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What changed in FLEXIBLE SOLUTIONS INTERNATIONAL INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of FLEXIBLE SOLUTIONS INTERNATIONAL INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+64 added−70 removedSource: 10-K (2025-03-31) vs 10-K (2024-04-01)

Top changes in FLEXIBLE SOLUTIONS INTERNATIONAL INC's 2024 10-K

64 paragraphs added · 70 removed · 57 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeENP Peru owns a building the Company occupies. 2 In June 2023, 317 Mendota LLC (“317 Mendota”) was created to purchase real estate and the Company has 80% ownership with an unrelated party (NCI) owning the remaining 20%.
Biggest changeIn June 2023, 317 Mendota LLC (“317 Mendota”) was created to purchase real estate and the Company has 80% ownership with an unrelated party (NCI) owning the remaining 20%. The Company occupies part of the building currently owned by 317 Mendota and intends to rent out the remaining portion of the building.
Our website is www.flexiblesolutions.com Our Products Thermal Polyaspartates (“TPAs”) We manufacture TPAs in our Peru, Illinois plant using a thermal polymerizing process. The multiple variants produced are optimized for individual market verticals and sold for end use or through distribution. TPAs for Oilfields . TPAs are used to reduce scale and corrosion in various “topside” water systems.
Our website is www.flexiblesolutions.com Our Products Thermal Polyaspartates (“TPAs”) We manufacture TPAs in our Peru, Illinois plant using a thermal polymerizing process. The multiple variants produced are optimized for individual market verticals and sold for end use or through distribution. 2 TPAs for Oilfields . TPAs are used to reduce scale and corrosion in various “topside” water systems.
We sell SUN 27TM and N Savr 30TM through distributors in North and South America under our trade names and under private labels. 3 Food and Nutritional Materials We have installed custom equipment used to produce food and nutritional materials. All the ingredients we produce are custom products for specific clients and are confidential.
We sell SUN 27TM and N Savr 30TM through distributors in North and South America under our trade names and under private labels. Food and Nutritional Materials We have installed custom equipment used to produce food and nutritional materials. All the ingredients we produce are custom products for specific clients and are confidential.
We have these products made by outside parties without long term contracts. 5 Our WATERSAVR® products are manufactured by a third party. We are not required to purchase any minimum quantity of this product.
We have these products made by outside parties without long term contracts. Our WATERSAVR® products are manufactured by a third party. We are not required to purchase any minimum quantity of this product.
We believe that we can compete effectively with Lanxess by offering excellent customer service in oilfield sales, superior distributor support in the agricultural marketplace and flexibility due to our relative size. In addition, we intend to continue to seek market niches that are not the primary targets of Lanxess. There are other competitors based in Asia.
We believe that we can compete effectively with Lanxess by offering excellent customer service in oilfield sales, superior distributor support in the agricultural marketplace and flexibility due to our relative size. In addition, we intend to continue to seek market niches that are not the primary targets of Lanxess.
Nitrogen Conservation Products: We have obtained all government approvals for the markets in which we sell these products. HEATSAVR®: Chemical products for use in swimming pools are covered by a variety of governmental regulations in all countries where we sell these products. These regulations cover packaging, labeling, and product safety. We believe our products are in compliance with these regulations.
Nitrogen Conservation Products: We have obtained all government approvals for the markets in which we sell these products. 5 HEATSAVR®: Chemical products for use in swimming pools are covered by a variety of governmental regulations in all countries where we sell these products. These regulations cover packaging, labeling, and product safety.
In 2023, NanoChem purchased the remaining 8.33% of shares to become sole owner. ENP Peru was previously accounted for under the equity method however, from 2022 it is consolidated into the financial statements from the date control was obtained.
In 2023, NanoChem purchased the remaining 8.33% of shares to become sole owner. ENP Peru was previously accounted for under the equity method however, from 2022 it is consolidated into the financial statements from the date control was obtained. ENP Peru owns a building the Company occupies.
WATERSAVR®: Our WATERSAVR® product is subject to regulation in most countries, particularly for agricultural and drinking water uses. We do not anticipate that governmental regulations will be an impediment to marketing WATERSAVR® because the components in WATERSAVR® have historically been used in agriculture for many years for other purposes.
