**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-QSB**

| (Mark                one)                                                                         |
|---------------------------------------------------------------------------------------------------|
| ý                                                                                            | Quarterly                Report Pursuant to Section 13 or 15(d) of the Securities Exchange                Act of                1934 |
|                                                                                              |
| **For                the quarterly period ended June 30, 2007.**                                  |
|                                                                                              |
| o                                                                                                 | Transition                Report Under Section 13 or 15(d) of the Securities Exchange Act of                1934 |
|                                                                                              |
| For                the transition period from _______________ to _______________                . |
|                                                                                              |
| Commission                File Number 000-29649                                                   |
|                                                                                              |

----

| **FLEXIBLE                SOLUTIONS INTERNATIONAL, INC.**                                 |
|-------------------------------------------------------------------------------------------|
| (Name                of Small Business Issuer as Specified in Its                Charter) |

| **Nevada**                                                                                   |   | **91-1922863**                                   |
|----------------------------------------------------------------------------------------------|--------|--------------------------------------------------|
| (State                of Incorporation)                                                      |   | (IRS                Employer Identification No.) |
|                                                                                         |   |                                             |
| **615                Discovery Street****Victoria,                British Columbia, CANADA** |   | **V8T                5G4**                       |
| (Address                of Principal Executive Offices)                                      |   | (Zip                Code)                        |
|                                                                                         |   |                                             |
| **(250)                477-9969**                                                            |
| (Issuer’s                Telephone Number, Including Area Code)                        |
|                                                                                         |

----

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**APPLICABLE      ONLY TO CORPORATE ISSUERS**

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**FORM      10-QSB**

| **PART                I.**  | **FINANCIAL                INFORMATION**                                                       |                                                                                                                                            |
|-----------------------------|------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|
|                        |                                                                                           |                                                                                                                                            |
| Item                1.      | Financial                Statements.                                                           |                                                                                                                                            |
|                        |                                                                                           |                                                                                                                                            |
|                        | (a)                                                                                            | Unaudited                Consolidated Balance Sheets at June 30, 2007 and                December 31, 2006.                                     | 1 |
|                        |                                                                                           |                                                                                                                                            |
|                        | (b)                                                                                            | Unaudited                Consolidated Statements of Operations for the Six Months Ended                June                30, 2007 and 2006.   | 2 |
|                        |                                                                                           |                                                                                                                                            |   |
|                        | (c)                                                                                            | Unaudited                Consolidated Statements of Operations for the Three Months Ended                June                30, 2007 and 2006. | 3 |
|                        |                                                                                           |                                                                                                                                            |
|                        | (d)                                                                                            | Unaudited                Consolidated Statements of Cash Flows for the Six Months Ended                June                30, 2007 and 2006.   | 4 |
|                        |                                                                                           |                                                                                                                                            |
|                        | (e)                                                                                            | Notes                to Unaudited Consolidated Financial Statements for the Period Ended                June                30, 2007.           | 5 |
|                        |                                                                                           |                                                                                                                                            |
| Item                2.      | Management’s                Discussion and Analysis or Plan of                Operation. | 17                                                                                                                                              |
|                        |                                                                                           |                                                                                                                                            |
| Item                3.      | Controls                and Procedures.                                                        | 21                                                                                                                                              |
|                        |                                                                                           |                                                                                                                                            |
| **PART                II.** | **OTHER                INFORMATION**                                                           |                                                                                                                                            |
|                        |                                                                                           |                                                                                                                                            |
| Item                1.      | Legal                Proceedings.                                                              | 21                                                                                                                                              |
|                        |                                                                                           |                                                                                                                                            |
| Item                2.      | Unregistered                Sales of Equity Securities and Use of                Proceeds.     | 22                                                                                                                                              |
|                        |                                                                                           |                                                                                                                                            |
| Item                3.      | Defaults                Upon Senior Securities.                                                | 22                                                                                                                                              |
|                        |                                                                                           |                                                                                                                                            |
| Item                4.      | Submission                of Matters to a Vote of Security                Holders.             | 22                                                                                                                                              |
|                        |                                                                                           |                                                                                                                                            |
| Item                5.      | Other                Information.                                                              | 23                                                                                                                                              |
|                        |                                                                                           |                                                                                                                                            |
| Item                6.      | Exhibits.                                                                                      | 23                                                                                                                                              |
|                        |                                                                                           |                                                                                                                                            |
| **SIGNATURES**              |                                                                                           | 24                                                                                                                                              |
|                        |                                                                                           |                                                                                                                                            |

----

**CAUTIONARY      NOTE REGARDING FORWARD-LOOKING STATEMENTS**

| ·                     | Increased                competitive pressures from existing competitors and new                entrants; |
|------------------------------------------------|-----------------------------------------------------------------------------------------------------------|

| ·                     | Increases                in interest rate or our cost of borrowing or a default under any                material                debt agreement; |
|------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| ·                     | Deterioration                in general or regional economic                conditions; |
|------------------------------------------------|-----------------------------------------------------------------------------------------|

| ·                     | Adverse                state or federal legislation or regulation that increases the costs                of                compliance, or adverse findings by a regulator with respect to existing                operations; |
|------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·                     | Loss                of customers or sales weakness; |
|------------------------------------------------|-----------------------------------------------------|

| ·                     | Inability                to achieve future sales levels or other operating                results; |
|------------------------------------------------|----------------------------------------------------------------------------------------------------|

| ·                     | The                unavailability of funds for capital expenditures;                and |
|------------------------------------------------|-----------------------------------------------------------------------------------------|

| ·                     | Operational                inefficiencies in distribution or other                systems. |
|------------------------------------------------|--------------------------------------------------------------------------------------------|

----

| **PART                I** | **FINANCIAL                INFORMATION** |
|---------------------------|------------------------------------------|

| **Item                1.** | **Financial                Statements.** |
|----------------------------|------------------------------------------|

