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


                                   FORM 10K-SB


              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2000     Commission File Number:  0-29649



                      Flexible Solutions International Inc.
                      -------------------------------------
        (Exact name of Small Business Issuer as specified in its charter)


            Nevada                                           N/A
(State or other Jurisdiction of                (IRS Employer Identification No.)
  Incorporation or Organization)

        2614 Quuenswood Drive, Victoria, British Columbia CANADA V8N 1X5
        ----------------------------------------------------------------
                    (Address of principal executive offices)

                    Issuer's Telephone Number, (250) 477-9969



     Securities to be registered pursuant to Section 12(b) of the Act: None


        Securities to be registered pursuant to Section 12(g) of the Act:
        -----------------------------------------------------------------
                         Common Stock $0.001 par value.
                                (Title of Class)


                                  Page 1 of xxx
                          Index to Exhibits on Page 29


<PAGE>
                      Flexible Solutions International Inc.

                                   Form 10-SB
                                TABLE OF CONTENTS

                                                             Page
                                     PART I

Item 1.  Description of Business.............................   3

Item 2.  Management's Discussion and Analysis or Plan of
         Operation...........................................  15

Item 3.  Description of Property.............................  18

Item 4.  Security Ownership of Certain Beneficial Owners
          and Management.....................................  19

Item 5.  Directors, Executive Officers, Promoters
         and Control Persons.................................  20

Item 6.  Executive Compensation..............................  23

Item 7.  Certain Relationships and Related Transactions......  23

Item 8.  Description of Securities...........................  24

                                     PART II

Item 1.  Market Price Of And Dividends on the Registrant's
         Common Equity and Related Stockholder Matters.......  26

Item 2.  Legal Proceedings...................................  26

Item 3.  Changes in and Disagreements with  Accountants......  27

Item 4.  Recent Sales of  Unregistered Securities............  27

Item 5.  Indemnification of  Directors and Officers..........  27

                                    PART F/S

Item 1.  Financial Statements................................  28

                                    PART III

Item 1.   Index to Exhibits                                    29

Item 2.   Description of Exhibits


                                       2
<PAGE>
                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS
--------------------------------

Introduction
------------

Flexible Solutions  International  Inc.  (hereinafter is also referred to as the
"Company"  and/or the  "Registrant")  is involved in the sale of chemicals which
slow down the evaporation of water.  Applications  include  swimming pools where
their use allows the water to retain a higher temperature for a longer period of
time;  irrigation  canals  and  reservoirs.  The  Registrant  is  still  in  the
development phase. At the end of its latest fiscal year, 12/31/00,  total assets
were $489  thousand;  gross revenues were $1,030  thousand;  and, net income was
$139 thousand. At the end of Fiscal 1999, ended 12/31/99,  the Company had total
assets  of $359  thousand,  gross  revenues  of $759;  and,  net  income of $103
thousand. The Registrant also currently relies exclusively on the efforts of its
founder and  president  Mr.  Daniel B.  O'Brien.  (Note the Risk Factor  section
beginning on page ten which  discusses  this along with other risk factors.) The
Company was incorporated in May 1998 in the state of Nevada.

The shares of the Company began trading on the NASDAQ Electronic  Bulletin Board
on June 16, 2000.

On June 25,  1998 the  Company  completed  the  process  of  acquiring  Flexible
Solutions Ltd. Flexible  Solutions Ltd. was a company engaged in the development
and marketing of a swimming pool chemical designed to reduce heat loss.

The Company's  principal office is located at 2614 Queenswood  Drive,  Victoria,
British Columbia V8N 1X5. The contact person is Mr. Daniel B. O'Brien, President
and Director.  The telephone  number is (250) 477-9969;  the facsimile number is
(250)    477-9912.    The   Company    currently    maintains   a   website   at
www.flexiblesolutions.com.

The Company's authorized capital includes 50,000,000 shares of common stock with
$0.001 par value and 1,000,000  shares of preferred  stock with $0.01 par value.
As of the close of the Company's  latest fiscal year,  December 31, 2000,  there
were  9,131,316  shares of common stock  outstanding  and no shares of preferred
shares outstanding.

The Company's common stock trades on the NASDAQ Electronic  Bulletin Board under
the symbol "FXSO".

The information in this Annual Report is current as of December 31, 2000, unless
otherwise indicated.

                                       3
<PAGE>
Historical Corporate Development
--------------------------------

The Company was incorporated in the state of Nevada on May 12, 1998.

