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

                                   FORM 10QSB

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

                  For the quarterly period ended JUNE 30, 2005
                                                 -------------

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


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

                                     NEVADA
                                     ------
         (State or other jurisdiction of incorporation or organization)

                                   91-1922863
                                   ----------
                        (IRS Employer Identification No.)

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

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


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



                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section 12,13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes[X] No[ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: Common stock $.001 par value
12,831,316 shares as of July 29, 2005.

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]




<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

Attached hereto and incorporated herein by reference.

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

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

RESULTS OF OPERATIONS

Separate financial data for each of the Company's operating segments is provided
below. Segment Gross Profit Margin is defined in the discussion below. The
Company evaluates the performance of the Company's operating segments based on
the following:
<TABLE>
<CAPTION>
                                                   JUNE 30
                                                                                    % CHANGE        % CHANGE
                                    2005            2004             2003           2005-2004       2004-2003
<S>                                <C>             <C>             <C>                      <C>          <C>
Sales
     Energy Segment                $ 765,621       $ 759,744       $ 1,942,562              1%           (61%)
     Polymer Segment               3,122,093         276,127                --  *        1031%            -- *

         Consolidated              3,887,714       1,035,871         1,942,562            275%           (47%)

Gross Profit Margin
     Energy Segment                  310,557         357,257           846,660            (13%)          (58%)
     Polymer Segment               1,445,212         267,537                --  *         440%            -- *

         Consolidated              1,755,769         624,864           846,660            181%           (26%)

SG&A
     Energy Segment                1,293,921         994,893           974,108             30%             2%
     Polymer Segment                 889,583         238,591                --  *         273%            -- *

         Consolidated              2,183,504       1,233,484           974,108             77%            27%

Interest Income
     Energy Segment                    3,616          30,470           102,246            (88%)          (70%)
     Polymer Segment                       0               0                --  *           0%            -- *

         Consolidated                  3,616          30,470           102,246            (88%)          (70%)

Write Down of Investments
     Energy Segment                        0               0                 0              0              0
     Polymer Segment                       0               0                --  *          --  *          -- *

         Consolidated                      0               0                 0

Net Income (Loss)                 $ (424,119)     $ (578,150)       $  (49,297)            27%         (1072%)
</TABLE>
---------------
* Polymer segment data is not available as indicated. The Company's polymer
segment was formed after the acquisition of certain assets of the Donlar
Corporation in June 2004.
<PAGE>
SIX MONTHS ENDED JUNE 30 2005 AND 2004
--------------------------------------

Sales for the six months ended June 30, 2005 were $3,887,714, compared to
$1,035,871 for the six months ended June 30, 2004, an increase of $2,851,843, or
275%. The increase in sales was primarily attributable to the new revenue
provided by the Company's wholly-owned subsidiary, NanoChem Solutions Inc.,
which was formed as the corporate entity used to acquire certain assets from the
bankruptcy estate of the Donlar Corporation.

The Company's Energy segment had sales of $765,621 for the six months ended June
30, 2004, compared to $759,744 for the six months ended June 30, 2004, an
increase of 1%. The Company expects revenue in this segment to increase in 2006
as brand recognition of its ECO$AVR(R) product line continues to grow and the
Company's marketing efforts of its WATER$AVR(R) product line begin to produce
increased sales. The Company's Polymer segment achieved sales of $3,122,093 for
the six months ended June 30, 2005, compared to $276,127 for the six months
ended June 30, 2004. This increase is in part due to a full six months of sales
from the new NanoChem Solutions subsidiary.

The Company had a loss of $424,119, or $0.03 per share, compared to a loss of
$578,150, or $0.05 per share in the same period in 2004. The three largest
contributing factors to the loss were:

     o   The brand building, marketing and extra staffing costs in connection
         with sales of the Company's ECO$AVR(R) product incurred throughout the
         year that were not reflected in sales because there was still
         substantial "Tropical Fish" product with dealers that had been sold by
         the Company's discontinued distributor, Sunsolar Technologies.
         Management believes that very little old product is on shelves and that
         costs and revenue for the ECO$AVR(R) product will be better balanced in
         2006.

     o   All divisions maintained or increased sales and marketing costs in the
         fourth quarter in order to increase the probability of sales increases
         in all of fiscal 2005. The extra costs were considered to be necessary
         to position the Company for future growth.

     o   Non cash transactions such as stock option expense significantly
         increased. This was a one time only event, related to the private
         placement in April 2005.

The Company's overall gross profit margin on product sales decreased to 45% in
the six months ended June 30, 2005, down from 60% in the six months ended June
30, 2004. This decrease in gross margin was primarily due to the rise in oil and
its affect on raw material pricing and shipping. There were also extra costs
related to the labor and material inputs for the Company's swimming pool
products as a result of the significant rise of the Canadian dollar versus the
U.S. dollar. For more information regarding this result, see Note 2(e) to the
Company's Notes to Consolidated Financial Statements, Foreign Currency.