**FLEXIBLE      SOLUTIONS INTERNATIONAL, INC.**

**CONSOLIDATED      BALANCE SHEETS**

**At      June 30, 2007**

**(U.S.      Dollars)**

|                                                                                                       |   | **June                30,****2007**** (Unaudited)** |       |   | **December                31,****2006** |   |
|------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------|------------|--------|-----------------------------------------|--------|
| **Assets**                                                                                                 |   |                                                     |       |   |                                    |   |
| **Current**                                                                                                |   |                                                     |       |   |                                    |   |
|   Cash                and cash equivalents                                                       |   | $                                                        | 3,913,094  |   |                                    | $      | 450,759 |   |
|   Accounts                receivable                                                             |   |                                                     | 1,376,196  |   |                                    |   | 1,319,575 |   |
|   Inventory                                                                                      |   |                                                     | 1,916,522  |   |                                    |   | 1,904,315 |   |
|   Prepaid                expenses                                                                |   |                                                     | 136,640    |   |                                    |   | 124,360 |   |
|                                                                                                       |   |                                                     | 7,342,452  |   |                                    |   | 3,799,009 |   |
|                                                                                                       |   |                                                     |       |   |                                    |   |   |   |
| **Property,                equipment and leaseholds**                                                      |   |                                                     | 3,864,737  |   |                                    |   | 4,100,553 |   |
| **Patents**                                                                                                |   |                                                     | 204,530    |   |                                    |   | 169,758 |   |
| **Investment**                                                                                             |   |                                                     | 369,000    |   |                                    |   | 369,000 |   |
| **Long                term deposits**                                                                      |   |                                                     | 48,628     |   |                                    |   | 47,220 |   |
|                                                                                                       |   | $                                                        | 11,829,347 |   |                                    | $      | 8,485,540 |   |
| **Liabilities**                                                                                            |   |                                                     |       |   |                                    |   |   |   |
| **Current**                                                                                                |   |                                                     |       |   |                                    |   |   |   |
|   Accounts                payable and accrued liabilities                                        |   | $                                                        | 305,558    |   |                                    | $      | 423,030 |   |
|   Deferred                revenue                                                                |   |                                                     | -          |   |                                    |   | 20,559 |   |
|                                                                                                       |   |                                                     | 305,558    |   |                                    |   | 443,589 |   |
| **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                                                                      |   |                                                     |       |   |                                    |   |   |   |
|   14,157,567                (2006: 13,058,427) common shares                                     |   |                                                     | 14,158     |   |                                    |   | 13,058 |   |
| **Capital                in excess of par value**                                                          |   |                                                     | 15,812,776 |   |                                    |   | 12,370,418 |   |
| **Other                comprehensive income**                                                              |   |                                                     | 264,073    |   |                                    |   | 131,002 |   |
| **Deficit**                                                                                                |   |                                                     | (4,567,218 | )      |                                    |   | (4,472,527 | ) |
|                                                                                                       |   |                                                     |       |   |                                    |   |   |   |
| **Total                Stockholders’ Equity**                                                        |   |                                                     | 11,523,789 |   |                                    |   | 8,041,951 |   |
|                                                                                                       |   |                                                     |       |   |                                    |   |   |   |
| **Total                Liabilities and Stockholders’ Equity**                                        |   | $                                                        | 11,829,347 |   |                                    | $      | 8,485,540 |   |
|                                                                                                       |   |                                                     |       |   |                                    |   |   |   |
| **Commitments,                Contingencies and Subsequent events (Notes 12, 13 &                14)** |   |                                                     |       |   |                                    |   |   |   |
|                                                                                                       |   |                                                     |       |   |                                    |   |   |   |

**1**

----

**FLEXIBLE      SOLUTIONS INTERNATIONAL, INC.**

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

**For      the Three Months Ended June 30, 2007 and 2006**

**(U.S.      Dollars -- Unaudited)**

|                                                                   |   | **Three                Months Ended June 30,** |       |
|------------------------------------------------------------------------|--------|------------------------------------------------|------------|
|                                                                   |   | **2007**                                       |       |   | **2006** |   |
|                                                                   |   |                                           |       |   |   |   |
| **Sales**                                                              |   | $                                              | 2,143,107  |   |   | $ | 2,250,388 |   |
| **Cost                of sales**                                       |   |                                           | 1,260,324  |   |   |   | 1,579,739 |   |
|                                                                   |   |                                           |       |   |   |   |   |   |
| **Gross                profit**                                        |   |                                           | 882,783    |   |   |   | 670,649 |   |
|                                                                   |   |                                           |       |   |   |   |   |   |
| **Operating                expenses**                                  |   |                                           |       |   |   |   |   |   |
|   Wages                                                      |   |                                           | 259,272    |   |   |   | 332,092 |   |
|   Administrative                salaries and benefits        |   |                                           | 124,485    |   |   |   | 159,192 |   |
|   Advertising                and promotion                   |   |                                           | 6,146      |   |   |   | 13,437 |   |
|   Investor                relations and transfer agent fee   |   |                                           | 119,647    |   |   |   | 31,034 |   |
|   Office                and miscellaneous                    |   |                                           | 65,578     |   |   |   | 73,971 |   |
|   Insurance                                                  |   |                                           | 52,236     |   |   |   | 51,214 |   |
|   Interest                expense                            |   |                                           | 159        |   |   |   | - |   |
|   Rent                                                       |   |                                           | 56,738     |   |   |   | 59,266 |   |
|   Consulting                                                 |   |                                           | 62,682     |   |   |   | 108,248 |   |
|   Professional                fees                           |   |                                           | 42,477     |   |   |   | 67,938 |   |
|   Travel                                                     |   |                                           | 48,287     |   |   |   | 30,735 |   |
|   Telecommunications                                         |   |                                           | 9,845      |   |   |   | 8,029 |   |
|   Shipping                                                   |   |                                           | 15,151     |   |   |   | 12,119 |   |
|   Research                                                   |   |                                           | 22,974     |   |   |   | 42,661 |   |
|   Commissions                                                |   |                                           | 38,894     |   |   |   | 32,765 |   |
|   Bad                debt expense (recovery)                 |   |                                           | 775        |   |   |   | (165 | ) |
|   Currency                exchange                           |   |                                           | 19,683     |   |   |   | (990 | ) |
|   Utilities                                                  |   |                                           | 4,439      |   |   |   | 4,638 |   |
|                                                                   |   |                                           | 949,468    |   |   |   | 1,016,184 |   |
|                                                                   |   |                                           |       |   |   |   |   |   |
| **Income                (loss) before other items and income tax**     |   |                                           | (66,685    | ) |   |   | (345,535 | ) |
| **Other                expenses**                                      |   |                                           | (5,570     | ) |   |   |   |   |
| **Interest                income**                                     |   |                                           | 1,778      |   |   |   | 908 |   |
|                                                                   |   |                                           |       |   |   |   |   |   |
| **Income                (loss) before income tax**                     |   |                                           | (70,477    | ) |   |   | (344,627 | ) |
|                                                                   |   |                                           |       |   |   |   |   |   |
| **Net                income (loss)**                                   |   |                                           | (70,477    | ) |   |   | (344,627 | ) |
|                                                                   |   |                                           |       |   |   |   |   |   |
| **Net                income (loss) per share (basic and diluted)**     |   | $                                              | (0.01      | ) |   | $ | (0.03 | ) |
|                                                                   |   |                                           |       |   |   |   |   |   |
| **Weighted                average number of  common shares** |   |                                           | 13,841,489 |   |   |   | 12,982,898 |   |
|                                                                   |   |                                           |       |   |   |   |   |   |

