FLEXIBLE SOLUTIONS INTERNATIONAL INC - FORM 10-Q

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EX-31.1 - CERTIFICATION - FLEXIBLE SOLUTIONS INTERNATIONAL INC	fsi_ex311.htm
EX-32.1 - CERTIFICATION - FLEXIBLE SOLUTIONS INTERNATIONAL INC	fsi_ex321.htm
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EX-31.2 - CERTIFICATION - FLEXIBLE SOLUTIONS INTERNATIONAL INC	fsi_ex312.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2013

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 registrant as Specified in Its Charter)

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

615 Discovery St. Victoria, British Columbia, Canada		V8T 5G4
(Address of Principal Executive Offices)		(Zip Code)

Registrant’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 þ 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 þ 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 þ
(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 þ

Class of Stock	No. Shares Outstanding	Date
Common	13,169,991	November 1, 2013

FORM 10-Q

Index

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements.

	(a)	Unaudited Condensed Consolidated Balance Sheets at September 30, 2013 and December 31, 2012.	4

	(b)	Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended September 30, 2013 and 2012.	5

	(c)	Unaudited Condensed Consolidated Statements of Operations for the Nine Months Ended September 30, 2013 and 2012.	6

	(d)	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and 2012.	7

	(e)	Notes to Unaudited Condensed Consolidated Financial Statements for the Period Ended September 30, 2013.	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation.		19

Item 4.	Controls and Procedures.		21

PART II.	OTHER INFORMATION		22

Item 6.	Exhibits.		22

SIGNATURES			23

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, 2012.

PART I FINANCIAL INFORMATION

Item 1. Financial Statements.

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars)

	September 30, 2013 (Unaudited)			December 31, 2012
Assets
Current
Cash and cash equivalents	$	522,964		$	361,867
Accounts receivable (Note 3)		2,301,623			2,199,359
Inventory (Note 4)		3,261,144			3,361,760
Prepaid expenses		176,926			127,009
		6,262,657			6,049,995

Property, equipment and leaseholds (Note 5)		6,129,966			7,185,730
Patents (Note 6)		179,226			200,512
Long term deposits (Note 7)		7,640			7,893
Deferred tax asset		292,111			292,111
	$	12,871,600		$	13,736,241
Liabilities
Current
Accounts payable and accrued liabilities	$	554,734		$	677,969
Deferred revenue		263,988			312,556
Taxes payable		(74,002	)		45,998
Short term line of credit (Note 8)		1,400,000			1,205,000
Current portion of long term debt (Note 9)		312,703			318,644
		2,457,423			2,560,167
Long Term
Loans (Note 9)		1,237,550			1,407,406
	$	3,694,973		$	3,967,573
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 (December 31, 2012: 13,169,991) common shares		13,170			13,170
Capital in excess of par value		16,096,710			16,006,798
Other comprehensive income		439,447			574,829
Deficit		(7,372,700	)		(6,826,129	)

Total Stockholders’ Equity		9,176,627			9,768,668

Total Liabilities and Stockholders’ Equity	$	12,871,600		$	13,736,241

Commitments and contingencies (Note 13)

-- See Notes to Unaudited Consolidated Financial Statements --

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended September 30, 2013 and 2012

(U.S. Dollars -- Unaudited)

	Three Months Ended September 30,
	2013			2012

Sales	$	2,980,999		$	3,598,032
Cost of sales		2,430,190			2,567,853

Gross profit		550,809			1,030,179

Operating expenses
Wages		434,333			410,369
Administrative salaries and benefits		190,462			153,280
Advertising and promotion		2,401			10,895
Investor relations and transfer agent fee		52,390			58,008
Office and miscellaneous		201,799			167,339
Insurance		78,707			70,899
Interest expense		26,869			24,223
Rent		47,540			44,984
Consulting		75,900			78,755
Professional fees		34,993			152,936
Travel		23,412			38,431
Telecommunications		8,054			7,793
Shipping		3,611			12,713
Research		23,277			14,608
Commissions		10,517			42,751
Bad debt expense		736			(395	)
Currency exchange		(4,678	)		(5,219	)
Utilities		21,906			34,824

Total operating expenses		1,232,229			1,317,194

Income (loss) before other items and income tax		(681,420	)		(287,015	)
Interest income		2,000			398
Income (loss) before income tax		(679,420	)		(286,617	)