We believe our products are in compliance with these regulations. WATERSAVR®: Our WATERSAVR® product is subject to regulation in most countries, particularly for agricultural and drinking water uses. We do not anticipate that governmental regulations will be an impediment to marketing WATERSAVR® because the components in WATERSAVR® have historically been used in agriculture for many years for other purposes.
We have not received any claims alleging infringement of the intellectual property rights of others, but there can be no assurance that we may not be subject to such claims in the future. Research and Development We spent $158,246 during the year ended December 31, 2023 and $99,275 during year ended December 31, 2022 on research and development.
We have not received any claims alleging infringement of the intellectual property rights of others, but there can be no assurance that we may not be subject to such claims in the future. Research and Development We spent $329,952 during the year ended December 31, 2024 and $158,246 during year ended December 31, 2023 on research and development.
Notwithstanding the above, we believe our competitive advantages include: ● Biodegradability compared to competing oil field chemicals; ● Cost-effectiveness for crop enhancement compared to increased fertilizer use; and ● Environmental considerations, ease of formulation and increased crop yield opportunities in irrigation scale markets.
In irrigation scale control, acid washes are our prime competitor. Notwithstanding the above, we believe our competitive advantages include: ● Biodegradability compared to competing oil field chemicals; ● Cost-effectiveness for crop enhancement compared to increased fertilizer use; and ● Environmental considerations, ease of formulation and increased crop yield opportunities in irrigation scale markets.
Our TPA products face indirect competition from other chemicals in every market in which we are active. For purposes of oilfield scale prevention, phosphonates, phosphates and molibdonates provide the same effect. For crop enhancement, increased fertilizer levels can serve as a substitute for TPAs. In irrigation scale control, acid washes are our prime competitor.
There are other competitors based in Asia. 4 Our TPA products face indirect competition from other chemicals in every market in which we are active. For purposes of oilfield scale prevention, phosphonates, phosphates and molibdonates provide the same effect. For crop enhancement, increased fertilizer levels can serve as a substitute for TPAs.
Year Ended December 31, 2023 2022 Company A $ 6,811,083 $ 6,677,815 Company B $ 10,260,870 $ 12,938,735 Company C $ 3,410,845 $ 8,159,066 4 Customers with balances greater than 10% of our receivable balances as of each of the fiscal year ends presented are shown in the following table: Year Ended December 31, 2023 2022 Company A $ 4,225,028 $ 3,634,083 Company B $ 2,073,813 2,423,285 Competition TPAs: Our TPA products have direct competition with Lanxess AG (spun out of Bayer AG) (“Lanxess”), a German manufacturer of TPAs, which uses a patented process different from ours.
Year Ended December 31, 2024 2023 Company A $ 8,050,462 $ 6,811,083 Company B $ 8,235,394 $ 10,260,870 Company C $ 4,493,455 $ 3,410,845 Customers with balances greater than 10% of our receivable balances as of each of the fiscal year ends presented are shown in the following table: Year Ended December 31, 2024 2023 Company A $ 5,377,088 $ 4,225,028 Company B $ 1,866,645 $ 2,073,813 Company D $ 1,189,157 $ 670,920 * *Less than 10% in that period Competition TPAs: Our TPA products have direct competition with Lanxess AG (spun out of Bayer AG) (“Lanxess”), a German manufacturer of TPAs, which uses a patented process different from ours.
The Company occupies part of the building currently owned by 317 Mendota and intends to rent out the remaining portion of the building. For financial reporting purposes, the assets, liabilities and earnings of 317 Mendota are consolidated into these financial statements. The NCI’s ownership interest in 317 Mendota is recorded in non-controlling interests in these consolidated financial statements.
For financial reporting purposes, the assets, liabilities and earnings of 317 Mendota are consolidated into these financial statements. The NCI’s ownership interest in 317 Mendota is recorded in non-controlling interests in these consolidated financial statements.
WATERSAVR® is sold in granulated form and can be applied by hand, by fully automated scheduled metering, or by an automatic dispenser.
WATERSAVR may also be used for lawn and turf care and potted and bedding plants. WATERSAVR® is sold in granulated form and can be applied by hand, by fully automated scheduled metering, or by an automatic dispenser.
None of our employees are represented by a labor union and we have not experienced any work stoppages to date.
Employees As of December 31, 2024, we had 45 employees, including one officer, 17 sales and customer support personnel, and 27 manufacturing personnel. None of our employees are represented by a labor union and we have not experienced any work stoppages to date.
