Edgar Filing: FLEXIBLE SOLUTIONS INTERNATIONAL INC

fsi_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2015

o	TRANSITION REPORT PURSUANT TO 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number: 001-31540

FLEXIBLE SOLUTIONS INTERNATIONAL INC.

(Exact Name of Issuer as Specified in Its Charter)

Nevada		91-1922863
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

#206 – 920 Hillside Ave. Victoria, British Columbia, Canada		V8T 1Z8
(Address of Issuer's Principal Executive Offices)		(Zip Code)

Issuer’s telephone number: (250) 477-9969

N/A

(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) had been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer o Accelerated filer o

Non-accelerated filer o Smaller reporting company x

(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act).

Yes o No x

Class of Stock No. Shares Outstanding Date

Common 13,177,991 August 1, 2015

FORM 10-Q

Index

PART I.	FINANCIAL INFORMATION		4

Item 1.	Financial Statements.		4

	(a)	Unaudited Interim Condensed Consolidated Balance Sheets at June 30, 2015 and December 31, 2014.	4

	(b)	Unaudited Interim Condensed Consolidated Statements of Operations for the Three Months Ended June 30, 2015 and 2014.	5

	(c)	Unaudited Interim Condensed Consolidated Statements of Operations for the Six Months Ended June 30, 2015 and 2014.	6

	(d)	Unaudited Interim Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2015 and 2014.	7

	(e)	Notes to Unaudited Interim Consolidated Financial Statements for the Period Ended June 30, 2015.	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation.		21

Item 4.	Controls and Procedures.		25

PART II.	OTHER INFORMATION		25

Item 6.	Exhibits.		25

SIGNATURES			26

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are “forward-looking statements” for the purposes of the federal and state securities laws, including, but not limited to: any projections of earnings, revenue or other financials items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing obligation to disclose material information as required by the federal securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include but are not limited to:

●	Increased competitive pressures from existing competitors and new entrants;

●	Increases in interest rates or our cost of borrowing or a default under any material debt agreement;

●	Deterioration in general or regional economic conditions;

●	Adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;

●	Loss of customers or sales weakness;

●	Inability to achieve future sales levels or other operating results;

●	The unavailability of funds for capital expenditures; and

●	Operational inefficiencies in distribution or other systems.

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014.

PART I FINANCIAL INFORMATION

Item 1. Financial Statements.

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

(U.S. Dollars)

	June 30, 2015 (Unaudited)			December 31, 2014
Assets
Current
Cash and cash equivalents	$	1,125,605		$	747,517
Accounts receivable (Note 3)		2,203,179			2,322,373
Inventory (Note 4)		3,622,137			3,467,438
Prepaid expenses		304,030			123,511
		7,254,951			6,660,839

Property, equipment and leaseholds (Note 5)		4,213,172			4,764,900
Patents (Note 6)		119,548			137,404
Long term deposits (Note 7)		5,186			4,425
Deferred tax asset		2,486,751			2,667,286
	$	14,079,608		$	14,234,854
Liabilities
Current
Accounts payable and accrued liabilities	$	286,341		$	815,141
Deferred revenue		138,454			44,593
Taxes payable		450,613			140,842
Short term line of credit (Note 8)		400,000			750,000
Current portion of long term debt (Note 9)		347,031			358,214
		1,622,439			2,108,790
Long Term
Loans (Note 9)		653,878			754,475
	$	2,276,317		$	2,863,265
Stockholders’ Equity
Capital stock
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
13,169,991 common shares at June 30, 2015 and December 31, 2014		13,170			13,170
Capital in excess of par value		16,262,312			16,227,121
Other comprehensive income		(693,978	)		(267,552	)
Deficit		(3,778,213	)		(4,601,150	)

Total Stockholders’ Equity		11,803,291			11,371,589

Total Liabilities and Stockholders’ Equity	$	14,079,608		$	14,234,854

Commitments (Note 13)

-- See Notes to Unaudited Interim Condensed Consolidated Financial Statements --

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended June 30, 2015 and 2014

(U.S. Dollars -- Unaudited)

	Three Months Ended June 30,
	2015			2014

Sales	$	3,900,922		$	4,286,731
Cost of sales		2,273,992			2,732,022

Gross profit		1,626,930			1,554,709

Operating expenses
Wages		405,418			381,913
Administrative salaries and benefits		187,103			199,659
Advertising and promotion		9,620			5,476
Investor relations and transfer agent fee		42,922			54,494
Office and miscellaneous		72,492			62,586
Insurance		70,237			71,874
Interest expense		14,831			25,940
Rent		31,940			50,562
Consulting		29,844			58,357
Professional fees		61,819			53,557
Travel		29,221			24,763
Telecommunications		8,369			8,158
Shipping		4,996			6,459
Research		15,710			32,020
Commissions		32,460			6,843
Currency exchange		339			1,263
Utilities		4,451			12,323

Total operating expenses		1,021,772			1,056,247

Income (loss) before other items and income tax		605,158			498,462
Gain (loss) on sale of equipment		(18,382	)		-
Interest income		1			-
Income (loss) before income tax		586,777			498,462

Provision for income taxes		268,106			98,709
Net income (loss)		318,671			399,753

Other comprehensive income (loss)		78,343			190,976
Comprehensive income (loss)		397,014			590,729

Net income (loss) per share ( basic and diluted)	$	0.02		$	0.03
Weighted average number of common shares (basic)		13,169,991			13,169,991
Weighted average number of common shares (diluted)		13,427,466			13,169,991