**2**

----

**FLEXIBLE      SOLUTIONS INTERNATIONAL,      INC.**

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

**For      the Six Months Ended June 30, 2007 and 2006**

**(U.S.      Dollars -- Unaudited)**

|                                                                   |   | **Six                Months Ended June 30,** |       |
|------------------------------------------------------------------------|--------|----------------------------------------------|------------|
|                                                                   |   | **2007**                                     |       |   | **2006** |   |
|                                                                   |   |                                         |       |   |   |   |
| **Sales**                                                              |   | $                                            | 4,433,008  |   |   | $ | 4,758,833 |   |
| **Cost                of sales**                                       |   |                                         | 2,726,675  |   |   |   | 3,066,420 |   |
|                                                                   |   |                                         |       |   |   |   |   |   |
| **Gross                profit**                                        |   |                                         | 1,706,333  |   |   |   | 1,692,413 |   |
|                                                                   |   |                                         |       |   |   |   |   |   |
| **Operating                expenses**                                  |   |                                         |       |   |   |   |   |   |
|   Wages                                                      |   |                                         | 516,458    |   |   |   | 598,492 |   |
|   Administrative                salaries and benefits        |   |                                         | 256,282    |   |   |   | 320,141 |   |
|   Advertising                and promotion                   |   |                                         | 38,024     |   |   |   | 32,384 |   |
|   Investor                relations and transfer agent fee   |   |                                         | 177,838    |   |   |   | 63,332 |   |
|   Office                and miscellaneous                    |   |                                         | 103,506    |   |   |   | 97,891 |   |
|   Insurance                                                  |   |                                         | 107,065    |   |   |   | 93,708 |   |
|   Interest                expense                            |   |                                         | 1,184      |   |   |   | 1,044 |   |
|   Rent                                                       |   |                                         | 111,031    |   |   |   | 117,799 |   |
|   Consulting                                                 |   |                                         | 127,679    |   |   |   | 196,049 |   |
|   Professional                fees                           |   |                                         | 81,271     |   |   |   | 160,873 |   |
|   Travel                                                     |   |                                         | 82,030     |   |   |   | 49,488 |   |
|   Telecommunications                                         |   |                                         | 19,461     |   |   |   | 15,026 |   |
|   Shipping                                                   |   |                                         | 23,244     |   |   |   | 25,585 |   |
|   Research                                                   |   |                                         | 55,668     |   |   |   | 80,264 |   |
|   Commissions                                                |   |                                         | 75,597     |   |   |   | 89,990 |   |
|   Bad                debt expense (recovery)                 |   |                                         | 1,851      |   |   |   | 424 |   |
|   Currency                exchange                           |   |                                         | 9,590      |   |   |   | 4,523 |   |
|   Utilities                                                  |   |                                         | 10,046     |   |   |   | 9,630 |   |
|                                                                   |   |                                         | 1,797,825  |   |   |   | 1,956,623 |   |
|                                                                   |   |                                         |       |   |   |   |   |   |
| **Income                (loss) before other items and income tax**     |   |                                         | (91,492    | ) |   |   | (264,230 | ) |
| **Other                expenses**                                      |   |                                         | (5,570     | ) |   |   |   |   |
| **Interest                income**                                     |   |                                         | 2,371      |   |   |   | 1,853 |   |
|                                                                   |   |                                         |       |   |   |   |   |   |
| **Income                (loss) before income tax**                     |   |                                         | (94,691    | ) |   |   | (262,377 | ) |
| **Income                tax (recovery)**                               |   |                                         | -          |   |   |   | (127,079 | ) |
|                                                                   |   |                                         |       |   |   |   |   |   |
| **Net                income (loss)**                                   |   |                                         | (94,691    | ) |   |   | (135,298 | ) |
|                                                                   |   |                                         |       |   |   |   |   |   |
| **Net                income (loss) per share (basic and diluted)**     |   | $                                            | (0.01      | ) |   | $ | (0.01 | ) |
|                                                                   |   |                                         |       |   |   |   |   |   |
| **Weighted                average number of  common shares** |   |                                         | 13,485,482 |   |   |   | 12,982,112 |   |
|                                                                   |   |                                         |       |   |   |   |   |   |