Income tax (recovery)		2,480			171,468
Net income (loss)		(681,900	)		(458,085	)

Other comprehensive income (loss)		71,182			154,822
Comprehensive income (loss)		(610,718	)		(303,263	)

Net income (loss) per share (basic and diluted)	$	(0.05	)	$	(0.02	)
Weighted average number of common shares (basic)		13,169,991			13,169,991
Weighted average number of common shares (diluted)		13,169,991			13,169,991

-- See Notes to Unaudited Consolidated Financial Statements --

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Nine Months Ended September 30, 2013 and 2012

(U.S. Dollars -- Unaudited)

	Nine Months Ended September 30,
	2013			2012

Sales	$	12,370,163		$	12,553,832
Cost of sales		8,899,830			8,442,563

Gross profit		3,470,333			4,111,269

Operating expenses
Wages		1,355,723			1,267,020
Administrative salaries and benefits		604,476			592,527
Advertising and promotion		20,064			54,161
Investor relations and transfer agent fee		167,906			171,771
Office and miscellaneous		535,029			372,131
Insurance		199,999			203,060
Interest expense		82,749			85,637
Rent		139,250			136,086
Consulting		237,516			220,112
Professional fees		160,166			408,880
Travel		85,196			102,580
Telecommunications		23,790			22,614
Shipping		17,824			29,678
Research		103,432			52,285
Commissions		96,857			155,523
Bad debt expense (recovery)		27,961			(319	)
Currency exchange		352			(8,782	)
Utilities		90,191			99,234
		3,948,481			3,964,198

Income (loss) before other items and income tax		(478,148	)		147,071
Gain on sale of equipment		2,057			2,217
Interest income		2,000			759
Income (loss) before income tax		(474,091	)		150,047

Deferred tax (recovery)		-			(10,000	)
Provision for income taxes		72,480			861,468
Net income (loss)		(546,571	)		(701,421	)

Other comprehensive income (loss)		(135,382	)		152,276
Comprehensive income (loss)		(681,953	)		(549,145	)

Net income (loss) per share (basic and diluted)	$	(0.05	)	$	(0.04	)
Weighted average number of common shares (basic)		13,169,991			13,169,991
Weighted average number of common shares (diluted)		13,169,991			13,169,991

-- See Notes to Unaudited Consolidated Financial Statements --

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2013 and 2012

(U.S. Dollars -- Unaudited)

	Nine Months Ended September 30,
	2013			2012

Operating activities
Net income (loss)	$	(546,570	)	$	(701,421	)
Stock compensation expense		89,918			95,851
Depreciation		978,093			919,528
Changes in non-cash working capital items:
(Increase) Decrease in accounts receivable		(105,882	)		332,550
(Increase) Decrease in inventory		84,236			128,274
(Increase) Decrease in prepaid expenses		(52,320	)		(30,432	)
(Increase) Decrease in deferred tax assets		-			(10,000	)
Increase (Decrease) in accounts payable		(104,776	)		224,095
Increase (Decrease) in taxes payable		(120,000	)		(657,000	)
Increase (Decrease) in deferred revenue		(48,263	)		-

Cash provided by (used in) operating activities		174,436			301,445

Investing activities
Acquisition of property and equipment		(82,097	)		(93,007	)

Cash provided by (used in) investing activities		(82,097	)		(93,007	)

Financing activities
Short term line of credit		195,000			225,000
Loan (repayment)		(117,331	)		(96,464	)
Purchase of common stock		-			-

Cash provided (used) by financing activities		77,669			128,536

Effect of exchange rate changes on cash		(8,911	)		5,265

Inflow (outflow) of cash		161,097			342,239
Cash and cash equivalents, beginning		361,867			506,905

Cash and cash equivalents, ending	$	522,964		$	849,144

Supplemental disclosure of cash flow information:
Income taxes paid	$	192,480		$	1,523,567
Interest paid	$	115,650		$	85,637

-- See Notes to Unaudited Consolidated Financial Statements --

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Period Ended September 30, 2013

(U.S. Dollars)

1. Basis of Presentation.

These unaudited condensed consolidated interim financial statements of Flexible Solutions International, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. 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, 2012 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 September 30, 2013, the consolidated results of operations for the three and nine months ended September 30, 2013 and 2012, and the consolidated statements of cash flows for the nine months ended September 30, 2013 and 2012. The results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the entire fiscal year.