The Company acquired Flexible Solutions Ltd. ("Flexible  Solutions") on June 25,
1998 in a non-arms length  transaction.  The Company issued  7,000,000 shares of
its Common  Stock in  exchange  for all of the issued and  outstanding  stock of
Flexible  Solutions.  Upon the filing of the Articles of Share Exchange with the
Nevada  Secretary  of  State  on June  30,  1998,  Flexible  Solutions  became a
wholly-owned subsidiary of the Company.

The transaction whereby the Company acquired Flexible Solutions is considered to
be a non-arm's length  transaction  because the valuation of Flexible  Solutions
and the determination of the number of shares to be issued to its owners was not
made independently or based on appraisals.

Flexible  Solutions  was  incorporated  on January 25, 1991.  From its inception
through the fiscal year ended January 31, 1994,  Flexible Solutions incurred net
losses as follows:  $1,326 in 1992;  $1,883 in 1993;  and,  $3,265 in 1994. From
1994 to 1995,  Flexible Solutions generated a net income of $3,440, but suffered
a net loss of $2,454 for the fiscal year ended  January 31,  1996.  For the 1997
and 1998 fiscal  years,  Flexible  Solutions had net income of $1,679 and $3,154
respectively.  For Fiscal 1999, ended December 31, 1999,  Flexible Solutions had
net income of $103 thousand and for Fiscal 2000,  ended  December31,  2000,  the
Company had net income of $139 thousand.

On August 17, 1998, the Company completed an offering of 1,050,000 shares of its
Common Stock at $0.01 per share, raising gross proceeds of $10,500.

ON September 7, 1998,  the Completed an offering of 500,000 shares of its Common
Stock at $0.05 per share, raising gross proceeds of $25,000.

On November 13, 1998, the Company  completed an offering of 1,000,000  shares of
its Common Stock at $0.25 per share, raising gross proceeds of $145,329 (581,316
shares sold).

On February 13, 2001,  the Company  announced an agreement for $5 million in new
financing  in the form of a  convertible  debenture.  The  debenture  carries an
interest rate of 8% over a one year term. It can be converted  into common stock
of the Company or repaid from the  proceeds of a public  offering  which may, or
may not, take place,  at the  discretion  of the Company.  The Company


                                       4
<PAGE>
will gain access to the  proceeds of this  financing  once an SB-2  document has
been filed with the Securities and Exchange  Commission for a maximum  financing
of $25 million. As of March 7, 2001, this offering had not closed.

The proceeds of all of the above completed  offerings were used for professional
fees;  research and  development  of the tropical fish product;  the purchase of
machinery and dies to begin large scale production of the tropical fish product;
and, general corporate  purposes.  The offerees,  in addition to Dan O'Brien and
Dr.  Robert  O'Brien,  were,  in all  instances,  friends,  family  or  business
associates well known to either Dan O'Brien or Dr. Robert O'Brien.

In 1999 the Company  began  renting a 1,000 square foot factory  located at 1746
Island Highway,  Victoria,  British  Columbia V9B 1H8. The monthly rent for this
facility is $690 and the Company has not executed a formal lease agreement.  All
of the Company's manufacturing functions are now conducted at this location.

BUSINESS
--------

Flexible Solutions Ltd.

Company Background
------------------

The Company  manufacturers and markets chemicals and chemical dispensers through
its wholly-owned subsidiary,  Flexible Solutions Ltd. The chemicals are designed
to act as energy saving "liquid blankets" which reduce the evaporation of water.

The Company currently  manufactures three products:  "HEAT$AVER",  the "Tropical
Fish" and "WATER$AVER".

The HEAT$AVER Product and the Tropical Fish Product:
---------------------------------------------------

Product Description:

The primary  product of the Company is  HEAT$AVER.  This  product is a non-toxic
chemical which forms an invisible skin on the surface of water thereby  reducing
the amount of  evaporation  and creating an energy  saving  device.  The Company
estimates  that  evaporative  losses account for between 70% and 95% of pool and
spa energy use.

HEAT$AVER is a mixture of ingredients  which are lighter than water so that they
automatically  float to the  surface.  They are  attracted to each other so that
they try always to form a very thin layer over the whole pool surface.  They are
individually  so small that they are 500 times smaller than the spaces in a high



                                       5
<PAGE>
quality filter. After a swimmer stops disturbing the water they rush to reform a
complete  layer.  Management  estimates that the use of HEAT$AVER  could achieve
savings in energy costs of up to 40% and that most pool  managers  and/or owners
will realize energy bill reductions between 17% and 30%.

