UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
Amendment #1
GENERAL FORM FOR REGISTRATION OF SECURITIES
Under Section 12(b) or (g) of the Securities Exchange
Act of 1934
Flexible Solutions International Inc.
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(Exact name of Small Business Issuer as specified in its charter)
Nevada N/A
------ ---
(State or other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
2614 Queenswood Drive, Victoria, British Columbia CANADA V8N 1X5
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(Address of principal executive offices)
Issuer's Telephone Number, (250) 477-9969
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Securities to be registered pursuant to Section 12(b) of the Act: None
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Securities to be registered pursuant to Section 12(g) of the Act:
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Common Stock $0.001 par value.
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(Title of Class)
Page 1 of 102
Index to Exhibits on Page 27
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Flexible Solutions International Inc.
Form 10-SB
TABLE OF CONTENTS
PART I
Page
Item 1. Description of Business............................. 3
Item 2. Management's Discussion and Analysis or Plan of
Operation........................................... 14
Item 3. Description of Property............................. 17
Item 4. Security Ownership of Certain Beneficial Owners
and Management..................................... 18
Item 5. Directors, Executive Officers, Promoters
and Control Persons................................. 20
Item 6. Executive Compensation.............................. 22
Item 7. Certain Relationships and Related Transactions...... 23
Item 8. Description of Securities........................... 23
PART II
Item 1. Market Price Of And Dividends on the Registrant's
Common Equity and Related Stockholder Matters....... 25
Item 2. Legal Proceedings................................... 25
Item 3. Changes in and Disagreements with Accountants...... 26
Item 4. Recent Sales of Unregistered Securities............ 26
Item 5. Indemnification of Directors and Officers.......... 26
PART F/S
Item 1. Financial Statements................................ 27
PART III
Item 1. Index to Exhibits 27
Item 2. Description of Exhibits
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
Introduction
Flexible Solutions International Inc. (hereinafter is also referred to as the
"Company" and/or the "Registrant") is involved in the sale of chemicals which
slow down the evaporation of water. Applications include swimming pools where
their use allows the water to retain a higher temperature for a longer period of
time; irrigation canals and reservoirs. The Registrant is still in the
development phase. At the end of its latest fiscal year, 12/31/99, total assets
were $359 thousand; gross revenues were $769 thousand; and, net income was $103
thousand. The Registrant also currently relies exclusively on the efforts of its
founder and president Mr. Daniel B. O'Brien. (Note the Risk Factor section
beginning on page ten which discusses this along with other risk factors.) The
Company was incorporated in May 1998 in the state of Nevada.
The shares of the Company began trading on the National Quotation Bureau's "Pink
Sheets" on October 12, 1998. The Pink Sheet Market consists of security firms
who act as market makers in the stocks of, usually very small, companies. The
bid and asked prices are not quoted electronically, but are quoted daily in
"hard copy" which is delivered to firms which subscribe. Stocks which trade in
the Pink Sheets are usually not as liquid as those which trade in electronic
markets and, often time, the difference between the bid and the asked prices are
substantial.
On June 25, 1998 the Company completed the process of acquiring Flexible
Solutions Ltd. Flexible Solutions Ltd. was a company engaged in the development
and marketing of a swimming pool chemical designed to reduce heat loss.
The Company's principal office is located at 2614 Queenswood Drive, Victoria,
British Columbia V8N 1X5. The contact person is Mr. Daniel B. O'Brien, President
and Director. The telephone number is (250) 477-9969; the facsimile number is
(250) 477-9912. The Company currently maintains a website at
www.flexiblesolutions.com.
The Company's authorized capital includes 50,000,000 shares of common stock with
$0.001 par value and 1,000,000 shares of preferred stock with $0.01 par value.
As of the close of the Company's latest fiscal year, December 31, 1999, there
were 9,131,316 shares of common stock outstanding and no shares of preferred
shares outstanding.
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The Company's common stock trades in the Pink Sheet Market under the symbol
"FXSO".
The information in this Registration Statement is current as of February 20,
2000, unless otherwise indicated.
Historical Corporate Development
- --------------------------------
The Company was incorporated in the state of Nevada on May 12, 1998.
The Company acquired Flexible Solutions Ltd. ("Flexible Solutions") on June 25,
1998 in a non-arms length transaction. The Company issued 7,000,000 shares of
its Common Stock in exchange for all of the issued and outstanding stock of
Flexible Solutions. Upon the filing of the Articles of Share Exchange with the
Nevada Secretary of State on June 30, 1998, Flexible Solutions became a
wholly-owned subsidiary of the Company.
The transaction whereby the Company acquired Flexible Solutions is considered to
be a non-arm's length transaction because the valuation of Flexible Solutions
and the determination of the number of shares to be issued to its owners was not
made independently or based on appraisals.
Flexible Solutions was incorporated on January 25, 1991. From its inception
through the fiscal year ended January 31, 1994, Flexible Solutions incurred net
losses as follows: $1,326 in 1992; $1,883 in 1993; and, $3,265 in 1994. From
1994 to 1995, Flexible Solutions generated a net income of $3,440, but suffered
a net loss of $2,454 for the fiscal year ended January 31, 1996. For the 1997
and 1998 fiscal years, Flexible Solutions had net income of $1,679 and $3,154
respectively.
On August 17, 1998, the Company completed an offering of 1,050,000 shares of its
Common Stock at $0.01 per share, raising gross proceeds of $10,500.
ON September 7, 1998, the Completed an offering of 500,000 shares of its Common
Stock at $0.05 per share, raising gross proceeds of $25,000.
On November 13, 1998, the Company completed an offering of 1,000,000 shares of
its Common Stock at $0.25 per share, raising gross proceeds of $145,329 (581,316
shares sold).
The proceeds of all of the above offerings were used for professional fees;
research and development of the tropical fish product; the purchase of machinery
and dies to begin large scale
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production of the tropical fish product; and, general corporate purposes. The
offerees, in addition to Dan O'Brien and Dr. Robert O'Brien, were, in all
instances, friends, family or business associates well know to either Dan
O'Brien or Dr. Robert O'Brien.
In 1999 the Company began renting a 1,000 square foot factory located at 1746
Island Highway, Victoria, British Columbia V9B 1H8. The monthly rent for this
facility is $690 and the Company has not executed a formal lease agreement. All
of the Company's manufacturing functions are now conducted at this location.
BUSINESS
- --------
Flexible Solutions Ltd.
Company Background
- ------------------
The Company manufacturers and markets chemicals and chemical dispensers through
its wholly-owned subsidiary, Flexible Solutions Ltd. The chemicals are designed
to act as energy saving "liquid blankets" which reduce the evaporation of water.
The Company currently manufactures three products: "HEAT$AVER", the "Tropical
Fish" and "WATER$AVER".
The HEAT$AVER Product and the Tropical Fish Product:
- ----------------------------------------------------
Product Description:
The primary product of the Company is HEAT$AVER. This product is a non-toxic
chemical which forms an invisible skin on the surface of water thereby reducing
the amount of evaporation and creating an energy saving device. The Company
estimates that evaporative losses account for between 70% and 95% of pool and
spa energy use.
HEAT$AVER is a mixture of ingredients which are lighter than water so that they
automatically float to the surface. They are attracted to each other so that
they try always to form a very thin layer over the whole pool surface. They are
individually so small that they are 500 times smaller than the spaces in a high
quality filter. After a swimmer stops disturbing the water they rush to reform a
complete layer. Management estimates that the use of HEAT$AVER could achieve
savings in energy costs of up to 40% and that most pool managers and/or owners
will realize energy bill reductions between 17% and 30%.
Management believes that customers associated with outdoor swimming pools use
HEAT$AVER primarily for two reasons, cost
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savings on energy being the primary one. The second reason is that, often times,
pool personnel find it inconvenient to use conventional pool blankets correctly
and consistently and that the ease of use provided by HEAT$AVER results in more
consistent usage.
Users of air-conditioned indoor swimming pools use the HEAT$AVER product because
it also results in savings. The savings occurs because less energy is required
to maintain a pool at the desired temperature and also because there is a
reduced load on the air-conditioning system because less heat and much less
water vapor will have to be removed from the air to maintain the required
comfort. Air-conditioned indoor pools are very high users of energy because the
swimmers and loungers have environmental expectations which require both gas
water heat and electric air cooling to keep both groups happy in the same room.
HEAT$AVER works by slowing the transfer of heat and water vapor from the pool to
the pool room atmosphere.
The British Health Department, the Health Department of Queensland and the
Health Department of New South Wales have concluded that the product, used as
directed, has no adverse effects on humans or animals.
Testing pertaining to the effectiveness of HEAT$AVER has been carried out by the
owners of the following facilities. The following chart summarizes the results
typically achieved by users:
<TABLE>
<CAPTION>
Pool Size Length Savings Humidity Heating Heat$avr Monthly Payback Yearly Net
of Test Measure Drop System Cost per Savings Ratio Savings
Month
- ---------------- ---------- -------- --------- ------------ ---------- ------------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Resthaven Indoor 2 40% 30% Elect. $38. $235. 6:2:1 $2364.
Condominium 50'x 20' Months
Pool, Sidney,
B.C.
- ---------------- ---------- -------- --------- ------------ ---------- ------------- ---------- ---------- ------------
Red Lion Hotel Outdoor 2 Weeks 45% 0% Natural $38. $230. 6:1:1 $2304.
#1 Seattle, Wa 50'x25' Gas
- ---------------- ---------- -------- --------- ------------ ---------- ------------- ---------- ---------- ------------
Red Lion Hotel Outdoor 2 Weeks 45% 0% Natural $38. $295. 7:8:1 $3084.
#2 Seattle, Wa 50'x25' Gas
- ---------------- ---------- -------- --------- ------------ ---------- ------------- ---------- ---------- ------------
YWCA Pool, Indoor 2 mths 16.5% 0% Oil $90. $275. 3:1:1 $2220.
Vancouver, B.C. 84'x42'
- ---------------- ---------- -------- --------- ------------ ---------- ------------- ---------- ---------- ------------
Kitsilano Outdoor 2 mths 24% 0% Natural $1420. $2700. 1:9:1 $15,360.
Municipal 480'x70' Gas
Pool,
Vancouver, B.C.
- ---------------- ---------- -------- --------- ------------ ---------- ------------- ---------- ---------- ------------
Vancouver Indoor 2 mths 15.5% 0% Natural $340. $620. 1:8:1 $3,360.
Aquatic Center 165'x80 Gas
Vancouver, B.C.
- ---------------- ---------- -------- --------- ------------ ---------- ------------- ---------- ---------- ------------
Hotel Vancouver Indoor 2 mths 12.5% 0% Steam $28. $150. 5:4:1 $1,464.
Vancouver, B.C.
- ---------------- ---------- -------- --------- ------------ ---------- ------------- ---------- ---------- ------------
Coast Victoria In/Out 2 mths 37.5% 0% Elect. $32. $270. 8:4:1 $2,856.
Hotel
Victoria,
B.C.
- ---------------- ---------- -------- --------- ------------ ---------- ------------- ---------- ---------- ------------
</TABLE>
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The company also sells a timer controlled injection pump which automatically
adds the chemical to the pool as needed. Each of these systems is programmable
to fit both the size of the pool and the hours of operation. The reservoir which
holds the HEAT$AVER must be checked and filled once a week instead of daily. The
system is self-contained and needs to be plugged into the main return line of
the pool and then plugged into a 110V AC socket.
There are some disadvantages to using HEAT$AVER and these include the following:
a. The product biodegrades and must be replaced twice per week unless the
timer controlled injection pump or the Tropical Fish dispenser is
utilized;
b. The product reduces evaporative heat loss only and has no effect on
convective and conductive losses;
c. The product is flammable when not mixed with water; and,
d. The product is poisonous, although not fatal, if ingested straight
from the bottle or the dispenser.
The product is manufactured by the Company with components, which are readily
available, and is usually dispensed by the consumer utilizing the Company's
"Tropical Fish" dispenser.
The Tropical Fish dispenser was designed by the Company and requires minimal
effort on the part of the consumer who utilizes it to dispense the product. It
acts like a conventional solar blanket by forming an invisible layer on the
surface of the swimming pool, thus inhibiting water evaporation. It dispenses a
blue liquid, which creates a one molecule thick layer on the surface of the
pool. One Tropical Fish covers an area of 400 square feet and is effective for
about one month.
The Tropical Fish is utilized by opening the fin where indicated and placing the
fish into the pool where it submerges to the bottom and, as the pressure
increases, the HEAT$AVER liquid escapes, rises, and forms an invisible layer on
the surface of the water. The Tropical Fish works effectively for thirty days
and then must be replaced.
Target Market:
The Company currently is selling to clients associated with hotels; municipal
swimming pools; and residential swimming pools. The Heat$avr and Tropical Fish
products are sold in Canada and the United States by the Company's distributor,
Sunsolar Energy Technologies and in Australia by Hydro-Flexible Solutins PTY.
The
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Company also sells Heat$aver directly into the United States to both wholesale
and retail accounts.
The Company estimates that there are approximately 106,000 municipal swimming
pools in its initial target market, which is Australia, Canada, Europe and the
United States. Based on the assumption that energy costs are a large portion of
the total operating costs for municipal pools and that the operators of these
facilities want to lower these costs, the Company anticipates that the operators
may turn to the use of chemicals, such as HEAT$AVER, as an alternative to the
higher cost pool blankets. The Company realizes, however, that the product may
not be used by proprietors of every pool in the target market referred to above.
With regard to hotel pools, the Company estimates that there are approximately
280,000 hotel pools located in its target market. Company management believes
that each hotel which utilizes the HEAT$SAVER product will be able to save
between $2,400 and $6,000 per year on its heating costs throughout the life of
the pool. Again, the Company realizes that the product may not be used by
proprietors of every pool in this category.
Regarding the residential pool market, management believes that there are
approximately 8 million residences in Canada and the United States that have
swimming pools. Management believes that successful market penetration in this
area will require developing sound business relationships with retail swimming
pool stores by creating equitable pricing policies. Management further believes
that the Company's HEAT$AVER product packaged in the Tropical Fish dispenser
will appeal to the residential pool market based on the novelty of the Tropical
Fish dispenser, coupled with the east of use and the low initial cost. The
Company realizes that the product may not be used by proprietors of ever pool in
this category.
The WATER$AVER Product
- ----------------------
The Company also intends to market its core technology in the areas of fresh
water conservation and aquaculture through another product called WATER$AVER.
The WATER$AVER product works in the same way as the HEAT$AVER product.
WATER$AVER has a full time contract salesperson using direct mail, telephone and
internet techniques to market the product in North America. Advertisements have
been started in national farm and water magazines in the United States. The
Company has plans for personnel to make personal visits to introduce the
product. Specific efforts will also be made to identify and attract joint
venture partners and distributors for the product. Hydro-Flexible
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Solutions in Australia is currently actively involved in sales efforts of
WATER$AVER in Australia. These efforts are on-going and will be expanded as
financing permits.
WATER$AVER is a granulated product which is delivered to the customer in a 44
pound weatherproof bag. There are various ways to apply this product ranging
from simple hand dispersal to fully automated scheduled metering using local
weather data to determine timing and dosage quantities. Examples of suitable
applications include the following:
a. Reservoirs
b. Potable water storages
c. Aqueducts and canals
d. Agricultural irrigation canals and ditches
e. Flood water crops
f. Stock watering ponds
This product can be used in any application where water is either standing or
running without rapids.
The Company currently makes available to customers one piece of mechanized
dispersal equipment called the Model PDM-320e WATER$AVER dispensing machine. It
is capable of servicing reservoirs up to 30 acres in size and 100 miles or less
of irrigation canals for six to eight days. It is fully automated and provides
scheduled powder metering using local weather data to determine timing and
dosage quantities. Specifications are:
a. Hopper capacity: 320 lbs.
b. Shoreline swivel mounted on 12 cubic yard abutment or trailer mounted
for mobile deployment
c. Has windproof dispersal pattern skirting
d. Full SCADA compliance ready (custom mounting tabs, bracketing and
enclosures)
e. Full NEMA weather proofing of electronics
f. Data collection storage and transmission with the customer's choice of
variables to be monitored
g. The data may be collected by laptop computer through RS 232 ports
h. Land line, cellular, radio and satellite transmission of real time and
stored data
i. Armored protection of electronics and backup equipment by casting into
abutment
j. Hydro grid powered with a battery backup
k. Battery powered with solar running and recharging capability
l. Antipersonnel-protective fencing-sabotage suppression razor wire
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The Company also has available a basic dispersal machine which is available for
lower tech situations and the Company will build custom models to suite
individual client's requirements.
Competition
The Company does not believe that there are any other companies developing or
producing similar swimming pool chemicals. This belief stems from the fact that
management has been directly involved in the pool and spa industry for ten years
and has kept abreast of the literature in the field. A source has not been
discovered that offers or advertises a competing product for either HEAT$AVER or
the Tropical Fish product or the Water$aver product. However, in general, and
with regard to the swimming pool supply industry, it is anticipated that the
Company will be competing with a wide variety of national, regional and local
companies, many of which have established public images and greater financial
strength and personnel resources than the Company. Further, it is likely that
the Company will also be competing with entities, which have established good
will and market acceptance.
Government Regulation and Legal Uncertainties
The Company anticipates that it will be subject to various governmental
regulations with regard to the chemicals used in HEAT$AVER, WATER$AVER and the
Tropical Fish. In Australia, the Company's operations are subject to health acts
as enacted by the Commonwealth and/or various states within Australia. In
Canada, the Company's operations are subject to health regulations within the
various provinces in Canada. Further, in French speaking provinces such as
Quebec, the Company is required to comply with "French only" regulations such as
the actual wording on its products (no English allowed). In the United States,
the Company's operations are subject to the regulations enacted by the U.S.
Department of Health and possibly the regulations enacted by the Environmental
Protection Agency. Further, the Company anticipates that all ingredients may
have to be approved by the Food and Drug Administration for direct, undiluted
skin contact.
Risk Factors
The Company is currently dependent on the efforts of its sole officer, Daniel
O'Brien.
The Company's success is dependent, to a large degree, upon the efforts of its
sole executive officer, Daniel O'Brien. The loss or unavailability of Mr.
O'Brien could have an adverse effect on the Company. At the present time the
Company does not maintain key man life insurance policies for this individual.
Also, the
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continued success and viability of the Company is dependent upon its ability to
attract and retain qualified personnel in all areas of its business, especially
management positions. In the event the Company is unable to attract and retain
qualified personnel, its business may be adversely affected. There are currently
no employment agreements in place.
The Company has been involved in the industry since 1991 and to date has
achieved minimal results.
The Company has nine years of operating history with minimal results upon which
to base an evaluation of its business and prospects. Operating results for
future periods are subject to numerous uncertainties. These uncertainties
include such critical factors as historically minimal profits and uncertainty as
to actual demand for its products. There can be no assurance that the Company
will achieve or sustain profitability on an annual or quarterly basis. The
Company's prospects must be considered in light of the risks encountered by
companies in the early stage of development, particularly companies in new and
rapidly evolving markets. Future operating results will depend upon many
factors, including the demand for the Company's swimming pool products, the
level of product and price competition, the Company's success in attracting and
retaining motivated and qualified personnel, and in particular, the use of
chemicals to retain heat in swimming pools instead of the historically
successful use of thermal blankets.
It is uncertain that the Company would be able to manage the growth that would
occur as result of an increase in sales.
Should the Company be successful in the sales and marketing efforts of its water
additive products it will experience significant growth in operations. If this
occurs, management anticipates that additional expansion in the areas of both
personnel and plant and equipment will be required in order to continue product
development and product marketing. Any expansion of the Company's business would
place further demands on its sole executive, operational capacity and financial
resources. The Company realizes that it will need to recruit qualified personnel
in all areas of its operations, including management, sales, marketing, and
product delivery when and if growth occurs. There can be no assurance that the
Company will be effective in attracting and retaining additional qualified
personnel, expanding its operational capacity or otherwise managing growth. In
addition, there can be no assurance that the Company's current systems,
procedures or controls will be adequate to support any expansion of it's
operations. The failure to
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manage growth effectively could result in the failure of the Company.