We also manufacture and sell products which automatically dispense HEATSAVR® into commercial size swimming pools or spas at the rate of one ounce per 400 sq. ft. of water surface per day.
We also manufacture and sell products which automatically dispense HEATSAVR® into commercial size swimming pools or spas at the rate of one ounce per 400 sq. ft. of water surface per day. 3 WATERSAVR® This product utilizes a patented variation of our HEATSAVR technology to reduce water evaporation in reservoirs, potable water storage tanks, livestock watering ponds, aqueducts, canals and irrigation ditches.
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WATERSAVR® This product utilizes a patented variation of our HEATSAVR technology to reduce water evaporation in reservoirs, potable water storage tanks, livestock watering ponds, aqueducts, canals and irrigation ditches. WATERSAVR may also be used for lawn and turf care and potted and bedding plants.
Removed
This work relates primarily to the development of our water and energy conservation products, as well as new research in connection with our TPA products. Employees As of December 31, 2023, we had 46 employees, including one officer, 15 sales and customer support personnel, and 30 manufacturing personnel.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAccordingly, in these areas there are few legal barriers that prevent potential competitors from copying certain of our products, processes and technologies or from otherwise entering into operations in direct competition with us.. 9 Our products may infringe on the intellectual property rights of others, and resulting claims against us could be costly and prevent us from making or selling certain products.
Biggest changeWhile we own certain patents and trademarks, some aspects of our business cannot be protected by patents or trademarks. Accordingly, in these areas there are few legal barriers that prevent potential competitors from copying certain of our products, processes and technologies or from otherwise entering into operations in direct competition with us.
Markets for our WATERSAVR® product are also seasonal, depending on the wet versus dry seasons in particular countries. We attempt to sell into a variety of countries with different seasons on both sides of the equator in order to minimize seasonality. 7 Interruptions in our ability to purchase raw materials and components may adversely affect our profitability.
Markets for our WATERSAVR® product are also seasonal, depending on the wet versus dry seasons in particular countries. We attempt to sell into a variety of countries with different seasons on both sides of the equator in order to minimize seasonality. Interruptions in our ability to purchase raw materials and components may adversely affect our profitability.
Nevertheless, we may require county or state approval on a case by case basis. We expect to spend $50,000 on the marketing and production of our WATERSAVR® product in fiscal 2024. If we do not introduce new products in a timely manner, our products could become obsolete and our operating results would suffer.
Nevertheless, we may require county or state approval on a case by case basis. We expect to spend $50,000 on the marketing and production of our WATERSAVR® product in fiscal 2025. 7 If we do not introduce new products in a timely manner, our products could become obsolete and our operating results would suffer.
Factors that may affect our operating results and the market price of our common stock include: ● Demand for and market acceptance of our products; ● Competitive pressures resulting in lower selling prices; ● Adverse changes in the level of economic activity in regions in which we do business; ● Adverse changes in the oil and gas industry on which we are particularly dependent; ● Changes in the portions of our revenue represented by various products and customers; ● Delays or problems in the introduction of new products; ● The announcement or introduction of new products, services or technological innovations by our competitors; ● Variations in our product mix; ● The timing and amount of our expenditures in anticipation of future sales; ● Increased costs of raw materials or supplies; and ● Changes in the volume or timing of product orders.
Factors that may affect our operating results and the market price of our common stock include: ● Demand for and market acceptance of our products; 6 ● Competitive pressures resulting in lower selling prices; ● Adverse changes in the level of economic activity in regions in which we do business; ● Adverse changes in the oil and gas industry on which we are particularly dependent; ● Changes in the portions of our revenue represented by various products and customers; ● Delays or problems in the introduction of new products; ● The announcement or introduction of new products, services or technological innovations by our competitors; ● Variations in our product mix; ● The timing and amount of our expenditures in anticipation of future sales; ● Increased costs of raw materials or supplies; ● Changes in the volume or timing of product orders; and ● Uncertainty in the tariff rates being charged.
Economic, political and other risks associated with international sales and operations could adversely affect our sales. Revenues from shipments made outside of the United States accounted for approximately 21% of our revenues in the year ended December 31, 2023, 20% in the year ended December 31, 2022 and 32% in the year ended December 31, 2021.