These unaudited condensed consolidated interim financial statements include the accounts of Flexible Solutions International, Inc. (the “Company”), and its wholly-owned subsidiaries Flexible Solutions, Ltd. (“Flexible Ltd.”) and NanoChem Solutions Inc. All inter-company balances and transactions have been eliminated. The Company was incorporated on May 12, 1998 in the State of Nevada.

The Company and its subsidiaries develop, manufacture and market specialty chemicals which slow the evaporation of water. The HEAT$AVR® product is marketed for use in swimming pools and spas where its use, by slowing the evaporation of water, allows the water to retain a higher temperature for a longer period of time and thereby reduces the energy required to maintain the desired temperature of the water in the pool. Another product, WATER$AVR®, 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 manufacturers and markets water-soluble chemicals utilizing thermal polyaspartate biopolymers (hereinafter referred to as “BCPAs”), which are beta-proteins manufactured from the common biological amino acid, L-aspartic. BCPAs can be formulated to prevent corrosion and scaling in water piping within the petroleum, chemical, utility and mining industries. BCPAs are also used as proteins to enhance fertilizers in improving crop yields and as additives for household laundry detergents, consumer care products and pesticides.

2. Significant Accounting Policies.

These unaudited 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.

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Period Ended September 30, 2013

(U.S. Dollars)

(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 cost 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 collectability 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
Automobile	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
Leasehold improvements	Straight-line over lease term

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 one of the Company’s subsidiaries is the Canadian Dollar. The translation of the Canadian Dollar to the reporting currency of 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 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 stockholders’ equity.

(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.

Provisions are made at the time the related revenue is recognized for estimated product returns. 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.

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Period Ended September 30, 2013

(U.S. Dollars)

(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.

(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 is calculated giving effect to the potential dilution of the exercise of options and warrants. Common equivalent shares, composed of incremental 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 nine months ended September 30, 2013 and 2012.

(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, and short term line of credit, 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.

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Period Ended September 30, 2013

(U.S. Dollars)

(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. Effective upon issuance, the Company has adopted this guidance with no material impact to the Company’s consolidated financial statements.

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 for all periods presented approximate their respective carrying amounts due to the short term nature of these financial instruments. No interest has been imputed on the non-interest bearing loan from Agriculture Financial Services Corp. (see Note 9).

(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.

(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 September 30, 2013, 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 $1,677,848 (73%) at September 30, 2013 (December 31, 2012 - $1,648,428 or 75%).

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.

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Period Ended September 30, 2013

(U.S. Dollars)

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

In February 2013, the FASB issued Accounting Standards update (ASU) 2013-02, Comprehensive Income (Topic 220). The amendments do not change the current requirements for reporting net income or other comprehensive income in financial statements. However, the amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. Substantially all of the information that this update requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. However, the new requirement about presenting information about amounts reclassified out of accumulated other comprehensive income and their corresponding effect on net income will present, in one place, information about significant amounts reclassified and, in some cases, cross-references to related footnote disclosures. Currently, this information is presented in different places throughout the financial statements. The amendments are effective prospectively for reporting periods beginning after December 15, 2012. Adoption of this ASU did not have a material impact on the Company's financial position or results of operations.

3. Accounts Receivable

	September 30, 2013			December 31, 2012
Accounts receivable	$	2,341,302		$	2,212,448
Allowances for doubtful accounts		(39,679	)		(13,089	)
	$	2,301,623		$	2,199,359

The Company has pledged $107,101 of the above listed accounts receivable as collateral for the Flexible Solutions Ltd. loan from AFSC (see Note 9b).

4. Inventory

	September 30, 2013		December 31, 2012
Completed goods	$	1,521,777	$	1,740,186
Works in progress		89,650		31,593
Raw materials		1,649,717		1,589,981
	$	3,261,144	$	3,361,760

5.Property, Plant & equipment

	September 30, 2013		Accumulated		September 30, 2013
	Cost		Depreciation		Net
Buildings	$	5,298,340	$	2,352,804	$	2,945,536
Computer hardware		104,207		90,762		13,445
Furniture and fixtures		27,701		22,516		5,185
Office equipment		23,125		20,538		2,587
Manufacturing equipment		5,987,548		3,382,041		2,605,507
Trailer		16,757		14,196		2,561
Technology		132,595		46,408		86,187
Land		468,958		—		468,958
	$	12,059,231	$	5,929,265	$	6,129,966