**3**

----

**FLEXIBLE      SOLUTIONS INTERNATIONAL, INC.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**For      the Six Months Ended June 30, 2007 and 2006**

**(U.S.      Dollars -- Unaudited)**

|                                                                  |   | **Six                Months Ended June 30,** |      |
|-----------------------------------------------------------------------|--------|----------------------------------------------|-----------|
|                                                                  |   | **2007**                                     |      |   | **2006** |   |
|                                                                  |   |                                         |      |   |   |   |
| **Operating                activities**                               |   |                                         |      |   |   |   |
|   Net                income (loss)                          |   | $                                            | (94,691   | ) |   | $ | (135,298 | ) |
|   Stock                compensation expense                 |   |                                         | 278,976   |   |   |   | 408,236 |   |
|   Depreciation                                              |   |                                         | 256,206   |   |   |   | 296,045 |   |
|                                                                  |   |                                         | 440,491   |   |   |   | 568,983 |   |
| Changes                in non-cash working capital items:             |   |                                         |      |   |   |   |   |   |
|   (Increase)                Decrease in accounts receivable |   |                                         | (56,621   | ) |   |   | (562,174 | ) |
|   (Increase)                Decrease in inventory           |   |                                         | (12,207   | ) |   |   | 625,440 |   |
|   (Increase)                Decrease in prepaid expenses    |   |                                         | (12,280   | ) |   |   | 19,372 |   |
|   Increase                (Decrease) in accounts payable    |   |                                         | (117,472  | ) |   |   | (286,964 | ) |
|   Increase                (Decrease) in deferred revenue    |   |                                         | (20,559   | ) |   |   | - |   |
|   Increase                (Decrease) in income taxes        |   |                                         | -         |   |   |   | 28,918 |   |
|                                                                  |   |                                         |      |   |   |   |   |   |
| **Cash                provided by (used in) operating activities**    |   |                                         | 221,353   |   |   |   | 393,575 |   |
|                                                                  |   |                                         |      |   |   |   |   |   |
| **Investing                activities**                               |   |                                         |      |   |   |   |   |   |
|   Long                term deposits                         |   |                                         | (1,408    | ) |   |   | - |   |
|   Investments                                               |   |                                         | -         |   |   |   | - |   |
|   Loan                receivable                            |   |                                         | -         |   |   |   | (974 | ) |
|   Development                of patents                     |   |                                         | (34,772   | ) |   |   | (8,204 | ) |
|   Acquisition                of property and equipment      |   |                                         | (20,390   | ) |   |   | (15,025 | ) |
|                                                                  |   |                                         |      |   |   |   |   |   |
| **Cash                provided by (used in) investing activities**    |   |                                         | (56,570   | ) |   |   | (24,203 | ) |
|                                                                  |   |                                         |      |   |   |   |   |   |
| **Financing                activities**                               |   |                                         |      |   |   |   |   |   |
|   Proceeds                from issuance of common stock     |   |                                         | 3,164,481 |   |   |   | (38,029 | ) |
|                                                                  |   |                                         |      |   |   |   |   |   |
| **Cash                provided by financing activities**              |   |                                         | 3,164,481 |   |   |   | (38,029 | ) |
|                                                                  |   |                                         |      |   |   |   |   |   |
| Effect                of exchange rate changes on cash                |   |                                         | 133,072   |   |   |   | 55,616 |   |
|                                                                  |   |                                         |      |   |   |   |   |   |
| **Inflow                (outflow) of cash**                           |   |                                         | 3,462,336 |   |   |   | 386,959 |   |
| Cash                and cash equivalents, beginning                   |   |                                         | 450,759   |   |   |   | 526,292 |   |
|                                                                  |   |                                         |      |   |   |   |   |   |
| **Cash                and cash equivalents, ending**                  |   | $                                            | 3,913,094 |   |   | $ | 913,251 |   |
|                                                                  |   |                                         |      |   |   |   |   |   |
| **Supplemental                disclosure of cash flow information:**  |   |                                         |      |   |   |   |   |   |
| Interest                paid                                          |   | $                                            | 1,184     |   |   | $ | 1,084 |   |
|                                                                  |   |                                         |      |   |   |   |   |   |

**4**

----

**FLEXIBLE      SOLUTIONS INTERNATIONAL, INC.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**For      the Period Ended June 30, 2007**

**(U.S.      Dollars)**

**1.           Basis      of Presentation.**

**5**

----

| 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 |   |

**2.           Significant      Accounting Policies.**

*Cash      and Cash Equivalents*

*Inventories      and Cost of Sales*

**6**

----

*Allowance      for Doubtful Accounts*

*Property,      Equipment and Leaseholds*

| 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  |   | Straight-line                over lease term |

*Impairment      of Long-Lived Assets*

*Investments.*

**7**

----

*Foreign      Currency*

*Revenue      Recognition*

*Stock      Issued in Exchange for Services*

*Stock-based      Compensation*

*Share-Based Payment*
*Accounting for Stock-Based Compensation”*
*Accounting for Stock Issued to Employees”*

**8**

----

*Comprehensive      Income*

*Income      (Loss) Per Share*

** **

*Use      of Estimates*

*Financial      Instruments*

*Contingencies*

**9**

----

**3.           Inventories**

|                             |   | 2007   |      |   | 2006   |   |
|----------------------------------|--------|--------|-----------|--------|--------|--------|
| Completed                goods   |   | $      | 878,579   |   |   | $      | 970,780 |   |
| Works                in progress |   |   | 344,726   |   |   |   | 397,995 |   |
| Raw                materials     |   |   | 693,217   |   |   |   | 535,540 |   |
|                             |   | $      | 1,916,522 |   |   | $      | 1,904,315 |   |