Management  believes that customers  associated with outdoor  swimming pools use
HEAT$AVER  primarily  for two reasons,  cost savings on energy being the primary
one. The second reason is that, often times, pool personnel find it inconvenient
to use conventional  pool blankets  correctly and consistently and that the ease
of use provided by HEAT$AVER results in more consistent usage.

Users of air-conditioned indoor swimming pools use the HEAT$AVER product because
it also results in savings.  The savings  occurs because less energy is required
to  maintain  a pool at the  desired  temperature  and also  because  there is a
reduced  load on the  air-conditioning  system  because  less heat and much less
water  vapor  will have to be  removed  from the air to  maintain  the  required
comfort.  Air-conditioned indoor pools are very high users of energy because the
swimmers and loungers  have  environmental  expectations  which require both gas
water heat and  electric air cooling to keep both groups happy in the same room.
HEAT$AVER works by slowing the transfer of heat and water vapor from the pool to
the pool room atmosphere.

The British  Health  Department,  the Health  Department of  Queensland  and the
Health  Department of New South Wales have concluded  that the product,  used as
directed, has no adverse effects on humans or animals.

Testing pertaining to the effectiveness of HEAT$AVER has been carried out by the
owners of the following  facilities.  The following chart summarizes the results
typically achieved by users:
<TABLE>
<CAPTION>
---------------- ---------- -------- ---------- ----------- ---------- ------------- ---------- ---------- ------------
                 Pool Size  Length   Savings    Humidity    Heating    Heat$avr      Monthly    Payback    Yearly  Net
                            of Test  Measure    Drop        System     Cost     per  Savings    Ratio      Savings
                                                                       Month
---------------- ---------- -------- ---------- ----------- ---------- ------------- ---------- ---------- ------------
<S>              <C>        <C>      <C>       <C>          <C>       <C>           <C>        <C>        <C>
Resthaven        Indoor     2        40%       30%          Elect.     $38.          $235.      6:2:1      $2364.
Condominium Pool 50'x 20'   Months
Sidney, B.C.
---------------- ---------- -------- --------- ------------ ---------- ------------- ---------- ---------- ------------
Red Lion  Hotel  Outdoor    2 Weeks  45%       0%           Natural    $38.          $230.      6:1:1      $2304.
#1 Seattle, Wa   50'x25'                                    Gas
---------------- ---------- -------- --------- ------------ ---------- ------------- ---------- ---------- ------------
Red Lion  Hotel  Outdoor    2 Weeks  45%       0%           Natural    $38.          $295.      7:8:1      $3084.
#2 Seattle, Wa   50'x25'                                    Gas
---------------- ---------- -------- --------- ------------ ---------- ------------- ---------- ---------- ------------
YWCA Pool,       Indoor     2 mths   16.5%     0%           Oil        $90.          $275.      3:1:1      $2220.
Vancouver, B.C.  84'x42'
---------------- ---------- -------- --------- ------------ ---------- ------------- ---------- ---------- ------------
Kitsilano        Outdoor    2 mths   24%       0%           Natural    $1420.        $2700.     1:9:1      $15,360.
Municipal Pool   480'x70'                                   Gas
Vancouver, B.C.
---------------- ---------- -------- --------- ------------ ---------- ------------- ---------- ---------- ------------
Vancouver        Indoor     2 mths   15.5%     0%           Natural    $340.         $620.      1:8:1      $3,360.
Aquatic Center   165'x80                                    Gas



                                       6
<PAGE>
Vancouver, B.C.
---------------- ---------- -------- --------- ------------ ---------- ------------- ---------- ---------- ------------
Hotel Vancouver  Indoor     2 mths   12.5%     0%           Steam      $28.          $150.      5:4:1      $1,464.
Vancouver, B.C.
---------------- ---------- -------- --------- ------------ ---------- ------------- ---------- ---------- ------------
Coast  Victoria  In/Out     2 mths   37.5%     0%           Elect.     $32.          $270.      8:4:1      $2,856.
Hotel
Victoria,
B.C.
---------------- ---------- -------- --------- ------------ ---------- ------------- ---------- ---------- ------------
</TABLE>


The company also sells a timer  controlled  injection  pump which  automatically
adds the chemical to the pool as needed.  Each of these systems is  programmable
to fit both the size of the pool and the hours of operation. The reservoir which
holds the HEAT$AVER must be checked and filled once a week instead of daily. The
system is  self-contained  and needs to be plugged  into the main return line of
the pool and then plugged into a 110V AC socket.