<PAGE>
Gross profit margin represents sales less cost of sales and producing. The major
categories of costs included in cost of sales and producing are cost of goods,
distribution costs, and costs of the Company's buying department. Distribution
costs consist of all warehouse receiving and inspection costs, warehousing
costs, all transportation costs associated with shipping goods from the
Company's facilities to its customers, and other costs of distribution. The
Company does not exclude any portion of distribution costs from cost of sales.
The Company's gross margins may not be comparable to those of other entities
because some entities include all of the costs related to their overhead in cost
of sales, as compared to the Company, which excludes a portion of cost of sales
from gross profit and instead includes such costs as a line item in operating
expenses.

For the six months ended June 30, 2005, there was an increase in sales and
marketing costs in connection with the Company's WATER$AVR(R) product, which was
reflected in increased wages, office, rent, telephone and travel expenses. The
Company incurred higher professional fees in the six months ended June 30, 2005
primarily due to increased legal and accounting expenses and increased
consultant expenses resulting from the cost of integrating the functions and
sales of the Company's NanoChem subsidiary as quickly as possible. Depreciation
expense was $388,086 for the six months ended June 30, 2005, compared to
$185,547 for the six months ended June 30, 2004, reflecting depreciation for
additional property and equipment added mid 2004.

The Company's Energy segment generated $1,293,291 in operating expenses in the
six months ended June 30, 2005, an increase of 30% over the same 2004 period.
The increase is primarily attributable to the Company's extraordinary stock
option expense related to the capital raising in the six months ended June 30,
2005. The Company's Polymer segment incurred $889,583 in operating expenses in
the six months ended June 30, 2005, and increase of 77% over the same period the
previous year. This is attributable to the fact the NanoChem Solutions
subsidiary operated for the full 6 months in 2005 compared to 20 days in 2004,
during the same period.

There was no income tax provision for the six months ended June 30, 2005, as no
tax installment payments were made during the year, same as the same period in
the previous year.

The Company's Energy segment reported interest income of $3,616 in the first six
months of 2005, compared to $30,470 in the same period in 2004, a decrease of
approximately 88% from 2004. This decrease in interest income is due to the
Company's use of capital to purchase assets and develop its business.

The Company reported a net loss of $424,119 for the six months ended June 30,
2005, compared to a net loss of $578,150 for the six months ended June 30, 2004.

With the addition of the assets acquired from the Donlar Corporation, the
Company became a much larger company with commensurate increases in most expense
segments. However, the Company was able to reduce certain expenses such as
advertising ($44,685 down from $56,792) and consulting ($91,787 down from
$188,816) as a direct result of better cost control in these areas instituted by
management over the past year and are expected to maintain at these levels. The
large increase in investor relations ($509,588 versus $122,625) has to do with
the stock options that vested in relation to the capital raising that closed on
April 14, 2005. This resulted in a non-cash transaction of $447,500 and without
this, the company would have seen a decrease in this expense.



<PAGE>
SIX MONTHS ENDED JUNE 30, 2004 AND 2003
---------------------------------------

The discussion in this section does not include a true comparison of Polymer
segment data for this period. The Company's Polymer segment was formed after the
acquisition of certain assets of the Donlar Corporation in June 2004.

Sales for the six months ended June 30, 2004 were $1,035,871, compared to
$1,942,562 for the six months ended June 30, 2003, a decrease of $906,691, or
47%. This decrease is primarily the result of substantial "Tropical Fish"
product still in the market, which product is being sold by the Company's
discontinued distributor, Sunsolar Technologies, and the Company's brand
building efforts in connection with its ECO$AVR(R) product line. The Company
expects revenue in this segment to increase in 2006 as brand recognition of its
ECO$AVR(R) product line continues to grow and the Company's marketing efforts of
its WATER$AVR(R) product line begin to produce increased sales.

The Company's Energy segment had sales of $759,744 for the six months ended June
30, 2004, compared to $1,942,562 for the six months ended June 30, 2003, a
decrease of 61%. The Company expects revenue in this segment to increase in 2006
as brand recognition of its ECO$AVR(R) product line continues to grow and the
Company's marketing efforts of its WATER$AVR(R) product line begin to produce
increased sales. The Company's Polymer segment achieved sales of $276,127 for
the six months ended June 30, 2004 with no comparable data for 2003.

The Company's overall gross profit margin on product sales increased to 60% in
the six months ended June 30, 2004, up from 45% in the six months ended June 30,
2003. This increase in gross margin was primarily due to the addition of the
Company's Polymer segment.

For the six months ended June 30, 2004, there was an increase in sales and
marketing costs in connection with the Company's WATER$AVR(R) and ECO$AVR(R)
products, which was also reflected in increased office and rent expenses. The
Company incurred higher professional fees in the six months ended June 30, 2004
primarily due to increased legal and accounting expenses and increased
consultant expenses resulting from the cost of integrating the functions and
sales of the Company's NanoChem subsidiary as quickly as possible. Depreciation
expense was $185,547 for the six months ended June 30, 2004, compared to $15,927
for the six months ended June 30, 2003, reflecting depreciation for additional
property and equipment added mid 2004.

The Company's Energy segment generated $994,893 in operating expenses in the six
months ended June 30, 2004, an increase of 2% over the same 2003 period. The
Company's Polymer segment incurred $238,591 in operating expenses in the six
months ended June 30, 2004 with no comparable data for the 2003 period.

