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What changed in FLEXIBLE SOLUTIONS INTERNATIONAL INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of FLEXIBLE SOLUTIONS INTERNATIONAL INC's 2022 and 2023 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 2023 report.

+65 added−61 removedSource: 10-K (2024-04-01) vs 10-K (2023-03-31)

Top changes in FLEXIBLE SOLUTIONS INTERNATIONAL INC's 2023 10-K

65 paragraphs added · 61 removed · 54 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

20 edited+5 added−1 removed27 unchanged
Biggest changeHEATSAVR® is a chemical product for use in swimming pools and spas that 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.
Biggest changeWe anticipate that this market vertical will grow over time. HEATSAVR® Our studies indicate that approximately 70% of the energy lost from a swimming pool occurs through water evaporation. HEATSAVR® is a chemical product for use in swimming pools and spas that forms a thin, transparent layer on the water’s surface.
Nitrogen conservation product: 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. 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.
Our website is www.flexiblesolutions.com 2 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. TPAs for Oilfields . TPAs are used to reduce scale and corrosion in various “topside” water systems.
In January 2020, ENP Investments, LLC acquired a 100% interest in ENP Realty, LLC and the 14,000 sq. ft. manufacturing facility in Mendota, Illinois owned by this entity. 5 Government Regulations TPAs: In the industrial oil field and agricultural markets, we have received government approval for all TPAs currently sold.
In January 2020, ENP Investments, LLC acquired a 100% interest in ENP Realty, LLC and the 14,000 sq. ft. manufacturing facility in Mendota, Illinois owned by this entity. Government Regulations TPAs: In the industrial oil field and agricultural markets, we have received government approval for all TPAs currently sold.
These assets are held in our wholly owned NanoChem Solutions Inc. subsidiary which has become our largest revenue generator. In October 2018, we purchased 65% of ENP Investments, LLC, a manufacturing and distribution company active in the areas of golf, turf and ornamental agriculture products.
These assets are held in our wholly owned subsidiary, NanoChem Solutions Inc. (“NanoChem”), which has become our largest revenue generator. In October 2018, we purchased 65% of ENP Investments, LLC, a manufacturing and distribution company active in the areas of golf, turf and ornamental agriculture products.
Manufacturing Our HEATSAVR® products and dispensers are made from chemicals, plastics and other materials and parts that are readily available from multiple suppliers. We have never experienced any shortage in the availability of raw materials and parts for these products and we do not have any long term supply contracts for any of these items.
Our HEATSAVR® products and dispensers are made from chemicals, plastics and other materials and parts that are readily available from multiple suppliers. We have never experienced any shortage in the availability of raw materials and parts for these products and we do not have any long term supply contracts for any of these items.
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.
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 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 $99,275 during the year ended December 31, 2022 and $116,411 during year ended December 31, 2021 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 $158,246 during the year ended December 31, 2023 and $99,275 during year ended December 31, 2022 on research and development.
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.
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.
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, 2022, we had 42 employees, including one officer, 14 sales and customer support personnel, and 27 manufacturing personnel.
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.
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.
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.
In January 2020, ENP Realty, LLC became a wholly owned subsidiary of ENP Investments, LLC and was renamed to ENP Mendota, LLC. In June 2022, ENP Peru Investments, LLC became a wholly owned subsidiary with NanoChem Solutions Inc. owning 91.67% and ENP Investments, LLC owning 8.33%. of ENP Peru.
In January 2020, ENP Realty, LLC became a wholly owned subsidiary of ENP Investments, LLC and was renamed to ENP Mendota, LLC. ENP Mendota owns a building that the Company occupies. In June 2022, ENP Peru Investments, LLC became a wholly owned subsidiary with NanoChem owning 91.67% and ENP Investments, LLC owning 8.33%. of ENP Peru.
Raw materials for TPA production are sourced from various manufacturers throughout the world and we believe they are available in sufficient quantities for any increase in sales. Raw materials are, however, derived from crude oil and are subject to price fluctuations related to world oil prices.
Manufacturing Our 56,780 sq. ft. facility in Peru, Illinois manufactures our TPA products. Raw materials for TPA production are sourced from various manufacturers throughout the world and we believe they are available in sufficient quantities for any increase in sales. Raw materials are, however, derived from crude oil and are subject to price fluctuations related to world oil prices.
Year Ended December 31, 2022 2021 Company A $ 6,677,815 $ 4,877,690 Company B $ 12,938,735 $ 7,982,281 Company C $ 8,159,066 $ 4,057,976 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, 2022 2021 Company A $ 3,634,083 $ 2,215,119 Company B $ 2,423,285 2,202,345 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, 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.
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. Our 56,780 sq. ft. facility in Peru, Illinois manufactures our TPA products.
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.
In addition, the use of HEATSAVR® in an indoor pool results in even greater energy savings since indoor pool locations use energy not only to heat the pool water, but also to air condition the pool environment.
Conversely, HEATSAVR® eliminates the need to install, remove and store the blanket and works 24 hours a day. In addition, the use of HEATSAVR® in an indoor pool results in even greater energy savings since indoor pool locations use energy not only to heat the pool water, but also to air condition the pool environment.