There are some disadvantages to using HEAT$AVER and these include the following:

     a. The product  biodegrades  and must be replaced twice per week unless the
        timer  controlled  injection  pump or the  Tropical  Fish  dispenser  is
        utilized;
     b. The  product  reduces  evaporative  heat  loss only and has no effect on
        convective and conductive losses;
     c. The product is flammable when not mixed with water; and,
     d. The product is poisonous,  although not fatal, if ingested straight from
        the bottle or the dispenser.

The product is  manufactured  by the Company with  components  which are readily
available,  and is usually  dispensed by the consumer  utilizing  the  Company's
"Tropical Fish" dispenser.

The Tropical  Fish  dispenser  was designed by the Company and requires  minimal
effort on the part of the consumer  who utilizes it to dispense the product.  It
acts like a  conventional  solar  blanket by forming an  invisible  layer on the
surface of the swimming pool, thus inhibiting water evaporation.  It dispenses a
blue  liquid,  which  creates a one  molecule  thick layer on the surface of the
pool.  One Tropical  Fish covers an area of 400 square feet and is effective for
about one month.

The Tropical Fish is utilized by opening the fin where indicated and placing the
fish  into the pool  where it  submerges  to the  bottom  and,  as the  pressure
increases,  the HEAT$AVER liquid escapes, rises, and forms an invisible layer on
the surface of the water.  The Tropical Fish works  effectively  for thirty days
and then must be replaced.

Target Market:

                                       7
<PAGE>
The Company  currently is selling to clients  associated with hotels;  municipal
swimming pools;  and residential  swimming pools. The Heat$avr and Tropical Fish
products are sold in Canada and the United States by the Company's  distributor,
Sunsolar Energy  Technologies and in Australia by  Hydro-Flexible  Solutins PTY.
The  Company  also  sells  Heat$aver  directly  into the  United  States to both
wholesale and retail accounts.

The Company  estimates that there are approximately  106,000 municipal  swimming
pools in its initial target market, which is Australia,  Canada,  Europe and the
United States.  Based on the assumption that energy costs are a large portion of
the total  operating  costs for municipal  pools and that the operators of these
facilities want to lower these costs, the Company anticipates that the operators
may turn to the use of chemicals,  such as HEAT$AVER,  as an  alternative to the
higher cost pool blankets.  The Company realizes,  however, that the product may
not be used by proprietors of every pool in the target market referred to above.

With regard to hotel pools, the Company  estimates that there are  approximately
280,000 hotel pools located in its target market.  Company  management  believes
that each hotel  which  utilizes  the  HEAT$SAVER  product  will be able to save
between  $2,400 and $6,000 per year on its heating costs  throughout the life of
the pool.  Again,  the  Company  realizes  that the  product  may not be used by
proprietors of every pool in this category.

Regarding  the  residential  pool  market,  management  believes  that there are
approximately  8 million  residences  in Canada and the United  States that have
swimming pools.  Management  believes that successful market penetration in this
area will require  developing sound business  relationships with retail swimming
pool stores by creating equitable pricing policies.  Management further believes
that the Company's  HEAT$AVER  product  packaged in the Tropical Fish  dispenser
will appeal to the residential  pool market based on the novelty of the Tropical
Fish  dispenser,  coupled  with the east of use and the low  initial  cost.  The
Company realizes that the product may not be used by proprietors of ever pool in
this category.

The WATER$AVER Product
----------------------

The Company  also  intends to market its core  technology  in the areas of fresh
water  conservation and aquaculture  through another product called  WATER$AVER.
The WATER$AVER product works in the same way as the HEAT$AVER product.



                                       8
<PAGE>
WATER$AVER has a full time contract salesperson using direct mail, telephone and
internet techniques to market the product in North America.  Advertisements have
been  started in national  farm and water  magazines in the United  States.  The
Company  has plans for  personnel  to make  personal  visits  to  introduce  the
product.  Specific  efforts  will also be made to  identify  and  attract  joint
venture partners and distributors for the product.  Hydro-Flexible  Solutions in
Australia is  currently  actively  involved in sales  efforts of  WATER$AVER  in
Australia. These efforts are on-going and will be expanded as financing permits.