**4.           Property,      Plant & equipment**

|                                   |   | 2007   |      |   | Accumulated  |   |      | 2007   |   |
|----------------------------------------|--------|--------|-----------|--------|--------------|--------|-----------|--------|--------|
|                                   |   | Cost   |      |   | Depreciation |   |      | Net    |   |
| Buildings                              |   | $      | 3,144,259 |   |         | $      | 845,727   |   |   | $ | 2,298,532 |   |
| Computer                hardware       |   |   | 72,493    |   |         |   | 45,669    |   |   |   | 26,824 |   |
| Furniture                and fixtures  |   |   | 19,884    |   |         |   | 10,296    |   |   |   | 9,588 |   |
| Office                equipment        |   |   | 23,165    |   |         |   | 14,737    |   |   |   | 8,428 |   |
| Manufacturing                equipment |   |   | 2,241,547 |   |         |   | 1,133,981 |   |   |   | 1,107,566 |   |
| Trailer                                |   |   | 2,178     |   |         |   | 1,638     |   |   |   | 540 |   |
| Leasehold                improvements  |   |   | 26,911    |   |         |   | 14,723    |   |   |   | 12,188 |   |
| Trade                show booth        |   |   | 8,156     |   |         |   | 5,271     |   |   |   | 2,885 |   |
| Land                                   |   |   | 398,186   |   |         |   | —   |   |   |   | 398,186 |   |
|                                   |   | $      | 5,936,779 |   |         | $      | 2,072,042 |   |   | $ | 3,864,737 |   |

|                                   |   | 2006   |      |   | Accumulated  |   |      | 2006   |   |
|----------------------------------------|--------|--------|-----------|--------|--------------|--------|-----------|--------|--------|
|                                   |   | Cost   |      |   | Depreciation |   |      | Net    |   |
| Buildings                              |   | $      | 3,144,259 |   |         | $      | 724,752   |   |   | $ | 2,419,507 |   |
| Computer                hardware       |   |   | 60,576    |   |         |   | 34,200    |   |   |   | 26,376 |   |
| Furniture                and fixtures  |   |   | 18,576    |   |         |   | 8,608     |   |   |   | 9,968 |   |
| Office                equipment        |   |   | 29,533    |   |         |   | 17,488    |   |   |   | 12,045 |   |
| Manufacturing                equipment |   |   | 2,207,781 |   |         |   | 990,959   |   |   |   | 1,216,822 |   |
| Trailer                                |   |   | 1,991     |   |         |   | 1,411     |   |   |   | 580 |   |
| Leasehold                improvements  |   |   | 39,517    |   |         |   | 25,551    |   |   |   | 13,966 |   |
| Trade                show booth        |   |   | 7,456     |   |         |   | 4,353     |   |   |   | 3,103 |   |
| Land                                   |   |   | 398,186   |   |         |   | —   |   |   |   | 398,186 |   |
|                                   |   | $      | 5,907,875 |   |         | $      | 1,807,322 |   |   | $ | 4,100,553 |   |

**5.           Patents**

**10**

----

|    |   | 2007Cost |    |   | AccumulatedAmortization |   |   | 2007Net |   |
|---------|--------|----------|---------|--------|-------------------------|--------|--------|---------|--------|
| Patents |   | $        | 212,393 |   |                    | $      | 7,863  |    |   | $ | 204,530 |   |

|    |   | 2006Cost |    |   | AccumulatedAmortization |   |   | 2006Net |   |
|---------|--------|----------|---------|--------|-------------------------|--------|--------|---------|--------|
| Patents |   | $        | 172,938 |   |                    | $      | 3,180  |    |   | $ | 169,758 |   |

**6.    Investments**

|                                                           |   | 2007   |    |   | 2006   |   |
|----------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Tatko                Inc.                                      |   | $      | 271,000 |   |   | $      | 271,000 |   |
| Air-Water                Interface Delivery and Detection Inc. |   |   | 98,000  |   |   |   | 98,000 |   |
|                                                           |   | $      | 369,000 |   |   | $      | 369,000 |   |

**7.           Long      Term Deposits**

|                              |   | 2007 |   |   | 2006   |   |
|-----------------------------------|--------|------|--------|--------|--------|--------|
| Long                term deposits |   | $    | 48,628 |   |   | $      | 47,220 |   |

**8.           Stock      Options**

**11**

----

|                                      |   | Number                of shares |      |   | Exercise                priceper                share |                              |   | Weighted                average exercise price |   |
|-------------------------------------------|--------|---------------------------------|-----------|--------|-------------------------------------------------------|-----------------------------------|--------|------------------------------------------------|--------|
| Balance,                December 31, 2004 |   |                            | 1,241,740 |   |                                                  | $1.00                - $4.60      |   |                                           | $      | 2.87 |   |
| Granted                                   |   |                            | 30,000    |   |                                                  | $3.58                - $4.40      |   |                                           | $      | 4.17 |   |
| Exercised                                 |   |                            | (162,000  | )      |                                                  | $1.40                             |   |                                           | $      | 1.40 |   |
| Cancelled                or expired       |   |                            | (49,000   | )      |                                                  | $3.00                - $4.25      |   |                                           | $      | 3.52 |   |
| Balance,                December 31, 2005 |   |                            | 1,060,740 |   |                                                  | $1.40                - $4.60      |   |                                           | $      | 3.44 |   |
| Granted                                   |   |                            | 1,191,000 |   |                                                  | $3.25                - $3.60      |   |                                           | $      | 3.25 |   |
| Exercised                                 |   |                            | (46,000   | )      |                                                  | $1.40                             |   |                                           | $      | 1.40 |   |
| Cancelled                or expired       |   |                            | (79,000   | )      |                                                  | $1.40                - $4.25      |   |                                           | $      | 2.46 |   |
| Balance,                December 31, 2006 |   |                            | 2,126,740 |   |                                                  | $1.40                – 4.55 |   |                                           | $      | 3.44 |   |
| Granted                                   |   |                            | 200,700   |   |                                                  | $1.50                – 3.60 |   |                                           | $      | 2.14 |   |
| Exercised                                 |   |                            | (163,000  | )      |                                                  | $1.50                – 3.25 |   |                                           | $      | 1.77 |   |
| Cancelled                or expired       |   |                            | (79,000   | )      |                                                  | $3.00                – 4.25 |   |                                           | $      | 3.36 |   |
| Balance,                June 30, 2007     |   |                            | 2,085,440 |   |                                                  | $3.00                - 4.60       |   |                                           | $      | 3.45 |   |