There was no income tax provision for the six months ended June 30, 2004, as no
tax installment payments were made during this period. The Company's income tax
provision for the six months ended June 30, 2003 was made by installment
payments totaling $26,094. The Company had interest income of $30,470 in the six
months ended June 30, 2004, as compared to interest income of $104,246 in the
six months ended June 30, 2003, a decrease of 70%. The Company reported net loss
of $578,150 in the six months ended June 30, 2004, compared to a net loss of
$49,295 for the six months ended June 30, 2003.

LIQUIDITY AND CAPITAL RESOURCES

The Company has cash on hand of $752,130 as of the end of June 2005 compared to
$558,795 on December 31st 2004.
<PAGE>
As of June 30th 2005 the Company had working capital of $3,590,510 as compared
to a working capital shortage of $101,121 on December 31st 2004. The increase
was mainly the result of the cash raised in the private placement that was used
to pay off the loan taken out for the purchase of the Donlar Corp. assets that
became the NanoChem division as well as from the increase in sales.

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

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

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS:

The Company does not have any derivative financial instruments as of June 30th
2005. However, the Company is exposed to interest rate risk.

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

FOREIGN CURRENCY RISK

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

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

a) On November 13, 2003, Patrick Grant filed a lawsuit in the Circuit Court of
Cook County, Illinois against the Company, Water$avr Global Solutions Inc.
("WGS"), the wholly-owned subsidiary of the Company, and Daniel B. O'Brien , the
Company's Chief Executive Officer. The plaintiff claims damages for breach of
contract, tortious interference with an agreement and various wrongful discharge
claims. The plaintiff seeks monetary damages in excess of $1,020,000 for the
breach of contract and tortious interference claims and unspecified compensatory
and punitive damages in the wrongful discharge claims. The parties completed
mandatory mediation ordered by the Circuit Court and will next appear in court
for case management, at which time the court will set discovery deadlines. The
Company considers the case without merit and is planning to dispute the matter
vigorously. In addition, the Company intends to file counterclaims against the
plaintiff for failure to repay financial obligations owed to the Company of
almost $40,000, as well as unspecified damages arising out of Plaintiff's
disclosure of confidential information to a client during his employment at WGS.
No amounts have been recorded as receivable and no accrual has been made for any
loss in the Company's consolidated financial statements as the outcome of the
claim filed by Mr. Grant is not determinable.





<PAGE>
b) On May 1, 2003, the Company filed a lawsuit in the Supreme Court of British
Columbia, Canada, against John Wells and Equity Trust, S.A. seeking return of
100,000 shares of the Company's common stock and repayment of a $25,000 loan,
which were provided to defendants for investment banking services consisting of
securing a $5 million loan and a $25 million stock OFFERING. Such services were
not performed and in the proceeding, the Company seeks return of such shares
after defendant's failure to both return the shares voluntarily and repay the
note. On May 7, 2003 the Company obtained an injunction freezing the transfer of
the shares. On May 24, 2004 there was a hearing on defendant's motion to set
aside the injunction, which motion was denied by the trial court on May 29,
2004. The proceeding is still in a discovery phase. On the date of issuance, the
share transaction was recorded as shares issued for services at fair market
value, a value of $0.80 per share. No amounts have been recorded as receivable
in the Company's consolidated financial statements as the outcome of this claim
is not determinable.

c) On May 28, 2004, Sunsolar Energy Technologies Inc. ("SET"), filed a lawsuit
in the Federal Court of Canada, against the Company, Flexible Solutions, Ltd.,
the Company's wholly-owned subsidiary ("FSL"), and Mr. O'Brien. SET is seeking:
(a) a declaration that the trademark "Tropical Fish" is available for use by
SET; (b) injunctive relief against further use of the "Tropical Fish" trademark
by the Company; and (c) monetary damages exceeding $7,000,000 for the alleged
infringement by the Company, FSL and Mr. O'Brien of the "Tropical Fish"
trademark, as well as any other "confusingly similar trademarks" or proprietary
trade dresses. On August 9, 2004, the Company, FSL and Mr. O'Brien filed their
defense and filed a counterclaim against SET. The counterclaim seeks: (x)
injunctive relief against further use of the "Tropical Fish" trademark by SET;
(y) a declaration that the "Tropical Fish" trademark is owned by the Company,
or, in the alternative, is not distinctive and should be struck from the
trademark registry; and (z) monetary damages exceeding $50,000. The parties have
completed documentary discovery, and examinations for discovery of all parties
have been scheduled for July 2005. No amounts have been recorded as receivable
in the Company's consolidated financial statements and no amounts have been
accrued as potential losses as the outcome of this claim is not determinable.

d) On July 23, 2004, the Company filed a breach of contract suit in the Circuit
Court of Cook County, Illinois against Tatko Biotech Inc. ("Tatko"). The action
arises out of a joint product ----- development agreement entered into between
the Company and Tatko in which the Company agreed to invest $10,000 toward the
product development venture and granted to Tatko 100,000 shares of the Company's
restricted common stock. In return, Tatko granted the Company a five-year option
to purchase 20% of Tatko's outstanding capital stock. Tatko has since refused to
collaborate on the agreement and the Company seeks declaratory relief stating
that Tatko is not entitled to the 100,000 shares of the Company's restricted
common stock. The litigation is still pending at this time.