The Company could experience delays in the delivery of its products which could
result in a loss of customers.
The Company has experienced development delays and cost overruns associated with
its product development; however, to date this has not been a significant
problem. It may, in the future, encounter additional such problems. Delays and
cost overruns could affect the Company's ability to respond to technological
changes, evolving industry standards, competitive developments or customer
requirements thus causing a loss of customers.
The Company markets its products on an international level and, consequently, is
exposed to all of the risks of doing business on a worldwide basis.
The Company markets and sells its products in the United States, Australia and
Canada. As such, it is subject to the normal risks of doing business abroad.
These risks include, but are not limited to, unexpected changes in regulatory
requirements, export and import restrictions, tariffs and trade barriers,
difficulties in staffing and managing foreign operations, longer payment cycles,
problems in collecting accounts receivable, potential adverse tax consequences,
exchange rate fluctuations, increased risks of piracy, discontinuity of the
Company's infrastructures, limitations on fund transfers and other legal and
political risks. Such limitations and interruptions could have a material
adverse effect on the Company's business. The Company does not currently hedge
its foreign currency exposures.
The Company does not pay a cash dividend to shareholders.
The Company does not presently intend to pay cash dividends in the foreseeable
future, as any earnings are expected to be retained for use in developing and
expanding its business. Further, the actual amount of any potential future
dividends received from the Company will remain subject to the discretion of the
Company's Board of Directors.
The Company has a limited cash position and there is no assurance that the it
will be able to meet its future capital requirements:
The Company currently has limited sources of operating cash flow to fund future
projects or corporate overhead. The Company has limited financial resources, and
there is no assurance that additional funding will be available. The Company's
ability to
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continue to operate will be dependent upon its ability to raise significant
additional funds in the future and.
Dilution could occur to existing and future shareholders because the Company is
authorized to issue up to 1,000,000 shares of preferred stock.
The Company is authorized to issue up to 1,000,000 shares of preferred stock,
$0.01 par value per share. As of the date of this Registration Statement, no
shares of preferred stock have been issued. The Company's preferred stock may
bear such rights and preferences, including dividend and liquidation
preferences, as the board of Directors may fix and determine from time to time.
Any such preferences may operate to the detriment of the rights of the holders
of the Common Stock and would cause dilution to these shareholders.
The securities of the Company are in the "penny stock" classification and there
are risks to the shareholders as a result of this classification.
The Company's stock is subject to "penny stock" rules as defined in 1934
Securities and Exchange Act rule 3151-1. The Commission has adopted rules that
regulate broker-dealer practices in connection with transactions in penny
stocks. The Company's common shares are subject to these penny stock rules.
Transaction costs associated with purchases and sales of penny stocks are likely
to be higher than those for other securities. Penny stocks generally are equity
securities with a price of less than U.S. $5.00 (other than securities
registered on certain national securities exchanges or quoted on the NASDAQ
system, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or system).
The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document that provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction,
and monthly account statements showing the market value of each penny stock held
in the customer's account. The bid and offer quotations, and the broker-dealer
and salesperson compensation information, must be given to the customer orally
or in writing prior to effecting the transaction and must be given to the
customer in writing before or with the customer's confirmation.
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In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from such rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for the common shares in the United
States and shareholders may find it more difficult to sell their shares.
Significant Customers and/or Suppliers
- --------------------------------------
The Company has no significant customers and/or suppliers.
Employees
- ---------
As of 2/20/00, the Company has eight employees, including its sole officer,
Daniel B. O'Brien. The Company employs four full-time and two part-time
employees at its factory. In addition, the Company employees a full-time
saleswoman, who works out of her home in San Diego, California, for a monthly
retainer of Cdn$1,000 plus 10% of her net sales of bulk HEAT$AVER.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
- ---------------------------------------------
OR PLAN OF OPERATION
- --------------------
SELECTED FINANCIAL DATA
- -----------------------
The selected financial data in Table No. 1 for Fiscal 1999, ended December 31,
1999, and the period May 12, 1998 (date of inception) to December 31, 1998, was
derived from the financial statements of the Company which were audited by
Smythe Ratcliffe independent Chartered Accountants, as indicated in their report
which is included elsewhere in this Registration Statement.
The selected financial data was extracted from the more detailed financial
statements and related notes included herein and should be read in conjunction
with such financial statements and with the information appearing under the
heading, "Management's Discussion and Analysis of Financial Condition and
Results of Operations".
Table No. 1
Selected Financial Data
($ in 000, except per share data)
Year Ended Year Ended
12/31/99 12/31/98
------------- -------------
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Revenue $759 $84
Net Income (Loss) $103 ($18)
Earnings (Loss) per Share $0.01 ($0.01)
Dividends per Share 0 0
Wtg. Avg. Shares 9,131,316 4,102,469
Working Capital $206 $139
Long - Term Debt $0 $3
Shareholders' Equity $256 $146
Total Assets $359 $174
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ---------------------------------------------------------------
RESULTS OF OPERATION
- --------------------
The Company was incorporated in the state of Nevada on May 12, 1998 and the
Company's wholly owned subsidiary, Flexible Solutions Ltd., was incorporated on
January 25, 1991 in Victoria, British Columbia Canada.
On June 30, 1998 the Company completed the acquisition of 100% of the shares of
Flexible Solutions Ltd. The acquisition was effected through the issuance of
7,000,000 shares of common stock by the Company with the former shareholders of
the subsidiary receiving 100% of the total shares then issued and outstanding.
The transaction has been accounted for as a reverse take-over.
Since completing the process of acquiring Flexible Solutions Ltd., the Company's
operating activities have related primarily to marketing its swimming pool
chemicals called "HEAT$AVER", the "Tropical Fish" and its fresh water
evaporation control chemical called "WATER$AVER".
Cash Balances
- -------------
The Company maintains its major cash balances at one financial institution,
Toronto Dominion Bank, located in Victoria, British Columbia CANADA. The
balances are insured up to $40,200 or $60,000 (Cdn$) per account by the Canada
Deposit Insurance Corporation. At February 1, 2000, there were no uninsured cash
balances.
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Liquidity and Capital Resources
- -------------------------------
Fiscal 1999 and Fiscal 1998, Ended December 31st
- ------------------------------------------------
Cash used in 1999 Operating Activities totaled ($49,152), including the $102,848
net income; the primary adjusting items were $12,764 in depreciation, ($111,308)
in accounts receivable, ($131,225) in inventory, ($520) in prepaid expenses,
$5,444 in accounts payable, $3,559 in accrued liabilities, and $69,286 in income
tax payable. Cash flows from financing activities included a repayment to a
shareholder of ($3,261).
Cash provided by 1998 Operating Activities totaled $1,004, including the
($18,030) net loss; the primary adjusting items were $2,619 in depreciation,
($1,531) in accounts receivable, ($5,335) in inventory, $19,911 in accounts
payable and $3,370 in accrued liabilities. Cash provided 1997 Financing
Activities totaled $169,045.
At the end of Fiscal 1999, the Company had cash of $59,441 and accounts
receivable of $112,839. Operating expenses currently are averaging $14,500 per
month and sales are averaging $63,300 per month. The cost of these sales
averages $34,500 per month. At the current volume of business management
believes that it can sustain operations indefinitely without the addition of any
additional capital. Additional capital will be necessary, however, should the
Company decide to expand operations. If the Company cannot raise additional
capital, expansion will not be possible.
Management currently has no plans to raise additional capital during the next
twelve months.
Results of Operations
- ---------------------
Fiscal 1999 and Fiscal 1998, Ended December 31st
- ------------------------------------------------
Operating expenses for the fiscal year ended December 31, 1999 totaled $175,213
and the Company experienced a net profit of $102,848 against revenues of
$769,218. The major expenses during this period were wages of $67,991,
commissions of $20,957, professional fees of $16,465, office expenses of
$15,600, subcontracting fees of $12,801, stock promotion and transfer agent fees
of $8,048, shipping of $7,179, travel of $6,607, and rent, telephone and
depreciation of $19,565.
Operating expenses for the fiscal year ended December 31, 1998 totaled $43,323
and the Company experienced a net loss of ($18,030) against revenues of $84,252.
The major expenses during this period were $25,292 in wages, commissions and
professional fees; $8,175 in
16
<PAGE>
office expenses and telephone; $4,207 in travel expenses; and, $2,2,619 in
depreciation.
In Fiscal 1999 income rose because sales of the Tropical Fish product increased
from less than 50,000 units to in excess of 400,000 units. HEAT$AVER sales also
grew, but only by a small amount. The tropical fish increase in sales occurred
primarily because Fiscal 1999 was the Company's first full season of sales for
that product and the beginning of sales into the United States through the
Company's distributor. Net income rose for the same reasons plus the following:
product development on the Tropical Fish product was successfully completed
thereby reducing expenses in that area. Production processes also improved as is
evidenced by the fact that in Fiscal 1998, 37 Tropical Fish were produced by
each employee per hour and during Fiscal 1999 that number grew to 75 Tropical
Fish per employee per hour.
The Tropical Fish product is priced at $1.68, or $2.50(Cdn$) in Canada and $2.00
in the United States. The Company currently offers no rebates, discounts or
promotional prices for the Tropical Fish product.
Income Taxes
- ------------
All tax returns due for the Company have been filed.
Inflation
- ---------
The Company's results of operations have not been affected by inflation and
management does not expect inflation to have a material impact on its operations
in the future.
ITEM 3. DESCRIPTION OF PROPERTY
- -------------------------------
The Company utilizes the residence of its sole officer and director, Mr. Daniel
O"Brien, for offices. No monthly fee is paid to Mr. O"Brien for rent.
The Company also leases a 1,000 square foot factory facility from Rolex Plastics
Ltd. of Victoria, British Columbia. The factory is located at 1746 Island
Highway, Victoria, British Columbia V9B 1H8. The monthly rent for the factory is
$690. The Company rents the facility on a month-to-month basis and has not
executed a formal lease agreement.
The Company also maintains a warehouse facility in Quebec. It is located at 2701
Sabourin Street, and is in St. Laurent, Quebec. The building belongs to the
Company's distributor and is provided by the distributor for no charge because
it saves him $0.05 in shipping on each "Fish" product.
17
<PAGE>
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
- ------------------------------------------------------------
MANAGEMENT
----------
The Registrant is a publicly-owned corporation, the shares of which are owned by
United States and Canadian residents. The Registrant is not controlled directly
or indirectly by another corporation or any foreign government.
Table No. 2 lists as of February 20, 2000 all persons/companies the Registrant
is aware of as being the beneficial owner of more than five percent (5%) of the
common stock of the Registrant.
18
<PAGE>
Table No. 2
Five Percent Shareholders
Title Amount and Nature Percent
of of Beneficial of
Class Name of Beneficial Owner Ownership Class #
- ------ ------------------------ ----------------- -------
Common Daniel B. O'Brien (1) 4,650,000 50.0%
Common Robert N. O'Brien (2) 1,750,000 18.3%
Common Beat Aschmann 700,000 7.7%
Common Sundstrand Ltd. 580,000 6.4%
- -----------------------------------------------------------
TOTAL 7,680,000 82.4%(3)
# Based on 9,131,316 shares outstanding as of February 20, 2000 and options to
purchase shares of common stock.
1. 4,550,000 of these shares are restricted pursuant to Rule 144. 50,000 of
these shares represent currently exercisable share purchase options with a
strike price of $0.25 and 50,000 of these share represent share purchase
options exercisable after 1/1/01 with a strike price of $0.25. Mr.
O'Brien's address is 2624 Queenswood Drive, Victoria, British Columbia
CANADA V8N 1X5.
2. 1,750,000 of these shares are restricted pursuant to Rule 144. Dr.
O'Brien's address is 2614 Queenswood Drive, Victoria BC V8N 1X5.
3. Does not reflect share purchase options for 60,000 shares of common stock
issued as follows: 20,000 shares with a strike price of $0.25 issued to an
employee; 20,000 shares with a strike price of $0.25 issued to another
employee; and, 20,000 shares with a strike price of $0.25 issued to another
employee.
Table No. 3 lists as of February 20, 2000 all Directors and Executive Officers
who beneficially own the Registrant's voting securities and the amount of the
Registrant's voting securities owned by the Directors and Executive Officers as
a group.
Table No. 3
Shareholdings of Directors and Executive Officers
Title Amount and Nature Percent
of of Beneficial of
Class Name of Beneficial Owner Ownership Class #
- ------ --------------------------------------- ----------------- -------
Common Daniel B. O'Brien Pres. & Director (1) 4,650,000 50.0%
Common Robert N. O'Brien Director 1,750,000 18.3%
Common John H. Bientjes Director 80,000 1.0%
Total 6,480,000 69.3%
19
<PAGE>
# Based on 9,131,316 shares outstanding as of February 1, 2000.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
- ---------------------------------------------------------------------
Table No. 4 lists as of February 20, 2000 the names of the Directors of the
Company. The Directors have served in their respective capacities since their
election and/or appointment and will serve until the next Annual Shareholders'
Meeting or until a successor is duly elected, unless the office is vacated in
accordance with the Articles/By-Laws of the Company. All Directors are residents
and citizens of Canada.
Table No. 4
Directors
Date First
Elected
Name Age or Appointed
- --------------------- ---- -----------------
Daniel B. O'Brien 43 May 12, 1998
Dr. Robert N. O'Brien 78 February 19, 2000
John H. Bientjes 47 February 19, 2000
Table No. 5 lists, as of February 20, 2000, the names of the Executive Officers
of the Company. The Executive Officers serve at the pleasure of the Board of
Directors. All Executive Officers are residents/citizens of Canada.
Table No. 5
Executive Officers
Name Position Date of Board Approval
- ----------------- --------- ----------------------
Daniel B. O'Brien President May 12, 1998
Business Experience
Daniel B. O'Brien: Mr. O'Brien is President and a Director of the Company. He
has been employed by the Company since May 12, 1998. His responsibilities
include coordinating strategy, planning, and product development. Mr. O'Brien
devotes 100% of his time to the affairs of the Company. He has been involved in
the swimming pool industry since 1991 at which time he founded a private company
called Flexible Solutions Ltd. which was purchased by the Company, through a
share exchange, in August 1998. Prior to his involvement with Flexible Solutions
Ltd., Mr.
20
<PAGE>
O'Brien was a teacher at Brentwood College where he was in charge of Outdoor
Education.
Dr. Robert N. O'Brien: Dr. O'Brien is a member of the Company's Board of
Directors. He was elected to this position on February 19, 2000. Dr. O'Brien
received his Bachelor of Applied Science in Chemical Engineering from the
University of British Columbia in 1951; his Masters of Applied Science in
Metallurgical Engineering from the University of British Columbia in 1952; his
Ph.D. in Metallurgy from the University of Manchester in 1955; and, was a Post
Doctoral Fellow in Pure Chemistry at the University of Ottawa from 1955 through
1957. He has held various academic positions since 1957 at the University of
Alberta, the University of California at Berkley, and the University of
Victoria. Most recently, he was a Professor of Chemistry at the University of
Victoria from 1968 until 1986 at which time he was given the designation of
Professor Emeritus at the University of Victoria. While teaching, Dr. O'Brien
acted as a consultant and served on the British Columbia Research Council. In
1987, Dr. O'Brien founded the Vancouver Island Advanced Technology and Research
Association.
John H. Bientjes: Mr. Bientjes is a member of the Company's Board of Directors.
He was elected to this position on February 19, 2000. Mr. Bientjes attended
Simon Fraser University in Vancouver, British Columbia and graduated in 1976
with a Bachelor of Arts Degree in Economics and Commerce. For the past fifteen
years he has been the manager of the Commercial Aquatic Supplies Division of
D.B. Perks & Associates, Ltd., located in Vancouver, British Columbia, a company
that markets supplies and equipment to commercial pools which are primarily
owned by municipalities. His primary responsibilities at D.B. Perks &
Associates, Ltd. are in the areas of purchasing, sales and customer service.
There have been no events during the last five years that are material to an
evaluation of the ability or integrity of any director, person nominated to
become a director, executive officer, promoter or control person including:
a) any bankruptcy petition filed by or against any business of which such person
was a general partner or executive officer either at the time of the bankruptcy
or within two years prior to that time;
b) any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);
21
<PAGE>
c) being subject to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently
enjoining, barring, suspending or otherwise limiting his/her involvement in any
type of business, securities or banking activities;
d) being found by a court of competent jurisdiction (in a civil action), the
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not been
reversed, suspended, or vacated.
Family Relationships
- --------------------
Dan O'Brien, the President of the Company is the son of Dr. Robert N. O'Brien, a
Director of the Company. Other than that there are no relationships between any
of the officers or directors of the Company.
Other Relationships/Arrangements
- --------------------------------
There are no arrangements or understandings between any two or more Directors or
Executive Officers, pursuant to which he/she was selected as a Director or
Executive Officer. There are no material arrangements or understandings between
any two or more Directors or Executive Officers.
On April 30, 1998 the Company retained Next Millennium Management Ltd. ("Next
Millennium") as a consultant. Next Millennium was retained to assist the Company
in coordinating its public offering; overseeing the acquisition of other
companies; negotiating agreements; and, general management consulting. Pursuant
to the terms of the Agreement, Next Millennium received a fee of $5,000 which
was paid in full. The agreement between the Company and Next Millennium
Management was terminated on October 12, 1999. The total amount paid to Next
Millennium was $5,000.
ITEM 6. EXECUTIVE COMPENSATION
- -------------------------------
The Company has no formal plan for compensating its Directors for their service
in their capacity as Directors. Directors are entitled to reimbursement for
reasonable travel and other out-of-pocket expenses incurred in connection with
attendance at meetings of the Board of Directors. The Board of Directors may
award special remuneration to any Director undertaking any special services on
behalf of the Company other than services ordinarily required of a Director.
During Fiscal 1999, no Director received and/or accrued any compensation for his
services as a Director, including committee participation and/or special
assignments.
22
<PAGE>
Mr. O'Brien receives a salary of $20,100 and is also reimbursed for reasonable
expenses incurred in the management of the Company's wholly owned subsidiary,
Flexible Solutions Ltd.
The Company has no formal stock option plan which has been approved by
regulatory authorities or other long-term compensation program other than that
described in the preceding paragraph.
During Fiscal 1999, no funds were set aside or accrued by the Company to provide
pension, retirement or similar benefits for Directors or Executive Officers.
The Company has no plans or arrangements in respect of remuneration received or
that may be received by Executive Officers of the Company in Fiscal 2000 to
compensate such officers in the event of termination of employment (as a result
of resignation, retirement, change of control) or a change of responsibilities
following a change of control, where the value of such compensation exceeds
$60,000 per Executive Officer.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------------------------------------------------------
The Company was incorporated for the purpose of acquiring Flexible Solutions
Ltd. The value of Flexible Solutions Ltd. and the determination of the number of
shares to be issued to its owners were not made independently or based on
appraisals. Accordingly, the transactions between the Company and Flexible
Solutions Ltd. cannot be deemed to be an arm's length transaction. By the terms
of the Agreement and Plan of Share Exchange, the Company issued 7,000,000 shares
of its common stock to Flexible Solutions Ltd., a company owned by Daniel
O'Brien, the president of the Company; Dr. Robert N. O'Brien, a Director of the
Company; and, Beat Aschmann.
Other than described above, there have been no transactions since May 12, 1998
(Date of Inception), or proposed transactions, which have materially affected or
will materially affect the Company in which any Director, Executive Officer, or
beneficial holder of more than 10% of the outstanding common stock, or any of
their respective relatives, spouses, associates or affiliates has had or will
have any direct or material indirect interest.