Economic, political and other risks associated with international sales and operations could adversely affect our sales. Revenues from shipments made outside of the United States accounted for approximately 24% of our revenues in the year ended December 31, 2024, 21% in the year ended December 31, 2023 and 20% in the year ended December 31, 2022.
Our products can be hazardous if not handled, stored and used properly; litigation related to the handling, storage and safety of our products would have a material adverse effect on our business and results of operations. Some of our products are flammable and must be stored properly to avoid fire risk.
See above principal customer information. Our products can be hazardous if not handled, stored and used properly; litigation related to the handling, storage and safety of our products would have a material adverse effect on our business and results of operations. Some of our products are flammable and must be stored properly to avoid fire risk.
Our business exposes us to potential product liability risks. There are many factors beyond our control that could lead to liability claims, including the failure of our products to work properly and the chance that consumers will use our products incorrectly or for purposes for which they were not intended.
There are many factors beyond our control that could lead to liability claims, including the failure of our products to work properly and the chance that consumers will use our products incorrectly or for purposes for which they were not intended.
Accordingly, our future results could be harmed by a variety of factors, including: ● Changes in foreign currency exchange rates; 8 ● Changes in a country’s or region’s political or economic conditions, particularly in developing or emerging markets; ● Longer payment cycles of foreign customers and difficulty of collecting receivables in foreign jurisdictions; ● Trade protection measures and import or export licensing requirements; ● Differing tax laws and changes in those laws; ● Difficulty in staffing and managing widespread operations; ● Differing laws regarding protection of intellectual property; and ● Differing regulatory requirements and changes in those requirements.
Accordingly, our future results could be harmed by a variety of factors, including: ● Changes in foreign currency exchange rates; ● Changes in a country’s or region’s political or economic conditions, particularly in developing or emerging markets; ● Longer payment cycles of foreign customers and difficulty of collecting receivables in foreign jurisdictions; ● Trade protection measures and import or export licensing requirements; ● Differing tax laws and changes in those laws; ● Difficulty in staffing and managing widespread operations; ● Differing laws regarding protection of intellectual property; and ● Differing regulatory requirements and changes in those requirements. 8 We are subject to credit risk and may be subject to substantial write-offs if one or more of our significant customers default on their payment obligations to us.
A high proportion of our costs are fixed, due in part to our sales, research and development and manufacturing costs. Thus, small declines in revenue could disproportionately affect our operating results.
Changes in competitive, market and economic conditions may cause us to adjust our operations. A high proportion of our costs are fixed, due in part to our sales, research and development and manufacturing costs. Thus, small declines in revenue could disproportionately affect our operating results.
This practice, while customary, presents an accounts receivable write-off risk if one or more of our significant customers defaulted on their payment obligations to us. Any such write-off, if substantial, would have a material adverse effect on our business and results of operations. See above principal customer information.
We currently allow our major customers between 30 and 90 days to pay for each sale. This practice, while customary, presents an accounts receivable write-off risk if one or more of our significant customers defaulted on their payment obligations to us. Any such write-off, if substantial, would have a material adverse effect on our business and results of operations.
We have in the past experienced operating losses and negative cash flow from operations. If our revenues decline, our results of operations and liquidity may be materially and adversely affected. If we experience slower than anticipated revenue growth or if our operating expenses exceed our expectations, we may not be profitable. We may not remain profitable in future periods.
We have in the past incurred significant operating losses and may not sustain profitability in the future. We have in the past experienced operating losses and negative cash flow from operations. If our revenues decline, our results of operations and liquidity may be materially and adversely affected.
Because our actual results may differ materially from any forward-looking statements made by us, this section includes a discussion of important factors that could affect our future operations and result in a decline in the market price of our common stock. 6 We have in the past incurred significant operating losses and may not sustain profitability in the future.
Item 1A. Risk Factors This Form 10-K contains forward-looking information based on our current expectations. Because our actual results may differ materially from any forward-looking statements made by us, this section includes a discussion of important factors that could affect our future operations and result in a decline in the market price of our common stock.
Our ongoing success is dependent upon the continued availability of certain key employees. Our business would be adversely affected if the services of Daniel B. O’Brien ceased to be available to us since we currently do not have any other employee with an equivalent level of expertise in and knowledge of our industry. If Mr.
O’Brien ceased to be available to us since we currently do not have any other employee with an equivalent level of expertise in and knowledge of our industry. If Mr.