In addition, Tatko filed its own suit on September 24, 2004 in the Circuit Court
of Cook County, Illinois seeking declaratory relief of its entitlement to the
Company's restricted common stock. On May 23, 2005, the Tatko suit was dismissed
with prejudice by the District Court.

No amounts have been recorded as receivable in the Company's consolidated
financial statements and no amount has been accrued as a loss as the outcome of
the claim against Tatko is not determinable.

e) The Company is the plaintiff in a lawsuit filed in the Court of the Queen's
Bench of Alberta, where the subsidiary Flexible Solutions Ltd. is
inter-provincially registered. The company is seeking undetermined damages
resulting from breach of contract against Calgary Diecast Corporation. The
contract was never completed and the Company's raw materials remain in the
possession Calgary Diecast Corp. On April 25th, 2005, the Court ordered a
judgment in favor of Flexible Solutions Ltd. in the amount of $48,723 and FSL
intends to collect using all available means.
<PAGE>
ITEM 2.  CHANGES IN SECURITIES
         989,400 common shares were issued during the quarter

ITEM 3.  DEFAULT UPON SENIOR SECURITIES
         None

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

         On June 10, 2005, the annual general meeting of shareholders was held
         in Vancouver, BC. The results are as follows:

         -    Mr. Dan O'Brien, Mr. Robert O'Brien, Ms. Dale Friend, Mr. John
              Bientjes and Mr. Eric Hodges were confirmed as directors for the
              following year

         -    Stock option compensation to officers and insiders were approved

         -    Election to approve the Annual Report as filed with the SEC was
              approved

         -    Cinnamon Jang Willoughby were confirmed as Auditors for the year
              ending December 31, 2005

ITEM 5.  OTHER INFORMATION
        None

ITEM 6.(B) REPORTS ON FORM 8-K

         June 29, 2005 - AGM shareholder votes

         June 9, 2005 - Private Placement

         May 16, 2005 - Release of Q1 Financials

         April 14, 2005 - Private Placement

         April 6, 2005 - Revenue Prediction

ITEM 14. CONTROLS AND PROCEDURES

         The Company maintains disclosure controls and procedures that are
         designed to ensure that information required to be disclosed in the
         Company's Exchange Act reports is recorded, processed, summarized and
         reported within the time periods specified in the SEC's rules and
         forms, and that such information is accumulated and communicated to the
         Company's management, including its Chief Executive Officer and Chief
         Financial Officer, as appropriate, to allow timely decisions regarding
         required disclosure based closely on the definition of "disclosure
         controls and procedures" in Rule 13a-14(c). In designing and evaluating
         the disclosure controls and procedures, management recognized that any
         controls and procedures, no matter how well designed and operated, can
         provide only reasonable assurance of achieving the desired control
         objectives, and management necessarily was required to apply its
         judgment in evaluating the cost-benefit relationship of possible
         controls and procedures.
<PAGE>
         Within 90 days prior to the date of this report, the Company carried
         out an evaluation, under the supervision and with the participation of
         the Company's management, including the Company's Chief Executive
         Officer and the Company's Chief Financial Officer, of the effectiveness
         of the design and operation of the Company's disclosure controls and
         procedures. Based on the foregoing, the Company's Chief Executive
         Officer and Chief Financial Officer concluded that the Company's
         disclosure controls and procedures were effective.

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


                                    SIGNATURE

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

                      FLEXIBLE SOLUTIONS INTERNATIONAL INC.
                                  (Registrant)

Dated: August 12, 2005                  /s/ DAN O'BRIEN, President and Director
<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Balance Sheets
June 30, 2005
(U.S. Dollars)
---------------------------------------------------------------------------------------------------------
                                                                   June 30                   December 31
                                                                    2005                        2004
---------------------------------------------------------------------------------------------------------

Assets

<S>                                                               <C>                         <C>
Current
  Cash and cash equivalents                                       $  752,130                  $  558,795
  Short term investments                                                   -                     559,440
  Accounts receivable                                              1,028,236                     501,372
  Income tax                                                          27,033                      92,963
  Loan receivable                                                     38,286                      38,570
  Inventory                                                        1,912,912                   1,416,588
  Prepaid expenses                                                   117,979                     131,280
---------------------------------------------------------------------------------------------------------
                                                                   3,876,576                   3,299,008
Property, equipment and leaseholds                                 4,984,801                   5,250,346
Investment                                                           347,000                     271,000
---------------------------------------------------------------------------------------------------------

                                                                  $9,208,377                  $8,820,354
------------------------------------------------------------------==========------------------==========-
Liabilities

Current
  Accounts payable and accrued liabilities                        $  286,066                  $  250,129
  Short term loan                                                                              3,150,000
---------------------------------------------------------------------------------------------------------
                                                                     286,066                   3,400,129
---------------------------------------------------------------------------------------------------------
Stockholders' Equity

Capital stock
Authorized
  50,000,000 Common shares with a par value
  of $0.001 each 1,000,000 Preferred
  shares with a par value of $0.01 each
Issued and Outstanding
12,821,316 (2004: 11,831,916) Common shares                           11,832                      11,832
Capital in excess of par Value                                    11,616,621                   7,663,421
Other comprehensive income                                            73,184                     100,179
Deficit                                                           (2,779,326)                 (2,355,207)
---------------------------------------------------------------------------------------------------------

Total Stockholders' Equity                                         8,922,311                   5,420,225
---------------------------------------------------------------------------------------------------------

Total Liabilities and Stockholders' Equity                        $9,208,377                  $8,820,354
------------------------------------------------------------------==========------------------==========-
</TABLE>

Commitments and Contingencies (Notes 14 & 15)

See accompanying condensed notes to unaudited interim consolidated financial
statements.