WATER$AVER  is a granulated  product  which is delivered to the customer in a 44
pound  weatherproof  bag.  There are various ways to apply this product  ranging
from simple hand  dispersal to fully  automated  scheduled  metering using local
weather data to  determine  timing and dosage  quantities.  Examples of suitable
applications include the following:

     a. Reservoirs
     b. Potable water storages
     c. Aqueducts and canals
     d. Agricultural irrigation canals and ditches
     e. Flood water crops
     f. Stock watering ponds

This product can be used in any  application  where water is either  standing or
running without rapids.

The Company  currently  makes  available  to customers  one piece of  mechanized
dispersal equipment called the Model PDM-320e WATER$AVER  dispensing machine. It
is capable of servicing  reservoirs up to 30 acres in size and 100 miles or less
of irrigation  canals for six to eight days. It is fully  automated and provides
scheduled  powder  metering  using local  weather data to  determine  timing and
dosage quantities. Specifications are:

     a. Hopper capacity: 320 lbs.
     b. Shoreline  swivel  mounted on 12 cubic yard abutment or trailer  mounted
        for mobile deployment
     c. Has windproof dispersal pattern skirting
     d. Full SCADA  compliance  ready  (custom  mounting  tabs,  bracketing  and
        enclosures)
     e. Full NEMA weather proofing of electronics
     f. Data collection  storage and transmission  with the customer's choice of
        variables to be monitored
     g. The data may be collected by laptop computer through RS 232 ports
     h. Land line, cellular,  radio and satellite  transmission of real time and
        stored data



                                       9
<PAGE>
     i. Armored  protection of electronics and backup  equipment by casting into
        abutment
     j. Hydro grid powered with a battery backup
     k. Battery powered with solar running and recharging capability
     l. Antipersonnel-protective fencing-sabotage suppression razor wire

The Company also has available a basic dispersal  machine which is available for
lower  tech  situations  and the  Company  will  build  custom  models  to suite
individual client's requirements.

Competition

The Company does not believe that there are any other  companies  developing  or
producing similar swimming pool chemicals.  This belief stems from the fact that
management has been directly involved in the pool and spa industry for ten years
and has kept  abreast  of the  literature  in the  field.  A source has not been
discovered that offers or advertises a competing product for either HEAT$AVER or
the Tropical Fish product or the Water$aver product.  However,  in general,  and
with regard to the swimming pool supply  industry,  it is  anticipated  that the
Company  will be competing  with a wide variety of national,  regional and local
companies,  many of which have established  public images and greater  financial
strength and personnel  resources than the Company.  Further,  it is likely that
the Company will also be competing with entities,  which have  established  good
will and market acceptance.

Government Regulation and Legal Uncertainties

The  Company  anticipates  that it  will  be  subject  to  various  governmental
regulations  with regard to the chemicals used in HEAT$AVER,  WATER$AVER and the
Tropical Fish. In Australia, the Company's operations are subject to health acts
as enacted by the  Commonwealth  and/or  various  states  within  Australia.  In
Canada,  the Company's  operations are subject to health  regulations within the
various  provinces in Canada.  Further,  in French  speaking  provinces  such as
Quebec, the Company is required to comply with "French only" regulations such as
the actual wording on its products (no English  allowed).  In the United States,
the  Company's  operations  are subject to the  regulations  enacted by the U.S.
Department of Health and possibly the regulations  enacted by the  Environmental
Protection  Agency.  Further,  the Company  anticipates that all ingredients may
have to be approved by the Food and Drug  Administration  for direct,  undiluted
skin contact.




                                       10
<PAGE>
Risk Factors

The Company is almost exclusively  dependent on the efforts of its sole officer,
--------------------------------------------------------------------------------
Daniel O'Brien and has no depth of management.
----------------------------------------------

The Company's success is dependent,  to a large degree,  upon the efforts of its
sole  executive  officer,  Daniel  O'Brien.  The loss or  unavailability  of Mr.
O'Brien  could have an adverse  effect on the  Company.  At the present time the
Company does not maintain key man life insurance  policies for this  individual.
Also,  the continued  success and viability of the Company is dependent upon its
ability to attract and retain qualified  personnel in all areas of its business,
especially management  positions.  In the event the Company is unable to attract
and retain qualified  personnel,  its business may be adversely affected.  There
are currently no employment agreements in place.


