||||
Furniture
and fixtures
|
18,576 | 8,608 | 9,968 | |||||||||
Office
equipment
|
29,533 | 17,488 | 12,045 | |||||||||
Manufacturing
equipment
|
2,207,781 | 990,959 | 1,216,822 | |||||||||
Trailer
|
1,991 | 1,411 | 580 | |||||||||
Leasehold
improvements
|
39,517 | 25,551 | 13,966 | |||||||||
Trade
show booth
|
7,456 | 4,353 | 3,103 | |||||||||
Land
|
398,186 | -- | 398,186 | |||||||||
$ | 5,907,875 | $ | 1,807,322 | $ | 4,100,553 |
2007
Cost
|
Accumulated
Amortization
|
2007
Net
|
||||||||||
Patents
|
$ | 243,853 | $ | 13,415 | 230,438 |
2006
Cost
|
Accumulated
Amortization
|
2006
Net
|
||||||||||
Patents
|
$ | 172,938 | $ | 3,180 | 169,758 |
2007
|
2006
|
|||||||
Tatko
Inc.
|
$ | - | $ | 271,000 | ||||
Air-Water
Interface Delivery and Detection Inc.
|
- | 98,000 | ||||||
$ | - | $ | 369,000 |
2007
|
2006
|
|||||||
Long
term deposits
|
$ | 48,034 | $ | 47,220 |
2007
|
2006
|
|||||||
Net
loss
|
$ | (923,227 | ) | $ | (1,164,369 | ) | ||
Other
comprehensive income
|
263,287 | (22,495 | ) | |||||
Comprehensive
income
|
$ | (659,940 | ) | $ | (1,186,864 | ) | ||
Basic
and diluted comprehensive loss per share
|
(0.05 | ) | (0.09 | ) |
2007
|
2006
|
|||||||
Current
tax, domestic
|
- | - | ||||||
Current
tax, foreign
|
- | $ | (127,079 | ) | ||||
Current
tax, total
|
- | $ | (127.079 | ) |
2006
|
2006
|
|||||||
Income
before taxes, domestic
|
$ | (49,668 | ) | $ | (427,661 | ) | ||
Income
before taxes, foreign
|
(873,559 | ) | (863,787 | ) | ||||
Income
before taxes, total
|
$ | (923,227 | ) | $ | (1,291,448 | ) | ||
Expense
(recovery) for income taxes at statutory rate (35%)
|
$ | (323,129 | ) | $ | (452,007 | ) | ||
Permanent
difference – stock based compensation
|
227,992 | 326,523 | ||||||
Depreciation
|
112,200 | 104,543 | ||||||
Miscellaneous
|
37,492 | - | ||||||
Tax
refund from application of losses to prior periods
|
- | (127,079 | ) | |||||
Application
of losses from prior periods
|
(198,858 | ) | (139,308 | ) | ||||
Losses
carried forward
|
144,287 | 160,249 | ||||||
Income
tax expense (recovery)
|
$ | - | $ | (127,079 | ) |
2006
|
2006
|
|||||||
Non-capital
loss carry forwards
|
$ | 1,198,347 | $ | 950,037 | ||||
Book
over tax value of property and equipment
|
404,188 | 220,502 | ||||||
Valuation
allowance
|
(1,602,535 | ) | (1,170,539 | ) | ||||
Net
deferred tax asset (liability)
|
- | - |
2013
|
$ | 107,685 | ||
2014
|
451,507 | |||
2016
|
926,433 | |||
2017 | 412,249 | |||
2022 | 125,722 | |||
2023
|
256,119 | |||
2024
|
813,503 | |||
2025
|
195,485 | |||
2027 | $ | 135,146 |
Net
loss
|
Shares
(denominator)
|
Per
Share
amount
|
||||||||||
2007
Basic net loss
|
$ | (923,227 | ) |
13,823,654
|
$ | (0.07 | ) | |||||
2006
Basic net loss
|
$ | (1,164,369 | ) | 12,994,430 | $ | (0.09 | ) |
Number
of shares
|
Exercise
price
per
share
|
Weighted
average exercise price
|
|||||||||
Balance,
December 31, 2005
|
1,060,740 |