*Share-Based Payment*
*Accounting for Stock-Based Compensation*
*Accounting for Stock Issued to Employees*

|                                                          |   | 2007   |    |   | 2006   |   |
|---------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Expected                life – years                    |   |   | 5.0     |   |   |   | 5.0 |   |
| Interest                rate                                  |   |   | 5.02    | %      |   |   | 3.85 | % |
| Volatility                                                    |   |   | 52      | %      |   |   | 52.0 | % |
| Dividend                yield                                 |   |   | — | %      |   |   | — | % |
| Weighted                average fair value of options granted |   | $      | 2.14    |   |   | $      | 1.69 |   |

**12**

----

**9.           Warrants**

|                                      |   | Number                of shares |      |   | Exercise                priceper                share |   |    | Weighted                average exercise price |   |
|-------------------------------------------|--------|---------------------------------|-----------|--------|-------------------------------------------------------|--------|---------|------------------------------------------------|--------|
| Balance,                December 31, 2004 |   |                            | —   |   |                                                  |   | — |                                           |   |   | — |   |
| Granted                                   |   |                            | 987,400   |   |                                                  | $      | 4.50    |                                           |   | $ | 4.50 |   |
| Exercised                                 |   |                            | —   |   |                                                  |   | — |                                           |   |   | — |   |
| Cancelled                                 |   |                            | —   |   |                                                  |   | — |                                           |   |   | — |   |
| Balance,                December 31, 2005 |   |                            | 987,400   |   |                                                  | $      | 4.50    |                                           |   | $ | 4.50 |   |
| Granted                                   |   |                            | —   |   |                                                  |   | — |                                           |   |   | — |   |
| Exercised                                 |   |                            | —   |   |                                                  |   | — |                                           |   |   | — |   |
| Cancelled                                 |   |                            | —   |   |                                                  |   | — |                                           |   |   | — |   |
| Balance,                December 31, 2006 |   |                            | 987,400   |   |                                                  | $      | 4.50    |                                           |   | $ | 4.50 |   |
| Granted                                   |   |                            | 490,040   |   |                                                  | $      | 4.50    |                                           |   | $ | 4.50 |   |
| Exercised                                 |   |                            | —   |   |                                                  |   | — |                                           |   |   | — |   |
| Cancelled                                 |   |                            | —   |   |                                                  |   | — |                                           |   |   | — |   |
| Balance,                June 30, 2007     |   |                            | 1,477,440 |   |                                                  | $      | 4.50    |                                           |   | $ | 4.50 |   |

**10.           Capital      Stock.**

**13**

----

**11.           Segmented,      Significant Customer Information and Economic Dependency.**

*Significant Accounting      Policies*

|                                                          |   | EWCP   |    |   | BPCA   |   |      | Total  |   |
|---------------------------------------------------------------|--------|--------|---------|--------|--------|--------|-----------|--------|--------|
| Revenue                                                       |   | $      | 998,289 |   |   | $      | 3,434,719 |   |   | $ | 4,433,008 |   |
| Interest                revenue                               |   |   | 1,517   |   |   |   | 854       |   |   |   | 2,371 |   |
| Interest                expense                               |   |   | 523     |   |   |   | 661       |   |   |   | 1,184 |   |
| Depreciation                and amortization                  |   |   | 26,256  |   |   |   | 229,950   |   |   |   | 256,206 |   |
| Segment                profit (loss)                          |   |   | 633,516 |   |   |   | 538,825   |   |   |   | (94,691 | ) |
| Segment                assets                                 |   |   | 193,507 |   |   |   | 3,671,230 |   |   |   | 3,864,737 |   |
| Expenditures                for segment                assets |   |   | 20,153  |   |   |   | 237       |   |   |   | 20,390 |   |

**14**

----

|                                    |   | 2007   |      |   | 2006   |   |
|-----------------------------------------|--------|--------|-----------|--------|--------|--------|
| Canada                                  |   | $      | 58,587    |   |   | $      | 186,168 |   |
| United                States and abroad |   |   | 4,374,421 |   |   |   | 4,572,665 |   |
| Total                                   |   | $      | 4,433,008 |   |   | $      | 4,758,833 |   |

|                         |   | 2007   |      |   | 2006   |   |
|------------------------------|--------|--------|-----------|--------|--------|--------|
| Canada                       |   | $      | 387,285   |   |   | $      | 364,487 |   |
| United                States |   |   | 3,681,982 |   |   |   | 3,905,824 |   |
| Total                        |   | $      | 4,069,267 |   |   | $      | 4,270,311 |   |

**12.           Commitments.**

| 2007 |   | $      | 105,933 |   |
|------|--------|--------|---------|--------|
| 2008 |   |   | 174,159 |   |
| 2009 |   |   | 122,785 |   |
| 2010 |   |   | 15,806  |   |
| 2011 |   |   | 15,806  |   |

**13.           Contingencies.**

**15**

----

**14.           Subsequent      Events.**

**15.           Comparative      Figures.**

**16**

----

| **Item                2.** | **Management’s                Discussion and Analysis or Plan of                Operation.** |
|----------------------------|----------------------------------------------------------------------------------------------------|