<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Statements of Operations
For Six Months Ended June 30, 2005 and 2004
(U.S. Dollars)

--------------------------------------------------------------------------------
                                                     Six Months Ended June 30
--------------------------------------------------------------------------------
                                                    2005                2004
--------------------------------------------------------------------------------

Sales                                           $ 3,887,714         $ 1,035,871
Cost of sales                                     2,131,945             411,007
--------------------------------------------------------------------------------

Gross profit                                      1,755,769             624,864
--------------------------------------------------------------------------------
Operating Expenses
  Wages                                             436,825             257,716
  Administrative salaries and benefits              109,076              57,544
  Advertising and promotion                          44,685              56,792
  Investor relations and transfer agent fee         509,588             122,625
  Office and miscellaneous                           69,531              96,922
  Insurance                                          62,787                   -
  Interest expense                                   62,189                   -
  Rent                                              103,672              52,216
  Consulting                                         91,787             188,816
  Professional fees                                 126,449             107,714
  Travel                                             78,866              49,514
  Telecommunications                                 22,890              14,714
  Shipping                                           23,036              10,797
  Research                                           18,404              15,842
  Commissions                                        87,998                   -
  Bad debt expense (recovery)                             -                (797)
  Currency exchange                                  (6,867)              3,324
  Utilities                                          11,502              14,198
  Depreciation                                      331,086             185,547
--------------------------------------------------------------------------------

                                                  2,183,504           1,233,484
--------------------------------------------------------------------------------

Income (loss) before other items and income tax    (427,735)           (608,620)
Interest income                                       3,616              30,470
--------------------------------------------------------------------------------

Income (loss) before income tax                    (424,119)           (578,150)
Income tax (recovery)                                     -                   -
--------------------------------------------------------------------------------

Net income (loss)                                $ (424,119)         $ (578,150)
Deficit, beginning                              $(2,355,207)        $(1,097,662)
--------------------------------------------------------------------------------
Deficit, ending                                 $(2,779,326)        $(1,675,812)
------------------------------------------------============--------============

Net income (loss) per share                         $ (0.03)            $ (0.05)
------------------------------------------------============--------============

Weighted average number of shares                12,256,208          11,819,916
------------------------------------------------============--------============
See accompanying condensed notes to unaudited interim consolidated financial
statements.


<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Statements of Operations
For Three Months Ended June 30, 2005 and 2004
(U.S. Dollars)

--------------------------------------------------------------------------------
                                                   Three Months Ended June 30
-------------------------------------------------------------------------------
                                                     2005              2004
-------------------------------------------------------------------------------

Sales                                            $ 1,868,133       $   547,761
Cost of sales                                      1,053,644           105,088
-------------------------------------------------------------------------------

Gross profit                                     $   814,489       $   442,673
-------------------------------------------------------------------------------

Operating Expenses
  Wages                                              202,388           143,246
  Administrative salaries and benefits                71,071            32,697
  Advertising and promotion                           13,414            49,062
  Investor relations and transfer agent fee          484,950            57,947
  Office and miscellaneous                            28,076            62,332
  Insurance                                           34,468                 -
  Interest expense                                    24,514                 -
  Rent                                                47,866            30,867
  Consulting                                          47,535           114,138
  Professional fees                                   65,607            71,206
  Travel                                              41,101            25,938
  Telecommunications                                  12,602             9,014
  Shipping                                            10,397             7,655
  Research                                             2,896             6,681
  Commissions                                         47,073                 -
  Bad debt expense (recovery)                              -              (797)
  Currency exchange                                   (7,585)            2,902
  Utilities                                            4,336             8,833
  Depreciation                                       162,983           175,595
-------------------------------------------------------------------------------

                                                   1,293,692           797,316
-------------------------------------------------------------------------------

Income (loss) before other items and income tax  $  (479,203)      $  (354,643)
Interest income                                          886            27,354
-------------------------------------------------------------------------------

Income (loss) before income tax                  $  (478,317)      $  (327,289)
Income tax (recovery)                                       -                -
-------------------------------------------------------------------------------

Net income (loss)                                $  (478,317)      $  (327,289)
Deficit, beginning                                (2,301,009)       (1,348,523)
-------------------------------------------------------------------------------
Deficit, ending                                  $(2,779,326)      $(1,675,812)
-------------------------------------------------============------============

Net income (loss) per share                          $ (0.04)          $ (0.03)
-------------------------------------------------============------============

Weighted average number of shares                 12,675,837        11,819,916
-------------------------------------------------============------============

See accompanying condensed notes to unaudited interim consolidated financial
statements.