ITEM 8. DESCRIPTION OF SECURITIES
- ----------------------------------
The authorized capital of the Registrant is 50,000,000 shares of common stock
with a par value of $0.001 per share and 1,000,000
23
<PAGE>
shares of preferred stock with a par value of $0.01 per share. 9,131,316 shares
of common stock and no shares of preferred stock were issued and outstanding at
December 31, 1999, the end of the most recent fiscal year. At February 20, 2000,
there were 9,131,316 shares of common stock outstanding and no shares of
preferred stock outstanding.
Common Stock:
All shares of the Company's Common Stock have equal voting rights, with one vote
per share, on all matters submitted to the stockholders for their consideration.
The shares of Common Stock do not have cumulative voting rights.
Subject to the prior rights of the holders of any series of preferred stock
which may be issued, holders of Common Stock are entitled to receive dividends,
when and if declared by the Board of Directors, out of funds of the Company
legally available therefor.
Holders of shares of Common Stock do not have any preemptive rights or other
rights to subscribe for additional shares, or any conversion rights. Upon a
liquidation, dissolution, or winding up of the affairs of the Company, holders
of the Common Stock will be entitled to share ratably in the assets available
for distribution to such stockholders after the payment of all liabilities and
after the liquidation preference of any preferred stock outstanding at the time.
There are no sinking fund provisions applicable to the Common Stock.
Preferred Stock:
The Articles of Incorporation authorize the Board of Directors to issue, by
resolution, 1,000,000 shares of preferred stock, in classes, having such
designations, powers, preferences, rights, and limitations and on such terms and
conditions as the Board of Directors may from time to time determine, including
the rights, if any, of the holders of such preferred stock with respect to
voting, dividends, redemptions, liquidation and conversion.
Debt Securities to be Registered. Not applicable.
- --------------------------------
American Depository Receipts. Not applicable.
- ----------------------------
Other Securities to be Registered. Not applicable.
- ---------------------------------
24
<PAGE>
PART II
Item 1. Market Price Of And Dividends on the Registrant's
- ----------------------------------------------------------
Common Equity and Other Shareholder Matters
- ----------------------------------------------------
The Company's common stock trades in the "Pink Sheets" in the United States,
having the trading symbol "FXSO" and CUSIP# 33938T 10 4. Trading volume and
high/low/closing prices, on a monthly basis, since the stock began trading on
the Pink Sheets on October 12, 1999.
Table No. 7
FXSO Stock Trading Activity
---------- ----------- ----------- ----------- -----------
Month High Low Close Volume
---------- ----------- ----------- ----------- -----------
October $0.375 $0.03 $0.375 263,000
---------- ----------- ----------- ----------- -----------
November $0.37 $0.22 $0.29 91,000
---------- ----------------------------------- -----------
December $0.25 $0.12 $0.12 99,000
---------- ----------- ----------- ----------- -----------
January No Trades No Trades No Trades No Trades
---------- ----------- ----------- ----------- -----------
February $0.30 $0.10 $0.20 49,000
---------- ----------- ----------- ----------- -----------
The Company's common stock is issued in registered form. American Securities
Transfer and Trust (located in Denver, Colorado) is the registrar and transfer
agent for the common stock.
On February 3, 2000 the shareholders' list for the Company's common shares
showed forty nine (49) registered shareholders and 9,131,316 shares outstanding.
The Company has not declared any dividends since incorporation and does not
anticipate that it will do so in the foreseeable future. The present policy of
the Company is to retain future earnings for use in its operations and expansion
of its business.
ITEM 2. LEGAL PROCEEDINGS
- --------------------------
The Company knows of no material, active or pending legal proceedings against
them; nor is the Company involved as a plaintiff in any material proceeding or
pending litigation.
The Company knows of no active or pending proceedings against anyone that might
materially adversely affect an interest of the Company.
25
<PAGE>
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
- ------------------------------------------------------
Not Applicable
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
- ------------------------------------------------
On August 17, 1998, the Company completed an offering of 1,050,000 shares of its
Common Stock at $0.01 per share, raising gross proceeds of $10,500.
On September 7, 1998, the Company completed an offering of 500,000 shares of its
Common Stock at $0.05 per share, raising gross proceeds of $25,000.
On November 13, 1998, the Company completed an offering of 1,000,000 shares of
its Common Stock at $0.25 per share, raising gross proceeds of $145,329 (581,316
shares sold).
The shares of common stock in all of the foregoing offerings, were offered
pursuant to an exemption to registration provided under Section 3(b), Regulation
D, Rule 504 of the Securities Act of 1933, as amended and under the exemption to
registration under Section 11-51-308(1)(p) of the Colorado Securities Act.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
- --------------------------------------------------
The Company's By-Laws address indemnification under Article VI, Sections 6.1 and
6.1.
To the fullest extent permitted by the laws of the State of Nevada (currently
set forth in NRS 78.751), as the same now exists or may hereafter be amended or
supplemented, the Company shall indemnify its directors and officers, including
payment of expenses as they are incurred and in advance of the final disposition
of any action, suit, or proceeding. Employees, agents, and other persons may be
similarly indemnified by the Company, including advancement of expenses, in such
case or cases and to the extent set forth in a resolution or resolutions adopted
by the Board of Directors. No amendment of this Section shall have any effect on
indemnification or advancement of expenses relating to any event arising prior
to the date of such amendment.
To the fullest extent permitted by the laws of the State of Nevada (currently
set forth in NRS 78.752), as the same now exists or may hereafter be amended or
supplemented, the Company may purchase and maintain insurance and make other
financial arrangements on behalf of any person who is or was a director,
26
<PAGE>
officer, employee, or agent of the Company, or is or was serving at the request
of the Company as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, for any
liability asserted against such person and liability and expense incurred by
such person in its capacity as a director, officer, employee, or agent, or
arising out of such person's status as such, whether or not the Corporation has
the authority to indemnify such person against such liability and expenses.
PART F/S
ITEM 1. FINANCIAL STATEMENTS
- -----------------------------
The financial statements and notes thereto as required under ITEM #13 are
attached hereto and found immediately following the text of this Registration
Statement. The audit report of Smthe Ratcliffe, independent Chartered
Accountants, for the audited financial statements for Fiscal 1999, ended
December 31, 1999 and notes thereto is included herein immediately preceding the
audited financial statements.
(A-1) Audited Financial Statements: Fiscal 1999
Auditors' Report, dated January 17, 2000
Consolidated Balance Sheet at 12/31/99 and 12/31/98
Consolidated Statement of Operations for the Year Ended 12/31/99 and 12/31/98
Consolidated Statement of Stockholders' Equity for the Years Ended 12/31/99 and
12/31/98
Consolidated Statement of Cash Flows for the Years Ended 12/31/99 and 12/31/98
Notes to Consolidated Financial Statements
PART III
Item 1. INDEX TO EXHIBITS:
- ---------------------------
Exhibit Number Description
- -------------- -----------
2 Articles of Share Exchange
3.1 Articles of Incorporation
27
<PAGE>
3.2 Bylaws
4.1 Form D, August 21, 1998
4.2 Form D, September 15, 1998
4.3 Form D, September 17, 1998
10.1 "Tropical Fish" Distribution Agreement
10.2 Executive Compensation Agreement
21 Subsidiaries
27 Financial Data Schedule
28
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
Flexible Solutions International Inc.
Date: April 17, 2000 By /s/Daniel B. O'Brien
----------------------------
Daniel B. O'Brien, President
29
<PAGE>
FLEXIBLE SOLUTIONS
INTERNATIONAL INC.
Consolidated Financial Statements
December 31, 1999
(U.S. Dollars)
INDEX Page
Report of Independent Chartered Accountants to
the Board of Directors and Stockholders 1
Financial Statements
Consolidated Balance Sheets 2
Consolidated Statements of Operations 3
Consolidated Statements of Stockholders' Equity 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6-10
<PAGE>
REPORT OF INDEPENDENT CHARTERED ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
OF FLEXIBLE SOLUTIONS INTERNATIONAL INC.
We have audited the consolidated balance sheets of Flexible Solutions
International Inc. as at December 31, 1999 and December 31, 1998 and the
consolidated statements of operations, stockholders' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
in the United States. Those standards require that we plan and perform an audit
to obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, these consolidated financial statements present fairly, in all
material respects, the consolidated financial position of the Company as at
December 31, 1999 and December 31, 1998 and the results of their operations and
their cash flows for each of the years then ended in conformity with generally
accepted accounting principles in the United States.
"Smythe Ratcliffe"
Chartered Accountants
Vancouver, British Columbia
January 17, 2000
1
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Balance Sheets
December 31
(U.S. Dollars)
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Assets
Current
Cash $59,441 $157,210
Accounts receivable (note 3) 112,839 1,531
Inventory 136,560 5,335
Prepaid expenses 520 0
-------- --------
Total Current Assets 309,360 164,076
Property and Equipment (note 4) 49,782 10,137
-------- --------
Total Assets $359,142 $174,213
======== ========
Liabilities
Current
Accounts payable $27,011 $21,567
Accrued liabilities 6,929 3,370
Income tax payable 69,286 0
-------- --------
Total Current Liabilities 103,226 24,937
Due to Stockholder (note 5) 0 3,261
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
9,131,316 Common shares 9,131 9,131
Capital in Excess of Par Value 163,653 163,653
Other Comprehensive Income (Loss) 6,677 (376)
Retained Earnings (Deficit) 76,455 (26,393)
-------- --------
255,916 146,015
-------- --------
Total Liabilities and Stockholders' Equity $359,142 $174,213
======== ========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Statements of Operations
Years Ended December 31
(U.S. Dollars)
1999 1998
---------- ----------
(note 1)
Sales $759,218 $84,252
Cost of Sales (Exclusive of Depreciation) 413,849 58,959
---------- ----------
Gross Profit 345,369 25,293
Operating Expenses
Wages 67,991 5,187
Commission 20,957 15,353
Professional fees 16,465 4,752
Office 15,600 6,267
Subcontracting 12,801 0
Stock promotion and transfer agent fee 8,048 750
Shipping 7,179 2,280
Travel 6,607 4,207
Rent 4,442 0
Telephone 2,359 1,908
Depreciation 12,764 2,619
---------- ----------
175,213 43,323
Income (Loss) Before Income Tax 170,156 (18,030)
Income Tax 67,308 0
---------- ----------
Net Income (Loss) $102,848 $(18,030)
========== ==========
Income (Loss) Per Share $ 0.01 $ (0.01)
========== ==========
Weighted Average Number of Shares 9,131,316 4,102,469
========== ==========
See notes to consolidated financial statements.
3
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Statement of Stockholders' Equity
Years Ended December 31, 1999 and 1998
(U.S. Dollars)
<TABLE>
<CAPTION>
Capital in Retained Other Total
Excess of Earnings Comprehensive Stockholders'
Shares Par Value Par Value (Deficit) Income (Loss) Equity
- ------------------------------- ----------- ---------- ------------ ------------ ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Shares Issued in Exchange
for 100% of Flexible
Solutions Ltd. 7,000,000 $7,000 $0 $(8,363) $0 $(1,363)
Shares Issued for Cash
(August and October 1998) 2,131,316 2,131 178,698 0 0 180,829
Share Issue Costs 0 0 (15,045) 0 0 (15,045)
Translation Adjustment 0 0 0 0 (376) (376)
Net Loss 0 0 0 (18,030) 0 (18,030)
----------- ---------- ------------ ------------ ------------- --------------
Balance, December 31, 1998 9,131,316 9,131 163,653 (26,393) (376) 146,015
=========== ========== ============ ============ ============= ==============
Translation Adjustment 0 0 0 0 7,053 7,053
Net Income 0 0 0 102,848 0 102,848
----------- ---------- ------------ ------------ ------------- --------------
Balance, December 31, 1999 9,131,316 $9,131 $163,653 $76,455 $6,677 $255,916
=========== ========== ============ ============ ============= ==============
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Statements of Cash Flows
Years Ended December 31
(U.S. Dollars)
<TABLE>
<CAPTION>
1999 1998
--------- ---------
(note 1)
<S> <C> <C>
Cash Flows from Operating Activities
Net income (loss) $102,848 $(18,030)
Adjustments to reconcile net income (loss)
to net cash, provided by (used in) operating activities
Depreciation 12,764 2,619
Changes in Non-Cash Working Capital
Accounts receivable (111,308) (1,531)
Inventory (131,225) (5,335)
Prepaid expenses (520) 0
Accounts payable 5,444 19,911
Accrued liabilities 3,559 3,370
Income tax payable 69,286 0
--------- ---------
Net Cash Flows Provided by (Used in) Operating Activities (49,152) 1,004
Cash Flows (Used in) Investing Activities
Acquisition of equipment (52,409) (12,671)
--------- ---------
Cash Flows from Financing Activities
Advances from (repayment to) shareholder (3,261) 3,261
Issuance of capital stock 0 180,829
Share issue costs 0 (15,045)
--------- ---------
Net Cash Flows Provided (Used in) Financing Activities (3,261) 169,045
--------- ---------
Effect of Exchange Rate Changes on Cash 7,053 (376)
--------- ---------
Inflow (Outflow) of Cash (97,769) 157,002
Cash, Beginning of Year 157,210 208
--------- ---------
Cash, End of Year $59,441 $157,210
========= =========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Notes to Consolidated Financial Statements
Years Ended December 31, 1999 and 1998
(U.S. Dollars)
1. OPERATIONS AND BASIS OF PRESENTATION
These financial statements include the accounts of Flexible Solutions
International Inc. and its wholly owned subsidiary Flexible Solutions
Ltd. ("the Company"). All intercompany balances and transactions are
eliminated. The parent company was incorporated May 12, 1998 in the
State of Nevada and had no operations until June 30, 1998 as described
below.
On June 30, 1998 the Company completed the acquisition of 100% of the
shares of Flexible Solutions Ltd. The acquisition was effected through
the issuance of 7,000,000 shares of common stock by the Company with
the former shareholders of the subsidiary receiving 100% of the total
shares then issued and outstanding. The transaction has been accounted
for as a reverse take-over.
Flexible Solutions Ltd. is accounted for as the acquiring party and the
surviving entity. Because Flexible Solutions Ltd. is the accounting
survivor, the consolidated financial statements presented for all
periods are those of Flexible Solutions Ltd. The shares issued by
Flexible Solutions International Inc. pursuant to the 1998 acquisition
have been accounted for as if those shares had been issued upon the
organization of Flexible Solutions Ltd.
The Company is engaged in the development and marketing of a swimming
pool chemical designed as an energy saving liquid pool blanket.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Foreign currency
The functional currency of the Company 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 of 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 Company's functional currency, Canadian
dollars, into the reporting currency, U.S. dollars are
excluded from the determination of income and disclosed as
other comprehensive income (loss) in stockholders' equity.
Foreign exchange gains and losses relating transactions not
denominated in the applicable local currency are included in
the determination of income.
(b) Use of estimates
The preparation of consolidated financial statements in
conformity with generally accepted accounting principles
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.
(d) Inventory
Inventory is valued at the lower of cost and net realizable
value. Cost is determined on a first-in, first-out basis.
6
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Notes to Consolidated Financial Statements
Years Ended December 31, 1999 and 1998
(U.S. Dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(d) Property and equipment
Property and equipment are recorded at cost and depreciated
using the declining balance method over the following annual
rates:
Manufacturing equipment - 20%
Trailer - 30%
Computer hardware - 30%
Furniture and fixtures - 20%
Office equipment - 20%
(e) Revenue recognition
Revenue from product sales is recognized at the time the
product is shipped. 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.
(f) Financial instruments
The Company's financial instruments consist of cash, accounts
receivable, accounts payable and accrued liabilities. It is
management's opinion that the Company is not exposed to
significant interest, currency or credit risks arising from
these financial instruments. The fair value of these financial
instruments approximate their carrying values due to their
short maturities.
(g) Income (loss) per share calculation
Income (loss) per share is calculated by dividing net income
(loss) by the weighted average number of shares outstanding.
3. ACCOUNTS RECEIVABLE
No provision has been made for uncollectible accounts as management
considers all accounts receivable are collectible.
7
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Notes to Consolidated Financial Statements
Years Ended December 31, 1999 and 1998
(U.S. Dollars)
4. PROPERTY AND EQUIPMENT
1999
Accumulated Net Book
Cost Depreciation Value
------- ------------ --------
Manufacturing equipment $61,127 $14,313 $46,814
Trailer 1,510 453 1,057
Computer hardware 1,039 312 727
Furniture and fixtures 946 189 757
Office equipment 534 107 427
------- ------- -------
$65,156 $15,374 $49,782
======= ======= =======
1998
Accumulated Net Book
Cost Depreciation Value
------- ------------ --------
Manufacturing equipment $12,671 $2,534 $10,137
======= ======= =======
5. DUE TO STOCKHOLDER
The amount due to the stockholder is without interest or stated terms
of repayment.
6. COMPREHENSIVE INCOME (LOSS)
1999 1998
-------- --------
Net income (loss) $102,848 $(18,030)
Other comprehensive income 7,053 (376)
-------- --------
Comprehensive income (loss) $109,901 $(18,406)
======== ========
8
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Notes to Consolidated Financial Statements
Years Ended December 31, 1999 and 1998
(U.S. Dollars)
7. INCOME TAX
Total income tax expense differs from the amounts computed by applying
the combined Canadian federal and provincial statutory rate of 45.62%
to income before income taxes as a result of the following
<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
Expected tax expense (benefit) at statutory rate $77,625 $(8,225)
Increase (decrease) resulting from
Manufacturing and processing deduction (11,911) 0
Deferred income tax asset arising from 0 8,225
operating loss carry forward
Other 1,594 0
------- -------
$67,308 $0
======= =======
The components of the deferred income tax assets are as follows
1999 1998
------- -------
Deferred income tax assets
Operating loss carry forward $0 $2,764
Property, plant and equipment 1,462 979
------- -------
1,462 3,743
Less: valuation allowance (1,462) (3,743)
------- -------
$0 $0
======= =======
</TABLE>
The valuation allowance reflects the Company's estimate that certain
tax deductions arising in the current year may not be realized.
9
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Notes to Consolidated Financial Statements
Years Ended December 31, 1999 and 1998
(U.S. Dollars)
8. EARNINGS PER SHARE
<TABLE>
<CAPTION>
1999
----------------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ----------
<S> <C> <C> <C>
Net Income $102,848 9,131,316 $ 0.01
=========== ============= ==========
1998
----------------------------------------------------
Loss Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ----------
Basic Loss per share
Net Loss $(18,030) 4,102,469 $( 0.01)
=========== ============= ==========
</TABLE>
There were no preferred shares issued and outstanding for the years
ending December 31, 1999 and 1998.
There were no dilutive securities outstanding for the years ended
December 31, 1999 and 1998.
9. SEGMENTED AND SIGNIFICANT CUSTOMER INFORMATION
The Company operates in a single segment, involving the development and
marketing of a swimming pool chemical designed as an energy saving
liquid pool blanket. In 1999, 28.8% of the Company's sales were in
United States, the remainder were earned in Canada. In 1998, 100% of the
Company's sales were in Canada.
All the Company's long-lived assets are located in Canada. The Company
had 1 major customer, Sunsolar Energy Technologies which comprised 90%
and 70% of total sales for the years ended December 31, 1999 and 1998
respectively. There were no significant concentrations of credit risk.
10
Exhibit 2
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
JUL 16 1998
No. c11067-98
ARTICLES OF SHARE EXCHANGE
OF
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
AND
FLEXIBLE SOLUTIONS LTD.
The undersigned, being first duly sworn, do hereby state as follows:
1. These Articles of Share Exchange are being filed with the Nevada
Secretary of State pursuant to Section 92A.200 of the Nevada General Corporation
Law to reflect the exchange of all of the issued and outstanding shares of stock
of FLEXIBLE SOLUTIONS LTD., a corporation of the Province of British Columbia,
for shares of stock of FLEXIBLE SOLUTIONS INTERNATIONAL INC., a Nevada
corporation, as the acquiring corporation.