**Overview**

**Results      of Operations**

| Item                                                     |   | Increase                (I) orDecrease (D) |   | Reason                                                                                                                                                                                                                                                                                                                                                                |
|----------------------------------------------------------|--------|--------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                     |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                                  |
| Gross                profit                              |   | I                                          |   | Increased                due to sales consisting of a different product mix.                                                                                                                                                                                                                                                                                          |
|                                                     |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                                  |
| Wages                                                    |   | D                                          |   | Five                year stock options plans granted to several key employees in 2006                resulted                in higher expenses in 2006.  Granting of stock options plans                resulted in an expense of $38,077 in first six months of 2007 as                compared                to $58,718 in the same period 2006.        |
|                                                     |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                                  |
| Administrative                salaries and benefits      |   | D                                          |   | Five                year stock option plans granted to several long term employees in                2006                resulted in higher expenses in 2006.  Granting of stock options                plans resulted in an expense of $102,301 in first six months of 2007                as                compared to $184,996 in the same period 2006. |
|                                                     |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                                  |
| Investor                relations and transfer agent fee |   | I                                          |   | Increase                in external investor relations and transfer agent fees as well as                options                granted in relation to the private placement in May 2007 increased                our                investor relations costs.                                                                                                        |
|                                                     |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                                  |
| Consulting                                               |   | D                                          |   | The                granting of stock options to long term consultants in 2006 resulted                in a                stock option expense of $122,304 in first quarter 2006 as compared                to                $65,609 in the same period 2007.                                                                                                        |
|                                                     |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                                  |
| Professional                fees                         |   | D                                          |   | The                Company experienced reduced professional fees after the conclusion                of two                lawsuits in December 2006 and January 2007.                                                                                                                                                                                                |
|                                                     |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                                  |
| Travel                                                   |   | I                                          |   | Increased                international sales have required increased                travel.                                                                                                                                                                                                                                                                           |

**17**

----

| Item                                                      |   | Increase                (I) orDecrease (D) |   | Reason                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-----------------------------------------------------------|--------|--------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                      |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Wages                                                     |   | I                                          |   | The                Company adopted FAS No. 123(R) for its first quarter starting January                1,                2006.  This requires the cost of all share-based payment                transactions to be recognized in an entity’s financial statements,                establishes fair value as the measurement objective and requires                entities                to apply a fair-value-based measurement method in accounting for                share-based payment transactions.  Five year stock options plans                granted to several key employees in 2006 resulted in higher expenses                in                2006.  Granting of stock options plans resulted in an expense of                $58,718 in first six months of 2006 as compared to $0 in the same                period                2005.  |
|                                                      |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Administrative                salaries and benefits       |   | I                                          |   | The                Company adopted FAS No. 123(R) for its first quarter starting January                1,                2006.  This requires the cost of all share-based payment                transactions to be recognized in an entity’s financial statements,                establishes fair value as the measurement objective and requires                entities                to apply a fair-value-based measurement method in accounting for                share-based payment transactions.  Five year stock options plans                granted to several key employees in 2006 resulted in higher expenses                in                2006.  Granting of stock options plans resulted in an expense of                $184,996 in first six months of 2006 as compared to $0 in the same                period                2005. |
|                                                      |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Investor                relations and transfer agent fees |   | D                                          |   | In                2005, the stock options vested in relation to the capital raised                on April                14th.  This                resulted in a non-cash transaction of $447,500.  Without this,                the expense would be about the same.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                      |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Interest                expense                           |   | D                                          |   | The                decrease in interest expense  is a direct result of the Company                paying off the short-term loan used for the purchase of assets to                create                the NanoChem division.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                      |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Consulting                                                |   | I                                          |   | The                granting of stock options to long term consultants in 2006 resulted                in a                stock option expense of $122,304 in first quarter 2006 as compared                to                $36,400 in the same period 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                      |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Professional                fees                          |   | I                                          |   | This                is the result of costs incurred in intellectual property prosecution                and                protection.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                      |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Travel                                                    |   | D                                          |   | Is                the direct the result of better cost-control in these areas instituted                by                management over the past year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

**18**

----

| Item                                                     |   | Increase                (I) orDecrease (D) |   | Reason                                                                                                                                                                                                                                                                                                                                                         |
|----------------------------------------------------------|--------|--------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                     |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                           |
| Wages                                                    |   | D                                          |   | Five                year stock options plans granted to several key employees in 2006                resulted                in higher expenses in 2006.  Granting of stock options plans                resulted in an expense of $19,038 in second quarter 2007 as compared                to                $29,359 in the same period 2006.      |
|                                                     |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                           |
| Administrative                salaries and benefits      |   | D                                          |   | Five                year stock option plans granted to several long term employees in                2006                resulted in higher expenses in 2006.  Granting of stock options                plans resulted in an expense of $51,150 in second quarter 2007 as                compared                to $92,498 in the same period 2006. |
|                                                     |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                           |
| Investor                relations and transfer agent fee |   | I                                          |   | Increase                in external investor relations and transfer agent fees as well as                options                granted in relation to the private placement in May 2007 increased                our                investor relations costs.                                                                                                 |
|                                                     |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                           |
| Travel                                                   |   | I                                          |   | Increased                international sales have required increased travel.                                                                                                                                                                                                                                                                                   |
|                                                     |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                           |
| Consulting                                               |   | D                                          |   | The                granting of stock options to long term consultants in 2006 resulted                in a                stock option expense of $61,152 in second quarter 2006 as compared                to                $32,805 in the same period 2007.                                                                                                 |
|                                                     |   |                                       |   |                                                                                                                                                                                                                                                                                                                                                           |
| Professional                fees                         |   | D                                          |   | The                Company experienced reduced professional fees after the conclusion                of two                lawsuits in December 2006 and January                2007.                                                                                                                                                                          |