-- See Notes to Unaudited Interim Condensed Consolidated Financial Statements --

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMREPHENSIVE INCOME (LOSS)

For the Six Months Ended June 30, 2015 and 2014

(U.S. Dollars -- Unaudited)

	Six Months Ended June 30,
	2015			2014

Sales	$	8,864,809		$	8,099,712
Cost of sales		5,338,686			5,390,848

Gross profit		3,526,123			2,708,864

Operating expenses
Wages		796,160			802,116
Administrative salaries and benefits		374,378			398,609
Advertising and promotion		25,951			27,950
Investor relations and transfer agent fee		78,099			103,197
Office and miscellaneous		113,593			172,294
Insurance		144,655			146,917
Interest expense		32,177			52,772
Rent		64,366			100,525
Consulting		67,193			138,903
Professional fees		94,466			148,655
Travel		57,427			54,662
Telecommunications		16,529			15,185
Shipping		9,769			17,867
Research		38,410			76,542
Commissions		70,945			70,678
Currency exchange		(10,917	)		(4,149	)
Utilities		14,997			43,257
		1,988,198			2,365,980

Income (loss) before other items and income tax		1,537,925			342,884
Gain (loss) on sale of equipment		(45,249	)		-
Interest income		2,963			-
Income (loss) before income tax		1,495,639			342,884

Provision for income taxes		672,703			98,709
Net income (loss)		822,936			244,175

Other comprehensive income (loss)		(426,426	)		(71,368	)
Comprehensive income (loss)	$	396,510		$	172,807

Net income (loss) per share (basic and diluted)	$	0.06		$	0.01
Weighted average number of common shares (basic)		13,169,991			13,169,991
Weighted average number of common shares (diluted)		13,320,109			13,169,991

-- See Notes to Unaudited Interim Condensed Consolidated Financial Statements --

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30, 2015 and 2014

(U.S. Dollars -- Unaudited)

	Six Months Ended June 30,
	2015			2014

Operating activities
Net income (loss)	$	822,936		$	244,175
Stock compensation expense		35,191			41,385
Depreciation and amortization		285,177			325,886
Changes in non-cash working capital items:
(Increase) Decrease in accounts receivable		109,028			(251,758	)
(Increase) Decrease in inventory		(180,186	)		39,413
(Increase) Decrease in prepaid expenses		(183,749	)		22,561
(Increase) Decrease in deferred tax assets		-			98,709
Increase (Decrease) in accounts payable		(516,939	)		(101,586	)
Increase (Decrease) in taxes payable		309,771			-
Increase (Decrease) in deferred revenue		98,128			(6,848	)

Cash provided by (used in) operating activities		779,357			411,937

Investing activities
Acquisition of property and equipment		51,901			(16,190	)

Cash provided by (used in) investing activities		51,901			(16,190	)

Financing activities
Short term line of credit (repayment)		(350,000	)		(400,000	)
Repayments of loans		(100,597	)		(64,393	)

Cash provided (used) by financing activities		(450,597	)		(464,393	)

Effect of exchange rate changes on cash		(2,573	)		(3,510	)

Inflow (outflow) of cash		378,088			(72,156	)
Cash and cash equivalents, beginning		747,517			568,087

Cash and cash equivalents, ending	$	1,125,605		$	495,931

Supplemental disclosure of cash flow information:
Income taxes paid	$	535,000		$	-
Interest paid	$	32,177		$	55,103

-- See Notes to Unaudited Interim Condensed Consolidated Financial Statements --

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

NOTES TO CONDENSED UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the Period Ended June 30, 2015

(U.S. Dollars)

1. Basis of Presentation.

These condensed consolidated interim financial statements include the accounts of Flexible Solutions International, Inc. (the “Company”, “we”, or “our”), and its wholly-owned subsidiaries Flexible Fermentation Ltd. (“Flexible Ltd.”), NanoChem Solutions Inc. (“NanoChem”), Flexible Solutions Ltd., Flexible Biomass LP, and FS Biomass Inc. All inter-company balances and transactions have been eliminated. The Company was incorporated May 12, 1998 in the State of Nevada and had no operations until June 30, 1998.

Flexible Solutions International Inc. and its subsidiaries develop, manufacture and market specialty chemicals which slow the evaporation of water. One product, HEATSAVR®, is marketed for use in swimming pools and spas where its use, by slowing the evaporation of water, allows the water to retain a higher temperature for a longer period of time and thereby reduces the energy required to maintain the desired temperature of the water in the pool. Another product, WATERSAVR®, is marketed for water conservation in irrigation canals, aquaculture, and reservoirs where its use slows water loss due to evaporation. In addition to the water conservation products, the Company also manufactures and markets water-soluble chemicals utilizing thermal polyaspartate biopolymers (hereinafter referred to as “TPAs”), which are beta-proteins manufactured from the common biological amino acid, L-aspartic. TPAs can be formulated to prevent corrosion and scaling in water piping within the petroleum, chemical, utility and mining industries. TPAs are also used as proteins to enhance fertilizers in improving crop yields and as additives for household laundry detergents, consumer care products and pesticides.

These unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements. These financial statements are condensed and do not include all disclosures required for annual financial statements. The organization and business of the Company, accounting policies followed by the Company and other information are contained in the notes to the Company’s audited consolidated financial statements filed as part of the Company’s December 31, 2014 Annual Report on Form 10-K. This quarterly report should be read in conjunction with such annual report.