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Period Ended September 30, 2013

(U.S. Dollars)

	December 31, 2012		Accumulated		December 31, 2012
	Cost		Depreciation		Net
Buildings	$	5,372,327	$	2,122,396	$	3,249,931
Computer hardware		106,457		88,811		17,646
Furniture and fixtures		28,385		22,155		6,230
Office equipment		23,946		20,795		3,151
Manufacturing equipment		6,039,836		2,725,324		3,314,512
Trailer		17,353		13,930		3,423
Technology		137,308		27,461		109,847
Truck		11,951		9,512		2,439
Land		478,551		—		478,551
	$	12,216,114	$	5,030,384	$	7,185,730

Amount of depreciation expense for 2013: $963,559 (2012: $910,308)

The following carrying amount of capital assets held by Flexible Solutions Ltd. serves as collateral for the AFSC loan. (See Note 9b):

Land	$	269,866
Building		828,146
Building improvements		878,139
Manufacturing equipment		2,256,114
Trailer		2,561
Technology		86,187

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.

		September 30, 2013 Cost				Accumulated Amortization				September 30, 2013 Net
Patents		$	257,325			$	78,099			$	179,226

		December 31, 2012 Cost				Accumulated Amortization				December 31, 2012 Net
Patents		$	266,680			$	65,939			$	200,512

Decrease in 2013 cost was due to currency conversion. 2013 cost in Canadian dollars - $265,102 (2012 - $265,102 in Canadian dollars).

Amount of amortization for 2013 - $14,534 (2012 - $9,220)

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

2013	$	18,283
2014		18,283
2015		18,283
2016		18,283
2017		18,283

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Period Ended September 30, 2013

(U.S. Dollars)

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.

		September 30, 2013				December 31, 2012
Long term deposits		$	7,640			$	7,893

8. Short-Term Line of Credit

On February 28, 2011, the Company entered into a Business Loan Agreement (the “Revolving Line of Credit Agreement”) with Harris Bank (the “Bank”). The Revolving Line of Credit Agreement provides for a secured working capital-based revolving line of credit (the “Revolving Line”) in an aggregate amount of up to the lesser of (i) $1,500,000, or (ii) 75% of eligible domestic accounts receivable and certain foreign accounts receivable plus 40% of inventory. Amounts advanced under the Revolving Line bear interest at an annual rate equal to the lender’s prime rate plus 0.75%. Interest on the Revolving Line is due monthly.

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 September 30, 2013, the Company was in compliance with all provisions of the Line of Credit.

To secure the repayment of any amounts borrowed under the Revolving Line, the Company granted to the Bank a security interest in substantially all of its assets of NanoChem Solutions Inc., which assets do not include its intellectual property assets.

In March 2012, the Company signed a new agreement with Harris Bank. The revolving line of credit was increased to an aggregate amount of up to the lesser of (i) $5,000,000, or (ii) 75% of eligible domestic accounts receivable and certain foreign accounts receivable plus 40% of inventory. As well, the Company obtained a further credit line of $1,400,000 with a secured loan. Both loans are at an annual interest rate of 3.75%.

Short-term borrowings outstanding under the Revolving Line as of September 30, 2013 were $1,400,000 (December 31, 2012 - $1,205,000) and there were no amounts outstanding on the secured loan.

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 balance owing at September 30, 2013 was $546,481 in Canadian funds (US$530,414); (December 31, 2012 - $546,481CDN; US$549,268). The repayment schedule is as follows:

Amount Due (in CDN funds)		Payment Due Date

$	182,160	December 31, 2013
$	182,160	December 31, 2014
$	182,161	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 and the balance as of December 31, 2010 was $1,405,492 in Canadian funds (US$1,413,082). The Company was required to make interest payments until May 1, 2010 and then started to pay down the principal in equal payments until May 1, 2014. The borrowing balance as September 30, 2013 was $1,050,730 in Canadian funds (US$1,019,839). The borrowing balance as December 31, 2012 was $1,170,811 in Canadian funds (US$1,176,782). The Company has pledged the assets of the Taber, AB building, including equipment, inventory and accounts receivable (see Notes 3 and 5) as collateral, as well as signed a promissory note guaranteeing the amount of the loan.