$1.40
- $4.60
|
$ | 3.44 | |||||||
Granted
|
1,191,000 |
$3.25
- $3.60
|
$ | 3.25 | |||||||
Exercised
|
(46,000 | ) |
$1.40
|
$ | 1.40 | ||||||
Cancelled
or expired
|
(79,000 | ) |
$1.40
- $4.25
|
$ | 2.46 | ||||||
Balance,
December 31, 2006
|
2,126,740 |
$1.40
- $4.60
|
$ | 3.44 | |||||||
Granted
|
235,700 |
$1.50
- $3.60
|
$ | 2.35 | |||||||
Exercised
|
(163,000 | ) |
$1.50
- $3.25
|
$ | 1.77 | ||||||
Cancelled
or expired
|
(287,000 | ) |
$3.00
- $4.40
|
$ | 3.93 | ||||||
Balance,
December 31, 2007
|
1,912,440 |
$3.00
– 4.60
|
$ | 3.38 |
2007
|
2006
|
|||||||
Expected
life – years
|
1.0
- 5.0
|
5.0
|
||||||
Interest
rate
|
4.18
- 5.18%
|
4.50%
|
||||||
Volatility
|
86.0
- 115.0%
|
52.0%
|
||||||
Dividend
yield
|
--
%
|
--
%
|
||||||
Weighted
average fair value of options granted
|
$ |
1.37
- 2.67
|
$ |
1.49
|
Number
of shares
|
Exercise
price
per
share
|
Weighted
average exercise price
|
||||||||||
Balance,
December 31, 2005
|
987,400 | $ | 4.50 | $ | 4.50 | |||||||
Granted
|
— | — | — | |||||||||
Exercised
|
— | — | — | |||||||||
Cancelled
|
— | — | — | |||||||||
Balance,
December 31, 2006
|
987,400 | $ | 4.50 | $ | 4.50 | |||||||
Granted
|
484,244 | $ | 4.50 | $ | 4.50 | |||||||
Exercised
|
— | — | — | |||||||||
Cancelled
|
— | — | — | |||||||||
Balance,
December 31, 2007
|
1,471,644 | $ | 4.50 | $ | 4.50 |
2008
|
$ | - | ||
2009
|
- | |||
2010
|
- | |||
2011 | - | |||
2012 | 651,298 |
EWCP
|
BPCA
|
Total
|
||||||||||
Revenue
|
$ | 1,217,365 | $ | 6,214,425 | $ | 7,431,791 | ||||||
Interest
revenue
|
3,142 | 907 | 4,049 | |||||||||
Interest
expense
|
7,412 | 3,193 | 10,605 | |||||||||
Depreciation
and Amortization
|
62,832 | 463,295 | 526,127 | |||||||||
Segment
profit (loss)
|
(1,868,458 | ) | 945,231 | (923,227 | ) | |||||||
Segment
assets
|
1,340,812 | 3,271,759 | 4,612,571 | |||||||||
Expenditures
for
segment assets
|
1,004,938 | 33,204 | 1,038,142 |
EWCP
|
BPCA
|
Total
|
||||||||||
Revenue
|
$ | 1,410,842 | $ | 6,963,320 | $ | 8,374,162 | ||||||
Interest
revenue
|
3,114 | -- | 3,114 | |||||||||
Interest
expense
|
788 | 2,348 | 3,136 | |||||||||
Depreciation
and Amortization
|
59,695 | 537,475 | 597,170 | |||||||||
Segment
profit (loss)
|
(1,975,029 | ) | 810,660 | (1,164,369 | ) | |||||||
Segment
assets
|
199,230 | 3,901,180 | 4,100,553 | |||||||||
Expenditures
for
segment assets
|
9,004 | 31,336 | 40,340 |
2007
|
2006
|
|||||||
Canada
|
$ | 934,757 | $ | 202,763 | ||||
United
States and abroad
|
6,497,034 | 8,171,399 | ||||||
Total
|
$ | 7,431,791 | $ | 8,374,162 |
2007
|
2006
|
|||||||
Canada
|
$ | 1,331,166 | $ | 364,487 | ||||
United
States
|
3,511,843 | 3,905,824 | ||||||
Total
|
$ | 4,843,009 | $ | 4,270,311 |
2008 |
186,906
|
2009 |
134,192
|
2010 |
16,962
|
2011 |
16,962
|
Item8A(T).
|
Item
8B.
|
Name
|
Age
|
Position
|
Daniel
B. O’Brien
|
51
|
President,
Director
|
John
H. Bientjes
|
54
|
Director
|
Dr.