In the opinion of the Company’s management, these consolidated financial statements reflect all adjustments necessary to present fairly the Company’s consolidated financial position at June 30, 2015, the consolidated results of operations for the three and six months ended June 30, 2015 and 2014, and the consolidated statements of cash flows for the six months ended June 30, 2015 and 2014. The results of operations for the three and six months ended June 30, 2015 are not necessarily indicative of the results to be expected for the entire fiscal year.

2. Significant Accounting Policies.

These condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States applicable to a going concern and reflect the policies outlined below.

(a) Cash and Cash Equivalents.

The Company considers all highly liquid investments purchased with an original or remaining maturity of less than three months at the date of purchase to be cash equivalents. Cash and cash equivalents are maintained with several financial institutions.

(b) Inventories and Cost of Sales

The Company has three major classes of inventory: finished goods, work in progress and raw materials. In all classes, inventory is valued at the lower of cost or market. Cost is determined on a first-in, first-out basis. Cost of sales includes all expenditures incurred in bringing the goods to the point of sale. Inventory costs and costs of sales include direct costs of the raw material, inbound freight charges, warehousing costs, handling costs (receiving and purchasing) and utilities and overhead expenses related to the Company’s manufacturing and processing facilities.

The Company provides an allowance for doubtful accounts when management estimates collectibility to be uncertain. Accounts receivable are continually reviewed to determine which, if any, accounts are doubtful of collection. In making the determination of the appropriate allowance amount, the Company considers current economic and industry conditions, relationships with each significant customer, overall customer credit-worthiness and historical experience.

(d) Property, Equipment and Leaseholds.

The following assets are recorded at cost and depreciated using the methods and annual rates shown below:

Computer hardware		30% Declining balance
Furniture and fixtures		20% Declining balance
Manufacturing equipment		20% Declining balance
Office equipment		20% Declining balance
Building and improvements		10% Declining balance

Property and equipment are written down to net realizable value when management determines there has been a change in circumstances which indicates its carrying amount may not be recoverable. No write-downs have been necessary to date.

(e) Impairment of Long-Lived Assets.

In accordance with FASB Codification Topic 360, “Property, Plant and Equipment (ASC 360), the Company reviews long-lived assets, including, but not limited to, property and equipment, patents and other assets, for impairment annually or whenever events or changes in circumstances indicate the carrying amounts of assets may not be recoverable. The carrying value of long-lived assets is assessed for impairment by evaluating operating performance and future undiscounted cash flows of the underlying assets. If the sum of the expected future cash flows of an asset is less than its carrying value, an impairment measurement is indicated. Impairment charges are recorded to the extent that an asset’s carrying value exceeds its fair value. Accordingly, actual results could vary significantly from such estimates. There were no impairment charges during the periods presented.

(f) Foreign Currency.

The functional currency of three of the Company’s subsidiaries is the Canadian Dollar. The translation of the Canadian Dollar to the reporting currency of the Company, the U.S. Dollar is performed for assets and liabilities using exchange rates in effect at the balance sheet date. Revenue and expense transactions are translated using average exchange rates prevailing during the year. Translation adjustments arising on conversion of the Company’s financial statements from the subsidiary’s functional currency, Canadian Dollars, into the reporting currency, U.S. Dollars, are excluded from the determination of income (loss) and are disclosed as other comprehensive income (loss) in the Statement of Comprehensive Income (Loss).

Foreign exchange gains and losses relating to transactions not denominated in the applicable local currency are included in operating income (loss) if realized during the year and in comprehensive income (loss) if they remain unrealized at the end of the year.

(g) Revenue Recognition.

Revenue from product sales is recognized at the time the product is shipped since title and risk of loss is transferred to the purchaser upon delivery to the carrier. Shipments are made F.O.B. shipping point. The Company recognizes revenue when there is persuasive evidence of an arrangement, delivery to the carrier has occurred, the fee is fixed or determinable, collectability is reasonably assured and there are no significant remaining performance obligations. When significant post-delivery obligations exist, revenue is deferred until such obligations are fulfilled. To date there have been no such significant post-delivery obligations.

Since the Company’s inception, product returns have been insignificant; therefore no provision has been established for estimated product returns.

Deferred revenues consist of products sold to distributors with payment terms greater than the Company’s customary business terms due to lack of credit history or operating in a new market in which the Company has no prior experience. The Company defers the recognition of revenue until the criteria for revenue recognition have been met, and payments become due or cash is received from these distributors.

(h) Stock Issued in Exchange for Services.

The Company’s common stock issued in exchange for services is valued at an estimated fair market value based upon trading prices of the Company’s common stock on the dates of the stock transactions. The corresponding expense of the services rendered is recognized over the period that the services are performed.

(i) Stock-based Compensation.

The Company recognizes compensation expense for all share-based payments, in accordance with FASB Codification Topic 718, Compensation — Stock Compensation, (ASC 718). Under the fair value recognition provisions of ASC 718, the Company recognizes share-based compensation expense, net of an estimated forfeiture rate, over the requisite service period of the award.

The fair value at grant date of stock options is estimated using the Black-Scholes-Merton option-pricing model. Compensation expense is recognized on a straight-line basis over the stock option vesting period based on the estimated number of stock options that are expected to vest. Shares are issued from treasury upon exercise of stock options.

(j) Comprehensive Income.