There can be no assurance that the amount of product liability insurance that we carry will be sufficient to protect us from product liability claims. A product liability claim in excess of the amount of insurance we carry could have a material adverse effect on our business, financial condition and results of operations.
There can be no assurance that the amount of product liability insurance that we carry will be sufficient to protect us from product liability claims.
Fluctuations in our operating results may cause our stock price to decline. Given the nature of the markets in which we operate, we cannot reliably predict future revenues and profitability. Changes in competitive, market and economic conditions may cause us to adjust our operations.
If we experience slower than anticipated revenue growth or if our operating expenses exceed our expectations, we may not be profitable. We may not remain profitable in future periods. Fluctuations in our operating results may cause our stock price to decline. Given the nature of the markets in which we operate, we cannot reliably predict future revenues and profitability.
In addition, claims of third parties against us could result in awards of substantial damages or court orders that could effectively prevent us from making, using or selling our products in the United States or internationally. A product liability claim for damages could materially and adversely affect our financial condition and results of operations.
We may incur significant expense in any legal proceedings to protect our proprietary rights or to defend infringement claims by third parties. In addition, claims of third parties against us could result in awards of substantial damages or court orders that could effectively prevent us from making, using or selling our products in the United States or internationally.
Third parties may seek to claim that our products and operations infringe on their patent s or other intellectual property rights. We may incur significant expense in any legal proceedings to protect our proprietary rights or to defend infringement claims by third parties.
Our products may infringe on the intellectual property rights of others, and resulting claims against us could be costly and prevent us from making or selling certain products. Third parties may seek to claim that our products and operations infringe on their patent s or other intellectual property rights.
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Item 1A. Risk Factors This Form 10-K contains forward-looking information based on our current expectations.
Added
A product liability claim for damages could materially and adversely affect our financial condition and results of operations. Our business exposes us to potential product liability risks.
Removed
We are subject to credit risk and may be subject to substantial write-offs if one or more of our significant customers default on their payment obligations to us. We currently allow our major customers between 30 and 90 days to pay for each sale.
Added
A product liability claim in excess of the amount of insurance we carry could have a material adverse effect on our business, financial condition and results of operations. 9 Our ongoing success is dependent upon the continued availability of certain key employees. Our business would be adversely affected if the services of Daniel B.
Removed
While we own certain patents and trademarks, some aspects of our business cannot be protected by patents or trademarks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe own a 61,200 sq. ft. facility and a 56,780 sq. ft. facility in Peru, Illinois along with a 14,000 sq. ft facility in Mendota, Illinois which is used to manufacture our TPA line of products. In 2017, we purchased a 3,000 sq ft building on 1 acre of land in Taber, Alberta.
Biggest changeItem 2. Properties. We own a 61,200 sq. ft. facility and a 56,780 sq. ft. facility in Peru, Illinois along with a 14,000 sq. ft facility in Mendota, Illinois which is used to manufacture our TPA line of products. In 2017, we purchased a 3,000 sq ft building on 1 acre of land in Taber, Alberta.
Removed
Item 2. Properties. We lease a 6,400 sq. ft. facility in Naperville, Illinois which we use for offices and laboratories at a cost of $5,670 per month with a lease effective to December 2025.
Removed
We also lease a 1,300 sq. ft. facility in Mendota, Illinois used for offices at a cost of $880 per month on a month by month basis.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe Company declared a special dividend of $0.05 per share on April 14, 2023, paid on May 16, 2023 to shareholders of record on April 28, 2023.
Biggest changeThe Company declared a special dividend of $0.10 per share on April 23, 2024, paid on May 16, 2024 to shareholders of record on April 30, 2024. The Company declared a special dividend of $0.05 per share on April 14, 2023, paid on May 16, 2023 to shareholders of record on April 28, 2023.
None of our officers or directors, nor any of our principal shareholders purchased, on our behalf, any shares of our common stock from third parties either in a private transaction or as a result of purchases in the open market during the years ended December 31, 2023 and 2022.
None of our officers or directors, nor any of our principal shareholders purchased, on our behalf, any shares of our common stock from third parties either in a private transaction or as a result of purchases in the open market during the years ended December 31, 2024 and 2023.