Robert N. O’Brien
|
86
|
Director
|
Dale
Friend
|
51
|
Director
|
Eric
Hodges
|
59
|
Director
|
Item
10.
|
Name
and Principal Position
|
Fiscal
Year
|
Salary
(1)
|
Bonus
(2)
|
Restricted
Stock
Awards
(3)
|
Options
Awards
(4)
|
All
Other
Annual
Compensation
(5)
|
Total
|
||||||||||||||||||
Daniel
B. O’Brien
|
2007
|
$ | 140,154 | -- | -- | -- | -- | $ | 140,154 | ||||||||||||||||
President
and Chief
|
2006
|
$ | 150,109 | -- | -- | 340,217 | -- | 490,326 | |||||||||||||||||
Executive
Officer
|
(1)
|
The
dollar value of base salary (cash and non-cash)
earned.
|
(2)
|
The
dollar value of bonus (cash and non-cash)
earned.
|
(3)
|
During
the periods covered by the table, the value of the shares of restricted
stock issued as compensation for services to the persons listed in the
table.
|
(4)
|
The
value of all stock options granted during the periods covered by the
table.
|
(5)
|
All
other compensation received that we could not properly report in any other
column of the table.
|
Plan
Category
|
Number
of Securities to be Issued Upon Exercise of Outstanding
Options,
Warrants
and Rights
|
Weighted-Average
Exercise
Price of
Outstanding
Options,
Warrants
and Rights
|
Number
of Securities
Remaining
Available for
Future
Issuance Under
Equity
Compensation
Plans
(Excluding Securities Reflected
in
Column (a))
|
||||||
(a)
|
(b)
|
(c)
|
|||||||
Stock
Option Program
|
1,912,440 | $ | 3.38 |
Not
Applicable
|
|||||
Total
|
1,912,440 | $ | 3.38 |
Options Granted
|
||||
Name |
Grant
Date
|
Options
Granted (#) |
Exercise
Price
Per
Share
|
Expiration
Date
|
Daniel O’Brien |
--
|
--
|
--
|
--
|
Options
Exercised
|
||
Name |
Shares
Acquired
On
Exercise
(1)
|
Value
Realized
(2)
|
|
||
Daniel O’Brien |
--
|
--
|
(1)
|
The
number of shares received upon exercise of options during the fiscal year
ended December 31, 2007.
|
(2)
|
With
respect to options exercised during the fiscal year ended December 31,
2007, the dollar value of the difference between the option exercise price
and the market value of the option shares purchased on the date of the
exercise of the options.
|
Shares
underlying
unexercised
options
which
are:
|
Exercise
|
Expiration
|
||
Name
|
Exercisable
|
Unexercisable
|
Price
|
Date
|
Daniel
O’Brien
|
50,000
|
|
$4.25
|
07/01/07
|
20,000
|
3.60
|
12/31/08
|
||
50,000
|
3.00
|
11/26/09
|
||
200,000
|
3.25
|
01/05/11
|
||
300,000
|
3.25
|
01/05/11
|
Name
|
Paid
in Cash
|
Stock
Awards (1)
|
Option
Awards (2)
|
Robert
N. O’Brien
|
--
|
--
|
--
|
John
H. Bientjes
|
$1,000
|
--
|
--
|
Dale
Friend
|
$1,000
|
--
|
--
|
Eric
Hodges
|
$1,000
|
--
|
--
|
(1)
|
The
fair value of stock issued for services computed in accordance with FAS
123R on the date of grant.
|
(2)
|
The
fair value of options granted computed in accordance with FAS 123R on the
date of grant.
|
Name
|
Option
Price
|
No. of
Options
|
Expiration Date
|
Robert
N. O’Brien
|
$3.25
|
250,000
|
January
5, 2011
|
John
H. Bientjes
|
$3.25
|
5,000
|
January
5, 2011
|
John
H. Bientjes
|
$3.60
|
5,000
|
December
18, 2012
|
Dale
Friend
|
$3.25
|
5,000
|
January
5, 2011
|
Dale
Friend
|
$3.60
|
5,000
|
December
18, 2012
|
Eric
Hodges
|
$3.25
|
5,000
|
January
5, 2011
|
Eric
Hodges
|
$3.60
|
5,000
|
December
18, 2012
|
Item
11.
|
Shares
(1)
|
Percentage
Ownership
|
|
Daniel
B. O’Brien
2614
Queenswood Dr.