Other comprehensive income refers to revenues, expenses, gains and losses that under generally accepted accounting principles are included in comprehensive income, but are excluded from net income as these amounts are recorded directly as an adjustment to stockholders’ equity. The Company’s other comprehensive income is primarily comprised of unrealized foreign exchange gains and losses.

(k) Income (loss) Per Share.

Basic earnings (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding in the period. Diluted earnings (loss) per share are calculated giving effect to the potential dilution of the exercise of options and warrants. Common equivalent shares, composed of common shares issuable upon the exercise of stock options and warrants are included in diluted net income per share to the extent that these shares are dilutive. Common equivalent shares that have an anti-dilutive effect on net income per share have been excluded from the calculation of diluted weighted average shares outstanding for the three and six months ended June 30, 2015.

(l) Use of Estimates.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and would impact the results of operations and cash flows.

Estimates and underlying assumptions are reviewed at each period end. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Significant areas requiring the use of management estimates include assumptions and estimates relating to the asset impairment analysis, share-based payments and warrants, valuation allowances for deferred income tax assets, determination of useful lives of property, plant and equipment, and the valuation of inventory.

(m) Financial Instruments.

The fair market value of the Company’s financial instruments, comprising cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, short term line of credit, and loan, were estimated to approximate their carrying values due to immediate or short-term maturity of these financial instruments. The Company maintains cash balances at financial institutions which at times, exceed federally insured amounts. The Company has not experienced any material losses in such accounts.

The Company is exposed to foreign exchange and interest rate risk to the extent that market value rate fluctuations materially differ from financial assets and liabilities, subject to fixed long-term rates.

(n) Fair Value of Financial Instruments

In August 2009, an update was made to Fair Value Measurements and Disclosures — “Measuring Liabilities at Fair Value.” This update permits entities to measure the fair value of liabilities, in circumstances in which a quoted price in an active market for an identical liability is not available, using a valuation technique that uses a quoted price of an identical liability when traded as an asset, quoted prices for similar liabilities or similar liabilities when traded as assets, or the income or market approach that is consistent with the principles of Fair Value Measurements and Disclosures.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs described below, of which the first two are considered observable and the last unobservable, that may be used to measure fair value.

●	Level 1 – Quoted prices in active markets for identical assets or liabilities

●

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

●	Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities and short term line of credit for all periods presented approximate their respective carrying amounts due to the short term nature of these financial instruments

(o) Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company's management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company's legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the Company's financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Legal fees associated with loss contingencies are expensed as incurred.

(p) Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. 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. Deferred tax assets are reduced by a valuation allowance so that the assets are recognized only to the extent that when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized.

Per FASB ASC 740 “Income taxes” under the liability method, it is the Company’s policy to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. At June 30, 2015, the Company believes it has appropriately accounted for any unrecognized tax benefits. To the extent the Company prevails in matters for which a liability for an unrecognized benefit is established or is required to pay amounts in excess of the liability, the Company’s effective tax rate in a given financial statement period may be affected. Interest and penalties associated with the Company’s tax positions are recorded as Interest Expense.

(q) Risk Management

The Company’s credit risk is primarily attributable to its account receivables. The amounts presented in the accompanying consolidated balance sheets are net of allowances for doubtful accounts, estimated by the Company’s management based on prior experience and the current economic environment. The Company is exposed to credit-related losses in the event of non-performance by counterparties to the financial instruments. Credit exposure is minimized by dealing with only credit worthy counterparties. Accounts receivable for the Company’s three primary customers totaled $1,355,377 (61%) at June 30, 2015 (December 31, 2014 - $1,769,114 or 76%).

The credit risk on cash and cash equivalents is limited because the Company limits its exposure to credit loss by placing its cash and cash equivalents with major financial institutions.

The Company is not exposed to significant interest rate risk to the extent that the long term debt maintained from the foreign government agencies is subject to a fixed rate of interest.

In order to manage its exposure to foreign exchange risks, the Company is closely monitoring the fluctuations in the foreign currency exchange rates and the impact on the value of cash and cash equivalents, accounts receivable, and accounts payable.

( r ) Recently Adopted Accounting Pronouncements

On May 28, 2014, the Financial Accounting Standards Board (the “FASB”)and the International Accounting Standards Board (the “IASB”) issued substantially converged final standards on revenue recognition. The FASB's Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), was issued in three parts: (a) Section A,“Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606)and Other Assets and Deferred Costs-Contracts with Customers (Subtopic 340-40),” (b) Section B,“Conforming Amendments to Other Topics and Subtopics in the Codification and Status Tables” and (c) Section C, “Background Information and Basis for Conclusions.” The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new revenue recognition guidance becomes effective for the Company on January 1, 2017, and early adoption is not permitted. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance in the ASU. The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

In April 2014, the FASB issued new guidance on the definition of a discontinued operation that requires entities to provide additional disclosures about disposal transactions that do not meet the discontinued operations criteria. The new guidance narrows the focus of discontinued operations to those components that are disposed of or classified as held-for-sale and that represent a strategic shift that has or will have a major impact on the entity’s operations or financial results. The guidance is effective prospectively for all disposals or components initially classified as held-for-sale in periods beginning on or after December 15, 2014. Early adoption is permitted. Upon adoption, this guidance did not have a material impact on the Company’s consolidated results of operations or financial position.