2. A copy of the Agreement and Plan of Share Exchange dated June 25,
1998 (the "Plan'), is attached hereto as Exhibit "A."
3. The Plan was approved by the shareholders of FLEXIBLE SOLUTIONS LTD.
and the Sole Director of FLEXIBLE SOLUTIONS INTERNATIONAL INC. on May 27, 1998.
In the case of FLEXIBLE SOLUTIONS LTD., the number of shares cast for the Plan
entitled to vote on the share exchange was sufficient for approval by that
voting group. In the case of FLEXIBLE SOLUTIONS INTERNATIONAL INC., which has no
shareholders, the Plan on the share exchange was approved by the sole director
on June 25, 1998.
4 The share exchange is to be effective as of June 30, 1998.
Dated this 6th day of July, 1998
FLEXIBLE SOLUTIONS LTD. FLEXIBLE SOLUTIONS INTERNATIONAL INC
By: /s Robert N. O'Brien,Vice-President By: /s Daniel B. O'Brien, President
------------------------------------ --------------------------------
Robert N. O'Brien,Vice-President Daniel B. O'Brien, President
By: /s Daniel B. O'Brien, Secretary By: /s Daniel B. O'Brien, Secretary
------------------------------------ --------------------------------
Daniel B. O'Brien, Secretary Daniel B. O'Brien, Secretary
<PAGE>
CITY OF Victoria )
)
PROVINCE OF British Columbia )
Before me, a notary public in and for the aforesaid Province,
personally appeared Daniel B. O'Brien, President of Flexible Solutions
International known to be the person who executed the foregoing document this
6th day of July, 1998.
Notary Public /s Robert J. Salmond
-------------------------------
ROBERT J. SALMOND
Barrister and Solicitor
#203 - 3994 Shelbourn Street
Victoria, B.C.
V8N 3E2
My Commission does not expire
being a solicitor
CITY OF Victoria
PROVINCE OF British Columbia
Before me, a notary public in and for the aforesaid Province, personally
appeared Daniel B. O'Brien, Secretary of Flexible Solutions International Inc.
known to be the person who executed the foregoing document this 6th day of July,
1998.
Notary Public /s Robert J. Salmond
------------------------------
ROBERT J. SALMOND
Barrister and Solicitor
#203 - 3994 Shelbourn Street
Victoria, B.C.
V8N 3E2
My Commission does not expire
being a solicitor
<PAGE>
EXHIBIT"A"
AGREEMENT AND PLAN OF SHARE EXCHANGE
AGREEMENT AND PLAN OF SHARE EXCHANGE (the "Agreement") dated this 25th
day of June, 1998, by and between FLEXIBLE SOLUTIONS INTERNATIONAL INC., a
Nevada corporation ("FLEXIBLE INTERNATIONAL"), and FLEXIBLE SOLUTIONS LTD., a
corporation incorporated in the Province of British Columbia, Canada FLEXIBLE').
WHEREAS, the Sole Director of FLEXIBLE INTERNATIONAL and the Board of
Directors of FLEXIBLE deem it advisable and in the best interests of FLEXIBLE
INTERNATIONAL and FLEXIBLE that FLEXIBLE INTERNATIONAL acquire FLEXIBLE by
exchanging all of the issued and outstanding shares of FLEXIBLE for shares of
FLEXIBLE INTERNATIONAL (the "Share Exchange"); and
WHEREAS, the Sole Director of FLEXIBLE INTERNATIONAL and the Board of
Directors of FLEXIBLE have approved and adopted this Agreement as a "plan of
reorganization" within the meaning of Section 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, provisions and conditions contained herein, and for other good and
valuable consideration, the adequacy and receipt of which are hereby
acknowledged, the parties hereto agree that all of the issued and outstanding
capital stock of FLEXIBLE shall be acquired by FLEXIBLE INTERNATIONAL, upon and
subject to the following terms and conditions:
ARTICLE I
GENERAL TERMS AND PROVISIONS
Section 1.01. Effectiveness. At June 30, 1998, (the "Effective Date"),
FLEXIBLE INTERNATIONAL shall issue new FLEXIBLE INTERNATIONAL Common Stock in
exchange for all of the outstanding FLEXIBLE Stock on the terms provided herein,
and FLEXIBLE shall become a wholly-owned subsidiary of FLEXIBLE INTERNATIONAL.
Section 1.02. Taking of Necessary Action. FLEXIBLE INTERNATIONAL and
FLEXIBLE shall take all such actions as may be necessary or appropriate in order
to effectuate the transaction contemplated by this Agreement. If, at any time
after the Effective Date, any further action is necessary or desirable to carry
out the purpose of this Agreement or to vest FLEXIBLE INTERNATIONAL with title
to any or all of the properties, assets, rights, approvals, or immunities of
FLEXIBLE, the officers and directors of FLEXIBLE INTERNATIONAL and its
subsidiary, at the expense of FLEXIBLE INTERNATIONAL, shall take such necessary
or desirable action.
<PAGE>
ARTICLE III
EXCHANGE OF SHARES
Section 2.01. Exchange of Shares. On the Effective Date, FLEXIBLE
INTERNATIONAL shall issue 7,000,000 shares of its FLEXIBLE INTERNATIONAL Common
Stock to the shareholders of FLEXIBLE in exchange for all of the issued and
outstanding FLEXIBLE Common Stock (1,000 shares of Common Stock).
Section 2.02. Stock Legends. Certificates representing shares of
FLEXIBLE INTERNATIONAL Common Stock shall bear a legend restricting transfer of
the shares of the Common Stock represented by such certificate in substantially
the form set forth below:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") or applicable
state law, and are "restricted securities" as that term is defined in
Rule 144 under the Act. The securities may not be offered for sale,
sold, or otherwise transferred except pursuant to an effective
registration statement under the Act and applicable state law, the
availability of which is to be established to the satisfaction of the
Company."
FLEXIBLE INTERNATIONAL shall, from time to time, make stop transfer
notations in it records to ensure compliance in connection with any proposed
transfer of the shares with the Act and all applicable state securities laws.
Section 2.03 Dissenting Shareholders. The shareholders of FLEXIBLE each
waive their right to dissent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of FLEXIBLE INTERNATIONAL and FLEXIBLE represents to the other as
follows:
Section 3.01. Capitalization. It has no obligation under any agreement
with any person to register any of its securities under the 193 3 Act or any
applicable state securities laws and, during the three years preceding the date
of this Agreement, it has not sold or issued any of its securities in a
transaction which was not registered under the 1933 Act or any applicable state
securities law or exempt from such registration. There are no preemptive rights
with respect to any of its securities.
(a) FLEXIBLE. FLEXIBLE represents and warrants that its authorized
capital stock consists of 100,000 shares of Common Stock, no par value, 1,000
shares of which are issued and outstanding as of June 25, 1998. All of the
issued and outstanding shares of FLEXIBLE are validly issued, fully paid, and
nonassessable.
2
<PAGE>
(b) FLEXIBLE INTERNATIONAL. FLEXIBLE INTERNATIONAL represents and
warrants that its authorized capital stock consists of 1,000,000 shares of
Preferred Stock, $0.01 par value per share, none of which are issued or
outstanding; and 50,000,000 shares of Common Stock, $0.001 par value per share,
none of which were issued or outstanding as of June 25, 1998.
Section 3.02. Principal Shareholders. No person owns of record or, to
the best of its knowledge, owns beneficially five percent or more of any class
of the issued and outstanding shares of its voting securities, except as set
forth as follows:
FLEXIBLE. The following individuals own 100% of the outstanding shares
of FLEXIBLE Common Stock:
Beat Aschmann 10%
Daniel B. O'Brien 65%
Dr. Robert N. O'Brien 25%
Section 3.03. No Subsidiaries. It has no subsidiaries.
Section 3.04. Options and Other Rights. There are no outstanding
options, warrants, or rights to subscribe for, purchase, or receive shares of
its common stock or any other securities convertible into common stock.
ARTICLE IV
CONDITIONS PRECEDENT TO THE MERGER
The obligations of the parties under this Agreement are subject to the
satisfaction of the following express conditions precedent at or before the
Effective Date:
Section 4. 0 1. Compliance with Laws. All statutory requirements for
the valid consummation by it of the transactions contemplated by this Agreement
shall have been fulfilled.
Section 4.02. Blue Sky Filings. All Blue Sky filings and permits or
orders required to carry out the transactions contemplated by this Agreement
shall have been made and received containing no term or condition reasonably
unacceptable to it.
Section 4.03. Adequate Proceedings. All corporate and other proceedings
in connection with the transactions contemplated herein and all documents
incident thereto shall be reasonably satisfactory in form and substance to it
and its counsel.
Section 4.04. Certificate of President and Secretary. Each corporation
shall have furnished to the other a certificate of the President or Vice
President and the Secretary of the respective company, dated as of the Effective
Date, to the effect that the representations and warranties of the respective
company in this Agreement are true and correct at and as of the Effective Date,
that no
3
<PAGE>
error, misstatement, or omission has been discovered or is known with respect to
such representations and warranties, and that the respective company has
complied with all the agreements and has satisfied all the covenants on its part
to be performed at or prior to the Effective Date.
Section 4.05. No Adverse Change. Between the date of execution of this
Agreement and the Effective Date, FLEXIBLE U-41TRNATIONAL and FLEXIBLE (a)
except in the ordinary course of its business, shall not have incurred any
liabilities or obligations (direct or contingent) or disposed of any of its
assets, or entered into any material transaction or suffered or experienced any
materially adverse change in its condition, financial or otherwise, and (b)
shall not have increased its issued and outstanding shares of common stock or
any other securities.
ARTICLE V
MISCELLANEOUS
Section 5.01. Assignment. This Agreement may not be assigned nor any of
the performance hereunder delegated by operation of law or otherwise by any
party hereto, and any purported assignment or delegation shall be void.
Section 5.02. Headings. The article and section headings of this
Agreement are inserted for convenience of reference only and do not constitute a
part of this Agreement.
Section 5.03. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors, legal representatives, assigns, and transferors.
Section 5.04. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof. There
are no representations, warranties, conditions, or other obligations except as
herein specifically provided. Any waiver, amendment, or modification hereof must
be in writing. A waiver in one instance shall not be deemed to be a continuing
waiver or waiver in other instance.
Section 5.05. Counterparts. This Agreement may be executed in
counterparts and each counterpart hereof shall be deemed to be an original, but
all such counterparts together shall constitute but one agreement an original,
but all such counterparts together shall constitute but one agreement.
Section 5.06. Notices. All notices, requests, instructions, or other
documents to be given hereunder shall be deemed given if in writing, sent
registered mail:
4
<PAGE>
to FLEXIBLE SOLUTIONS INTERNATIONAL INC.:
2614 Queenswood Drive
Victoria, B.C. V8N IX5
Canada
to FLEXIBLE SOLUTIONS LTD.
2614 Queenswood Drive
Victoria, B.C. V8N 1X5
Canada
IN WITNESS WIHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
/s Daniel B. O'Brien
--------------------------------------
BY: Daniel B. O'Brien
Its: President
FLEXIBLE SOLUTIONS LTD.
/s Robert N. O'Brien
--------------------------------------
By: Robert N O'Brien
Its: Vice-President
5
Exhibit 3.1
SECRETARY OF STATE
(CORPORATE SEAL)
STATE OF NEVADA
CORPORATE CHARTER
1, DEAN HELLER, the duly elected and qualified Nevada Secretary of State, do
hereby certify that FLEXIBLE SOLUTIONS INTERNATIONAL INC. did on May 12,1998,
file in this office the original Articles of Incorporation; that said Articles
are now on file and of record in the office of the Secretary of State of the
State of Nevada, and further, that said Articles contain all the provisions
required by the law of said State of Nevada.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Great Seal of
State, at my office, in Carson City, Nevada, on May 13,1998.
/s Dean Heller
-------------------
Secretary of State
By
/s Marianne Lockyer
-------------------
Certification Clerk
<PAGE>
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
MAY 12 1998
No. c11067-98
/S Dean Heller
DEAN HELLER, SECRETARY OF STATE
ARTICLES OF INCORPORATION
OF
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
ARTICLE I
The name of the corporation is Flexible Solutions International Inc.
(the "Corporation").
ARTICLE II
The amount of total authorized capital stock which the Corporation
shall have authority to issue is 50,000,000 shares of common stock, each with
$0.001 par value, and 1,000,000 shares of preferred stock, each with $0.01 par
value. To the fullest extent permitted by the laws of the State of Nevada
(currently set forth in NRS 78.195), as the same now exists or may hereafter be
amended or supplemented, the Board of Directors may fix and determine the
designations, rights, preferences or other variations of each class or series
within each class of capital stock of the Corporation.
ARTICLE III
The business and affairs of the Corporation shall be managed by a Board
of Directors which shall exercise all the powers of the Corporation except as
otherwise provided in the Bylaws, these Articles of Incorporation or by the laws
of the State of Nevada. The number of members of the Board of Directors shall be
set in accordance with the Company's Bylaws; however, the initial Board of
Directors shall consist of one member. The name and address of the person who
shall serve as the director until the first annual meeting of stockholders and
until his successors are duly elected and qualified is as follows:
Name Address
Daniel O'Brien 2614 Queenswood
Victoria, B.C. V8N 1X5
Canada
1
<PAGE>
ARTICLE IV
The name and address of the incorporator of the Corporation is Fay M.
Matsukage, 455 Sherman Street, Suite 300, Denver, Colorado 80203.
ARTICLE V
To the fullest extent permitted by the laws of the State of Nevada
(currently set forth in NRS 78.037), as the same now exists or may hereafter be
amended or supplemented, no director or officer of the Corporation shall be
liable to the Corporation or to its stockholders for damages for breach of
fiduciary duty as a director or officer.
ARTICLE VI
The Corporation shall indemnify, to the fullest extent permitted by
applicable law in effect from time to time, any person against all liability and
expense (including attorneys' fees) incurred by reason of the fact that he is or
was a director or officer of the Corporation, he is or was serving at the
request of the Corporation as a director, officer, employee, or agent of, or in
any similar managerial or fiduciary position of, another corporation,
partnership, joint venture, trust or other enterprise. The Corporation shall
also indemnify any person who is serving or has served the Corporation as a
director, officer, employee, or agent of the Corporation to the extent and in
the manner provided in any bylaw, resolution of the shareholders or directors,
contract, or otherwise, so long as such provision is legally permissible.
ARTICLE VII
The owners of shares of stock of the Corporation shall not have a
preemptive right to acquire unissued shares, treasury shares or securities
convertible into such shares.
ARTICLE VII
Only the shares of capital stock of the Corporation designated at
issuance as having voting rights shall be entitled to vote at meetings of
stockholders of the Corporation, and only stockholders of record of shares
having voting rights shall be entitled to notice of and to vote at meetings of
stockholders of the Corporation.
2
<PAGE>
ARTICLE IX
The initial resident agent of the Corporation shall be the Corporation
Trust Company of Nevada, whose street address is One East 1st Street, Reno,
Nevada 89501.
ARTICLE X
The provisions of NRS 78.378 to 78.3793 inclusive, shall not apply to
the Corporation.
ARTICLE XI
The purposes for which the Corporation is organized and its powers are
as follows:
To engage in all lawful business; and
To have, enjoy, and exercise all of the rights, powers, and
privileges conferred upon corporations incorporated pursuant to Nevada law,
whether now or hereafter in effect, and whether or not herein specifically
mentioned.
ARTICLE XII
One-third of the votes entitled to be cast on any matter by each
shareholder voting group entitled to vote on a matter shall constitute a quorum
of that voting group for action on that matter by shareholders.
ARTICLE XIII
The holder of a bond, debenture or other obligation of the Corporation
may have any of the rights of a stockholder in the Corporation to the extent
determined appropriate by the Board of Directors at the time of issuance of such
bond, debenture or other obligation.
3
<PAGE>
IN WITNESS WHEREOF, the undersigned incorporator has executed these
Articles of Incorporation this 6th day of May, 1998.
By
Fay M. Matsukage
Incorporator
STATE OF COLORADO )
CITY AND )ss.
COUNTY OF DENVER )
Personally appeared before me this 6th day of May, 1998, Fay M.
Matsukage who, being first duly sworn, declared that she executed the foregoing
Articles of Incorporation and that the statements therein are true and correct
to the best of her knowledge and belief.
Witness my hand and official seal.
\ss Nancy J. Parks
------------------
Notary Public
My Commission expires: Address:
455 Sherman Street
10/26/98 Suite 300
Denver, CO 80237
K:\FMM\FLEXIBLE\ARTICLES.INC '01
4
Exhibit 3.2
FLEXIBLE SOLUTIONS INTERNATIONAL INC
BYLAWS
- --------------------------
Adopted as of May 12, 1998
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
BYLAWS
TABLE OF CONTENTS
Section Page
- ------- ----
ARTICLE I
Offices
1.1 Registered Office..................................................1
1.2 Principal Office...................................................1
ARTICLE II
Stockholders
2.1 Annual Meeting.....................................................1
2.2 Special Meetings...................................................1
2.3 Place of Meeting...................................................2
2.4 Notice of Meeting..................................................2
2.5 Adjournment........................................................2
2.6 Organization.......................................................2
2.7 Closing of Transfer Books or Fixing of Record Date.................3
2.8 Quorum.............................................................3
2.9 Proxies............................................................3
2.10 Voting of Shares...................................................3
2.11 Action Taken Without a Meeting.....................................4
2.12 Meetings by Telephone..............................................4
-i-
<PAGE>
ARTICLE III
Directors
Section Page
- ------- ----
3.1 Board of Directors; Number; Qualifications; Election...............4
3.2 Powers of the Board of Directors: Generally........................4
3.3 Committees of the Board of Directors...............................5
3.4 Resignation........................................................5
3.5 Removal............................................................5
3.6 Vacancies..........................................................5
3.7 Regular Meetings...................................................5
3.8 Special Meetings...................................................6
3.9 Notice.............................................................6
3.10 Quorum.............................................................6
3.11 Manner of Acting...................................................6
3.12 Compensation.......................................................6
3.13 Action Taken Without a Meeting.....................................6
3.14 Meetings by Telephone..............................................6
ARTICLE IV
Officers and Agents
4.1 Officers of the Corporation........................................7
4.2 Election and Term of Office........................................7
4.3 Removal............................................................7
4.4 Vacancies..........................................................7
4.5 President..........................................................8
4.6 Vice Presidents....................................................8
4.7 Secretary..........................................................8
4.8 Treasurer..........................................................9
4.9 Salaries...........................................................9
4.10 Bonds..............................................................9
-ii-
<PAGE>
Section Page
- ------- ----
ARTICLE V
Stock
5.1 Certificates.......................................................10
5.2 Record.............................................................11
5.3 Consideration for Shares...........................................11
5.4 Cancellation of Certificates.......................................11
5.5 Lost Certificates..................................................11
5.6 Transfer of Shares.................................................11
5.7 Transfer Agents, Registrars, and Paying Agents.....................12
ARTICLE VI
Indemnification of Officers and Directors
6.1 Indemnification; Advancement of Expenses...........................12
6.2 Insurance and Other Financial Arrangements Against
Liability of Directors, Officers, Employees, and
Agents.............................................................12
ARTICLE Vill
Acquisition of Controlling Interest
7.1 Acquisition of Controlling Interest................................13
ARTICLE VIll
Execution of Instruments; Loans, Checks and Endorsements;
Deposits; Proxies
8.1 Execution of Instruments...........................................13
8.2 Loans..............................................................13
8.3 Checks and Endorsements............................................13
8.4 Deposits...........................................................14
8.5 Proxies............................................................14
8.6 Contracts..........................................................14
-iii-
<PAGE>
Section Page
- ------- ----
ARTICLE IX
Miscellaneous
9.1 Waivers of Notice..................................................14
9.2 Corporate Seal.....................................................14
9.3 Fiscal Year........................................................15
9.4 Amendment of Bylaws................................................15
9.5 Uniformity of Interpretation and Severability......................15
9.6 Emergency Bylaws...................................................15
Secretary's Certification...................................................16
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BYLAWS
OF
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
ARTICLE I
Offices
1.1 Registered Office. The registered office of the Corporation
required by the General Corporation Law of Nevada, Nevada Revised Statutes, 1957
("NRS"), Chapter 78, to be maintained in Nevada may be, but need not be,
identical with the principal office if in Nevada, and the address of the
registered office may be changed from time to time by the Board of Directors.