The Company  currently  Has  One  Significant  Customer the Decrease of Sales To
--------------------------------------------------------------------------------
Which Could  Seriously  Hamper Sales Growth
-------------------------------------------

During Fiscal 1999 and Fiscal 2000, the Company had one major customer, Sunsolar
Energy  Technologies  which  comprised  86% and 70% of total sales for the years
ended December 31, 2000 and 1999 respectively.


There can be no guarantee that the Company will  experience  significant  growth
--------------------------------------------------------------------------------
because it has been in  operation  since 1991 and to date has  achieved  minimal
--------------------------------------------------------------------------------
results:
--------

The Company has nine years of operating  history with minimal results upon which
to base an  evaluation  of its business  and  prospects.  Operating  results for
future  periods  are  subject to  numerous  uncertainties.  These  uncertainties
include such critical factors as historically minimal profits and uncertainty as
to actual  demand for its products.  There can be no assurance  that the Company
will  achieve or sustain  profitability  on an annual or  quarterly  basis.  The
Company's  prospects  must be  considered in light of the risks  encountered  by
companies in the early stage of development,  particularly  companies in new and
rapidly  evolving  markets.  Future  operating  results  will  depend  upon many
factors,  including the demand for the Company's  swimming  pool  products,  the
level of product and price competition,  the Company's success in attracting and
retaining  motivated  and qualified  personnel,  and in  particular,  the use of
chemicals  to  retain  heat  in  swimming  pools  instead  of  the  historically
successful use of thermal blankets.

                                       11
<PAGE>
There is no assurance  that the Company will be able to grow  internally  to the
--------------------------------------------------------------------------------
level that would be necessary to support a higher level of sales:
-----------------------------------------------------------------

Should the Company be successful in the sales and marketing efforts of its water
additive products it will experience  significant growth in operations.  If this
occurs,  management  anticipates that additional  expansion in the areas of both
personnel and plant and equipment will be required in order to continue  product
development and product  marketing.  It is possible that the Company will not be
able to finance  this  potential  additional  expansion.  Any  expansion  of the
Company's   business  would  place  further   demands  on  its  sole  executive,
operational capacity and financial resources.  It is possible that the Company's
sole executive will not be able to assume any additional responsibility and that
the current operational  capacity of the Company will not be able to accommodate
additional business. The Company realizes that it will need to recruit qualified
personnel  in  all  areas  of  its  operations,   including  management,  sales,
marketing,  and  product  delivery  when and if growth  occurs.  There can be no
assurance  that the  Company  will be  effective  in  attracting  and  retaining
additional qualified personnel,  expanding its operational capacity or otherwise
managing  growth.  In  addition,  there can be no assurance  that the  Company's
current  systems,  procedures  or  controls  will be  adequate  to  support  any
expansion of it's  operations.  The failure to manage growth  effectively  could
result in the failure of the Company.

The Company  could  experience  delays in the  delivery  of its  products in the
--------------------------------------------------------------------------------
future and this delay could result in a loss of customers.
----------------------------------------------------------

The  Company,  in the  first  quarter  of Fiscal  1999,  ended  March 31,  1999,
experienced  a cost  over-run  of  $40,000.  This  resulted  in a backlog in the
delivery  schedule  which  was not  overcome  until May  1999.  Delays  and cost
overruns  such  as this  could  affect  the  Company's  ability  to  respond  to
technological changes, evolving industry standards,  competitive developments or
customer requirements thus causing a loss of customers.

The Company markets its products on an international level and, consequently, is
--------------------------------------------------------------------------------
exposed to all of the risks of doing business on a worldwide basis.
-------------------------------------------------------------------

The Company  markets and sells its products in the United States,  Australia and
Canada.  As such,  it is subject to the normal risks of doing  business  abroad.
These risks include,  but are not limited to,  unexpected  changes in regulatory
requirements,  export


                                       12
<PAGE>

and import  restrictions,  tariffs and trade barriers,  difficulties in staffing
and managing foreign operations,  longer payment cycles,  problems in collecting
accounts   receivable,   potential  adverse  tax  consequences,   exchange  rate
fluctuations,   increased  risks  of  piracy,  discontinuity  of  the  Company's
infrastructures,  limitations  on fund  transfers  and other legal and political
risks. Such limitations and  interruptions  could have a material adverse effect
on the  Company's  business.  The Company does not  currently  hedge its foreign
currency exposures.