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.
WATERSAVR® is sold in granulated form and can be applied by hand, by fully automated scheduled metering, or by an automatic dispenser.
We have received reports from our commercial customers documenting energy savings of between $2,400 and $6,000 per year when using HEATSAVR®. In outdoor pools, the HEATSAVR® also provides convenience compared to pool blankets. It is often inconvenient to use conventional pool blankets since a pool blanket must be removed and stored before the pool can be used.
In outdoor pools, the HEATSAVR® also provides convenience compared to pool blankets. It is often inconvenient to use conventional pool blankets since a pool blanket must be removed and stored before the pool can be used. Pool blankets do not provide any energy savings when not on the pool.
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.
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 sell SUN 27TM and N Savr 30TM through distributors in North and South America under our trade names and under private labels. HEATSAVR® Our studies indicate that approximately 70% of the energy lost from a swimming pool occurs through water evaporation.
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.
Removed
Pool blankets do not provide any energy savings when not on the pool. Conversely, HEATSAVR® eliminates the need to install, remove and store the blanket and works 24 hours a day.
Added
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.
Added
ENP 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%.
Added
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.
Added
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. We have received reports from our commercial customers documenting energy savings of between $2,400 and $6,000 per year when using HEATSAVR®.
Added
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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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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.
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.
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.
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.
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. 9 A product liability claim for damages could materially and adversely affect our financial condition and results of operations.
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.
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 2023. 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 2024. If we do not introduce new products in a timely manner, our products could become obsolete and our operating results would suffer.
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, 2022, 20% in the year ended December 31, 2021 and 32% in the year ended December 31, 2020.
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.
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; 8 ● Difficulty in staffing and managing widespread operations; ● Differing laws regarding protection of intellectual property; ● Differing regulatory requirements and changes in those requirements; and ● Impact of the COVID-19 virus.
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.
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.
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.
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; ● Changes in the volume or timing of product orders; and ● Availability of raw material in a timely manner in periods of disruption such as, but not limited to, COVID-19.
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.
The marketing efforts of our WATERSAVR® product may result in continued losses. We introduced our WATERSAVR® product in June 2002 and, to date, we have delivered quantities for testing by potential customers, but only a few customers have ordered the product for commercial use.
We introduced our WATERSAVR® product in June 2002 and, to date, we have delivered quantities for testing by potential customers, but only a few customers have ordered the product for commercial use.
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.
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.
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.
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.
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.
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.
Because we do not have guaranteed long-term supply arrangements with our suppliers, any material interruption in our ability to purchase necessary raw materials or components could have a material adverse effect on our business, financial condition and results of operations. 7 Our WATERSAVR® product has not proven to be a revenue producing product and we may never recoup the cost associated with its development.
We purchase certain raw materials and components from third parties pursuant to purchase orders placed from time to time. Because we do not have guaranteed long-term supply arrangements with our suppliers, any material interruption in our ability to purchase necessary raw materials or components could have a material adverse effect on our business, 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.
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.
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. 6 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.
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.
Removed
We purchase certain raw materials and components from third parties pursuant to purchase orders placed from time to time.
Added
Item 1A. Risk Factors This Form 10-K contains forward-looking information based on our current expectations.
Removed
In particular, we have been informed that our former exclusive agent for the sale of our products in North America is now competing with us in the swimming pool and personal spa markets. As a former distributor, they were given access to many of our sales, marketing and manufacturing techniques.
Added
Our WATERSAVR® product has not proven to be a revenue producing product and we may never recoup the cost associated with its development. The marketing efforts of our WATERSAVR® product may result in continued losses.
Removed
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.
Added
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

