UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10QSB

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

                 For the quarterly period ended MARCH 31, 2005

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT


                      FLEXIBLE SOLUTIONS INTERNATIONAL INC.
                      -------------------------------------
        (Exact name of small business issuer as specified in its charter)

            NEVADA                                       91-1922863
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)


                615 Discovery Street, Victoria BC CANADA V8T 5G4
                -------------------------------------------------
                    (Address of principal executive offices)

                               ( 250 ) 477 - 9969
                           (Issuer's telephone number)


(Former name, former address and former fiscal year if changed since last
report)


                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: Common stock $.001 par value
12,733,916 shares as of April 30, 2005.

    Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

Attached hereto and incorporated herein by reference.

ITEM 2.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The following information contains certain forward-looking statements that
anticipate future trends or events. These statements are based on certain
assumptions that may prove to be erroneous and are subject to certain risks
including but not limited to the risks of increased competition in the Company's
industry and other risks detailed in the Company's Securities and Exchange
Commission filings. Accordingly, actual results may differ, possibly materially,
from the predictions contained herein.

RESULTS OF OPERATIONS
The following analysis and discussion pertains to the Company's results of
operations for the three month period ended March 31st 2005, compared to the
results of operations for the three month period ended March 31st 2004, and to
changes in the Company's financial condition from December 31st 2004 to March
31st 2005.

THREE MONTHS ENDED MARCH 31ST 2005 AND 2004
For the three months ended March 31st 2005, the Company experienced a profit of
$54,198 as compared to a loss of $250,861 for the three months ended March 31st
2004. Increased brand recognition and increased sales of our residential pool
product, Ecosavr, as well as a full quarter of operations from the NanoChem
division has resulted in revenue of $2,019,581 compared to $488,110 in the year
earlier quarter. Management is extremely satisfied with the effect of the
acquisition as the NanoChem division had contributed greatly to sales and cash
flow and is starting to replace the capital expended for it. As well,
opportunities to synergistically cross sell the products of all divisions have
already generated leads to new business and the swimming pool division has
discovered ways to help NanoChem increase utilization of the Peru, IL factory
while decreasing costs for the Company as a whole. The Company maintained
expenditures in the areas of WaterSavr sales and marketing and production
equipment development. The major changes that resulted in the large revenue
increase were greater sales from our swimming pool division into new overseas
markets and increase in sales from the recently acquired NanoChem division.
NanoChem sales are much less seasonal than those of our WaterSavr and Flexible
Solutions Ltd divisions which should lead to less volatile sales figures in
future. Management will attempt to reduce seasonality even further over time.

Operating expenses were $889,812 for the first quarter, up from $374, 987 for
the first quarter of 2004. Flexible Solutions continued its sales and marketing
efforts for WaterSavr with the objective of closing the first major sales as
soon as possible and with development of advanced production machinery for
swimming pool products. The largest real increases were in the areas of wages
($234,436 versus $53,289), rent ($55,806 versus $21,349), advertising ($31,271
from $7,730), and commissions ($40,925 versus zero). These increases are wholly
accounted for by the operating costs of the new division and represent a
permanent increase in operating costs related to the new level of sales. The
decreases in investor relations ($24,638 down from $64,678) and consulting
($44,252 down from $74,678) are the result of better cost-control in these areas
instituted by management over the past year. Professional fees increased to
$60,843 from $36,508 in the quarter. This is the result of the company
protecting its intellectual property assets vigorously. Note should be made that
depreciation increased to $168,103 from $9,952 as a result of the depreciable
NanoChem assets acquired in June 2004.

                                       1
<PAGE>

The profit for the quarter was $54,198, an increase from first quarter last year
when the loss was $250,861. The gain was realized through increased sales in
swimming pool products compared to the year earlier quarter augmented by
positive operating cash from the NanoChem division.

The profit per share was $0.00 for the three months ended March 31st, 2005
compared to a loss of $0.02 for the three months ended March 31st, 2004.