1.2 Principal Office. The Corporation may have such other office
or offices either within or outside of the State of Nevada as the business of
the Corporation may require from time to time if so designated by the Board of
Directors.
ARTICLE II
Stockholders
2.1 Annual Meeting. Unless otherwise designated by the Board of
Directors, the annual meeting shall be held on the date and at the time and
place fixed by the Board of Directors; provided, however, that the first annual
meeting shall be held on a date that is within 18 months after the date on which
the Corporation first has stockholders, and each successive annual meeting shall
be held on a date that is within 18 months after the preceding annual meeting.
2.2 Special Meetings. Special meetings of stockholders of the
Corporation, for any purpose, may be called by the Chairman of the Board, the
president, any vice president, any two members of the Board of Directors, or the
holders of at least 10% of all of the shares entitled to vote at such meeting.
Any holder or holders of not less than 10% of all the outstanding shares of the
Corporation who desire to call a special meeting pursuant to this Section 2 of
Article 11 shall notify the president that a special meeting of the stockholders
shall be called. Within 30 days after notice to the president, the president
shall set the date, time, and location of a stockholders' meeting. The date set
by the president shall be not less than 30 nor more than 120 days after the date
of notice to the president. If the president fails to set the date, time, and
location of special meeting within
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the 30-day time period described above, the stockholder or stockholders calling
the meeting shall set the date, time, and location of the special meeting. At a
special meeting no business shall be transacted and no corporate action shall be
taken other than that stated in the notice of the meeting.
2.3 Place of Meeting. The Board of Directors may designate any
place, either within or outside the State of Nevada, as the place for any annual
meeting or special meeting called by the Board of Directors. If no designation
is made, or if a meeting shall be called otherwise than by the Board, the place
of meeting shall be the Company's principal offices, whether within or outside
the State of Nevada.
2.4 Notice of Meeting. Written notice signed by an officer
designated by the Board of Directors, stating the place, day, and hour of the
meeting and the purpose for which the meeting is called, shall be delivered
personally or mailed postage prepaid to each stockholder of record entitled to
vote at the meeting not less than 10 nor more than 60 days before the meeting.
If mailed, such notice shall be directed to the stockholder at his address as it
appears upon the records of the Corporation, and notice shall be deemed to have
been given upon the mailing of any such notice, and the time of the notice shall
begin to run from the date upon which the notice is deposited in the mail for
transmission to the stockholder. Personal delivery of any such notice to any
officer of a corporation or association, or to any member of a partnership,
constitutes delivery of the notice to the corporation, association or
partnership. Any stockholder may waive notice of any meeting by a writing signed
by him, or his duly authorized attorney, either before or after the meeting.
2.5 Adjournment. When a meeting is for any reason adjourned to
another time or place, notice need not be given of the adjourned meeting if the
time and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting, any business may be transacted which might have
been transacted at the original meeting.
2.6 Organization. The president or any vice president shall call
meetings of stockholders to order and act as chairman of such meetings. In the
absence of said officers, any stockholder entitled to vote at that meeting, or
any proxy of any such stockholder, may call the meeting to order and a chairman
shall be elected by a majority of the stockholders entitled to vote at that
meeting. In the absence of the secretary or any assistant secretary of the
Corporation, any person appointed by the chairman shall act as secretary of such
meeting. An appropriate number of inspectors for any meeting of stockholders may
be appointed by the chairman of such meeting. Inspectors so appointed will open
and close the polls, will receive and take charge of proxies and ballots, and
will decide all questions as to the qualifications of voters, validity of
proxies and ballots, and the number of votes properly cast.
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2.7 Closing of Transfer Books or Fixing of Record Date. The directors
may prescribe a period not exceeding 60 days before any meeting of the
stockholders during which no transfer of stock on the books of the Corporation
may be made, or may fix a day not more than 60 days before the holding of any
such meeting as the day as of which stockholders entitled to notice of and to
vote at such meetings must be determined. Only stockholders of record on that
day are entitled to notice or to vote at such meeting.
2.8 Quorum. Unless otherwise provided by the Articles of Incorporation,
one-third of the outstanding shares of the Corporation entitled to vote,
represented in person or by proxy shall constitute a quorum at a meeting of
stockholders. If fewer than one-third of the outstanding shares are represented
at a meeting, a majority of the shares so represented may adjourn the meeting
without further notice for a period not to exceed 60 days at any one
adjournment. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified. The stockholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of stockholders so that less than a quorum remains.
If a quorum is present, the affirmative vote of a majority of the
shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the stockholders, unless the vote of a greater number or
voting by classes is required by law or the Articles of Incorporation.
2.9 Proxies. At all meetings of stockholders, a stockholder may vote by
proxy, as prescribed by law. Such proxy shall be filed with the secretary of the
Corporation before or at the time of the meeting. No proxy shall be valid after
6 months from the date of its creation, unless it is coupled with an interest,
or unless the stockholder specifies in it the length of time for which it is to
continue in force, which may not exceed 7 years from the date of its creation.
2.10 Voting of Shares. Each outstanding share, regardless of class,
shall be entitled to one vote, and each fractional share shall be entitled to a
corresponding fractional vote on each matter submitted to a vote at a meeting of
stockholders, except as may be otherwise provided in the Articles of
Incorporation or in the resolution providing for the issuance of the stock
adopted by the Board of Directors pursuant to authority expressly vested in it
by the provisions of the Articles of Incorporation. If the Articles of
Incorporation or any such resolution provide for more or less than one vote per
share for any class or series of shares on any matter, every reference in the
Articles of Incorporation, these Bylaws and the General Corporation Law of
Nevada to a majority or other proportion or number of shares shall be deemed to
refer to a majority or other proportion of the voting power of all of the shares
or those classes or series of shares, as may be required by the Articles of
Incorporation, or in the resolution providing for the issuance of the stock
adopted by the Board of Directors pursuant to authority expressly vested in it
by the
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Articles of Incorporation, or the General Corporation Law of Nevada. Cumulative
voting shall not be allowed. Unless the General Corporation Law of Nevada, the
Articles of Incorporation, or these Bylaws provide for different proportions, an
act of stockholders who hold at least a majority of the voting power and are
present at a meeting at which a quorum is present is the act of the
stockholders.
2.11 Action Taken Without a Meeting. Unless otherwise provided in the
Articles of Incorporation or these Bylaws, any action required or permitted to
be taken at a meeting of the stockholders may be taken without a meeting if a
written consent thereto is signed by stockholders holding at least a majority of
the voting power, except that if a different proportion of voting power is
required for such an action at a meeting, then that proportion of written
consents is required. In no instance where action is authorized by written
consent need a meeting of stockholders be called or notice given. The written
consent must be filed with the minutes of the proceedings of the stockholders.
2.12 Meetings by Telephone. Unless other restricted by the Articles of
Incorporation or these Bylaws, stockholders may participate in a meeting of
stockholders by means of a telephone conference or similar method of
communication by which all persons participating in the meeting can hear each
other. Participation in a meeting pursuant to this Section constitutes presence
in person at the meeting.
ARTICLE III
Directors
3.1 Board of Directors; Number; Qualifications; Election. The
Corporation shall be managed by a Board of Directors, all of whom must be
natural persons at least 18 years of age. Directors need not be residents of the
State of Nevada or stockholders of the Corporation. The number of directors of
the Corporation shall be not less than one nor more than twelve. Subject to such
limitations, the number of directors may be increased or decreased by resolution
of the Board of Directors, but no decrease shall have the effect of shortening
the term of any incumbent director. Subject to the provisions of Article III of
the Corporation's Articles of Incorporation, each director shall hold office
until the next annual meeting of shareholders or until his successor has been
elected and qualified.
3.2 Powers of the Board of Directors: Generally. Subject only to such
limitations as may be provided by the General Corporation Law of Nevada or the
Articles of Incorporation, the Board of Directors shall have full control over
the affairs of the Corporation.
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3.3 Committees of the Board of Directors. The Board of Directors may,
by resolution or resolutions passed by a majority of the whole Board, designate
one or more committees, each committee to consist of one or more directors,
which, to the extent provided in the resolution or resolutions or in these
Bylaws, shall have and may exercise the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and may have power to
authorize the seal of the Corporation to be affixed to all papers on which the
Corporation desires to place on a seal. Such committee or committees shall have
such name or names as may be determined from time to time by resolution adopted
by the Board of Directors. Unless the Articles of Incorporation or these Bylaws
provide otherwise, the Board of Directors may appoint natural persons who are
not directors to serve on committees.
3.4 Resignation. Any director of the Corporation may resign at any time
by giving written notice of his resignation to the Board of Directors, the
president, any vice president, or the secretary of the Corporation. Such
resignation shall take effect at the date of receipt of such notice or at any
later time specified therein and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective. When
one or more directors shall resign from the Board, effective at a future date, a
majority of the directors then in office.
3.5 Removal. Except as otherwise provided in the Articles of
Incorporation, any director may be removed, either with or without cause, at any
time by the vote of the stockholders representing not less than two-thirds of
the voting power of the issued and outstanding stock entitled to voting power.
3.6 Vacancies. All vacancies, including those caused by an increase in
the number of directors, may be filled by a majority of the remaining directors,
though less than a quorum, unless it is otherwise provided in the Articles of
Incorporation. A director elected to fill a vacancy shall be elected for the
unexpired term of his predecessor in office. A director elected to fill a
vacancy caused by an increase in the number of directors shall hold office until
the next annual meeting of stockholders and until his successor has been elected
and has qualified.
3.7 Regular Meetings. A regular meeting of the Board of Directors shall
be held without other notice than this Bylaw immediately after and at the same
place as the annual meeting of stockholders. The Board of Directors may provide
by resolution the time and place, either within or outside the State of Nevada,
for the holding of additional regular meetings without other notice than such
resolution.
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3.8 Special Meetings. Special meetings of the Board of Directors may be
called by or at the request of the president or a one-third of the directors
then in office. The person or persons authorized to call special meetings of the
Board of Directors may fix any place, either within or outside Nevada, as the
place for holding any special meeting of the Board of Directors called by them.
3.9 Notice. Notice of any special meeting shall be given at least two
days previously thereto by written notice delivered personally or mailed to each
director at his business address. Any director may waive notice of any meeting.
A director's presence at a meeting shall constitute a waiver of notice of such
meeting if the directors oral consent is entered on the minutes or by taking
part in the deliberations at such meeting without objecting. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors need be specified in the notice or waiver of notice of
such meeting.
3.10 Quorum. A majority of the number of directors elected and
qualified at the time of the meeting shall constitute a quorum for the
transaction of business at any such meeting of the Board of Directors, but if
less than such majority is present at a meeting, a majority of the directors
present may adjourn the meeting from time to time without further notice.
3.11 Manner of Acting. If a quorum is present, the affirmative vote of
a majority of the directors present at the meeting and entitled to vote on that
particular matter shall be the act of the Board, unless the vote of a greater
number is required by law or the Articles of Incorporation.
3.12 Compensation. By resolution of the Board of Directors, any
director may be paid any one or more of the following: his expenses, if any, of
attendance at meetings; a fixed sum for attendance at such meeting; or a stated
salary as director. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.
3.13 Action Taken Without a Meeting. Unless otherwise provided in the
Articles of Incorporation or these Bylaws, any action required or permitted to
be taken at a meeting of the Board of Directors or a committee thereof may be
taken without a meeting if, before or after the action, a written consent
thereto is signed by all the members of the Board or of the committee. The
written consent must be filed with the minutes of the proceedings of the Board
or committee.
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3.14 Meetings by Telephone. Unless other restricted by the Articles of
Incorporation or these Bylaws, members of the Board of Directors or of any
committee designated by the Board, may participate in a meeting of the Board or
committee by means of a telephone conference or similar method of communication
by which all persons participating in the meeting can hear each other.
Participation in a meeting pursuant to this Section constitutes presence in
person at the meeting.
ARTICLE IV
Officers and Agents
4.1 Officers of the Corporation. The Corporation shall have a
president, a secretary, and a treasurer, each of whom shall be elected by the
Board of Directors. The Board of Directors may appoint one or more vice
presidents and such other officers, assistant officers, committees, and agents,
including a chairman of the board, assistant secretaries, and assistant
treasurers, as they may consider necessary, who shall be chosen in such manner
and hold their offices for such terms and have such authority and duties as from
time to time may be determined by the Board of Directors. One person may hold
any two or more offices. The officers of the Corporation shall be natural
persons 18 years of age or older. In all cases where the duties of any officer,
agent, or employee are not prescribed by the Bylaws or by the Board of
Directors, such officer, agent, or employee shall follow the orders and
instructions of (a) the president, and if a chairman of the board has been
elected, then (b) the chairman of the board.
4.2 Election and Term of Office. The officers of the Corporation shall
be elected by the Board of Directors annually at the first meeting of the Board
held after each annual meeting of the stockholders. If the election of officers
shall not be held at such meeting, such election shall be held as soon
thereafter as may be convenient. Each officer shall hold office until the first
of the following occurs: until his successor shall have been duly elected and
shall have qualified; or until his death; or until he shall resign; or until he
shall have been removed in the manner hereinafter provided.
4.3 Removal. Any officer or agent may be removed by the Board of
Directors or by the executive committee, if any, whenever in its judgment the
best interests of the Corporation will be served thereby, but such removal shall
be without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not of itself create
contract rights.
4.4 Vacancies. A vacancy in any office, however occurring, may be
filled by the Board of Directors for the unexpired portion of the term.
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4.5 President. The president shall, subject to the direction and
supervision of the Board of Directors, be the chief executive officer of the
Corporation and shall have general and active control of its affairs and
business and general supervision of its officers, agents, and employees. He
shall, unless otherwise directed by the Board of Directors, attend in person or
by substitute appointed by him, or shall execute, on behalf of the Corporation,
written instruments appointing a proxy or proxies to represent the Corporation,
at all meetings of the stockholders of any other corporation in which the
Corporation shall hold any stock. He may, on behalf of the Corporation, in
person or by substitute or by proxy, execute written waivers of notice and
consents with respect to any such meetings. At all such meetings and otherwise,
the president, in person or by substitute or proxy as aforesaid, may vote the
stock so held by the Corporation and may execute written consents and other
instruments with respect to such stock and may exercise any and all rights and
powers incident to the ownership of said stock, subject however to the
instructions, if any, of the Board of Directors. The president shall have
custody of the treasurer's bond, if any. If a chairman of the board has been
elected, the chairman of the board shall have, subject to the direction and
modification of the Board of Directors, all the same responsibilities, rights,
and obligations as described in these Bylaws for the president.
4.6 Vice Presidents. The vice presidents, if any, shall assist the
president and shall perform such duties as may be assigned to them by the
president or by the Board of Directors. In the absence of the president, the
vice president designated by the Board of Directors or (if there be no such
designation) the vice president designated in writing by the president shall
have the powers and perform the duties of the president. If no such designation
shall be made, all vice presidents may exercise such powers and perform such
duties.
4.7 Secretary. The secretary shall perform the following: (a) keep the
minutes of the proceedings of the stockholders, executive committee, and the
Board of Directors; (b) see that all notices are duly given in accordance with
the provisions of these Bylaws or as required by law; (c) be custodian of the
corporate records and of the seal of the Corporation and affix the seal to all
documents when authorized by the Board of Directors; (d) keep, at the
Corporation's registered office or principal place of business within or outside
Nevada, a record containing the names and addresses of all stockholders and the
number and class of shares held by each, unless such a record shall be kept at
the office of the Corporation's transfer agent or registrar; (e) sign with the
president or a vice president, certificates for shares of the Corporation, the
issuance of which shall have been authorized by resolution of the Board of
Directors; (f) have general charge of the stock transfer books of the
Corporation, unless the Corporation has a transfer agent; and (g) in general,
perform all duties incident to the office of secretary and such other duties as
from time to time may be assigned to him by the president or by the Board of
Directors. Assistant secretaries, if any, shall have the same duties and powers,
subject to supervision by the secretary.
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4.8 Treasurer. The treasurer shall be the principal financial officer
of the Corporation and shall have the care and custody of all funds, securities,
evidences of indebtedness, and other personal property of the Corporation, and
shall deposit the same in accordance with the instructions of the Board of
Directors. He shall receive and give receipts and acquittances for monies paid
in or on account of the Corporation, and shall pay out of the funds on hand all
bills, payrolls, and other just debts of the Corporation of whatever nature upon
maturity. He shall perform all other duties incident to the office of the
treasurer and, upon request of the Board, shall make such reports to it as may
be required at any time. He shall, if required by the Board, give the
Corporation a bond in such sums and with such sureties as shall be satisfactory
to the Board, conditioned upon the faithful performance of his duties and for
the restoration to the Corporation of all books, papers, vouchers, money, and
other property of whatever kind in his possession or under his control belonging
to the Corporation. He shall have such other powers and perform such other
duties as may be from time to time prescribed by the Board of Directors or the
president. The assistant treasurers, if any, shall have the same powers and
duties, subject to the supervision of the treasurer.
The treasurer shall also be the-principal accounting officer of the
Corporation. He shall prescribe and maintain the methods and systems of
accounting to be followed, keep complete books and records of account, prepare
and file all local, state, and federal tax returns, prescribe and maintain an
adequate system of internal audit, and prepare and furnish to the president and
the Board of Directors statements of account showing the financial position of
the Corporation and the results of its operations.
4.9 Salaries. Officers of the Corporation shall be entitled to such
salaries, emoluments, compensation, or reimbursement as shall be fixed or
allowed from time to time by the Board of Directors.
4.10 Bonds. If the Board of Directors by resolution shall so require,
any officer or agent of the Corporation shall give bond to the Corporation in
such amount and with such surety as the Board of Directors may deem sufficient,
conditioned upon the faithful performance of that officer's or agent's duties
and offices.
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ARTICLE V
Stock
5.1 Certificates. The shares of stock shall be represented by
consecutively numbered certificates signed in the name of the Corporation by its
president or a vice president and by the treasurer or an assistant treasurer or
by the secretary or an assistant secretary, and shall be sealed with the seal of
the Corporation, or with a facsimile thereof. Whenever any certificate is
countersigned or otherwise authenticated by a transfer agent or transfer clerk,
and by a registrar, then a facsimile of the signatures of the officers or
agents, the transfer agent or transfer clerk or the registrar of the Corporation
may be printed or lithographed upon the certificate in lieu of the actual
signatures,, If the Corporation uses facsimile signatures of its officers and
agents on its stock certificates, it cannot act as the registrar of its own
stock, but its transfer agent and registrar may be identical if the institution
acting in those dual capacities countersigns or otherwise authenticates any
stock certificates in both capacities. In case any officer who has signed or
whose facsimile signature has been placed upon such certificate shall have
ceased to be such officer before such certificatb is delivered by the
Corporation, the certificate or certificates may nevertheless be adopted by the
Corporation and be issued and delivered as though the person or persons who
signed the certificates, or whose facsimile signature has been used thereon, had
not ceased to be an officer of the Corporation. If the Corporation is authorized
to issue shares of more than one class or more than one series of any class,
each certificate shall set forth upon the face or back of the certificate or
shall state that the Corporation will furnish to any stockholder upon request
and without charge a full statement of the designations, preferences,
limitations, and relative rights of the shares of each class authorized to be
issued and, if the Corporation is authorized to issue any preferred or special
class in series, the variations in the relative rights and preferences between
the shares of each such series, so far as the same have been fixed and
determined, and the authority of the Board of Directors to fix and determine the
relative rights and preferences of subsequent series.