1 edited+1 added−1 removed2 unchanged
Biggest changeWe also lease a 1,300 sq. ft. facility in Mendota, Illinois used for offices at a cost of $880 per month with a lease effective to September 2023.
Biggest changeWe 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.
Removed
In the year ended December 31, 2021, the 3.3 acres of cleared and undeveloped land in Taber, AB Canada was disposed of for the proceeds of $263,380 ($333,899CAD). With a cost of $219,318 ($278,040CAD) the Company recognized a gain of $44,330 ($55,859CAD) on the disposal.
Added
In 2023, the Company purchased an 80% share in 317 Mendota, a real estate company that was set up to purchase a manufacturing building in Mendota, IL. ENP Investments now occupies part of this space.

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 February 25, 2019, paid on March 15, 2019 to shareholders of record on March 6, 2019. On March 12, 2019 the Company announced an annual dividend of $0.15 per share to be paid in two tranches.
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.
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, 2022 and 2021.
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.
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, 2023: Number Note Of Shares Reference Shares issuable upon exercise of options granted to our officers, directors, employees, consultants, and third parties 1,673,000 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 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.
Options are exercisable at prices ranging from $1.70 to $4.13 per share. See Item 11 of this report for more information concerning these options.
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.
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, 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 High Low Year Ended December 31, 2021 First Quarter $ 4.45 $ 2.48 Second Quarter 4.08 2.97 Third Quarter 4.33 3.31 Fourth Quarter 4.00 3.29 As of March 30, 2023, we had approximately 2,300 shareholders.
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.
As of March 30, 2023, we had 12,435,532 outstanding shares of common stock.
As of March 29, 2024, we had 12,450,532 outstanding shares of common stock.
Removed
Shareholders of record on March 31, 2019 were paid $0.075 on April 15, 2019 and shareholders of record on October 1, 2019 were paid the same amount on October 15, 2019. On March 18, 2020, the Company suspended the dividend until further notice due to the uncertainty surrounding the COVID-19 virus.

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, 2022 and 2021 are shown below: 2022 2021 Cash provided by operations $ 1,476,903 $ 4,535,746 Purchase of investments - (500,000 ) Distributions from equity investments 265,001 359,300 Acquisition of ENP Peru, LLC (499,329 ) - Sale of property and equipment - 263,380 Purchases of property, equipment and leaseholds (1,981,307 ) (782,219 ) Advances of short term line of credit 517,772 184,746 Repayment of long term debt (2,292,819 ) (943,080 ) Proceeds of long term debt 3,230,798 - Lease payments (58,611 ) (287,903 ) Distributions to non-controlling interests (689,434 ) (804,003 ) Sale of common stock 140,620 140,440 Impact of foreign exchange rates (30,069 ) 96,391 We have sufficient cash resources to meets our future commitments and cash flow requirements for the coming year.
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.
A modified version of EWCP can also be used in reservoirs, potable water storage tanks, livestock watering pods, canals, and irrigation ditches for the purpose of reducing evaporation. 11 The second product, biodegradable polymers (“TPAs”), is used by the petroleum, chemical, utility and mining industries to prevent corrosion and scaling in water piping.
A modified version of EWCP can also be used in reservoirs, potable water storage tanks, livestock watering pods, canals, and irrigation ditches for the purpose of reducing evaporation. The second product, biodegradable polymers (“TPAs”), is used by the petroleum, chemical, utility and mining industries to prevent corrosion and scaling in water piping.
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 . We may need to record a provision for estimated obsolescence and shrinkage of inventory.
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.
Our estimates would 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. 13 Valuation of Goodwill and Intangible Assets.
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.
Recent Accounting Pronouncements We have evaluated recent accounting pronouncements issued since January 1, 2022 and determined that the adoption of these recent accounting pronouncements will not have a material effect on our consolidated financial statements.
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.
Commitments for rent in the next three years are as follows: 2023 $ 77,100 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.
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.
As of December 31, 2022, our working capital was $20,692,526 (2021 - $13,986,013) 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 $219,480 over the term of two leases, the last expiring on December 31, 2025.
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.
If tariffs are maintained or expanded 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; ● Drought conditions, since we also sell our TPA product to farmers; and ● The impact of COVID-19 virus.
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.
These products are made and sold by the Company’s TPA division. Material changes in the line items in our Statement of Income and Comprehensive Income for the year ended December 31, 2022 as compared to the same period last year, are discussed below: Item Increase (I) or Decrease (D) Reason Sales EWCP products I Increase in customer orders.
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.
Lease Expense D Purchases of ENP Mendota and ENP Peru, the businesses we were renting from, reduced our lease expense. 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.
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.
TPA products I Growth in most product lines. Cost of goods sold I Increased raw material costs and increased wages to retain manufacturing employees. Wages I Increased wages for employee retention. Administrative salaries I Increased wages for employee retention. Professional fees I Increased due to costs associated with now cancelled merger with Lygos Inc.
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.
Office and miscellaneous I Increase related to fees associated with moving loans from Midland States Bank to Stock Yards Bank. Insurance I Increase in assets and in sales resulted in higher insurance costs. Interest I Increase due to loans assumed upon purchase of ENP Peru, LLC. Travel I Travel has resumed as COVID-19 has become an endemic.
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.
Removed
Aspartic acid is a key ingredient in our TPA product.
Added
These products are made and sold by the Company’s TPA division.
Added
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.

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