LIQUIDITY AND CAPITAL RESOURCES
The Company has cash on hand of $495,520 as of the end of March 2005 compared to
$558,795 on December 31st, 2004.

As of March 31st 2005, the Company had working capital of $36,925 as compared to
working capital of $(101,121) on December 31st 2004. The increase in working
capital is the result of increase sales and profits.

The Company has no external sources of liquidity in the form of credit lines
from banks.

Management believes that its available cash will be sufficient to fund the
Company's working capital requirements through December 31st 2005. Management
further believes that available cash will be sufficient to implement the
Company's expansion plans. No investment banking agreements are in place and
there is no guarantee that the Company will be able to raise capital in the
future should that become necessary.

SUBSEQUENT EVENTS

On April 4th, 2005 the Company announced that it had raised $3.375 million in
capital through a private placement. Participating investors are a select group
of investment funds, and the terms are one common share at $3.75 and a warrant
to acquire a further share at $4.50. The total number of shares subscribed for
was limited to 900,000, in order to minimize shareholder dilution while
providing sufficient funds to retire the debt remaining from the acquisition of
our NanoChem division in June 2004

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS:

The Company does not have any derivative financial instruments as of March 31st
2005. However, the Company is exposed to interest rate risk.

The Company's interest income and expense are most sensitive to changes in the
general level of U.S. and Canadian interest rates. In this regard, changes in
U.S. and Canadian interest rates affect the interest paid on the Company's cash
equivalents as well as the interest paid on debt.

FOREIGN CURRENCY RISK

The Company operates extensively in both Canada and the USA. Therefore, the
Company's business and financial condition is sensitive to currency exchange
rates or any other restriction imposed on its currency.





                                       2
<PAGE>
                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

a) The company has been named as defendant in a lawsuit filed in the state of
Illinois by a former employee. In November 2003, an ex-employee, Patrick Grant,
filed suit against Flexible Solutions International Inc. in Cook County Circuit
Court, Cook County, IL, claiming wrongful dismissal and seeking return of
options rights or cash. The company believes these allegations are without merit
and intends to vigorously defend against them.

b) The company is plaintiff in a lawsuit demanding return of the share
certificate of 100,000 shares of stock originally given to the defendant as
payment in advance for services. The services for which the advance was given
were never performed or given to the company, and the company therefore received
no consideration or value for such advance. Return of the share certificate for
100,000 shares was demanded within ten (10) days, namely August 22, 2001,
however, to date remains unreturned. On date of issue, January 4, 2001, the
share transaction was recorded as shares issued for services at fair market
value, a value of $0.80 per share.

c) The company has been named the defendant in a lawsuit filed in the Federal
Court of Canada as well as the plaintiff in a countersuit in the same court. In
July 2004, a former distributor, Sunsolar Energy Technologies, filed suit
claiming trademark infringement. The company believes these allegations are
without merit and intends to vigorously defend against them.

d) The company is plaintiff in a lawsuit demanding the return of the share
certificate of 100,000 shares of stock originally given as payment in advance
for services, $10,000 and undetermined damages resulting from a breach of
contract. The suite has been filed in the Circuit Court of Cook County, IL
against Tatko Biotech Inc. of Peoria, IL. The services for which the advance was
given were never performed or given to the company, and the company therefore
received no consideration or value for such advance. The shares were recorded at
fair market value less 10%, resulting in an expense of $271,000 recognized in
June 2003.

e) The Company is the plaintiff in a lawsuit filed in the Court of the Queen's
Bench of Alberta, where the subsidiary Flexible Solutions Ltd. is
inter-provincially registered. The company is seeking undetermined damages
resulting from breach of contract against Calgary Diecast Corporation. The
contract was never completed and the Company's raw materials remain in the
possession Calgary Diecast Corp. On April 25th, 2005, the Court ordered a
judgment in favor of Flexible Solutions Ltd. in the amount of $47,495 and FSL
intends to collect using all available means.