Each certificate representing shares shall state the following upon the
face thereof: the name of the state of the Corporation's organization; the name
of the person to whom issued; the number and class of shares and the designation
of the series, if any, which such certificate represents; the par value of each
share represented by such certificate or a statement that the shares are without
par value. Certificates of stock shall be in such form consistent with law as
shall be prescribed by the Board of Directors. No certificate shall be issued
until the shares represented thereby are fully paid.
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5.2 Record. A record shall be kept of the name of each person or other
entity holding the stock represented by each certificate for shares of the
Corporation issued, the number of shares represented by each such certificate,
the date thereof and, in the case of cancellation, the date of cancellation. The
person or other entity in whose name shares of stock stand on the books of the
Corporation shall be deemed the owner thereof, and thus a holder of record of
such shares of stock, for all purposes as regards the Corporation.
5.3 Consideration for Shares. Shares shall be issued for such
consideration, expressed in dollars (but not less than the par value thereof) as
shall be fixed from time to time by the Board of Directors. That part of the
surplus of the Corporation which is transferred to stated capital upon the
issuance of shares as a share dividend shall be deemed the consideration for the
issuance of such dividend shares. Such consideration may consist, in whole or in
part, of money, promissory notes, other property, tangible or intangible, or in
labor or services actually performed for the Corporation, contracts for services
to be performed or other securities of the Corporation.
5.4 Cancellation of Certificates. All certificates surrendered to the
Corporation for transfer shall be canceled and no new certificates shall be
issued in lieu thereof until the former certificate for a like number of shares
shall have been surrendered and canceled, except as herein provided with respect
to lost, stolen, or destroyed certificates.
5.5 Lost Certificates. In case of the alleged loss, destruction, or
mutilation of a certificate of stock, the Board of Directors may direct the
issuance of a new certificate in lieu thereof upon such terms and conditions in
conformity with law as it may prescribe. The Board of Directors may in its
discretion require a bond, in such form and amount and with such surety as it
may determine, before issuing a new certificate.
5.6 Transfer of Shares. Upon surrender to the Corporation or to a
transfer agent of the Corporation of a certificate of stock duly endorsed or
accompanied by proper evidence of succession, assignment, or authority to
transfer, and such documentary stamps as may be required by law, it shall be the
duty of the Corporation to issue a new certificate to the person entitled
thereto, and cancel the old certificate. Every such transfer of stock shall be
entered on the stock book of the Corporation which shall be kept at its
principal office or by its registrar duly appointed.
The Corporation shall be entitled to treat the holder of record of any
share of stock as the holder in fact thereof, and accordingly shall not be bound
to recognize any equitable or other claim to or interest in such share on the
part of any other person whether or not it shall have express or other notice
thereof, except as may be required by the laws of Nevada.
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5.7 Transfer Agents, Registrars, and Paying Agents. The Board may at
its discretion appoint one or more transfer agents, registrars, and agents for
making payment upon any class of stock, bond, debenture, or other security of
the Corporation. Such agents and registrars may be located either within or
outside Nevada. They shall have such rights and duties and shall be entitled to
such compensation as may be agreed.
ARTICLE VI
Indemnification of Officers and Directors
6.1 Indemnification; Advancement of Expenses. To the fullest extent
permitted by the laws of the State of Nevada (currently set forth in NRS
78.751), as the same now exists or may hereafter be amended or supplemented, the
Corporation shall indemnify its directors and officers, including payment of
expenses as they are incurred and in advance of the final disposition of any
action, suit, or proceeding. Employees, agents, and other persons may be
similarly indemnified by the Corporation, including advancement of expenses, in
such case or cases and to the extent set forth in a resolution or resolutions
adopted by the Board of Directors. No amendment of this Section shall have any
effect on indemnification or advancement of expenses relating to any event
arising prior to the date of such amendment.
6.2 Insurance and Other Financial Arrangements Against Liability of
Directors, Officers, Employees, and Agents. To the fullest extent permitted by
the laws of the State of Nevada (currently set forth in NRS 78.752), as the same
now exists or may hereafter be amended or supplemented, the Corporation may
purchase and maintain insurance and make other financial arrangements on behalf
of any person who is or was a director, officer, employee, or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, for any liability asserted against such
person and liability and expense incurred by such person in its capacity as a
director, officer, employee, or agent, or arising out of such person's status as
such, whether or not the Corporation has the authority to indemnify such person
against such liability and expenses.
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ARTICLE VII
Acquisition of Controlling Interest
7.1 Acquisition of Controlling Interest. The provisions of the General
Corporation Law of Nevada pertaining to the acquisition of a controlling
interest (currently set forth NRS 78.378 to 78.3793, inclusive), as the same now
exists or may hereafter be amended or supplemented, shall not apply to the
Corporation.
ARTICLE VIII
Execution of Instruments; Loans, Checks and Endorsements;
Deposits; Proxies
8.1 Execution of Instruments. The president or any vice president shall
have the power to execute and deliver on behalf of and in the name of the
Corporation any instrument requiring the signature of an officer of the
Corporation, except as otherwise provided in these Bylaws or where the execution
and delivery thereof shall be expressly delegated by the Board of Directors to
some other officer or agent of the Corporation. Unless authorized to do so by
these Bylaws or by the Board of Directors, no officer, agent, or employee shall
have any power or authority to bind the Corporation in any way, to pledge its
credit, or to render it liable pecuniarily for any purpose or in any amount.
8.2 Loans. The Corporation may lend money to, guarantee the obligations
of, and otherwise assist directors, officers, and employees of the Corporation,
or directors of another corporation of which the Corporation owns a majority of
the voting stock, only upon compliance with the requirements of the General
Corporation Law of Nevada.
No loans shall be contracted on behalf of the Corporation and no
evidence of indebtedness shall be issued in its name unless authorized by a
resolution of the Board of Directors. Such authority may be general or confined
to specific instances.
8.3 Checks and Endorsements. All checks, drafts, or other orders for
the payment of money, obligations, notes, or other evidences of indebtedness,
bills of lading, warehouse receipts, trade acceptances, and other such
instruments shall be signed or endorsed by such officers or agents of the
Corporation as shall from time to time be determined by resolution of the Board
of Directors, which resolution may provide for the use of facsimile signatures.
8.4 Deposits. All funds of the Corporation not otherwise employed shall
be deposited from time to time to the Corporation's credit in such banks or
other depositories as shall from time to time be determined by resolution of the
Board of Directors, which
13
<PAGE>
resolution may specify the officers or agents of the Corporation who shall have
the power, and the manner in which such power shall be exercised, to make such
deposits and to endorse, assign, and deliver for collection and deposit checks,
drafts, and other orders for the payment of money payable to the Corporation or
its order.
8.5 Proxies. Unless otherwise provided by resolution adopted by the
Board of Directors, the president or any vice president may from time to time
appoint one or more agents or attorneys-in-fact of the Corporation, in the name
and on behalf of the Corporation, to cast the votes which the Corporation may be
entitled to cast as the holder of stock or other securities in any other
corporation, association, or other entity any of whose stock or other securities
may be held by the Corporation, at meetings of the holders of the stock or other
securities of such other corporation, association, or other entity or to consent
in writing, in the name of the Corporation as such holder, to any action by such
other corporation, association, or other entity, and may instruct the person or
persons so appointed as to the manner of casting such votes or giving such
consent, and may execute or cause to be executed in the name and on behalf of
the Corporation and under its corporate seal, or otherwise, all such written
proxies or other instruments as he may deem necessary or proper in the premises
8.6 Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation, and such authority
may be general or confined to specific instances.
ARTICLE IX
Miscellaneous
9.1 Waivers; of Notice. Whenever notice is required by the General
Corporation Law of Nevada, by the Articles of Incorporation, or by these Bylaws,
a waiver thereof in writing signed by the director, stockholder, or other person
entitled to said notice, whether before, at, or after the time stated therein,
or his appearance at such meeting in person or (in the case of a stockholders'
meeting) by proxy, shall be equivalent to such notice.
9.2 Corporate Seal. The Board of Directors may adopt a seal circular in
form and bearing the name of the Corporation, the state of its incorporation,
and the word "Seal" which, when adopted, shall constitute the seal of the
Corporation. The seal may be used by causing it or a facsimile of it to be
impressed, affixed, manually reproduced, or rubber stamped with indelible ink.
9.3 Fiscal Year. The Board of Directors may, by resolution, adopt a
fiscal year for the Corporation.
14
<PAGE>
9.4 Amendment of Bylaws. The provisions of these Bylaws may at any
time, and from time to time, be amended, supplemented or repealed by the Board
of Directors.
9.5 Uniformity of Interpretation and Severability. These Bylaws shall
be so interpreted and construed as to conform to the Articles of Incorporation
and the laws of the State of Nevada or of any other state in which conformity
may become necessary by reason of the qualification of the Corporation to do
business in such state, and where conflict between these Bylaws, the Articles of
Incorporation or the laws of such a state has arisen or shall arise, these
Bylaws shall be considered to be modified to the extent, but only to the extent,
conformity shall require. If any provision hereof or the application thereof
shall be deemed to be invalid by reason of the foregoing sentence, such
invalidity shall not affect the validity of the remainder of these Bylaws
without the invalid provision or the application thereof, and the provisions of
these Bylaws are declared to be severable.
9.6 Emergency Bylaws. Subject to repeal or change by action of the
stockholders, the Board of Directors may adopt emergency bylaws in accordance
with and pursuant to the provisions of the laws-of the State of Nevada.
15
<PAGE>
SECRETARY'S CERTIFICATION
The undersigned Secretary of Flexible Solutions International Inc. (the
"Corporation") hereby certifies that the foregoing Bylaws are the Bylaws of the
Corporation adopted by the Board of Directors as of the 12th day of May, 1998.
By
Daniel B. O'Brien
Secretary
16
Exhibit 4.1
DILL DILL CARR STONBRAKER & HUTCHINGS
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
(LETTERHEAD)
August 21, 1998
VIA FEDERAL EXPRESS
- -------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
Office of Small Business Policy
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Exemption Notice Filing of Flexible Solutions International
Inc. Rule 504 Offering at $0.01/Share (the "Issuer") Pursuant
to Regulation D Under the Securities Act of 1933
Ladies and Gentlemen:
Enclosed, in connection with the Issuer's notice filing pursuant to the
requirements of Rule 504 of Regulation D, are five copies of Form D, including
one manually signed, executed by a person duly authorized by the Issuer.
Please stamp the enclosed copy of this letter "RECEIVED," indicate the
date of receipt and return same to us in the enclosed self-addressed, stamped
envelope. If you have any questions, or require any additional information,
please telephone the undersigned at (303) 777-3737.
Very truly yours,
/s Fay Matsukage
Fay Matsukage
FND/ccf
Enclosures
cc: Flexible Solutions International Inc.
455 SHERMAN STREET, SUITE 300/DENVER, COLORADO 80203
/FAX (303) 777-3823/(303) 777-3737
E-mail: [email protected]
<PAGE>
FORM D
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C 20549
FORM D
NOTICE OF SALE OF SECURITIES
PURSUANT TO REGULATION D,
SECTION 4(6), AND/OR
UNIFORM LIMITED OFFERING EXEMPTION
- --------------------------------------------------------------------------------
Name of Offering ([ ] check if this is an amendment and name has changed. and
indicate change.) Flexible Solutions International Inc. Rule 504 Offering @
$0.01/Share
- --------------------------------------------------------------------------------
Filing Under (Check box(es) that apply): [x] Rule 504 [ ] Rule 505 [ ] Rule 506
[ ] Section 4(6) [ ] ULOE Tvpe of Filing: [x] New Filing [ ] Amendment
- --------------------------------------------------------------------------------
A. BASIC IDENTIFICATION DATA
- --------------------------------------------------------------------------------
1. Enter the information requested about the issuer
- --------------------------------------------------------------------------------
Name of Issuer ([ ] check it this is an amendment and name has changed. and
indicate change.) Flexible Solutions International Inc.
- --------------------------------------------------------------------------------
Address of Executive Offices (Number and Street. City. State, Zip Code)
Telephone 2614 Queenswood Drive, Victoria, B.C. V8N 1X5, Canada Number
(Including Area Code) (250) 477-9969
- --------------------------------------------------------------------------------
Address of Principal Business Operations (Number and Street, City. State. Zip
Code) (if different from Executive Offices) Telephone Number (including Area
Code)
- --------------------------------------------------------------------------------
Brief Description of Business Marketing of swimming pool chemicals.
- --------------------------------------------------------------------------------
Type of Business Organization [x] corporation [ ] limited partnership, already
formed [ ] other (please specify) [ ] business trust [ ] limited partnership, to
be formed
- --------------------------------------------------------------------------------
Month Year Actual or Estimated Date of Incorporation or Organization: 05 98 [x]
Actual [ ] Estimated
Jurisdiction of Incorporation or Organization: (Enter two-letter U.S. Postal
Service abbreviation for State; CN for Canada: FN for other foreign
jurisdiction) [N][V]
- --------------------------------------------------------------------------------
GENERAL INSTRUCTIONS
Federal:
Who Must File: All issuers making an offering of securities in reliance on an
exemption under Regulation D or Section 4(6), 17 CFR 2.10.501 et seq. or 15
U.S.C. 77d(6).
When To File: A notice must be riled no later than 15 days after the first sale
of securities in the offering. A notice is deemed filed with the U.S. Securities
and Exchange Commission (SEC) on the earlier of the date it is received by the
SEC at the address given below or, if received at that address after the date on
which it is due, on the date it was mailed by United States registered or
certified mail to that address.
Where to File: U.S. Securities and Exchange Commission. 450 Fifth Street. N.W.
Washington, D.C. 20549
Copies Required: Five (5) copies of this notice must be riled with the SEC. tine
of which must be manually signed. Any copies not manually signed must be
photocopies of the manually signed copy or bear typed or printed signatures.
Information Required. A new riling must contain all information requested.
Amendments need only report the name of the issuer and offering. any changes
thereto. The information requested in Part C. and any material changes from the
information previously supplied in Parts A and 3. Part E and the Appendix need
not be riled with the SEC.
Filing Fee: There is no federal filing fee.
State:
This notice shall be used to indicate reliance on the Uniform Limited Offering
Exemption (ULOE) for sales of securities in those states that have adopted ULOE
and that have adopted this form. Issuers relying on ULOE must rile a separate
notice with the Securities Administrator in each state where sales are to be, or
have been made. If a state requires the payment of a fee as a precondition to
the claim for the exemption, a fee in the proper amount shall accompany this
form. This notice shall be riled in the appropriate states in accordance with
state law. The Appendix to the notice constitutes a part of this notice and must
be completed.
ATTENTION
Failure to file notice in the appropriate states will not 'result in a loss of
the federal exemption. Conversely, failure to file the appropriate federal
notice will not result in a loss of an available state exemption unless such
exemption is predicated on the filing of a federal notice.
Potential persons who are to respond to the collection of information contained
in this form are not required to respond unless the form displays a currently
valid OMB control number.
SEC 1972 (2-97) 1 of 8
<PAGE>
A. BASIC IDENTIFICATION DATA
2. Enter the information requested for the following:
o Each promoter of the issuer, if the issuer has been organized within the
past Five years;
o Each beneficial owner having the power to vote or dispose, or direct the
vote or disposition of, 10% or more of a class of equity securities of
the issuer;
o Each executive officer and director of corporate issuers and of
corporate general and managing partners of partnership issuers; and
o Each general and managing partner of partnership issuers.
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[x] Beneficial Owner [ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
Aschmann, Beat
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
Laerchenhof weg No. 3, 8906 Bonstetten, Switzerland
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [x] Promoter [x] Beneficial Owner[x] Executive Officer
[x] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual) O'Brien, Daniel B.
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
2614 Queenswood Drive, Victoria, B.C. V8N 1K5 Canada
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[x] Beneficial Owner [ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first. if individual)
O'Brien, Dr. Robert N.
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
2614 Queenswood Drive, Victoria, B.C. V8N 1X5 Canada
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[ ] Beneficial Owner[ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[ ] Beneficial Owner[ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[ ] Beneficial Owner[ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[ ] Beneficial Owner[ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[ ] Beneficial Owner[ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
(Use blank sheet. or copy and use additional copies of this sheet. as necessary)
2 of 8
<PAGE>
B. INFORMATION ABOUT OFFERING
1. Has the issuer sold or does the issuer intend to sell to non-accredited
investors in this offering?
[x] Yes [ ] No
Answer also in Appendix, Column 2, if filing under ULOE.
2. What is the minimum investment that will be accepted from any individual?
$100.00
3. Does the offering permit joint ownership of a single unit? [x] Yes [ ] No
4. Enter the information requested for each person who has been or will be paid
or given, directly or indirectly, any commission or similar remuneration for
solicitation of purchasers in connection with sales of securities in the
offering. If a person to be listed is an associated person or agent of a
broker or dealer registered with the SEC and/or with a state or states, list
the name of the broker or dealer. If more than five (5) persons to be listed
are associated persons of such a broker or dealer, you may set forth the
information for that broker or dealer only.
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual) Not applicable.
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Name of Associated Broker or Dealer
- --------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers
(Check "All States" or check individual States) ...............[ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID] [IL] [IN] [IA]
[KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] (MS] [MO] [MT] [NE] [NV] [NH] (NJ] [NM]
[NY] [NC] [ND] [OH] [OK] [OR] [PA] [RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA]
[WV] [WI] [WY] [PR]
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual) Not applicable.
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Name of Associated Broker or Dealer
- --------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers
(Check "All States" or check individual States) ...............[ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID] [IL] [IN] [IA]
[KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] (MS] [MO] [MT] [NE] [NV] [NH] (NJ] [NM]
[NY] [NC] [ND] [OH] [OK] [OR] [PA] [RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA]
[WV] [WI] [WY] [PR]
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual) Not applicable.
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Name of Associated Broker or Dealer
- --------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers
(Check "All States" or check individual States) ...............[ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID] [IL] [IN] [IA]
[KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] (MS] [MO] [MT] [NE] [NV] [NH] (NJ] [NM]
[NY] [NC] [ND] [OH] [OK] [OR] [PA] [RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA]
[WV] [WI] [WY] [PR]
- --------------------------------------------------------------------------------
(Use blank sheet, or copy and use additional copies of this sheet. as necessary)
3 of 8
<PAGE>
C. OFFERING PRICE, NUMBER OF INVESTORS, EXPENSES AND USE OF PROCEEDS
<TABLE>
<CAPTION>
1.Enter the aggregate offering price of securities included in this offering and the total amount already sold. Enter "0" if
answer is "none" or "zero". If the transaction is an exchange offering, check this box [ ] and indicate in the column below the
amounts of the securities offered for exchange and already exchanged. Type of Security
Aggregate Amount Already
Offering Price Sold
<S> <C> <C>
Offering Price
Debt ........................................................................$ $
Equity.......................................................................$ 10,500 $ 10,500
[x] Common [ ] Preferred
Convertible Securities (including warrants)..................................$ $
Partnership Interests........................................................$ $
Other (Specify )....................................$ $
Total...................................................................$ 10,500 $ 10,500
Answer also in Appendix, Colum 3, if filing under ULOE
2.Enter the number of accredited and non-accredited investors who have purchased
securities in this offering and the aggregate dollar amounts of their
purchases. For offerings under Rule 504, indicate the number of persons who
have purchased securities and the aggregate dollar amount of their purchases
on the total lines. Enter "0" if answer is "none" or "zero."