In August 2014, the FASB issued new guidance on determining when and how to disclose going -concern uncertainties in the financial statements. The new guidance requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about its ability to continue as a going concern. The guidance is effective for annual periods ending after December 15, 2016 and interim periods thereafter. Early adoption is permitted. Upon adoption, the Company does not believe this guidance will have a material impact on its consolidated results of operations or financial position.

In February 2015, the FASB issued ASU No. 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis"("ASU 2015-02"). ASU 2015-02 makes several modifications to the consolidation guidance for variable interest entities ("VIEs") and general partners' investments in limited partnerships, as well as modifications to the evaluation of whether limited partnerships are

VIEs or voting interest entities. It is effective for annual and interim periods beginning after December 15, 2015. Early adoption is permitted. The Company is evaluating the impact of the amended guidance on its consolidated financial statements.

3. Accounts Receivable

	June 30, 2015			December 31, 2014
Accounts receivable	$	2,221,893		$	2,363,492
Allowances for doubtful accounts		(18,714	)		(41,119	)
	$	2,203,179		$	2,322,373

4. Inventory

	June 30, 2015		December 31, 2014
Completed goods	$	1,637,426	$	1,449,640
Works in progress		124,118		1,216
Raw materials		1,860,593		2,016,582
	$	3,622,137	$	3,467,438

5. Property, Plant & equipment

	June 30, 2015		Accumulated		June 30, 2015
	Cost		Depreciation		Net
Buildings	$	4,933,770	$	2,716,160	$	2,217,610
Computer hardware		93,120		86,506		6,614
Furniture and fixtures		24,331		21,187		3,144
Office equipment		19,074		17,628		1,446
Manufacturing equipment		5,305,047		3,810,727		1,494,320
Trailer		13,822		12,687		1,135
Boat		34,400		-		34,400
Technology		109,371		76,560		32,811
Land		421,692		-		421,692
	$	10,954,627	$	6,741,455	$	4,213,172

	December 31, 2014		Accumulated		December 31, 2014
	Cost		Depreciation		Net
Buildings	$	5,065,433	$	2,653,287	$	2,412,146
Computer hardware		97,124		89,083		8,041
Furniture and fixtures		25,548		21,906		3,642
Office equipment		20,537		18,807		1,730
Manufacturing equipment		5,710,354		3,864,204		1,846,150
Trailer		14,882		13,444		1,438
Technology		117,758		64,767		52,991
Land		438,762		-		438,762
	$	11,490,398	$	6,725,498	$	4,764,900

Amount of depreciation expense for the six months ended June 30, 2015: $276,975 (2014: $316,649).

6. Patents

In fiscal 2005, the Company started the patent process for additional WATER$AVR® products. Patents associated with these costs were granted in 2006 and they have been amortized over their legal life of 17 years.

		June 30, 2015 Cost				Accumulated Amortization				June 30, 2015 Net
Patents		$	212,357			$	92,809			$	119,548

		December 31, 2014 Cost				Accumulated Amortization				December 31, 2014 Net
Patents		$	228,597			$	91,193			$	137,404

Decrease in 2015 cost was due to currency conversion. June 30, 2015 cost in Canadian dollars - $265,102 (December 31, 2014 - $265,102 in Canadian dollars).

Amount of amortization for the six months ended June 30, 2015 - $8,202 (2014 - $9,237)

Estimated amortization expense over the next five years is as follows:

2015	$ 16,404
2016	16,404
2017	16,404
2018	16,404
2019	16,404

7. Long Term Deposits

The Company has reclassified certain security deposits to better reflect their long term nature. Long term deposits consist of damage deposits held by landlords and security deposits held by various vendors.

		June 30, 2015				December 31, 2014
Long term deposits		$	5,186			$	4,425

8. Short-Term Line of Credit

In April 2015, the Company signed a new agreement with Harris Bank to renew the expiring credit line. The revolving line of credit is for an aggregate amount of up to the lesser of (i) $3,000,000, or (ii) 75% of eligible domestic accounts receivable and certain foreign accounts receivable plus 40% of inventory. The loan has an annual interest rate of 3.75%.

The Revolving Line of Credit contains customary affirmative and negative covenants, including the following: compliance with laws, provision of financial statements and periodic reports, payment of taxes, maintenance of inventory and insurance, maintenance of operating accounts at the Bank, the Bank’s access to collateral, formation or acquisition of subsidiaries, incurrence of indebtedness, dispositions of assets, granting liens, changes in business, ownership or business locations, engaging in mergers and acquisitions, making investments or distributions and affiliate transactions. The covenants also require that the Company maintain a minimum ratio of qualifying financial assets to the sum of qualifying financial obligations. As of June 30, 2015, Company was in compliance with all loan covenants.

To secure the repayment of any amounts borrowed under the Revolving Line of Credit, the Company granted the Bank a security interest in substantially all of the assets of NanoChem Solutions Inc., exclusive of intellectual property assets.

Short-term borrowings outstanding under the Revolving Line as of June 30, 2015 were $400,000 (December 31, 2014 - $750,000).