ITEM 2. CHANGES IN SECURITIES

        None

ITEM 3. DEFAULT UPON SENIOR SECURITIES

        None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

        None

ITEM 5. OTHER INFORMATION

        None

                                       3
<PAGE>

ITEM 6.

        (b)   Reports on Form 8-K

              April 14, 2005 - Private placement announcment

              April 6, 2005 - 2005 sales prediction

              March 24, 2005 - 2004 financials results and distributor
              announcement

              January 10, 2005 - Owens Lakes trial results

ITEM 14. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's Exchange Act
reports is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms, and that such information is accumulated
and communicated to the Company's management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure based closely on the definition of "disclosure
controls and procedures" in Rule 13a-14(c). In designing and evaluating the
disclosure controls and procedures, management recognized that any controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.

Within 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and the Company's
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based on the foregoing, the
Company's Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures were effective.

There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect the internal controls subsequent
to the date the Company completed its evaluation.


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                      FLEXIBLE SOLUTIONS INTERNATIONAL INC.
                                  (Registrant)


Dated: May 13th 2005                            /s/ DAN O'BRIEN
                                                President and Director


                                       4
<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Balance Sheets
March 31, 2004
(U.S. Dollars)
------------------------------------------------------------------------------------------------
                                                                    March 31         December 31
                                                                      2005              2004
                                                                  ----------         ----------
Assets
<S>                                                                <C>               <C>
Current
  Cash and cash equivalents                                        $ 495,520          $ 558,795
  Short term investments                                                   -            559,440
  Accounts receivable                                              1,111,374            501,372
  Income tax                                                          27,799             92,963
  Loan receivable                                                     38,652             38,570
  Inventory                                                        1,705,890          1,416,588
  Prepaid expenses                                                    96,764            131,280
                                                                  ----------         ----------

                                                                   3,475,999          3,299,008
Property, equipment and leaseholds                                 5,122,341          5,250,346
Investment                                                           325,000            271,000
                                                                  ----------         ----------

                                                                  $8,923,340         $8,820,354
                                                                  ==========         ==========

Liabilities

Current
  Accounts payable and accrued liabilities                         $ 289,074          $ 250,129
  Short term loan                                                  3,150,000          3,150,000
                                                                  ----------         ----------
                                                                   3,439,074          3,400,129
                                                                  ----------         ----------

Stockholders' Equity

Capital stock
Authorized
  50,000,000 Common shares with a par value of $0.001 each
   1,000,000 Preferred shares with a par value of $0.01 each
Issued and Outstanding
  11,831,916 (2003: 11,794,916) Common shares                         11,832             11,832
Capital in excess of par Value                                     7,686,820          7,663,421
Other comprehensive income                                            86,623            100,179
Deficit                                                           (2,301,009)        (2,355,207)
                                                                  ----------         ----------

Total Stockholders' Equity                                         5,484,266          5,420,225
                                                                  ----------         ----------

Total Liabilities and Stockholders' Equity                        $8,923,340         $8,820,354
                                                                  ==========         ==========
</TABLE>
Commitments and Contingencies (Notes 14 & 15)

See accompanying notes to financial statements.

                                       5
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Statements of Operations
For Three Months Ended December 31, 2004 and 2003
(U.S. Dollars)

------------------------------------------------------------------------------
                                                 Three Months Ended March 31
                                                   2005               2004
                                                -----------        -----------

Sales                                           $ 2,019,581          $ 488,110
Cost of sales                                     1,078,301            367,100
                                                -----------        -----------

Gross profit                                        941,280            121,010
                                                -----------        -----------