<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Statements of Cash Flows
For The Six Months Ended June 30, 2005 and 2004
(U.S. Dollars)

-------------------------------------------------------------------------------
                                                          Six Months June 30
                                                          2005          2004
-------------------------------------------------------------------------------

Operating activities
  Net income (loss)                                  $  (424,119)  $  (578,150)
  Stock compensation expense                             503,650       135,230
  Depreciation                                           331,086       185,547
-------------------------------------------------------------------------------
                                                         410,617      (257,373)
Changes in non-cash working capital items:
  (Increase) Decrease in accounts receivable            (526,864)     (238,982)
  (Increase) Decrease in inventory                      (496,324)     (628,460)
  (Increase) Decrease in prepaid expenses                 13,301       (33,719)
  Increase (Decrease) in accounts payable                 35,937        31,552
  Increase (Decrease) in Income taxes                     65,930         2,240
  Increase (Decrease) in amounts due to shareholders           -        (7,700)
-------------------------------------------------------------------------------

Cash (used in) operating activities                     (497,405)   (1,132,442)
-------------------------------------------------------------------------------

Investing activities
  Short-term investments                                 559,440     3,699,188
  Investments                                            (76,000)            -
  Loan receivable                                            284            45
  Acquisition of property and equipment                  (65,541)   (5,270,011)
-------------------------------------------------------------------------------

Cash provided by (used in) investing activities          418,183    (1,570,778)
-------------------------------------------------------------------------------

Financing activities
  Short term loan                                     (3,150,000)    3,150,000
  Proceeds from issuance of common stock               3,449,550        57,500
-------------------------------------------------------------------------------

Cash provided by financing activities                    299,550     3,207,500
-------------------------------------------------------------------------------

Effect of exchange rate changes on cash                  (26,993)       (3,023)
-------------------------------------------------------------------------------

Inflow (outflow) of cash                                 193,335       501,257
Cash and cash equivalents, beginning                     558,795       237,080
-------------------------------------------------------------------------------

Cash and cash equivalents, ending                    $   752,130   $   738,337
-----------------------------------------------------===========---============

Supplemental disclosure of cash flow information:
Interest received                                    $    2,730    $    30,470
-----------------------------------------------------===========---============

See accompanying condensed notes to unaudited interim consolidated financial
statements.


<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------

1.    BASIS OF PRESENTATION:

      These consolidated financial statements include the accounts of Flexible
      Solutions International Inc., and its wholly owned subsidiaries Flexible
      Solutions Ltd., NanoChem Solutions Inc. and Water$aver Global Solutions
      Inc. All intercompany balances and transactions have been eliminated. The
      parent company was incorporated May 12, 1998 in the State of Nevada and
      had no operations until June 30, 1998 as described below.

      On June 30, 1998 the company completed the acquisition of 100% of the
      shares of Flexible Solutions Ltd. The acquisition was effected through the
      issuance of 7,000,000 shares of common stock by the company with former
      shareholders of the subsidiary receiving 100% of the total shares then
      issued and outstanding. The transaction has been accounted for as a
      reverse-takeover.

      Flexible Solutions Ltd. is accounted for as the acquiring party and the
      surviving entity. As Flexible Solutions Ltd. is the accounting survivor,
      the consolidated financial statements presented for all periods are those
      of Flexible Solutions Ltd. The shares issued by Flexible Solutions
      International Inc. pursuant to the 1998 acquisition have been accounted
      for as if those shares had been issued upon the organization of Flexible
      Solutions Ltd.

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

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

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

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

      As at June 9, 2004:

       Current assets                                               $ 1,126,805
       Property and equipment                                         5,023,195
                                                                    -----------

                                                                      6,150,000
       Acquisition costs assigned to property and equipment             314,724
                                                                    ------------

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

      On February 7, 2005 the Company incorporated two new subsidiaries in
      Nevada. SeaHorse Systems Inc. was incorporated to research new
      applications of our patented dispensing mechanism currently used for
      Ecosavr. NanoDetect Technologies Inc. is focusing on ways to use our
      current technologies to detect pathogens.
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------

2.    SIGNIFICANT ACCOUNTING POLICIES:

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

      a) Cash and Cash Equivalents -

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

      b) Inventory -

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

      c) Property, Equipment and Leaseholds -

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

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

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

      d) Impairment of Long Lived Assets -

           The company assesses the recoverability of its long lived assets by
           determining whether the carrying value of the long lived assets can
           be recovered over their remaining lives through undiscounted future
           operating cash flows using a discount rate reflecting the company's
           average cost of funds. The assessment of the recoverability will be
           impacted if estimated future operating cash flows are not achieved.
           For the year ended December 31, 2004, no impairment charges have been
           recognized.
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------

2.    SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

      e) Foreign Currency -

           The functional currency of Flexible Solutions Ltd. is the Canadian
           dollar. The translation of the Canadian dollar to the reporting
           currency of the U.S. dollar is performed for assets and liabilities
           using exchange rates in effect at the balance sheet date. Revenue and
           expense transactions are translated using average exchange rates
           prevailing during the year. Translation adjustments arising on
           conversion of the financial statements from the company's functional
           currency, Canadian dollars, into the reporting currency, U.S.
           dollars, are excluded from the determination of income and disclosed
           as other comprehensive income (loss) in stockholders' equity.