Number Aggregate
Investors Dollar Amount
of Purchases
Accredited Investors.......................................................... $
Non-accredited Investors ..................................................... $
Total (for filings under Rule 504 only).................................. 7 $ 10,500
Answer also in Appendix. Column 4. if filing under ULOE
3. If this filing is for an offering under Rule 504 or 505. enter the information requested for all securities sold by the issuer,
to date. in offerings of the types indicated, in the twelve (12) months prior to the first sale of securities in this offering.
Classify securities by type listed in Part C-Question 1.
Type of offering Type of Dollar Amount
Security Sold
Rule 505 ..................................................................... $
Regulation A ................................................................. $
Rule 504 .................................................................. $ 0
Total ................................................................... $ 0
4.a. Furnish a statement of all expenses in connection with the issuance and
distribution of the securities in this offering. Exclude amounts relating
solely to organization expenses of the issuer. The information may be given
as subject to future contingencies. If the amount of an expenditure is not
known, furnish an estimate and check the box to the left of the estimate.
Transfer Agent's Fees .................................................................[ ] $
Printing and Engraving Costs ................................................................[ ] $
Legal Fees .................................................................................[x] $ 5,000
Accounting Fees .............................................................................[ ] $
Engineering Fees ............................................................................[ ] $
Sales Commissions (Specify finder's fees separately) ........................................[ ] $
Other Expenses (identify) ...................................................................[ ] $
Total ..............................................................................[x] $ 5,000
</TABLE>
4 of 8
<PAGE>
C. OFFERING PRICE, NUMBER OF INVESTORS, EXPENSES AND USE OF PROCEEDS
b. Enter the difference between the aggregate offering price given in
response to Part C-Question I and total expenses furnished in response to
Part C-Question 4.a. This difference is the "adjusted gross proceeds to the
issuer $ 5,500
5. Indicate below the amount of the adjusted gross proceeds to the issuer used
or proposed to be used for each of the purposes shown. If the amount for any
purpose is not known, furnish an estimate and check the box to the left of
the estimate. The total of the payments listed must equal the adjusted gross
proceeds to the issuer set forth in response to Part C-Question 4.b. above.
<TABLE>
<CAPTION>
Payments to
Officers
Directors, & Payments to
Affiliates Others
<S> <C> <C>
Salaries and fees ......................................................................[ ] $ [ ] $
Purchase of real estate.................................................................[ ] $ [ ] $
Purchase, rental or leasing and installation of machinery and equipment.................[ ] $ [ ] $
Construction or leasing of plant buildings and facilities...............................[ ] $ [ ] $
Acquisition of other businesses (including the value of securities involved in
this offering that may be used in exchange for the assets or securities of
another issuer
pursuant to a merger ...................................................................[ ] $ [ ] $
Repayment of indebtedness. .............................................................[ ] $ [ ] $
Working capital.........................................................................[ ] $ [x] $ 5,500
Other (specify) ........................................................................[ ] $ [ ] $
Column Totals. .........................................................................[ ] $ [x] $ 5,500
Total Payments Listed (column totals added) ...................................................... [x] $ 5,500
</TABLE>
D. FEDERAL SIGNATURE
The issuer has duly caused this notice to be signed by the undersigned duly
authorized person. If this notice is filed under Rule 505, the following
signature constitutes an undertaking by the issuer to furnish to the U.S.
Securities and Exchange Commission, upon written request of its staff, the
information furnished by the issuer to any non-accredited investor pursuant to
paragraph (b) (2) of Rule 502. Issuer (Print or Type)
Issuer (Print or Type) Signature Date
Flexible Solutions International Inc. /s/ Daniel B. 0 'Brien August 20, 1998
Name of Signer (Print or Type Title of Signer (Print or Type)
Daniel B. O'Brien President
ATTENTION
Intentional misstatements or omissions of fact constitute federal criminal
violations. (see is U.S.C. 1001.)
5 of 8
<PAGE>
E. STATE SIGNATURE
1. Is any party described in 17 CFR 230.252 (c), W. (e) or (f) presently
subject to any of the disqualification provisions of such rule?
[ ] Yes [x] No
See Appendix, Column 5, for state response.
2. The undersigned issuer hereby undertakes to furnish to any state
administrator of any state in which this notice is Form D (17 CFR 239.500)
at such times as required by state law.
3. The undersigned issuer hereby undertakes to furnish to the state
administrators, upon written request, information furnished by the issuer
to offerees.
4. The undersigned issuer represents that the issuer is familiar with the
conditions that must be satisfied to be entitled to the Uniform Limited
Offering Exemption (ULOE) of the state in which this notice is filed and
understands that the issuer claiming the availability of this exemption has
the burden of establishing that these conditions have been satisfied.
The issuer has read this notification and knows the contents to be true and has
duly caused this notice to be signed on its behalf by the undersigned duly
authorized person.
Issuer (Print or Type) Signature Date
Flexible Solutions International Inc. /s/ Daniel B. 0 'Brien August 20, 1998
Name of Signer (Print or Type) Title of Signer (Print or Type)
Daniel B. O'Brien President
Instruction:
Print the name and title of the signing representative under his signature for
the state portion of this form. One copy of every notice on Form D must be
manually signed. Any copies not manually signed must be photocopies of the
manually signed copy or bear typed or printed signatures.
6 of 8
Note: Pages 7 and 8 were not used
Exhibit 4.2
DILL DILL CARR STONBRAKER & HUTCHINGS
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
(LETTERHEAD)
September 15, 1998
VIA FEDERAL EXPRESS
- -------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
Office of Small Business Policy
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Exemption Notice Filing of Flexible Solutions International
Inc. @ $0.05/Share (the "Issuer") Pursuant to Regulation D
Under the Securities Act of 1933
Ladies and Gentlemen:
Enclosed, in connection with the Issuer's notice filing pursuant to the
requirements of Rule 504 of Regulation D, are five copies of Form D, including
one manually signed, executed by a person duly authorized by the Issuer.
Please stamp the enclosed copy of this letter "RECEIVED," indicate the
date of receipt and return same to us in the enclosed self-addressed, stamped
envelope. If you have any questions, or require any additional information,
please telephone the undersigned at (303) 777-3737.
Very truly yours,
/s/ Lori Ann Y. Fujoka
Lori Ann Y. Fujoka
LAF/ccf
Enclosures
cc: Flexible Solutions International Inc.
455 SHERMAN STREET, SUITE 300/DENVER, COLORADO 80203
/FAX (303) 777-3823/(303) 777-3737
E-mail: [email protected]
<PAGE>
FORM D
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C 20549
FORM D
NOTICE OF SALE OF SECURITIES
PURSUANT TO REGULATION D,
SECTION 4(6), AND/OR
UNIFORM LIMITED OFFERING EXEMPTION
- --------------------------------------------------------------------------------
Name of Offering ([ ] check if this is an amendment and name has changed. and
indicate change.) Flexible Solutions International Inc. Rule 504 Offering @
$0.25/Share
- --------------------------------------------------------------------------------
Filing Under (Check box(es) that apply): [x] Rule 504 [ ] Rule 505 [ ] Rule 506
[ ] Section 4(6) [ ] ULOE Tvpe of Filing: [x] New Filing [ ] Amendment
- --------------------------------------------------------------------------------
A. BASIC IDENTIFICATION DATA
- --------------------------------------------------------------------------------
1. Enter the information requested about the issuer
- --------------------------------------------------------------------------------
Name of Issuer ([ ] check it this is an amendment and name has changed. and
indicate change.) Flexible Solutions International Inc.
- --------------------------------------------------------------------------------
Address of Executive Offices (Number and Street. City. State, Zip Code)
Telephone 2614 Queenswood Drive, Victoria, B.C. V8N 1X5, Canada Number
(Including Area Code) (250) 477-9969
- --------------------------------------------------------------------------------
Address of Principal Business Operations (Number and Street, City. State. Zip
Code) (if different from Executive Offices) Telephone Number (including Area
Code)
- --------------------------------------------------------------------------------
Brief Description of Business Marketing of swimming pool chemicals.
- --------------------------------------------------------------------------------
Type of Business Organization [x] corporation [ ] limited partnership, already
formed [ ] other (please specify) [ ] business trust [ ] limited partnership, to
be formed
- --------------------------------------------------------------------------------
Month Year Actual or Estimated Date of Incorporation or Organization: 05 98 [x]
Actual [ ] Estimated
Jurisdiction of Incorporation or Organization: (Enter two-letter U.S. Postal
Service abbreviation for State; CN for Canada: FN for other foreign
jurisdiction) [N][V]
- --------------------------------------------------------------------------------
GENERAL INSTRUCTIONS
Federal:
Who Must File: All issuers making an offering of securities in reliance on an
exemption under Regulation D or Section 4(6), 17 CFR 2.10.501 et seq. or 15
U.S.C. 77d(6).
When To File: A notice must be riled no later than 15 days after the first sale
of securities in the offering. A notice is deemed filed with the U.S. Securities
and Exchange Commission (SEC) on the earlier of the date it is received by the
SEC at the address given below or, if received at that address after the date on
which it is due, on the date it was mailed by United States registered or
certified mail to that address.
Where to File: U.S. Securities and Exchange Commission. 450 Fifth Street. N.W.
Washington, D.C. 20549
Copies Required: Five (5) copies of this notice must be riled with the SEC. tine
of which must be manually signed. Any copies not manually signed must be
photocopies of the manually signed copy or bear typed or printed signatures.
Information Required. A new riling must contain all information requested.
Amendments need only report the name of the issuer and offering. any changes
thereto. The information requested in Part C. and any material changes from the
information previously supplied in Parts A and 3. Part E and the Appendix need
not be riled with the SEC.
Filing Fee: There is no federal filing fee.
State:
This notice shall be used to indicate reliance on the Uniform Limited Offering
Exemption (ULOE) for sales of securities in those states that have adopted ULOE
and that have adopted this form. Issuers relying on ULOE must rile a separate
notice with the Securities Administrator in each state where sales are to be, or
have been made. If a state requires the payment of a fee as a precondition to
the claim for the exemption, a fee in the proper amount shall accompany this
form. This notice shall be riled in the appropriate states in accordance with
state law. The Appendix to the notice constitutes a part of this notice and must
be completed.
ATTENTION
Failure to file notice in the appropriate states will not 'result in a loss of
the federal exemption. Conversely, failure to file the appropriate federal
notice will not result in a loss of an available state exemption unless such
exemption is predicated on the filing of a federal notice.
Potential persons who are to respond to the collection of information contained
in this form are not required to respond unless the form displays a currently
valid OMB control number.
SEC 1972 (2-97) 1 of 8
<PAGE>
A. BASIC IDENTIFICATION DATA
2. Enter the information requested for the following:
o Each promoter of the issuer, if the issuer has been organized within the
past Five years;
o Each beneficial owner having the power to vote or dispose, or direct the
vote or disposition of, 10% or more of a class of equity securities of
the issuer;
o Each executive officer and director of corporate issuers and of
corporate general and managing partners of partnership issuers; and
o Each general and managing partner of partnership issuers.
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[x] Beneficial Owner [ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
Aschmann, Beat
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
Laerchenhof weg No. 3, 8906 Bonstetten, Switzerland
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [x] Promoter [x] Beneficial Owner[x] Executive Officer
[x] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual) O'Brien, Daniel B.
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
2614 Queenswood Drive, Victoria, B.C. V8N 1K5 Canada
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[x] Beneficial Owner [ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first. if individual)
O'Brien, Dr. Robert N.
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
2614 Queenswood Drive, Victoria, B.C. V8N 1X5 Canada
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[ ] Beneficial Owner[ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[ ] Beneficial Owner[ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[ ] Beneficial Owner[ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[ ] Beneficial Owner[ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[ ] Beneficial Owner[ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
(Use blank sheet. or copy and use additional copies of this sheet. as necessary)
2 of 8
<PAGE>
B. INFORMATION ABOUT OFFERING
1. Has the issuer sold or does the issuer intend to sell to non-accredited
investors in this offering?
[x] Yes [ ] No
Answer also in Appendix, Column 2, if filing under ULOE.
2. What is the minimum investment that will be accepted from any individual?
$100.00
3. Does the offering permit joint ownership of a single unit? [x] Yes [ ] No
4. Enter the information requested for each person who has been or will be paid
or given, directly or indirectly, any commission or similar remuneration for
solicitation of purchasers in connection with sales of securities in the
offering. If a person to be listed is an associated person or agent of a
broker or dealer registered with the SEC and/or with a state or states, list
the name of the broker or dealer. If more than five (5) persons to be listed
are associated persons of such a broker or dealer, you may set forth the
information for that broker or dealer only.
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual) Not applicable.
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Name of Associated Broker or Dealer
- --------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers
(Check "All States" or check individual States) ...............[ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID] [IL] [IN] [IA]
[KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] (MS] [MO] [MT] [NE] [NV] [NH] (NJ] [NM]
[NY] [NC] [ND] [OH] [OK] [OR] [PA] [RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA]
[WV] [WI] [WY] [PR]
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual) Not applicable.
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Name of Associated Broker or Dealer
- --------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers
(Check "All States" or check individual States) ...............[ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID] [IL] [IN] [IA]
[KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] (MS] [MO] [MT] [NE] [NV] [NH] (NJ] [NM]
[NY] [NC] [ND] [OH] [OK] [OR] [PA] [RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA]
[WV] [WI] [WY] [PR]
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual) Not applicable.
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Name of Associated Broker or Dealer
- --------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers
(Check "All States" or check individual States) ...............[ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID] [IL] [IN] [IA]
[KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] (MS] [MO] [MT] [NE] [NV] [NH] (NJ] [NM]
[NY] [NC] [ND] [OH] [OK] [OR] [PA] [RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA]
[WV] [WI] [WY] [PR]
- --------------------------------------------------------------------------------
(Use blank sheet, or copy and use additional copies of this sheet. as necessary)
3 of 8
<PAGE>
C. OFFERING PRICE, NUMBER OF INVESTORS, EXPENSES AND USE OF PROCEEDS
<TABLE>
<CAPTION>
1.Enter the aggregate offering price of securities included in this offering and the total amount already sold. Enter "0" if
answer is "none" or "zero". If the transaction is an exchange offering, check this box [ ] and indicate in the column below the
amounts of the securities offered for exchange and already exchanged. Type of Security
Aggregate Amount Already
Offering Price Sold
<S> <C> <C>
Offering Price
Debt ........................................................................$ $
Equity.......................................................................$250,000 $ 0
[x] Common [ ] Preferred
Convertible Securities (including warrants)..................................$ $
Partnership Interests........................................................$ $
Other (Specify )....................................$ $
Total...................................................................$250,000 $ 0
Answer also in Appendix, Colum 3, if filing under ULOE
2.Enter the number of accredited and non-accredited investors who have purchased
securities in this offering and the aggregate dollar amounts of their
purchases. For offerings under Rule 504, indicate the number of persons who
have purchased securities and the aggregate dollar amount of their purchases
on the total lines. Enter "0" if answer is "none" or "zero."
Number Aggregate
Investors Dollar Amount
of Purchases
Accredited Investors.......................................................... $
Non-accredited Investors ..................................................... $
Total (for filings under Rule 504 only).................................. 0 $ 0
Answer also in Appendix. Column 4. if filing under ULOE
3. If this filing is for an offering under Rule 504 or 505. enter the information requested for all securities sold by the issuer,
to date. in offerings of the types indicated, in the twelve (12) months prior to the first sale of securities in this offering.
Classify securities by type listed in Part C-Question 1.
Type of offering Type of Dollar Amount
Security Sold
Rule 505 ..................................................................... $
Regulation A ................................................................. $
Rule 504 .................................................................. Equity $35,000
Total ................................................................... Eqiuity $35,000
4.a. Furnish a statement of all expenses in connection with the issuance and
distribution of the securities in this offering. Exclude amounts relating
solely to organization expenses of the issuer. The information may be given
as subject to future contingencies. If the amount of an expenditure is not
known, furnish an estimate and check the box to the left of the estimate.
Transfer Agent's Fees .................................................................[ ] $
Printing and Engraving Costs ................................................................[ ] $
Legal Fees .................................................................................[x] $ 2,000
Accounting Fees .............................................................................[ ] $
Engineering Fees ............................................................................[ ] $
Sales Commissions (Specify finder's fees separately) ........................................[ ] $
Other Expenses (identify) ...................................................................[ ] $
Total ..............................................................................[x] $ 2,000
</TABLE>
4 of 8
<PAGE>
C. OFFERING PRICE, NUMBER OF INVESTORS, EXPENSES AND USE OF PROCEEDS
b. Enter the difference between the aggregate offering price given in
response to Part C-Question I and total expenses furnished in response to
Part C-Question 4.a. This difference is the "adjusted gross proceeds to the
issuer $ 248,000
5. Indicate below the amount of the adjusted gross proceeds to the issuer used
or proposed to be used for each of the purposes shown. If the amount for any
purpose is not known, furnish an estimate and check the box to the left of
the estimate. The total of the payments listed must equal the adjusted gross
proceeds to the issuer set forth in response to Part C-Question 4.b. above.
<TABLE>
<CAPTION>
Payments to
Officers
Directors, & Payments to
Affiliates Others
<S> <C> <C>
Salaries and fees ......................................................................[ ] $ [ ] $
Purchase of real estate.................................................................[ ] $ [ ] $
Purchase, rental or leasing and installation of machinery and equipment.................[ ] $ [ ] $
Construction or leasing of plant buildings and facilities...............................[ ] $ [ ] $
Acquisition of other businesses (including the value of securities involved in
this offering that may be used in exchange for the assets or securities of
another issuer
pursuant to a merger ...................................................................[ ] $ [ ] $
Repayment of indebtedness. .............................................................[ ] $ [ ] $
Working capital.........................................................................[ ] $ [x] $58,000
Other (specify) ........................................................................[ ] $ [x] $75,000
Column Totals. .........................................................................[ ] $ [x $115,000
Total Payments Listed (column totals added) ...................................................... [x] $248,000
</TABLE>
D. FEDERAL SIGNATURE
The issuer has duly caused this notice to be signed by the undersigned duly
authorized person. If this notice is filed under Rule 505, the following
signature constitutes an undertaking by the issuer to furnish to the U.S.
Securities and Exchange Commission, upon written request of its staff, the
information furnished by the issuer to any non-accredited investor pursuant to
paragraph (b) (2) of Rule 502. Issuer (Print or Type)
Issuer (Print or Type) Signature Date
Flexible Solutions International Inc. /s/ Daniel B. 0 'Brien September 17, 1998
Name of Signer (Print or Type Title of Signer (Print or Type)
Daniel B. O'Brien President
ATTENTION
Intentional misstatements or omissions of fact constitute federal criminal
violations. (see is U.S.C. 1001.)
5 of 8
<PAGE>
E. STATE SIGNATURE
1. Is any party described in 17 CFR 230.252 (c), W. (e) or (f) presently
subject to any of the disqualification provisions of such rule?
[ ] Yes [x] No
See Appendix, Column 5, for state response.
2. The undersigned issuer hereby undertakes to furnish to any state
administrator of any state in which this notice is Form D (17 CFR 239.500)
at such times as required by state law.
3. The undersigned issuer hereby undertakes to furnish to the state
administrators, upon written request, information furnished by the issuer
to offerees.
4. The undersigned issuer represents that the issuer is familiar with the
conditions that must be satisfied to be entitled to the Uniform Limited
Offering Exemption (ULOE) of the state in which this notice is filed and
understands that the issuer claiming the availability of this exemption has
the burden of establishing that these conditions have been satisfied.
The issuer has read this notification and knows the contents to be true and has
duly caused this notice to be signed on its behalf by the undersigned duly
authorized person.