9. Long Term Debt

(a) Flexible Solutions Ltd. has received a non-interest bearing, unsecured loan from the Department of Agriculture and Agri-Food Canada (“AAFC”). Eligible for up to $1,000,000 in Canadian funds, the Company had borrowed $910,801in Canadian funds (US$729,187) as of June 30, 2015 on an unsecured basis (December 31, 2014 – CDN$910,801; US$785,106). The balance owing at June 30, 2015 was $182,160 in Canadian funds (US$145,837); (December 31, 2014 - $182,160CDN; US$157,021). The repayment schedule is as follows:

Amount Due (in CDN funds)	Payment Due Date
$182,160	December 31, 2015

(b) Flexible Solutions Ltd. has also received a 5% simple interest loan from Agriculture Financial Services Corp. (“AFSC”). Eligible for up to $2,000,000 in Canadian funds, the Company had originally borrowed $1,491,000 in Canadian funds. The Company was required to make interest payments until May 1, 2010 and then started to pay down the principal in equal payments until April 1, 2015. The Company had pledged the assets of the Taber, AB building, including equipment, inventory and accounts receivable as collateral, as well as signed a promissory note guaranteeing the amount of the loan. The Company repaid this loan in full in September 2014.

Harris Bank with a rate of prime plus 0.5% to be repaid over 5 years with equal monthly installments plus interest. This money was used to retire the AFSC debt and make the December 2014 payment on the AAFC loan. The balance owing at June 30, 2015 was $855,072 (December 31, 2014 - US$955,668).

The Company has committed to the following repayments:

2015	$ 100,597
2016	$ 201,193
2017	$ 201,193
2018	$ 201,193
2019	$ 150,895

As of June 30, 2015 the Company was in compliance with all loan covenants.

	June 30, 2015			December 31, 2014
Continuity
Balance, beginning of period	$	1,112,689			1,297,830
Plus: Proceeds from loans		-			1,005,967
Less: Payments on loan		(100,597	)		(982,973	)
Effect of exchange rate		(11,183	)		(208,135	)
Balance, end of period	$	1,000,909		$	1,112,689

Outstanding balance at:
a) Long term debt – AAFC	$	145,837		$	157,021
b) Long term debt – AFSC		-			-
c) Long term debt - Harris		855,072			955,668
Long term debt	$	1,000,909		$	1,112,689
Less: current portion		(347,031	)		(358,214	)
Balance	$	653,878		$	754,475

10. Stock Options

The Company adopted a stock option plan ("Plan"). The purpose of this Plan is to provide additional incentives to key employees, officers, directors and consultants of the Company and its subsidiaries in order to help attract and retain the best available personnel for positions of responsibility and otherwise promoting the success of its business. It is intended that options issued under this Plan constitute non-qualified stock options. The general terms of awards under the option plan are that 100% of the options granted will vest the year following the grant. The maximum term of options granted is 5 years.

The Company may issue stock options and stock bonuses for shares of its common stock to provide incentives to directors, key employees and other persons who contribute to the success of the Company. The exercise price of all options is not less than fair market value at the date of grant.

The following table summarizes the Company’s stock option activity for the year ended December 31, 2014 and the six month period ended June 30, 2015:

	Number of shares			Exercise price per share		Weighted average exercise price

Balance, December 31, 2013		1,164,000		$	1.21 – 2.45	$	1.73
Granted		227,000		$	1.00 – 1.21	$	1.01
Cancelled or expired		(265,000	)	$	1.00 – 2.25	$	1.91
Balance, December 31, 2014		1,126,000		$	1.00 – 2.45	$	1.54
Granted		159,000		$	1.05	$	1.05
Cancelled or expired		(236,000	)	$	1.00 - 2.22	$	1.73
Balance, June 30, 2015		1,049,000		$	1.00 – 2.45	$	1.43
Exercisable, June 30, 2015		837,000		$	1.00 – 2.45	$	1.49

The fair value of each option grant is calculated using the following weighted average assumptions:

	2015			2014
Expected life – years		3.0			3.0
Interest rate		1.07	%		0.78	%
Volatility		61	%		58	%
Dividend yield		—	%		—	%
Weighted average fair value of options granted	$	0.49		$	0.36

During the six months ended June 30, 2015 the Company granted 60,000 options to consultants that resulted in $11,782 in expenses this quarter. During the same period, 99,000 options were granted to employees, resulting in $19,440 in expenses this quarter. Options granted in previous quarters resulted in additional expenses in the amount of $1,674 for consultants and $2,295 for employees during the quarter ended June 30, 2015. No stock options were exercised during the period.

During the six months ended June 30, 2014 the Company granted 85,000 options to consultants that resulted in $6,161 in expenses this quarter. During the same period, 127,000 options were granted to employees, resulting in $9,205 in expenses this quarter. Options granted in previous quarters resulted in additional expenses in the amount of $1,871 for consultants and $3,456 for employees during the quarter ended June 30, 2014. No stock options were exercised during the period.

As of June 30, 2015, there was approximately $35,191 of compensation expense related to non-vested awards. This expense is expected to be recognized over a weighted average period of .5 years.

The aggregate intrinsic value of vested stock options outstanding at June 30, 2015 is $478,730.

11. Capital Stock.

There was no stock activity for the six months ended June 30, 2015.

12. Segmented, Significant Customer Information and Economic Dependency.

The Company operates in two segments:

(a) Energy and water conservation products (as shown under the column heading “EWCP” below), which consists of a (i) liquid swimming pool blanket which saves energy and water by inhibiting evaporation from the pool surface, and (ii) food-safe powdered form of the active ingredient within the liquid blanket and which is designed to be used in still or slow moving drinking water sources.

(b) Biodegradable polymers and chemical additives used within the petroleum, chemical, utility and mining industries to prevent corrosion and scaling in water piping (as shown under the column heading “BPCA” below). These chemical additives can also be used in laundry and dish detergents, as well as in products to reduce levels of insecticides, herbicides and fungicides.