The following table lists additional shares of our common stock, including shares issuable upon the exercise of options which have not yet vested, which may be issued as of March 29, 2024: Number Note Of Shares Reference Shares issuable upon exercise of options granted to our officers, directors, employees, consultants, and third parties 1,649,000 A A.
The following table lists additional shares of our common stock, including shares issuable upon the exercise of options which have not yet vested, which may be issued as of March 30, 2025: Number Note Of Shares Reference Shares issuable upon exercise of options granted to our officers, directors, employees, consultants, and third parties 1,708,000 A A.
Options are exercisable at prices ranging from $1.75 to $3.61 per share. See Item 11 of this report for more information concerning these options.
Options are exercisable at prices ranging from $2.00 to $4.05 per share. See Item 11 of this report for more information concerning these options.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities. Our common stock is traded on the NYSE American under the symbol “FSI”.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities. Our common stock is traded on the NYSE American under the symbol “FSI”. As of March 30, 2025, we had approximately 3,400 shareholders.
As of March 29, 2024, we had 12,450,532 outstanding shares of common stock.
As of March 30, 2025, we had 12,647,532 outstanding shares of common stock.
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The following is the range of high and low closing prices for our common stock for the periods indicated: High Low Year Ended December 31, 2023 First Quarter $ 3.35 $ 2.86 Second Quarter 3.32 2.60 Third Quarter 2.96 3.51 Fourth Quarter 2.69 1.37 High Low Year Ended December 31, 2022 First Quarter $ 4.44 $ 3.01 Second Quarter 3.96 2.23 Third Quarter 2.68 1.56 Fourth Quarter 3.24 2.38 As of March 29, 2024, we had approximately 3,400 shareholders.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOther 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. 12 Capital Resources and Liquidity Our sources and (uses) of cash for the years ended December 31, 2023 and 2022 are shown below: 2023 2022 Cash provided by operations $ 6,989,966 $ 1,476,903 Purchase of investments (470,000 ) - Redemption of investments 200,000 Distributions from equity investments 201,034 265,001 Acquisition of ENP Peru, LLC - (499,329 ) Non-Controlling Interest of 317 Mendota LLC 200,000 - Long-term deposits 815,714 - Sale of property and equipment 5,411 - Purchases of property and equipment (4,990,675 ) (1,981,307 ) Advances (repayment) of short term line of credit (1,008,112 ) 517,772 Repayment of long term debt (725,824 ) (2,292,819 ) Proceeds of long term debt 2,686,682 3,230,798 Dividends paid (626,777 ) - Lease payments (58,080 ) (58,611 ) Distributions to non-controlling interests (719,439 ) (689,434 ) Sale of common stock 13,600 140,620 Impact of foreign exchange rates 10,653 (30,069 ) We have sufficient cash resources to meets our future commitments and cash flow requirements for the coming year.
Biggest changeCapital Resources and Liquidity Our sources and (uses) of cash for the years ended December 31, 2024 and 2023 are shown below: 2024 2023 Cash provided by operating activities $ 5,568,346 $ 6,116,171 Sale of investment 2,000,000 - Purchase of investments - (470,000 ) Redemption of investments - 200,000 Distributions received from equity investments 510,710 201,034 Non-Controlling Interest of 317 Mendota LLC - 200,000 Proceeds from sale of asset - 5,411 Purchases of property and equipment (4,964,736 ) (4,990,675 ) Advances (repayment) of line of credit 241,680 (1,008,112 ) Repayment of long term debt (1,517,500 ) (725,823 ) Proceeds of long term debt 2,162,412 2,686,682 Dividends paid (1,255,053 ) (626,777 ) Distributions to non-controlling interest (794,722 ) (719,439 ) Shares issued upon exercise of stock options 184,850 13,600 Effects of foreign exchange rate changes on cash 188,160 10,653 We have sufficient cash resources to meets our future commitments and cash flow requirements for the coming year.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation. Results of Operations We have three product lines. The first is a chemical (“EWCP”) used in swimming pools and spas. The product forms a thin, transparent layer on the water’s surface.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Results of Operations We have three product lines. The first is a chemical (“EWCP”) used in swimming pools and spas. The product forms a thin, transparent layer on the water’s surface.
For shipments which are F.O.B. shipping point, we have elected to account for shipping and handling activities as a fulfillment cost rather than as an additional promised service and performance obligation.