Operating Expenses
  Wages                                             234,436             53,289
  Administrative salaries and benefits               38,005             24,847
  Advertising and promotion                          31,271              7,730
  Investor relations and transfer agent fee          24,638             64,678
  Office and miscellaneous                           41,457             34,590
  Insurance                                          28,318                  -
  Interest expense                                   37,674                  -
  Rent                                               55,806             21,349
  Consulting                                         44,252             74,678
  Professional fees                                  60,843             36,508
  Travel                                             37,765             23,576
  Telecommunications                                 10,288              5,700
  Shipping                                           12,639              3,142
  Research                                           15,508              9,161
  Commissions                                        40,925                  -
  Bad debt expense (recovery)                             -                  -
  Currency exchange                                     718                422
  Utilities                                           7,166              5,365
  Depreciation                                      168,103              9,952
                                                -----------        -----------

                                                    889,812            374,987
                                                -----------        -----------

Income (loss) before other items and income tax      51,468           (253,977)
Interest income                                       2,730              3,116
                                                -----------        -----------

Income (loss) before income tax                      54,198           (250,861)
Income tax (recovery)                                     -                  -
                                                -----------        -----------

Net income (loss)                                    54,198           (250,861)
Deficit, beginning                               (2,355,207)        (1,097,662)
                                                -----------        -----------
Deficit, ending                                 $(2,301,009)       $(1,348,523)
                                                ===========        ===========

Net income (loss) per share                          $ 0.00            $ (0.02)
                                                ===========        ===========

Weighted average number of shares                11,831,916         11,807,801
                                                ===========        ===========
See accompanying notes to financial statements.
                                       6
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Statements of Cash Flows
For The Years Ended December 31, 2004 and 2003
(U.S. Dollars)

--------------------------------------------------------------------------------
                                                          Three Months March 31
                                                         2005           2004
                                                      ----------   -----------

Operating activities
  Net income (loss)                                   $  54,198    $ (250,861)
  Stock compensation expense                             23,400        66,935
  Depreciation                                          168,103         9,952
                                                      ----------   -----------
                                                        245,701      (173,974)
Changes in non-cash working capital items:
  (Increase) Decrease in accounts receivable           (610,002)      166,617
  (Increase) Decrease in inventory                     (289,302)       29,118
  (Increase) Decrease in prepaid expenses                34,516       (15,809)
  Increase (Decrease) in accounts payable                38,945       (32,987)
  Increase (Decrease) in Income taxes                    65,164         1,120
  Increase (Decrease) in amounts due to shareholders          -        (7,700)
                                                      ----------   -----------

Cash (used in) operating activities                    (514,977)      (33,615)
                                                      ----------   -----------

Investing activities
  Short-term investments                                559,440     1,525,735
  Investments                                           (54,000)            -
  Loan receivable                                           (81)      (14,868)
  Acquisition of property and equipment                 (40,099)      (18,338)
  Incurred acquisition costs                                  -       (90,912)
                                                      ----------   -----------

Cash provided by (used in) investing activities         465,260     1,401,617
                                                      ----------   -----------

Financing activities
  Proceeds from issuance of common stock                      -        40,500
                                                      ----------   -----------

Cash provided by financing activities                         -        40,500
                                                      ----------   -----------

Effect of exchange rate changes on cash                 (13,559)       12,348
                                                      ----------   -----------

Inflow (outflow) of cash                                (63,276)    1,420,850
Cash and cash equivalents, beginning                    558,795       237,080
                                                      ----------   -----------

Cash and cash equivalents, ending                     $ 495,520    $1,657,930
                                                      ==========   ===========

Supplemental disclosure of cash flow information:
Interest received                                     $   2,730    $    3,116
                                                      ==========   ===========
See accompanying notes to financial statements.

                                       7
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------
1.    BASIS OF PRESENTATION:

      These consolidated financial statements include the accounts of Flexible
      Solutions International Inc., and its wholly owned subsidiaries Flexible
      Solutions Ltd., NanoChem Solutions Inc. and Water$aver Global Solutions
      Inc. All intercompany balances and transactions have been 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 former
      shareholders of the subsidiary receiving 100% of the total shares then
      issued and outstanding. The transaction has been accounted for as a
      reverse-takeover.