           Foreign exchange gains and losses relating to transactions not
           denominated in the applicable local currency are included in income
           if realized during the year and in comprehensive income if they
           remain unrealized at the end of the year.

      f) Revenue Recognition -

           Revenue from product sales is recognized at the time the product is
           shipped since title and risk of losses is transferred to purchaser
           upon delivery to the carrier. Shipments are made F.O.B. shipping
           point. Provisions are made at the time the related revenue is
           recognized for estimated product returns. Since the company's
           inception, product returns have been insignificant, therefore no
           provision has been established for estimated product returns.

      g) Stock Issued in Exchange for Services -

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

      h) Stock Based Compensation -

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

      i) Comprehensive Income -

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

<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------

2.    SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

      j) Income (Loss) Per Share -

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

      k) Use of Estimates -

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

      l) Financial Instruments -

           i) Fair Values -

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

           ii) Foreign Exchange and Interest Rate Risks -

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

      m) Recent Accounting Pronouncements -

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


<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------

2.    SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

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

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


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

      5% loan receivable due on demand             $  38,286        $  38,570
                                                   =========        ==========


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

      Security deposit and prepaids                $ 117,969        $ 131,280
                                                   =========        ==========













<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------

5.    PROPERTY, EQUIPMENT AND LEASEHOLDS:

                                           Accumulated      2005        2004
                                   Cost    Amortization      NET         Net
                               ----------- ----------- ----------- -----------

       Buildings               $ 3,144,259  $  303,488 $ 2,840,771 $ 2,987,046
       Computer hardware            44,302      18,068      26,234      27,511
       Furniture and fixtures       15,265       4,674      10,591      11,515
       Office equipment             28,322      12,233      16,089      18,421
       Manufacturing equipment   2,141,071     491,376   1,649,695   1,785,858
       Trailer                       1,865         912         953       1,146
       Leasehold improvements       30,560      13,786      16,774      14,533
       Trade Show Booth              6,985       1,885       5,100       6,130
       Patents                      20,408           -      20,408
                                                                             -
       Land                        398,186           -     398,186     398,186
                               -----------  ---------- ----------- -----------

                               $ 5,831,223  $  846,422 $ 4,984,801 $ 5,250,346
                               ===========  ========== =========== ===========


6.    INVESTMENT:
<TABLE>
<CAPTION>
                                                                         2005             2004
----------------------------------------------------------------------------------------------

<S>                                                                 <C>              <C>
      Tatko Inc. - Option to purchase 20% interest in common stock  $ 271,000
      Air Water Interface Delivery & Detection Inc.                    76,000                -


                                                                    $ 347,000        $ 271,000
==============================================================================================
</TABLE>

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

      See Contingencies (Note 11d)

      On 2005, NanoDetect Technologies Inc., a new subsidiary of Flexible
      Solutions International Inc., purchased 25.3 shares in Air Water Interface
      Delivery and Detection Inc. for a total cost of $76,000. This investment
      represents only 2.5% of the issued and outstanding shares of AWD, and
      accordingly will be accounted for under the cost method.




<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------

7. STOCK OPTIONS:

      The company may issue stock options and stock bonuses for common stock of
      the company to provide incentives to directors, key employees and other
      persons who contribute to the success of the company. The exercise price
      of all incentive options are issued for not less than fair market value.

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


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

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

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

       Balance, December 31, 2004  1,241,740   $1.00 - $4.60        $2.87
       Granted                       30,000        $3.85            $3.85
       Exercised                     (2,000)       $1.40            $1.40
      --------------------------- ------------ ------------- ------------------

       Balance, June 30, 2005      1,269,740   $1.00 - $4.60        $3.19
      ======================================= ============== ==================

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

                                     2004       2003      2002
------------------------------------------------------------------------

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

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


<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------

8.    CAPITAL STOCK:

      During the six months ended June 30, 2005:

          i)  issued 2,000 shares of common stock at $1.40 upon exercise of
              options

          (ii) issued 900,000 shares of common stock with 900,000 warrants
              attached for the price of 3.75 a share

          (iii) issued 87,400 shares of common stock with 87,400 warrants
              attached for the price of $3.75 a share to allow a shareholder to
              maintain their position after the capital raising

      During the year ended December 31, 2004 the company:

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

      During the year ended December 31, 2003 the company:

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

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


9. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY:

      The company operates in two segments:

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

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

      (b) Manufacture of biodegradable polymers and chemical additives:

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

      The sales in the United States of America and abroad amounted to 79% (2003
      - 28%). The remainder was earned in Canada.
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------

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

                                      2005          2004
     --------------------------- -------------- --------------
     Canada                      $     273,130  $     238,807
     United States                   4,711,671      5,011,539
     --------------------------- -------------- --------------
     Total                       $   4,984,801  $   5,250,346
     =========================== ============== ==============


10.   COMMITMENTS:

      Property and Premises Leases -

      The company is committed to minimum rental payments for property and
      premises aggregating approximately $326,538 over the term of two leases,
      the last expiring on June 30, 2009.