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Period Ended September 30, 2013

(U.S. Dollars)

The Company has committed to the following repayments:

2013		$	45,733
2014		$	76,222

Continuity	September 30, 2013			December 31, 2012
Balance, January 1	$	1,726,050			1,976,992
Less: Payments on loan		115,650			310,384
Effect of exchange rate		(60,147	)		59,442
Balance	$	1,550,253		$	1,726,050

Outstanding balance at:

a) Long term debt – AAFC	$	530,414		$	549,268
b) Long term debt – AFSC		1,019,839			1,176,782
Long term debt	$	1,550,253		$	1,726,050
Less: current portion		(312,703	)		(318,644	)
Balance	$	1,237,550		$	1,407,406

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 date of 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.

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Period Ended September 30, 2013

(U.S. Dollars)

The following table summarizes the Company’s stock option activity for the two years ended December 31, 2012 and the nine month period ended September 30, 2013:

	Number of shares			Exercise price per share		Weighted average exercise price

Balance, December 31, 2011		1,193,700		$	1.50 - 3.60	$	2.04
Granted		94,000		$	2.00 – 2.22	$	2.14
Cancelled or expired		(288,700	)	$	1.50 – 3.60	$	2.35
Balance, December 31, 2012		999,000		$	1.21 – 2.45	$	1.96
Granted		233,000		$	1.21- 1.50	$	1.27
Cancelled or expired		(68,000	)	$	3.60	$	3.60
Balance, September 30, 2013		1,164,000		$	1.21 – 2.45	$	1.73
Exercisable, Setpember 30, 2013		738,000		$	1.50 – 2.45	$	1.91

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

		2013			2012
Expected life – years		5.0			5.0
Interest rate		0.38 - 0.63	%		0.36 – 0.38	%
Volatility		51 – 63	%		51-58	%
Dividend yield		—	%		—	%
Weighted average fair value of options granted	$	0.36 - 0.38		$	0.38

During the nine months ended September 30, 2013 the Company granted 55,000 options to consultants that resulted in $10,828 in expenses this period. During the same period, 178,000 options were granted to employees, resulting in $47,306 in expenses this period. Options granted in previous quarters resulted in additional expenses in the amount of $19,313 for consultants and $12,471 for employees during the nine months ended September 30, 2013. No stock options were exercised during the period.

During the nine months ended September 30, 2012 the Company granted 33,000 options to consultants that resulted in $29,555 in expenses this period. During the same period, 61,000 options were granted to employees, resulting in $15,984 in expenses this period. Options granted in previous quarters resulted in additional expenses in the amount of $20,580 for consultants and $29,741 for employees during the quarter ended September 30, 2012. No stock options were exercised during the period.

11. Capital Stock.

There was no stock activity for the nine months ended September 30, 2013.

12. Segmented, Significant Customer Information and Economic Dependency.

The Company operates in two segments:

(a) Development and marketing of two lines of 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.

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Period Ended September 30, 2013

(U.S. Dollars)

(b) Manufacture of biodegradable polymers (“BCPA’s”), used by the petroleum, chemical, utility and mining industries to prevent corrosion and scaling in water piping. This product can also be used in detergents to increase biodegradability and in agriculture to increase crop yields by enhancing fertilizer uptake.

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.

Nine months ended September 30, 2013:

	EWCP			BPCA		Total
Revenue	$	592,081		$	11,778,082	$	12,370,163
Interest revenue		1			1,999		2,000
Interest expense		37,594			45,155		82,749
Depreciation and amortization		813,573			164,520		978,093
Segment profit (loss)		(2,273,828	)		1,727,257		(546,571	)
Segment assets		4,512,436			1,796,756		6,309,192
Expenditures for segment assets		82,097			-		82,097

Nine months ended September 30, 2012:

	EWCP			BPCA		Total
Revenue	$	616,050		$	11,937,782	$	12,553,832
Interest revenue		750			9		759
Interest expense		45,447			40,190		85,637
Depreciation and amortization		729,708			189,820		919,528
Segment profit (loss)		(2,017,779	)		1,316,358		(701,421	)
Segment assets		5,760,309			2,025,466		7,785,775
Expenditures for segment assets		76,503			16,504		93,007

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Period Ended September 30, 2013

(U.S. Dollars)

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

	Nine Months Ended September 30, 2013		Nine Months Ended September 30, 2012
Canada	$	540,554	$	682,159
United States and abroad		11,829,609		11,871,673
Total	$	12,370,163	$	12,553,832

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

	September 30, 2013		December 31, 2012
Canada	$	4,512,436	$	5,424,966
United States		1,796,756		1,961,276
Total	$	6,309,192	$	7,386,242

Three customers accounted for $7,402,615 (60%) of sales made during the nine months ended September 30, 2013 (2012 - $7,103,617 or 57%).