      Flexible Solutions Ltd. is accounted for as the acquiring party and the
      surviving entity. As 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.

      On May 2, 2002, the company established Water$aver Global Solutions Inc.
      through issuance of 100 shares of common stock.

      Pursuant to a purchase agreement dated May 26, 2004, the company acquired
      the assets of Donlar Corporation on June 9, 2004 and created a new
      company, NanoChem Solutions Inc.

      The purchase price of the transaction was $6,150,000 with consideration
      being a combination of cash and debt. Under the purchase agreement and as
      part of the consideration, the company issued a promissory note bearing
      interest at 4 % to the vendor to satisfy $3,150,000 of the purchase price.
      This note is due June 2, 2005 and all of the former Donlar assets are used
      as security.

      The following table summarizes the estimated fair value of the assets
      acquired at the date of acquisition:

      As at June 9, 2004:

       Current assets                                         $ 1,126,805
       Property and equipment                                   5,023,195
                                                              ------------
                                                                6,150,000
       Acquisition costs assigned to property and equipment       314,724
                                                              ------------

       Total assets acquired                                  $ 6,464,724
                                                              ============

On February 7, 2005 the Company incorporated two new subsidiaries in Nevada.
SeaHorse Systems Inc. was incorporated to research new applications of our
patented dispensing mechanism currently used for Ecosavr. NanoDetect
Technologies Inc. is focusing on ways to use our current technologies to detect
pathogens.

                                       8
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------
2.    SIGNIFICANT ACCOUNTING POLICIES:

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

      a) Cash and Cash Equivalents -

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

      b) Inventory -

           Inventory is valued at the lower of cost and net realizable value.
           Cost is determined on a first-in, first-out basis.

      c) Property, Equipment and Leaseholds -

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

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

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

      d) Impairment of Long Lived Assets -

           The company assesses the recoverability of its long lived assets by
           determining whether the carrying value of the long lived assets can
           be recovered over their remaining lives through undiscounted future
           operating cash flows using a discount rate reflecting the company's
           average cost of funds. The assessment of the recoverability will be
           impacted if estimated future operating cash flows are not achieved.
           For the year ended December 31, 2004, no impairment charges have been
           recognized.






                                       9
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------
2.    SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

      e) Foreign Currency -

           The functional currency of Flexible Solutions Ltd. is the Canadian
           dollar. The translation of the Canadian dollar to the reporting
           currency of the U.S. dollar is performed for assets and liabilities
           using exchange rates in effect at the balance sheet date. Revenue and
           expense transactions are translated using average exchange rates
           prevailing during the year. Translation adjustments arising on
           conversion of the financial statements from the 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 to transactions not
           denominated in the applicable local currency are included in income
           if realized during the year and in comprehensive income if they
           remain unrealized at the end of the year.

      f) Revenue Recognition -

           Revenue from product sales is recognized at the time the product is
           shipped since title and risk of losses is transferred to purchaser
           upon delivery to the carrier. Shipments are made F.O.B. shipping
           point. 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.

      g) Stock Issued in Exchange for Services -

           The valuation of the common stock issued to non-employees in exchange
           for services is valued at an estimated fair market value as
           determined by officers and directors of the company based upon
           trading prices of the company's common stock on the dates of the
           stock transactions.

      h) Stock Based Compensation -

           The company applies the fair value based method of accounting
           prescribed by the Statement of Financial Accounting Standards
           ("SFAS") No. 123 in accounting for stock issued in exchange for
           services.

      i) Comprehensive Income -

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

                                       10
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005 AND 2004
--------------------------------------------------------------------------------
(US DOLLARS)
2.    SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

      j) Income (Loss) Per Share -

           Income (loss) per share is calculated by dividing net income (loss)
           by the weighted average number of shares outstanding. Diluted income
           (loss) per share is computed by giving effect to all potential
           dilutive options that were outstanding during the year. For the years
           ending December 31, 2004, 2003 and 2002 all outstanding options were
           anti-dilutive.