Issuer (Print or Type) Signature Date
Flexible Solutions International Inc. /s/ Daniel B. 0 'Brien September 17, 1998
Name of Signer (Print or Type) Title of Signer (Print or Type)
Daniel B. O'Brien President
Instruction:
Print the name and title of the signing representative under his signature for
the state portion of this form. One copy of every notice on Form D must be
manually signed. Any copies not manually signed must be photocopies of the
manually signed copy or bear typed or printed signatures.
6 of 8
Note: Pages 7 and 8 were not used
Exhibit 4.3
DILL DILL CARR STONBRAKER & HUTCHINGS
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
(LETTERHEAD)
September 17, 1998
VIA FEDERAL EXPRESS
- -------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
Office of Small Business Policy
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Exemption Notice Filing of Flexible Solutions International
Inc. @ $0.25/Share (the "Issuer") Pursuant to Regulation D
Under the Securities Act of 1933
Ladies and Gentlemen:
Enclosed, in connection with the Issuer's notice filing pursuant to the
requirements of Rule 504 of Regulation D, are five copies of Form D, including
one manually signed, executed by a person duly authorized by the Issuer.
Please stamp the enclosed copy of this letter "RECEIVED," indicate the
date of receipt and return same to us in the enclosed self-addressed, stamped
envelope. If you have any questions, or require any additional information,
please telephone the undersigned at (303) 777-3737.
Very truly yours,
/s/ Lori Ann Y. Fujoka
Lori Ann Y. Fujoka
LAF/ccf
Enclosures
cc: Flexible Solutions International Inc.
455 SHERMAN STREET, SUITE 300/DENVER, COLORADO 80203
/FAX (303) 777-3823/(303) 777-3737
E-mail: [email protected]
<PAGE>
FORM D
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C 20549
FORM D
NOTICE OF SALE OF SECURITIES
PURSUANT TO REGULATION D,
SECTION 4(6), AND/OR
UNIFORM LIMITED OFFERING EXEMPTION
- --------------------------------------------------------------------------------
Name of Offering ([ ] check if this is an amendment and name has changed. and
indicate change.) Flexible Solutions International Inc. Rule 504 Offering @
$0.05/Share
- --------------------------------------------------------------------------------
Filing Under (Check box(es) that apply): [x] Rule 504 [ ] Rule 505 [ ] Rule 506
[ ] Section 4(6) [ ] ULOE Tvpe of Filing: [x] New Filing [ ] Amendment
- --------------------------------------------------------------------------------
A. BASIC IDENTIFICATION DATA
- --------------------------------------------------------------------------------
1. Enter the information requested about the issuer
- --------------------------------------------------------------------------------
Name of Issuer ([ ] check it this is an amendment and name has changed. and
indicate change.) Flexible Solutions International Inc.
- --------------------------------------------------------------------------------
Address of Executive Offices (Number and Street. City. State, Zip Code)
Telephone 2614 Queenswood Drive, Victoria, B.C. V8N 1X5, Canada Number
(Including Area Code) (250) 477-9969
- --------------------------------------------------------------------------------
Address of Principal Business Operations (Number and Street, City. State. Zip
Code) (if different from Executive Offices) Telephone Number (including Area
Code)
- --------------------------------------------------------------------------------
Brief Description of Business Marketing of swimming pool chemicals.
- --------------------------------------------------------------------------------
Type of Business Organization [x] corporation [ ] limited partnership, already
formed [ ] other (please specify) [ ] business trust [ ] limited partnership, to
be formed
- --------------------------------------------------------------------------------
Month Year Actual or Estimated Date of Incorporation or Organization: 05 98 [x]
Actual [ ] Estimated
Jurisdiction of Incorporation or Organization: (Enter two-letter U.S. Postal
Service abbreviation for State; CN for Canada: FN for other foreign
jurisdiction) [N][V]
- --------------------------------------------------------------------------------
GENERAL INSTRUCTIONS
Federal:
Who Must File: All issuers making an offering of securities in reliance on an
exemption under Regulation D or Section 4(6), 17 CFR 2.10.501 et seq. or 15
U.S.C. 77d(6).
When To File: A notice must be riled no later than 15 days after the first sale
of securities in the offering. A notice is deemed filed with the U.S. Securities
and Exchange Commission (SEC) on the earlier of the date it is received by the
SEC at the address given below or, if received at that address after the date on
which it is due, on the date it was mailed by United States registered or
certified mail to that address.
Where to File: U.S. Securities and Exchange Commission. 450 Fifth Street. N.W.
Washington, D.C. 20549
Copies Required: Five (5) copies of this notice must be riled with the SEC. tine
of which must be manually signed. Any copies not manually signed must be
photocopies of the manually signed copy or bear typed or printed signatures.
Information Required. A new riling must contain all information requested.
Amendments need only report the name of the issuer and offering. any changes
thereto. The information requested in Part C. and any material changes from the
information previously supplied in Parts A and 3. Part E and the Appendix need
not be riled with the SEC.
Filing Fee: There is no federal filing fee.
State:
This notice shall be used to indicate reliance on the Uniform Limited Offering
Exemption (ULOE) for sales of securities in those states that have adopted ULOE
and that have adopted this form. Issuers relying on ULOE must rile a separate
notice with the Securities Administrator in each state where sales are to be, or
have been made. If a state requires the payment of a fee as a precondition to
the claim for the exemption, a fee in the proper amount shall accompany this
form. This notice shall be riled in the appropriate states in accordance with
state law. The Appendix to the notice constitutes a part of this notice and must
be completed.
ATTENTION
Failure to file notice in the appropriate states will not 'result in a loss of
the federal exemption. Conversely, failure to file the appropriate federal
notice will not result in a loss of an available state exemption unless such
exemption is predicated on the filing of a federal notice.
Potential persons who are to respond to the collection of information contained
in this form are not required to respond unless the form displays a currently
valid OMB control number.
SEC 1972 (2-97) 1 of 8
<PAGE>
A. BASIC IDENTIFICATION DATA
2. Enter the information requested for the following:
o Each promoter of the issuer, if the issuer has been organized within the
past Five years;
o Each beneficial owner having the power to vote or dispose, or direct the
vote or disposition of, 10% or more of a class of equity securities of
the issuer;
o Each executive officer and director of corporate issuers and of
corporate general and managing partners of partnership issuers; and
o Each general and managing partner of partnership issuers.
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[x] Beneficial Owner [ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
Aschmann, Beat
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
Laerchenhof weg No. 3, 8906 Bonstetten, Switzerland
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [x] Promoter [x] Beneficial Owner[x] Executive Officer
[x] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual) O'Brien, Daniel B.
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
2614 Queenswood Drive, Victoria, B.C. V8N 1K5 Canada
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[x] Beneficial Owner [ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first. if individual)
O'Brien, Dr. Robert N.
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
2614 Queenswood Drive, Victoria, B.C. V8N 1X5 Canada
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[ ] Beneficial Owner[ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[ ] Beneficial Owner[ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[ ] Beneficial Owner[ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[ ] Beneficial Owner[ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter[ ] Beneficial Owner[ ] Executive Officer
[ ] Director[ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
(Use blank sheet. or copy and use additional copies of this sheet. as necessary)
2 of 8
<PAGE>
B. INFORMATION ABOUT OFFERING
1. Has the issuer sold or does the issuer intend to sell to non-accredited
investors in this offering?
[x] Yes [ ] No
Answer also in Appendix, Column 2, if filing under ULOE.
2. What is the minimum investment that will be accepted from any individual?
$100.00
3. Does the offering permit joint ownership of a single unit? [x] Yes [ ] No
4. Enter the information requested for each person who has been or will be paid
or given, directly or indirectly, any commission or similar remuneration for
solicitation of purchasers in connection with sales of securities in the
offering. If a person to be listed is an associated person or agent of a
broker or dealer registered with the SEC and/or with a state or states, list
the name of the broker or dealer. If more than five (5) persons to be listed
are associated persons of such a broker or dealer, you may set forth the
information for that broker or dealer only.
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual) Not applicable.
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Name of Associated Broker or Dealer
- --------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers
(Check "All States" or check individual States) ...............[ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID] [IL] [IN] [IA]
[KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] (MS] [MO] [MT] [NE] [NV] [NH] (NJ] [NM]
[NY] [NC] [ND] [OH] [OK] [OR] [PA] [RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA]
[WV] [WI] [WY] [PR]
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual) Not applicable.
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Name of Associated Broker or Dealer
- --------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers
(Check "All States" or check individual States) ...............[ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID] [IL] [IN] [IA]
[KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] (MS] [MO] [MT] [NE] [NV] [NH] (NJ] [NM]
[NY] [NC] [ND] [OH] [OK] [OR] [PA] [RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA]
[WV] [WI] [WY] [PR]
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual) Not applicable.
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City. State, Zip Code)
- --------------------------------------------------------------------------------
Name of Associated Broker or Dealer
- --------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers
(Check "All States" or check individual States) ...............[ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID] [IL] [IN] [IA]
[KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] (MS] [MO] [MT] [NE] [NV] [NH] (NJ] [NM]
[NY] [NC] [ND] [OH] [OK] [OR] [PA] [RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA]
[WV] [WI] [WY] [PR]
- --------------------------------------------------------------------------------
(Use blank sheet, or copy and use additional copies of this sheet. as necessary)
3 of 8
<PAGE>
C. OFFERING PRICE, NUMBER OF INVESTORS, EXPENSES AND USE OF PROCEEDS
<TABLE>
<CAPTION>
1.Enter the aggregate offering price of securities included in this offering and the total amount already sold. Enter "0" if
answer is "none" or "zero". If the transaction is an exchange offering, check this box [ ] and indicate in the column below the
amounts of the securities offered for exchange and already exchanged. Type of Security
Aggregate Amount Already
Sold
<S> <C> <C>
Offering Price
Debt ........................................................................$ $
Equity.......................................................................$ 25,000 $ 25,000
[x] Common [ ] Preferred
Convertible Securities (including warrants)..................................$ $
Partnership Interests........................................................$ $
Other (Specify )....................................$ $
Total...................................................................$ 25,000 $ 25,000
Answer also in Appendix, Colum 3, if filing under ULOE
2.Enter the number of accredited and non-accredited investors who have purchased
securities in this offering and the aggregate dollar amounts of their
purchases. For offerings under Rule 504, indicate the number of persons who
have purchased securities and the aggregate dollar amount of their purchases
on the total lines. Enter "0" if answer is "none" or "zero."
Number Aggregate
Investors Dollar Amount
of Purchases
Accredited Investors.......................................................... $
Non-accredited Investors ..................................................... 9 $ 25,000
Total (for filings under Rule 504 only).................................. 9 $ 25,000
Answer also in Appendix. Column 4. if filing under ULOE
3. If this filing is for an offering under Rule 504 or 505. enter the information requested for all securities sold by the issuer,
to date. in offerings of the types indicated, in the twelve (12) months prior to the first sale of securities in this offering.
Classify securities by type listed in Part C-Question 1.
Type of offering Type of Dollar Amount
Security Sold
Rule 505 ..................................................................... $
Regulation A ................................................................. $
Rule 504 .................................................................. Equity $10,500
Total ................................................................... Equity $10,500
4.a. Furnish a statement of all expenses in connection with the issuance and
distribution of the securities in this offering. Exclude amounts relating
solely to organization expenses of the issuer. The information may be given
as subject to future contingencies. If the amount of an expenditure is not
known, furnish an estimate and check the box to the left of the estimate.
Transfer Agent's Fees .................................................................[ ] $
Printing and Engraving Costs ................................................................[ ] $
Legal Fees .................................................................................[x] $ 2,000
Accounting Fees .............................................................................[ ] $
Engineering Fees ............................................................................[ ] $
Sales Commissions (Specify finder's fees separately) ........................................[ ] $
Other Expenses (identify) ...................................................................[ ] $
Total ..............................................................................[x] $ 2,000
</TABLE>
4 of 8
<PAGE>
C. OFFERING PRICE, NUMBER OF INVESTORS, EXPENSES AND USE OF PROCEEDS
b. Enter the difference between the aggregate offering price given in
response to Part C-Question I and total expenses furnished in response to
Part C-Question 4.a. This difference is the "adjusted gross proceeds to the
issuer $23,000
5. Indicate below the amount of the adjusted gross proceeds to the issuer used
or proposed to be used for each of the purposes shown. If the amount for any
purpose is not known, furnish an estimate and check the box to the left of
the estimate. The total of the payments listed must equal the adjusted gross
proceeds to the issuer set forth in response to Part C-Question 4.b. above.
<TABLE>
<CAPTION>
Payments to
Officers
Directors, & Payments to
Affiliates Others
<S> <C> <C>
Salaries and fees ......................................................................[ ] $ [ ] $
Purchase of real estate.................................................................[ ] $ [ ] $
Purchase, rental or leasing and installation of machinery and equipment.................[ ] $ [ ] $
Construction or leasing of plant buildings and facilities...............................[ ] $ [ ] $
Acquisition of other businesses (including the value of securities involved in
this offering that may be used in exchange for the assets or securities of
another issuer
pursuant to a merger ...................................................................[ ] $ [ ] $
Repayment of indebtedness. .............................................................[ ] $ [ ] $
Working capital.........................................................................[ ] $ [x] $23,000
Other (specify) ........................................................................[ ] $ [ ] $
Column Totals. .........................................................................[ ] $ [ ] $
Total Payments Listed (column totals added) ...................................................... [x] $23,000
</TABLE>
D. FEDERAL SIGNATURE
The issuer has duly caused this notice to be signed by the undersigned duly
authorized person. If this notice is filed under Rule 505, the following
signature constitutes an undertaking by the issuer to furnish to the U.S.
Securities and Exchange Commission, upon written request of its staff, the
information furnished by the issuer to any non-accredited investor pursuant to
paragraph (b) (2) of Rule 502. Issuer (Print or Type)
Issuer (Print or Type) Signature Date
Flexible Solutions International Inc. /s/ Daniel B. 0 'Brien September 14, 1998
Name of Signer (Print or Type Title of Signer (Print or Type)
Daniel B. O'Brien President
ATTENTION
Intentional misstatements or omissions of fact constitute federal criminal
violations. (see is U.S.C. 1001.)
5 of 8
<PAGE>
E. STATE SIGNATURE
1. Is any party described in 17 CFR 230.252 (c), W. (e) or (f) presently
subject to any of the disqualification provisions of such rule?
[ ] Yes [x] No
See Appendix, Column 5, for state response.
2. The undersigned issuer hereby undertakes to furnish to any state
administrator of any state in which this notice is Form D (17 CFR 239.500)
at such times as required by state law.
3. The undersigned issuer hereby undertakes to furnish to the state
administrators, upon written request, information furnished by the issuer
to offerees.
4. The undersigned issuer represents that the issuer is familiar with the
conditions that must be satisfied to be entitled to the Uniform Limited
Offering Exemption (ULOE) of the state in which this notice is filed and
understands that the issuer claiming the availability of this exemption has
the burden of establishing that these conditions have been satisfied.
The issuer has read this notification and knows the contents to be true and has
duly caused this notice to be signed on its behalf by the undersigned duly
authorized person.
Issuer (Print or Type) Signature Date
Flexible Solutions International Inc. /s/ Daniel B. 0 'Brien September 14, 1998
Name of Signer (Print or Type) Title of Signer (Print or Type)
Daniel B. O'Brien President
Instruction:
Print the name and title of the signing representative under his signature for
the state portion of this form. One copy of every notice on Form D must be
manually signed. Any copies not manually signed must be photocopies of the
manually signed copy or bear typed or printed signatures.
6 of 8
Note: Pages 7 and 8 were not used
Exhibit 10.1
"TROPICAL FISH" DISTRIBUTION AGREEMENT
between
FLEXIBLE SOLUTIONS LTD and HELIOCOL LTD
2614 Queenswood Dr. 2577 Do Miniac
Victoria, BC, Canada St Laurent, PQ, Canada
This agreement lays out the terms upon which Heliocol Canada earns and maintains
exclusive distribution rights to the "Tropical Fish" swimming pool product
manufactured by Flexible Flexible Solutions.
The geographic am covered by this agreement is North America excluding Mexico
Exclusive distribution is earned by paying for the first ardor of 60 000
"Tropical fish" in advance less the projected profit on this order which will be
paid after successful delivery of the "fish". Exclusive distribution will be
maintained in the event that Heliocol Canada meets the following sales
performance levels.
In the year ending Feb. 28 1999 Heliocol Ltd. will order and pay for - 100 000
"fish"
In the year ending Feb. 29 2000 Heliocol Ltd. will order and pay for - 300 000
"fish"
In the year ending Feb. 28 2001 Heliocol Ltd. will order and pay for - 600 000
"fish"
A further three years of exclusive distribution can be maintained by:
In the year ending Feb. 28 2002 Heliocol Ltd. will order and pay for
the larger of either A) 600 000 times 1.2 (720 000) or B) 1.2 times the number
of "fish ordered and paid for in the year ending Feb 28 2001.
In the year ending Feb. 28 2003 Heliocol Ltd. will order and pay for a
number of "fish" equal to the previous years total times 1.2.
In the year ending Feb. 29 2004 Heliocol Ltd. will order and pay for a
number of "fish" equal to the previous year's total times 1.2.
<PAGE>
2
SALE OF FLEXIBLE SOLUTIONS LTD.
In the event that Flexible Solutions is sold the following must be part of the
sales contract.
1. A first refusal at the same price is granted to Heliocol Canada.
2. Heliocol Canada's exclusive distribution contract with Flexible
Solutions shall, be binding on the new owner(s).
3. Heliocol Canada has a veto over a proposed sale to an entity
Heliocol Canada reasonably believes may have intent to discontinue "Tropical
Fish" sales.
4. Heliocol Canada will sell it's veto for a reasonable premium arrived
at by a mutually agreed upon mediator.
SALE OF "THE EXCLUSIVE DISTRIBUTORSHIP OF TROPICAL FISH" BY HELIOCOL CANADA LTD
1. A first refusal at the same price is granted to Flexible Solutions.
2. Heliocol Canada's sales performance minimums are binding on the new
owner.
3. The buyer of the exclusive distribution rights must advance to
Flexible Solutions $1.00 US for each "fish" which must be bought that year in
order to maintain the distribution agreement in good standing, These monies will
be credited to future orders of "tropical fish" at a rate of $1.00 US per fish
as the orders are made.
NEW SWIMMING POOL PRODUCTS DEVELOPED BY FLEXIBLE S
It is agreed that Flexible Solutions will offer distribution rights on
new products it may develop for swimming pools to Heliocol Canada for the same
area as for "tropical fish" if sales performance by Heliocol is current as per
this agreement.
FOR: HELIOCOL CANADA LTD. FOR: FLEXIBLE SOLUTIONS LTD.
/s Ken Tait /s Dan O'Brien
-------------------------------- -----------------------
Ken Tait, President Dan O'Brien, President
Date June 1, 1998 Date 05/07/98
Exhibit 21
Subsidiary
Flexible Solutions Ltd.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Flexible Solutions International Inc. which are included
in its Registration Statement, Form 10-SB for the fiscal year ended December 31,
1999 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 59,441
<SECURITIES> 0
<RECEIVABLES> 112,839
<ALLOWANCES> 0
<INVENTORY> 136,560
<CURRENT-ASSETS> 309,360
<PP&E> 49,782
<DEPRECIATION> 12,764
<TOTAL-ASSETS> 359,142
<CURRENT-LIABILITIES> 103,226
<BONDS> 0
0
0
<COMMON> 9,131
<OTHER-SE> 246,785
<TOTAL-LIABILITY-AND-EQUITY> 359,142
<SALES> 759,218
<TOTAL-REVENUES> 759,218
<CGS> 413,849
<TOTAL-COSTS> 589,062
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 170,156
<INCOME-TAX> 67,308
<INCOME-CONTINUING> 102,848
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 102,848
<EPS-BASIC> 0.01
<EPS-DILUTED> 0.01
</TABLE>