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

                           2005                       $  67,145
                           2006                         114,752
                           2007                          55,169
                           2008                          55,654
                           2009                          33,818


11.   CONTINGENCIES:

      a) On November 13, 2003, Patrick Grant filed a lawsuit in the Circuit
         Court of Cook County, Illinois against the Company, Water$avr Global
         Solutions Inc. ("WGS"), the wholly-owned subsidiary of the Company, and
         Daniel B. O'Brien , the Company's Chief Executive Officer. The
         plaintiff claims damages for breach of contract, tortious interference
         with an agreement and various wrongful discharge claims. The plaintiff
         seeks monetary damages in excess of $1,020,000 for the breach of
         contract and tortious interference claims and unspecified compensatory
         and punitive damages in the wrongful discharge claims. The parties
         completed mandatory mediation ordered by the Circuit Court and will
         next appear in court for case management, at which time the court will
         set discovery deadlines. The Company considers the case without merit
         and is planning to dispute the matter vigorously. In addition, the
         Company intends to file counterclaims against the plaintiff for failure
         to repay financial obligations owed to the Company of almost $40,000,
         as well as unspecified damages arising out of Plaintiff's disclosure of
         confidential information to a client during his employment at WGS. No
         amounts have been recorded as receivable and no accrual has been made
         for any loss in the Company's consolidated financial statements as the
         outcome of the claim filed by Mr. Grant is not determinable.







<PAGE>


FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------


<PAGE>



--------------------------------------------------------------------------------
11.           CONTINGENCIES: (CONTINUED)

      b) On May 1, 2003, the Company filed a lawsuit in the Supreme Court of
         British Columbia, Canada, against John Wells and Equity Trust, S.A.
         seeking return of 100,000 shares of the Company's common stock and
         repayment of a $25,000 loan, which were provided to defendants for
         investment banking services consisting of securing a $5 million loan
         and a $25 million stock offering. Such services were not performed and
         in the proceeding, the Company seeks return of such shares after
         defendant's failure to both return the shares voluntarily and repay the
         note. On May 7, 2003 the Company obtained an injunction freezing the
         transfer of the shares. On May 24, 2004 there was a hearing on
         defendant's motion to set aside the injunction, which motion was denied
         by the trial court on May 29, 2004. The proceeding is still in a
         discovery phase. On the date of issuance, the share transaction was
         recorded as shares issued for services at fair market value, a value of
         $0.80 per share. No amounts have been recorded as receivable in the
         Company's consolidated financial statements as the outcome of this
         claim is not determinable.


      c) On May 28, 2004, Sunsolar Energy Technologies Inc. ("SET"), filed a
         lawsuit in the Federal Court of Canada, against the Company, Flexible
         Solutions, Ltd., the Company's wholly-owned subsidiary ("FSL"), and Mr.
         O'Brien. SET is seeking: (a) a declaration that the trademark "Tropical
         Fish" is available for use by SET; (b) injunctive relief against
         further use of the "Tropical Fish" trademark by the Company; and (c)
         monetary damages exceeding $7,000,000 for the alleged infringement by
         the Company, FSL and Mr. O'Brien of the "Tropical Fish" trademark, as
         well as any other "confusingly similar trademarks" or proprietary trade
         dresses. On August 9, 2004, the Company, FSL and Mr. O'Brien filed
         their defense and filed a counterclaim against SET. The counterclaim
         seeks: (x) injunctive relief against further use of the "Tropical Fish"
         trademark by SET; (y) a declaration that the "Tropical Fish" trademark
         is owned by the Company, or, in the alternative, is not distinctive and
         should be struck from the trademark registry; and (z) monetary damages
         exceeding $50,000. The parties have completed documentary discovery,
         and examinations for discovery of all parties have been scheduled for
         July 2005. No amounts have been recorded as receivable in the Company's
         consolidated financial statements and no amounts have been accrued as
         potential losses as the outcome of this claim is not determinable.










<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2005 AND 2004
(US DOLLARS)
--------------------------------------------------------------------------------
11.      CONTINGENCIES: (CONTINUED)

      d) On July 23, 2004, the Company filed a breach of contract suit in the
         Circuit Court of Cook County, Illinois against Tatko Biotech Inc.
         ("Tatko"). The action arises out of a joint product development
         agreement entered into between the Company and Tatko in which the
         Company agreed to invest $10,000 toward the product development venture
         and granted to Tatko 100,000 shares of the Company's restricted common
         stock. In return, Tatko granted the Company a five-year option to
         purchase 20% of Tatko's outstanding capital stock. Tatko has since
         refused to collaborate on the agreement and the Company seeks
         declaratory relief stating that Tatko is not entitled to the 100,000
         shares of the Company's restricted common stock. The litigation is
         still pending at this time.

         In addition, Tatko filed its own suit on September 24, 2004 in the
         Circuit Court of Cook County, Illinois seeking declaratory relief of
         its entitlement to the Company's restricted common stock. On May 23,
         2005, the Tatko suit was dismissed with prejudice by the District
         Court.

         No amounts have been recorded as receivable in the Company's
         consolidated financial statements and no amount has been accrued as a
         loss as the outcome of the claim against Tatko is not determinable.


      e) The Company is the plaintiff in a lawsuit filed in the Court of the
         Queen's Bench of Alberta, where the subsidiary Flexible Solutions Ltd.
         is inter-provincially registered. The company is seeking undetermined
         damages resulting from breach of contract against Calgary Diecast
         Corporation. The contract was never completed and the Company's raw
         materials remain in the possession Calgary Diecast Corp. On April 25th,
         2005, the Court ordered a judgment in favor of Flexible Solutions Ltd.
         in the amount of $48,723 and FSL intends to collect using all available
         means.


12.   COMPARATIVE FIGURES:

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