      k) Use of Estimates -

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

      l) Financial Instruments

           i)   Fair Values

                The fair market value of the financial instruments comprising
                cash, short-term investment, accounts receivable, loan
                receivable, accounts payable and accrued liabilities, and
                short-term loan payable were estimated to approximate their
                carrying values due to immediate or short-term maturity of these
                financial instruments.

          ii)   Foreign Exchange and Interest Rate Risks -

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

      m) Recent Accounting Pronouncements -

           i)   In June 2001, the Financial Accounting Standards Board (FASB)
                issued FAS 142, Goodwill and Other Intangible Assets. Under FAS
                142, goodwill and intangible assets with indefinite lives are no
                longer amortized but are reviewed at least annually for
                impairment. The amortization provisions of FAS 142 apply to
                goodwill and intangible assets acquired after June 30, 2001.
                With respect to goodwill and intangible assets acquired prior to
                July 1, 2001, the company adopted FAS 142 effective January 1,
                2002. Application of the non-amortization provisions of FAS 142
                for goodwill did not have any impact on its financial reporting.

                                       11
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------
2.    SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

           ii)  In October 2001, the FASB issued Statement of Financial
                Accounting Standards for FAS 144, "Accounting for the Impairment
                or Disposal of Long-Lived Assets." FAS 144 addresses significant
                issues relating to the implementation of FAS 121, "Accounting
                for the Impairment of Long-Lived Assets and for Long-Lived
                Assets to be Disposed Of," and develops a single accounting
                model, based on the framework established in FAS 121 for
                long-lived assets to be disposed of by sale, whether such assets
                are or are not deemed to be a business. FAS 144 also modifies
                the accounting and disclosure rules for discontinued operations.
                The standard was adopted on January 1, 2002 and did not have any
                impact on the financial statements.

           iii) In November 2001, the FASB issued EITF Issue No. 01-14,. "Income
                Statement Characterization of Reimbursements Received for "Out
                of Pocket" Expenses Incurred." This guidance requires companies
                to recognize the recovery of reimbursable expenses such as
                travel costs on service contracts as revenue. These costs are
                not to be netted as a reduction of cost. This guidance was
                implemented January 1, 2002. The company does not expect this
                guidance to have a material impact on the financial statements.

3.    LOAN RECEIVABLE:
                                                       2005             2004
                                                   ---------        ---------

      5% loan receivable due on demand             $  38,652        $  38,570
                                                   =========        =========


4.    PREPAID EXPENSES:
                                                       2005             2004
                                                   ---------        ---------

      Security deposit and prepaids                $ 96,764         $ 131,280
                                                   =========        =========
















                                       12
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------
5.    PROPERTY, EQUIPMENT AND LEASEHOLDS:

                                           Accumulat     2005        2004
                                   Cost   Amortization    Net         Net
       ----------------------- ----------- ---------- ----------- -----------
       Buildings               $ 3,144,259 $  231,268 $ 2,912,991 $ 2,987,046
       Computer hardware            44,370     15,854      28,516      27,511
       Furniture and fixtures       15,609      4,238      11,371      11,515
       Office equipment             28,905     11,390      17,515      18,421
       Manufacturing equipment   2,139,918    411,712   1,728,206   1,785,858
       Trailer                       1,926        864       1,062       1,146
       Leasehold improvements       31,551     12,739      18,812      14,533
       Trade Show Booth              7,212      1,530       5,682       6,130
       Land                        398,186          -     398,186     398,186
                               ----------- ---------- ----------- -----------
                               $ 5,811,936 $  689,595 $ 5,122,341 $ 5,250,346
                               =========== ========== =========== ===========

6.    INVESTMENT:

                                                           2005          2004
                                                        ---------     ---------