The accounting policies of the segments are the same as those described in Note 2, Significant Accounting Policies. The Company evaluates performance based on profit or loss from operations before income taxes, not including nonrecurring gains and losses and foreign exchange gains and losses.

The Company’s reportable segments are strategic business units that offer different, but synergistic products and services. They are managed separately because each business requires different technology and marketing strategies.

Six months ended June 30, 2015:

	EWCP			BPCA			Total
Revenue	$	446,002		$	8,418,807		$	8,864,809
Interest revenue		1			2,962			2,963
Interest expense		1			32,176			32,177
Depreciation and amortization		193,819			91,358			285,177
Segment profit (loss)		(589,560	)		1,412,496			822,936
Segment assets		2,653,187			1,679,533			4,332,720
Expenditures for segment assets		252,951			(201,050	)		51,901

Six months ended June 30, 2014:

	EWCP			BPCA		Total
Revenue	$	358,703		$	7,741,009	$	8,099,712
Interest revenue		0			0		0
Interest expense		22,010			30,762		52,772
Depreciation and amortization		231,328			94,558		325,886
Segment profit (loss)		(930,663	)		1,174,838		244,175
Segment assets		4,012,578			1,657,349		5,669,927
Expenditures for segment assets		6,199			9,991		16,190

The sales generated in the United States and Canada are as follows:

	Six Months Ended June 30, 2015		Six Months Ended June 30, 2014
Canada	$	270,775	$	332,248
United States and abroad		8,594,034		7,767,464
Total	$	8,864,809	$	8,099,712

The Company’s property, equipment, leasehold and patents are located in Canada and the United States as follows:

	June 30, 2015		December 31, 2014
Canada	$	2,652,604	$	3,331,879
United States		1,680,116		1,570,424
Total	$	4,332,720	$	4,902,304

Three customers accounted for $5,373,518 (61%) of sales during the six months ended June 30, 2015 (2014 - $5,032,361 or 62%). Three customers accounted for $1,355,377 of accounts receivable (62%) at June 30, 2015 (December 31, 2014 – $1,796,114 or 76%).

13. Commitments.

The Company is committed to minimum rental payments for property and premises aggregating approximately $36,431 over the term of two leases, the last expiring on October 31, 2015.

Commitments in each of the next two years are approximately as follows:

2015

36,431

14. Subsequent Events

The Company issued 8,000 shares upon the exercise of employee stock options in July 2015.

15. Comparative Figures.

Certain of the comparative figures have been reclassified to conform with the current year’s presentation.

Item 2.

Management’s Discussion and Analysis of Results of Operation and Financial Condition.

Overview

The Company develops, manufactures and markets specialty chemicals that slow the evaporation of water. The Company also manufactures and markets biodegradable polymers which are used in the oil, gas and agriculture industries.

Results of Operations

The Company has two product lines:

Energy and Water Conservation products - The Company’s HEAT$AVR® product is used in swimming pools and spas. The product forms a thin, transparent layer on the water’s surface. The transparent layer slows the evaporation of water, allowing the water to retain a higher temperature for a longer period of time and thereby reducing the energy required to maintain the desired temperature of the water. WATER$AVR®, a modified version of HEAT$AVR®, can be used in reservoirs, potable water storage tanks, livestock watering ponds, canals, and irrigation ditches.

BCPA products - The second product, TPA’s (i.e. thermal polyaspartate biopolymers), are biodegradable polymers used by the petroleum, chemical, utility and mining industries to prevent corrosion and scaling in water piping. TPA’s can also be used in detergents to increase biodegradability and in agriculture to increase crop yields by enhancing fertilizer uptake.

Material changes in the Company’s Statement of Operations for the three and six months ended June 30, 2015 are discussed below:

Six Months ended June 30, 2015

Item	Increase (I) or Decrease (D)	Reason
Sales EWCP products	I	The addition of new customers.

Gross Profit, as a % of sales	I	Lower oil prices reduced aspartic acid costs.

Office and miscellaneous	D	Reduced since the Taber plant is no longer operational.
Rent	D	Head office moved to a smaller place, resulting in reduced rent.


Consulting	D	Reduced since Taber plant no longer in operation.

Professional fess	D	Termination of litigation resulted in reduced professional fees.

Research	D	Costs for the prior period were associated with research into and regulatory compliance for new nitrogen conservation product.

Utilities	D	Reduced since Taber plant is no longer in operation.

Three months ended June 30, 2015

Item	Increase (I) or Decrease (D)	Reason
Sales EWCP products	I	The addition of new customers.

BPCA products	D	Q1 2015 Agriculture sales were much higher than the prior year. This increase was followed by a year over year decrease in Q2 2015, indicating that Q1 sales pulled revenue from Q2.

Gross Profit, as a % of sales	I	Lower oil prices reduced aspartic acid costs.

Interest	D	Reduction in amount borrowed reduced interest costs.

Consulting	D	Reduced since the Taber plant no longer in operation.

Research	D	Costs for the prior period were associated with research into and regulatory compliance for new nitrogen conservation product.

Commissions	I	Commissionable sales increased against uncommissionable sales.

Utilities	D	Reduced since Taber plant is no longer in operation.

Three customers accounting for 62% of our sales during the three months ended June 30, 2014 (2014 – 69%) and 61% of our sales during the six months ended June 30, 2014 (2014 – 62%) . The amount of revenue (all from the sale of BPCA products) attributable to each customer is shown below.