For shipments which are free on board (F.O.B). shipping point, we have elected to account for shipping and handling activities as a fulfillment cost rather than as an additional promised service and performance obligation.
If tariffs increase and if relief is not available, some customers may experience price increases; ● Activity in the oil and gas industry, as we sell our TPA product to oil and gas companies; and ● Drought conditions, since we also sell our TPA product to farmers.
Aspartic acid is a key ingredient in our TPA product. If tariffs increase and if relief is not available, some customers may experience price increases; ● Activity in the oil and gas industry, as we sell our TPA product to oil and gas companies; and ● Drought conditions, since we also sell our TPA product to farmers.
Material changes in the line items in our Statement of Income and Comprehensive Income for the year ended December 31, 2023 as compared to the same period last year, are discussed below: Item Increase (I) or Decrease (D) Reason Sales TPA products D Decreased customer orders along with decrease in pricing.
Material changes in the line items in our Statement of Income and Comprehensive Income for the year ended December 31, 2024 as compared to the same period last year, are discussed below: Item Increase (I) or Decrease (D) Reason Sales EWCP products I Increased customer orders. TPA products D Decreased customer orders.
Our estimates consider the cost of inventory, the estimated market value, the shelf life of the inventory and our historical experience. If there are changes to these estimates, provisions for inventory obsolescence may be necessary. Valuation of Goodwill and Intangible Assets.
We may need to record a provision for estimated obsolescence and shrinkage of inventory. Our estimates consider the cost of inventory, the estimated market value, the shelf life of the inventory and our historical experience. If there are changes to these estimates, provisions for inventory obsolescence may be necessary. Valuation of Goodwill and Intangible Assets.
Stock Based Compensation The fair value of share-based payments are subject to the limitations of the Black-Scholes option pricing model that incorporates market data and involves uncertainty in estimates used by management in the assumptions.
Stock Based Compensation The fair value of share-based payments are subject to the limitations of the Black-Scholes option pricing model that incorporates market data and involves uncertainty in estimates used by management in the assumptions. Since the Black-Scholes option pricing model relies on highly subjective assumptions, any changes to these inputs can significantly impact the estimated value.
Recent Accounting Pronouncements We have evaluated recent accounting pronouncements issued since January 1, 2023 and determined that the adoption of these recent accounting pronouncements will not have a material effect on our consolidated financial statements.
See Note 2 to the consolidated financial statements included as part of this report for a description of our significant accounting policies. Recent Accounting Pronouncements We have evaluated recent accounting pronouncements issued since January 1, 2024 and determined that the adoption of these recent accounting pronouncements will not have a material effect on our consolidated financial statements. 14
These products are made and sold by the Company’s TPA division.
These products are made and sold by the Company’s TPA division. 11 The Company also manufactures food grade products that are made and sold by the TPA division.
Commitments for rent in the next two years are as follows: 2024 $ 70,440 2025 $ 71,940 Other than as disclosed above, we do not know of any trends, demands, commitments, events or uncertainties that will result in, or that are reasonable likely to result in, our liquidity increasing or decreasing in any material way.
Other than as disclosed above, we do not know of any trends, demands, commitments, events or uncertainties that will result in, or that are reasonable likely to result in, our liquidity increasing or decreasing in any material way. Other than as disclosed above, we do not know of any significant changes in our expected sources and uses of cash.
If, for example, the financial condition of a customer deteriorates resulting in an impairment of its ability to pay or a pattern of late payment develops, an allowance may be required. 13 Provisions for Inventory Obsolescence . We may need to record a provision for estimated obsolescence and shrinkage of inventory.
This evaluation includes significant judgments and estimates, including an analysis of receivables aging and a review of large accounts. If, for example, the financial condition of a customer deteriorates resulting in an impairment of its ability to pay or a pattern of late payment develops, an allowance may be required. Provisions for Inventory Obsolescence .
Assessing the recoverability of deferred tax assets requires the Company to make estimates related to the expectations of future taxable income and the application of existing tax laws. To the extent that future taxable income differs significantly from estimates, the ability of the Company to realize deferred tax assets could be impacted.
To the extent that future taxable income differs significantly from estimates, the ability of the Company to realize deferred tax assets could be impacted. Privately Held Equity Investments The recoverability of privately held equity investments requires management to make certain assumptions and estimates. Changes in these assumptions and estimates could result in materially different results.
The 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 TPA product.