      Tatko Inc. Option to purchase 20%
                interest in common stock                $ 271,000     $ 271,000
      Air Water Interface Delivery & Detection Inc.        54,000             -
                                                        ---------     ---------
                                                        $ 325,000     $ 271,000
                                                        =========     =========

      On May 31, 2003 the company acquired an option to purchase a 20% interest
      in the outstanding shares of Tatko Inc. for consideration of the issuance
      of 100,000 shares of Flexible Solutions International Inc. common stock.
      The option to purchase the shares of Taiko Inc. expires on May 31, 2008.
      The cost of the investment has been accounted for based on the original
      fair market value of Flexible Solutions International Inc. stock on May
      31, 2003.

      See Contingencies (Note 11d)

      On February 8, 2005, NanoDetect Technologies Inc., a new subsidiary of
      Flexible Solutions International Inc., purchased 18 shares in Air Water
      Interface Delivery and Detection Inc. for a total cost of $54,000. This
      investment represents only 1.8% of the issued and outstanding shares of
      AWD, and accordingly will be accounted for under the cost method.








                                       13
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------
7. STOCK OPTIONS:

      The company may issue stock options and stock bonuses for common stock of
      the company to provide incentives to directors, key employees and other
      persons who contribute to the success of the company. The exercise price
      of all incentive options are issued for not less than fair market value.
      There was no stock options issued in the quarter ending March 31, 2005.

      The following table summarizes stock option activity for the years ended
      December 31, 2004 and 2003 and the three months ended March 31, 2005:

                                   Number of   Exercise price Weighted average
                                     shares      per share     exercise price
                                  -----------  -------------  ----------------

      Balance, December 31, 2002   3,686,800   $0.25 - $3.50       $3.79
      Granted                        256,000   $3.60 - $4.25       $3.61
      Exercised                     (124,000)  $0.25 - $2.28       $0.48
      Expired                     (2,107,800)  $0.25 - $5.50       $4.72
                                  -----------  -------------  ----------------

      Balance, December 31, 2003   1,711,000   $1.00 - $4.25       $2.84
      Granted                        572,740   $3.00 - $4.60       $3.46
      Exercised                      (37,000)  $1.00 - $2.50       $1.55
      Expired                         (5,000)      $4.25           $4.25
      Cancelled                   (1,000,000)  $1.50 - $3.50       $2.50
                                  -----------  -------------  ----------------

      Balance, December 31, 2004   1,241,740   $1.00 - $4.60       $2.87
                                  ===========  =============  ================

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

                                  2004           2003           2002


       Expected life - years       5.0            5.0             5.0
       Interest rate              3.50%          2.87%           3.00%
       Volatility                 49.0%          49.0%           72.3%
       Dividend yield              - %            - %             - %

      During the previous year, the company granted 275,400 (2003 - 205,000)
      stock options to consultants and have been recognized applying SFAS 123
      using the Black-Scholes Option Pricing Model which resulted in additional
      consulting expense of $299,345 (2003 - $122,570). During the year ended
      December 31, 2003, the company cancelled 2,000,000 stock options to
      consultants pursuant to the terms of the contract, resulting in a recovery
      of consulting expense of $2,480,200.




                                       14
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------
8.    CAPITAL STOCK:

      No stock was issued in the quarter ending March 31, 2005.

      During the year ended December 31, 2004 the company:

           (i)  issued 37,000 shares of common stock at prices ranging from
                $1.00 to $2.50 per share upon exercise of stock options.

      During the year ended December 31, 2003 the company:

           (i)  issued 100,000 shares of common stock valued at $271,000 to
                acquire an option to purchase a 20% interest in Tatko Inc. (Note
                7); and

           (ii) issued 124,000 shares of common stock at prices ranging from
                $0.25 to $2.28 per share upon exercise of stock options.


9. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY:

      The company operates in two segments:

      (a) Development and marketing of two lines of energy and water
          conservation products:

           The first line consists of a liquid swimming pool blanket which saves
           energy and water by storing evaporation from the pool surface. The
           second line consists of a food safe powdered form of the active
           ingredient within the liquid blanket and is designed to be used in
           still or slow moving drinking water sources.

     (b) Manufacture of biodegradable polymers and chemical additives:

           Biodegradable polymers are used within the petroleum, chemical,
           utility and mining industries to prevent corrosion and scaling in
           water piping. Chemical additives are manufactured for use in laundry
           and dish detergents, as well as in products to reduce levels of
           insecticides, herbicides and fungicides.

      The sales in the United States of America and abroad amounted to 79% (2003
      - 28%) . The remainder was earned in Canada.

      The long-lived assets are located in Canada and the United States as
      follows:

                              2005          2004
     ------------------- ------------- -------------
     Canada              $    254,579  $    238,807
     United States          4,867,762     5,011,539
     ------------------- ------------- -------------
     Total               $  5,122,341  $  5,250,346
     =================== ============= =============

                                       15
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------
10.   COMMITMENTS:

      Property and Premises Leases -

      The company is committed to minimum rental payments for property and
      premises aggregating approximately $360,111 over the term of two leases,
      the last expiring on June 30, 2009.

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

                                    2005                        $100,718
                                    2006                         114,752
                                    2007                          55,169
                                    2008                          55,654
                                    2009                          33,818

11.   CONTINGENCIES:

a)       The company has been named as a plaintiff in a lawsuit filed in the
         state of Illinois by a former employee. In November 2003, an
         ex-employee, Patrick Grant, filed suit against Flexible Solutions
         International Inc. in Cook County Circuit Court, Cook County, IL,
         claiming wrongful dismissal and seeking return of options rights or
         cash. The company believes these allegations are without merit and
         intends to vigorously defend against them.

b)       The company is plaintiff in a lawsuit demanding return of the share
         certificate of 100,000 shares of stock originally given to the defended
         as payment in advance for services. The services for which the advance
         was given were never performed or given to the company, and the company
         therefore received no consideration or value for such advance. Return
         of the share certificate for 100,000 shares was demanded within ten
         (10) days, namely August 22, 2001, however, to date remains unreturned.

         On date of issue, January 4, 2001, the share transaction was recorded
         as shares issued for services at fair market value, a value of $0.80
         per share.

c)       The company has been named the defendant in a lawsuit filed in the
         Federal Court of Canada as well as the plaintiff in a countersuit in
         the same court. In July 2004, a former distributor, Sunsolar Energy
         Technologies, filed suit claiming trademark infringement. The company
         believes these allegations are without merit and intends to vigorously
         defend against them.








                                       16
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------
11.   CONTINGENCIES: (CONTINUED)

d)       The company is plaintiff in a lawsuit demanding the return of the share
         certificate of 100,000 shares of stock originally given as payment in
         advance for services, $10,000 and undetermined damages resulting from a
         breach of contract. The suite has been filed in the Circuit Court of
         Cook County, IL against Tatko Biotech Inc. of Peoria, IL. The services
         for which the advance was given were never performed or given to the
         company, and the company therefore received no consideration or value
         for such advance.

         The shares were recorded at fair marker value less 10%, resulting in an
         expense of $271,000 recognized in June 2003.

e)       The Company is the plaintiff in a lawsuit filed in the Court of the
         Queen's Bench of Alberta, where the subsidiary Flexible Solutions Ltd.
         is inter-provincially registered. The company is seeking undetermined
         damages resulting from breach of contract against Calgary Diecast
         Corporation. The contract was never completed and the Company's raw
         materials remain in the possession Calgary Diecast Corp.

         On April 25th, 2005, the Court ordered a judgment in favor of Flexible
         Solutions Ltd. in the amount of $47,495 and intents to collect using
         all available means.


12.   COMPARATIVE FIGURES:

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
























                                       17