**19**

----

| Item                                                     |   | Increase                (I) orDecrease (D) |   | Reason                                                                                                                                                                                                                                                                                                                                   |
|----------------------------------------------------------|--------|--------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                     |   |                                       |   |                                                                                                                                                                                                                                                                                                                                     |
| Wages                                                    |   | I                                          |   | In                2005 the Company was not required to record the expense of stock                options                for employees.  The expense, for financial report purposes for                employee stock options, added $29,359 to wages in second quarter                2006.                                   |
|                                                     |   |                                       |   |                                                                                                                                                                                                                                                                                                                                     |
| Administrative                salaries and benefits      |   | I                                          |   | In                2005 the Company was not required to record the expense of stock                options                for employees.  The expense, for financial report purposes for                employee stock options, added $92,498 to administrative salaries                in                secondt quarter 2006. |
|                                                     |   |                                       |   |                                                                                                                                                                                                                                                                                                                                     |
| Investor                relations and transfer agent fee |   | D                                          |   | In                2005, the stock options vested in relation to the capital raised                on April                14th.  This                resulted in a non-cash transaction of $447,500.  Without this,                the expense would be about the same.                                              |
|                                                     |   |                                       |   |                                                                                                                                                                                                                                                                                                                                     |
| Consulting                                               |   | I                                          |   | The                granting of stock options to long term consultants resulted in a                stock                option expense of $61,152 in second quarter 2006 as compared to $18,200                in                the same period 2005.                                                                                   |
|                                                     |   |                                       |   |                                                                                                                                                                                                                                                                                                                                     |
| Interest                expense                          |   | D                                          |   | The                decrease in interest expense is a direct result of the Company paying                off                the short-term loan used for the purchase of assets to create the                NanoChem                division.                                                                                            |

**Capital      Resources and Liquidity**

| 2007 |   | $      | 105,933 |   |
|------|--------|--------|---------|--------|
| 2008 |   |   | 174,159 |   |
| 2009 |   |   | 122,785 |   |
| 2010 |   |   | 15,806  |   |
| 2011 |   |   | 15,806  |   |

**20**

----

| **Item                3.** | **Controls                and Procedures.** |
|----------------------------|---------------------------------------------|

*Disclosure      Controls and Procedures*

| **PART                II** | **OTHER                INFORMATION** |
|----------------------------|--------------------------------------|

| **Item                1.** | **Legal                Proceedings.** |
|----------------------------|---------------------------------------|

**21**

----

| **Item                2.** | **Unregistered                Sales of Equity Securities and Use of                Proceeds.** |
|----------------------------|------------------------------------------------------------------------------------------------|

| **Item                3.** | **Defaults                Upon Senior Securities.** |
|----------------------------|-----------------------------------------------------|

| **Item                4.** | **Submission                of Matters to a Vote of Security                Holders.** |
|----------------------------|----------------------------------------------------------------------------------------|

|  | 1. | Vote                to re-elect the five (5) directors to the Board of Directors in accordance                with the Company’s Constitution, for the upcoming                year: |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | A) | Daniel                B. O’Brien |
|--|----|----------------------------------------|

|  | B) | Dr.                Robert O’Brien |
|--|----|-----------------------------------------|

|  | C) | John                H. Bientjes |
|--|----|---------------------------------|

|  | D) | Dale                Friend |
|--|----|----------------------------|

|  | E) | Eric                Hodges |
|--|----|----------------------------|

|  | 2. | Vote                to approve the granting of the following options to officers and                directors: |
|--|----|----------------------------------------------------------------------------------------------------------------|

|  | John H.                Bientjes | 5,000                options to buy common shares with a strike price of $3.60/share,                vesting                on December 31, 2007 and expiring on December 18,                2012. |
|--|--------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Dale                Friend | 5,000                options to buy common shares with a strike price of $3.60/share,                vesting                on December 31, 2007 and expiring on December 18,                2012. |
|--------|----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Eric                Hodges | 5,000                options to buy common shares with a strike price of $3.60/share,                vesting                on December 31, 2007 and expiring on December 18,                2012. |
|--------|----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 3. | Approval                of Annual Report |
|--|----|------------------------------------------|

**22**

----

|  | 4. | Vote                to ratify the selection of Cinnamon Jang Willoughby & Company as the                Company’s independent registered public accountants for the year ending                December 31, 2007. |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Item                5.** | **Other                Information.** |
|----------------------------|---------------------------------------|

| **Item                6.** | **Exhibits.** |
|----------------------------|---------------|

| **Number** | **Description**                                                                                                                                                              |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1        | Amended                and Restated Certificate of Incorporation of the registrant.                (1)                                                                       |
| 3.2        | Bylaws                of the registrant. (1)                                                                                                                                 |
| 31.1       | Certification                of Principal Executive Officer                Pursuant to §302 of the Sarbanes-Oxley Act of                2002.*                          |
| 31.2       | Certification                of Principal Financial Officer                Pursuant to §302 of the Sarbanes-Oxley Act of                2002.*                          |
| 32.1       | Certification                of Principal Executive Officer                Pursuant to 18 U.S.C. §1350 and §906 of the Sarbanes-Oxley Act of                2002.* |
| 32.2       | Certification                of Principal Financial Officer                Pursuant to 18 U.S.C. §1350 and §906 of the Sarbanes-Oxley Act of                2002.* |
|       |                                                                                                                                                                         |

**______________**

**23**

----

**SIGNATURES**

|   | **Flexible                Solutions International, Inc.** |                                                 |
|--------|-----------------------------------------------------------|------------------------------------------------------|
|   |                                                      |                                                 |   |
|   | By:                                                       | /s/ Daniel              B. O’Brien        |   |
|   | Name:                                                     | Daniel              B. O’Brien                 |   |
|   | Title:                                                    | President                and Chief Executive Officer |   |
|   |                                                      |                                                 |   |

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

**24**