13. Commitments.

The Company is committed to minimum rental payments for property and premises aggregating approximately $199,306 over the term of three leases, the last expiring on September 30, 2015.

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

	2013	47,081
	2014	140,869
	2015	11,356

14. Comparative Figures.

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

Item 2.

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

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 Company’s second class of products, 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 nine months ended September 30, 2013 are discussed below:

Nine Months ended September 30, 2013

Item	Increase (I) or Decrease (D)	Reason

Sales

EWCP products	D	Increased orders in the previous periods contributed to decreased orders in this period.

BPCA products	D	The European economic situation pressured sales for the period.

Gross Profit, as a % of sales	D	Start of production at Taber plant increased depreciation; high oil prices increased aspartic acid costs.
Office and miscellaneous	I	Construction costs allocated to operating costs now that the Taber plant is operational.
Professional fees	D	Reduced litigation resulted in reduced professional fees.
Commissions	D	Uncommissionable sales increased against commissionable sales.

Three months ended September 30, 2013

Item	Increase (I) or Decrease (D)	Reason

Sales

EWCP products	D	Increased orders in the previous periods contributed to decreased orders in this period

BPCA products	D	The European economic situation pressured sales for the period.

Gross Profit, as a % of sales	D	Start of production at Taber plant increased depreciation; high oil prices increased aspartic acid costs.
Office and miscellaneous	I	Construction costs allocated to operating expenses now that the Taber plant is operational.
Professional fess	D	Reduced litigation resulted in reduced professional fees.
Commissions	D	Uncommissionable sales increased against commissionable sales.

Three customers accounting for 59% of our sales during the three months ended September 30, 2013 and 60% of our sales during the nine months ended September 30, 2013. The amount of revenue (all from the sale of BCPA products) attributable to each customer is shown below.

		Three months ended September 30,				Nine months ended September 30,
Customer		2013		2012		2013		2012
	A	$	677,520	$	1,053,237	$	3,511,928	$	2,939,291
	B	$	892,558	$	956,759	$	2,655,163	$	2,482,572
	C	$	189,698	$	228,079	$	1,235,524	$	1,681,754

Capital Resources and Liquidity

The Company’s sources and (uses) of cash for the nine months ended September 30, 2013 and 2012 are shown below:

	2013			2012
Cash provided by (used by) operations		174,436			301,445
Purchases of equipment		(82,097	)		(93,007	)
Advances from short term line of credit		195,000			225,000
Repayment of loans		(117,331	)		(96,464	)
Changes in exchange rates		(8,911	)		5,265

In 2012, the Company completed the construction of its plant in Taber, Alberta. The plant is being used to manufacture aspartic acid which is the major component of TPAs. Presently the Company buys most of its aspartic acid from China where the base raw material is oil. The Company's plant in Taber uses sugar as the base raw material. Once the Alberta plant reaches full production, the Company expects that it will still import some aspartic acid from China, however, using aspartic acid manufactured by its plant from sugar will reduce its raw material costs, reduce price fluctuations generated by oil prices and reduce shipping costs.

The Company has sufficient cash resources to meets its future commitments and cash flow requirements for the coming year. As of September 30, 2013 working capital was $3,805,234 (December 31, 2012 - $3,489,828) 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 $199,306 over the term of three leases, the last expiring on September 30, 2015.

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

	2013	47,081
	2014	140,869
	2015	11,356

Other than as disclosed as above, the Company does not anticipate any capital requirements for the twelve months ended September 30, 2014.

Other than as disclosed in this report, the Company does not know of any trends, demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, the Company’s liquidity increasing or decreasing in any material way.

Other than as disclosed in this report, 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 the Company with any sources of 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 and recent accounting pronouncements.

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 September 30, 2013. 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 September 30, 2013.

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 September 30, 2013. 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 September 30, 2013 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.

	Flexible Solutions International, Inc.

November 14, 2013	By:	/s/ Daniel B. O’Brien
	Name:	Daniel B. O’Brien
	Title:	President and Principal Executive Officer

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

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FLEXIBLE SOLUTIONS INTERNATIONAL INC Reports

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