Victoria,
BC V8N 1X5
|
4,891,900
|
34.6%
|
Dr.
Robert N. O’Brien
2614
Queenswood Dr.
Victoria,
BC V8N 1X5
|
1,970,000
|
13.9%
|
John
Bientjes
#1-230
West 13th Street,
North
Vancouver, B.C. V7M 1N7
|
35,000
|
0.2%
|
|
Dale
Friend
3009
E. Kent Ave,
Vancouver,
BC V5S 4P6
|
-
|
-
|
|
Eric
Hodges
#110
- 4252 Commerce Circle
Victoria,
BC V8Z 4M2
|
-
|
-
|
|
All
officers and directors
as
a group (5 persons)
|
6,896,900
|
48.7%
|
(1)
|
Includes
shares which may be acquired on the exercise of the stock options, all of
which were exercisable as of __________, listed
below.
|
Name
|
No.
of Options
|
Exercise
Price
|
Expiration
Date
|
Daniel
O’Brien
|
|
|
|
|
20,000
|
$3.60
|
December
31, 2008
|
|
50,000
|
$3.00
|
November
26, 2009
|
|
100,000
|
$3.25
|
January
5, 2011
|
100,000
|
$3.25
|
January
5, 2011
|
|
Dr.
Robert O’Brien
|
|||
|
20,000
|
$3.60
|
December
31, 2008
|
|
25,000
|
$3.00
|
November
26, 2009
|
|
50,000
|
$3.25
|
January
5, 2011
|
50,000
|
$3.25
|
January
5, 2011
|
John
Bientjes
|
|||
|
5,000
|
$3.60
|
December
31, 2008
|
|
5,000
|
$3.00
|
November
26, 2009
|
|
5,000
|
$3.25
|
January
5, 2011
|
Dale
Friend
|
|||
|
5,000
|
$3.60
|
December
31, 2008
|
|
5,000
|
$3.00
|
November
26, 2009
|
|
5,000
|
$3.25
|
January
5, 2011
|
Eric
Hodges
|
|||
5,000
|
$3.60
|
December
31, 2008
|
|
|
5,000
|
$3.00
|
November
26, 2009
|
|
5,000
|
$3.25
|
January
5, 2011
|
Item
13.
|
Number
|
Description
|
3.1
|
Articles
of Incorporation of the Registrant. (1)
|
3.2
|
Bylaws
of the Registrant. (1)
|
21.1
|
Subsidiaries.
(2)
|
23.1
|
|
31.1
|
|
31.2
|
|
32
|
(1)
|
Previously
filed as an exhibit to our Registration Statement on Form 10-SB filed with
the Commission on February 22, 2000, and incorporated herein by
reference.
|
(2)
|
Previously
filed as an exhibit to our Registration Statement on Form SB-2 filed with
the Commission on January 22, 2003, and incorporated herein by
reference.
|
Flexible
Solutions International, Inc.
|
|||
Dated: February
27, 2009.
|
By:
|
/s/ DANIEL B. O'BRIEN | |
Name:
|
Daniel
B. O’Brien
|
||
Title:
|
President
and Chief Executive Officer
|
||
Signature
|
Title
|
Date
|
/s/
DANIEL B. O'BRIEN
Daniel
B. O’Brien
|
President,
Chief Executive Officer, Principal Financial and Accounting Officer
and a Director
|
February
27, 2009
|
/s/
JOHN H. BIENTJES
John
H. Bientjes
|
Director
|
March
3, 2009
|
Robert
N. O’Brien
|
Director
|
|
/s/
DALE FRIEND
Dale
Friend
|
Director
|
March
3, 2009
|
Eric
G. Hodges
|
Director
|