Income tax expense I One time adjustments to income tax accruals in 2023 did not occur again in 2024. 12 The 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.
As of December 31, 2023, our working capital was $20,172,833 (2022 - $20,692,527) and we have no substantial commitments or capital requirements that require significant outlays of cash over the coming fiscal year. We are committed to minimum rental payments for property and premises aggregating approximately $142,380 over the term of two leases, the last expiring on December 31, 2025.
As of December 31, 2024, our working capital was $22,714,190 (2023 - $20,172,833) and we have no substantial commitments or capital requirements that require significant outlays of cash over the coming fiscal year.
Insurance I Prior year increase in assets and in sales resulted in higher insurance costs. Interest expense I Increased debt resulted in increased interest expense. Office and miscellaneous I Increase in property tax associated with more properties along with various other one time costs. Travel I Travel has resumed as COVID-19 has become an endemic.
Gross profit I Raw material costs declined to catch up with customer price reductions already in place. Insurance I Prior year increase in assets and in sales resulted in higher insurance costs. Office and Miscellaneous I Increase in property tax associated with more properties along with various other one time costs.
Other than as disclosed above, we do not know of any significant changes in our expected sources and uses of cash. We do not have any commitments or arrangements from any person to provide us with any equity capital. Critical Accounting Policies and Estimates Allowances for Product Returns .
We do not have any commitments or arrangements from any person to provide us with any equity capital. 13 Critical Accounting Policies and Estimates Allowances for Doubtful Accounts Receivable . We evaluate our accounts receivable to determine if they will ultimately be collected.
Because the Black-Scholes option pricing model requires the inputs of highly subjective assumptions, including the volatility of share prices, changes in subjective input assumptions can materially affect the estimate. Income Taxes Tax interpretations, regulations and legislation in the various jurisdictions in which the Company operates are subject to change and interpretation. As such, income taxes are subject to measurement uncertainty.
Income Taxes Tax interpretations, regulations and legislation in the various jurisdictions in which the Company operates are subject to change and interpretation. As such, income taxes are subject to measurement uncertainty. Assessing the recoverability of deferred tax assets requires the Company to make estimates related to the expectations of future taxable income and the application of existing tax laws.
Removed
Cost of goods sold, as a percentage of sales I Increased raw material costs and increased wages to add and retain manufacturing employees along with added costs associated with obtaining new certifications. Wages I Increased wages for employee retention. Administrative salaries I Increased wages for employee retention.
Added
Consulting I Increased reliance on consultants instead of full time employees. Professional fees I Increase in accounting fees related to tax filings and increase in audit fees related to growth of the Company. Research I New product development. Utilities I Addition of real estate not yet rented out.
Removed
Professional fees D Decreased due to one time costs associated with the planned merger with Lygos in 2022. Lease expense D Purchases of ENP Mendota and ENP Peru, the businesses we were renting from, reduced our lease expense.
Added
Investor relations D Reduced shares traded and filings required in 2023 did not reoccur in 2024. Currency exchange I Currency exchange increased as a result of movements in the US / Canadian dollar exchange rate and its effects on US dollar cash balances and US dollar payables held by the Company’s Canadian subsidiaries.
Removed
We grant certain of our customers the right to return product which they are unable to sell. Upon sale, we evaluate the need to record a provision for product returns based on our historical experience, economic trends and changes in customer demand. Allowances for Doubtful Accounts Receivable .
Added
Lease expense D Termination of lease in Naperville, IL reduced costs. Loss on lease termination I One time cost incurred terminating lease in Naperville, IL. Interest income I Increased interest rates combined with increase in term deposits. Gain on investment D Sale of 30.1% of Florida based LLC reduced our Company’s portion of the profits.
Removed
We evaluate our accounts receivable to determine if they will ultimately be collected. This evaluation includes significant judgments and estimates, including an analysis of receivables aging and a review of large accounts.
Added
Loss on sale of investment I One time loss on the sale of 30.1 % of Florida based LLC. Interest expense I Increased debt resulted in increased interest expense.
Removed
Privately Held Equity Investments The recoverability of privately held equity investments requires management to make certain assumptions and estimates. Changes in these assumptions and estimates could result in materially different results. See Note 2 to the consolidated financial statements included as part of this report for a description of our significant accounting policies.
Added
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.

Other FSI 10-K year-over-year comparisons