	Three months ended June 30,				Six months ended June 30,
Customer	2015		2014		2015		2014

A	$	1,226,031	$	1,116,417	$	2,310,896	$	2,123,958
B	$	975,519	$	1,248,017	$	2,167,821	$	2,114,042
C		-	$	546,105	$	894,801	$	794,361
D	$	213,159		-		-		-

Customers with balances greater than 10% of our receivables as of June 30, 2015 and 2014 are shown below:

	June 30,
	2015		2014
Company A		885,839		767,189
Company B		327,674		782,499

In 2007, we began construction of a plant in Taber, AB, Canada. The plant came on line during 2012 and we began depreciating the plant and related equipment effective January 2012.

The plant was designed to manufacture aspartic acid which is the major component of TPAS. Previously, we bought aspartic acid from China where the base raw material is oil. The plant used sugar as the base raw material. We believe that using aspartic acid manufactured from sugar would reduce our raw material costs, reduce price fluctuations generated by oil prices and reduce shipping costs.

In February 2014, we suspended production of aspartic acid at our Taber plant. The suspension was due to the fact that since construction of the plant began in 2008, economic conditions in Alberta and worldwide have changed significantly. In particular, plant operating costs increased and the price of aspartic acid derived from oil was less than forecast.

Although we continue to believe in the technical and economic viability of using sugar in the aspartic acid process that we have pioneered, we are unable to fund the equipment and personnel increases needed to reach break-even levels on our own. Accordingly, a partner is required to build on the technical successes achieved to date and reach profitable production levels.

While we are actively seeking a partner to complete process development, staffing at the Taber plant has been reduced to levels needed to maintain the intellectual property and the process equipment we have developed.

We expect that the suspension of the operations at the Taber plant will save us approximately $800,000 per year in plant operating costs and general and administrative expenses.

Other factors that will most significantly affect future operating results will be:

●

the sale price of crude oil which is used in the manufacture of aspartic acid we import from China. Aspartic acid is a key ingredient in our BCPA product;

●

activity in the oil and gas industry, as we sell our BCPA product to oil and gas companies; and

●

drought conditions, since we also sell our BCPA product to farmers.

Other than the foregoing we do not know of any trends, events or uncertainties that have had, or are reasonably expected to have, a material impact on our revenues or expenses.

Capital Resources and Liquidity

The Company’s sources and (uses) of cash for the six months ended June 30, 2015 and 2014 are shown below:

	2015			2014
Cash provided by (used by) operations		779,357			411,937
Sale/purchases of equipment		51,901			(16,190	)
Advances from (repayments of) short term line of credit		(350,000	)		(400,000	)
Repayment of loans		(100,597	)		(64,393	)
Changes in exchange rates		(2,573	)		(3,510	)

The Company has sufficient cash resources to meets its future commitments and cash flow requirements for the coming year. As of June 30, 2015 working capital was $5,632,512 (December 31, 2014 - $4,552,049) and the Company has no substantial commitments that require significant outlays of cash over the coming fiscal year.

The Company is committed to minimum rental payments for property and premises aggregating approximately $36,431 over the term of two leases, the last expiring on October 31, 2015.

Commitments in each of the next two years are approximately as follows:

2015

36,431

Other than as disclosed above, the Company does not anticipate any capital requirements during the remainder of 2015.

Other than as disclosed above, the Company does not know of any trends, demands, commitments, events or uncertainties that will result in, or that are reasonable likely to result in, its liquidity increasing or decreasing in any material way.

Other than as disclosed above, the Company does not know of any significant changes in its expected sources and uses of cash.

The Company does not have any commitments or arrangements from any person to provide it with any equity capital.

See Note 2 to the financial statements included as part of this report for a description of the Company’s significant accounting policies.

Item 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the direction and with the participation of our management, including our Principal Executive and Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2015. We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic reports with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations, and that such information is accumulated and communicated to our management, including our principal executive and financial officer, as appropriate, to allow timely decisions regarding required disclosure. Our disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching desired disclosure control objectives. Based on the evaluation, our Principal Executive and Financial Officer concluded that these disclosure controls and procedures are effective as of June 30, 2015.

Changes in Internal Control over Financial Reporting

Our management, with the participation of our Principal Executive and Financial Officer, evaluated whether any change in our internal control over financial reporting occurred during the three months ended June 30, 2015. Based on that evaluation, it was concluded that there has been no change in our internal control over financial reporting during the three months ended June 30, 2015 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

Item 6. Exhibits.

Number	Description
3.1	Amended and Restated Certificate of Incorporation of the registrant. (1)
3.2	Bylaws of the registrant. (1)
31.1	Certification of Principal Executive Officer Pursuant to §302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of Principal Financial Officer Pursuant to §302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of Principal Executive and Financial Officer Pursuant to 18 U.S.C. §1350 and §906 of the Sarbanes-Oxley Act of 2002.*

______________

* Filed with this report.

(1)	Incorporated by reference to the registrant’s Registration Statement on Form 10-SB (SEC File. No. 000-29649) filed February 22, 2000.

SIGNATURES

In accordance with the requirements of Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

August 14, 2015

	Flexible Solutions International, Inc.

	By:	/s/ Daniel B. O’Brien
		Daniel B. O’Brien
		President and Principal Executive Officer

	By:	/s/ Daniel B. O’Brien
		Daniel B. O’Brien
		Principal Financial and Accounting Officer