The Company does not pay a cash dividend to shareholders  and  shareholders  and
--------------------------------------------------------------------------------
future  shareholders  cannot be assured  that the Company will pay a dividend in
--------------------------------------------------------------------------------
the future.
-----------

The Company does not presently  intend to pay cash dividends in the  foreseeable
future,  as any earnings are expected to be retained for use in  developing  and
expanding its  business.  Further,  the actual  amount of any  potential  future
dividends received from the Company will remain subject to the discretion of the
Company's Board of Directors.


The Company  has a limited  cash  position  and there is no  assurance  that the
--------------------------------------------------------------------------------
Company will be able to meet its future capital requirements:
-------------------------------------------------------------

The Company  currently has limited sources of operating cash flow to fund future
projects or corporate overhead. The Company has limited financial resources, and
there is no assurance that additional  funding will be available.  The Company's
ability to  continue  to operate  will be  dependent  upon its  ability to raise
significant additional funds in the future and.


Dilution could occur to existing and future shareholders  because the Company is
--------------------------------------------------------------------------------
authorized to issue up to 1,000,000 shares of preferred stock.
--------------------------------------------------------------

The Company is  authorized to issue up to 1,000,000  shares of preferred  stock,
$0.01 par value per share.  As of the date of this  Registration  Statement,  no
shares of preferred  stock have been issued.  The Company's  preferred stock may
bear  such  rights  and   preferences,   including   dividend  and   liquidation
preferences,  as the board of Directors may fix and determine from time to time.
Any such  preferences  may operate to the detriment of the rights of the holders
of the Common Stock and would cause dilution to these shareholders.

                                       13
<PAGE>
The securities of the Company are in the "penny stock"  classification and there
--------------------------------------------------------------------------------
are risks including, but not limited to, lack of liquidity in the market for the
--------------------------------------------------------------------------------
Company's stock to the shareholders as a result of this classification.
-----------------------------------------------------------------------

The  Company's  stock is  subject  to "penny  stock"  rules as  defined  in 1934
Securities  and Exchange Act rule 3151-1.  The Commission has adopted rules that
regulate  broker-dealer  practices  in  connection  with  transactions  in penny
stocks.  The  Company's  common  shares are subject to these penny stock  rules.
Transaction costs associated with purchases and sales of penny stocks are likely
to be higher than those for other securities.  Penny stocks generally are equity
securities  with a  price  of  less  than  U.S.  $5.00  (other  than  securities
registered  on certain  national  securities  exchanges  or quoted on the NASDAQ
system,  provided  that  current  price and volume  information  with respect to
transactions in such securities is provided by the exchange or system).

The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not  otherwise  exempt  from the  rules,  to deliver a  standardized  risk
disclosure document that provides  information about penny stocks and the nature
and  level of risks in the  penny  stock  market.  The  broker-dealer  also must
provide the customer with current bid and offer  quotations for the penny stock,
the  compensation of the  broker-dealer  and its salesperson in the transaction,
and monthly account statements showing the market value of each penny stock held
in the customer's account.  The bid and offer quotations,  and the broker-dealer
and salesperson compensation  information,  must be given to the customer orally
or in  writing  prior  to  effecting  the  transaction  and must be given to the
customer in writing before or with the customer's confirmation.

In  addition,  the penny stock rules  require that prior to a  transaction  in a
penny stock not otherwise exempt from such rules, the broker-dealer  must make a
special written  determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's  written agreement to the transaction.
These  disclosure  requirements  may have the  effect of  reducing  the level of
trading  activity in the  secondary  market for the common  shares in the United
States and shareholders may find it more difficult to sell their shares.


Significant Customers and/or Suppliers
--------------------------------------

The Company has no significant customers and/or suppliers.

Employees
---------

                                       14
<PAGE>
As of 12/31/00,  the Company has eight  employees,  including  its sole officer,
Daniel  B.  O'Brien.  The  Company  employs  four  full-time  and two  part-time
employees  at its  factory.  In  addition,  the  Company  employees  a full-time
saleswoman,  who works out of her home in San Diego,  California,  for a monthly
retainer of Cdn$1,000 plus 10% of her net sales of bulk HEAT$AVER.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
------------------------------------------------------------------

SELECTED FINANCIAL DATA
-----------------------

The selected  financial data in Table No. 1 for Fiscal 2000,  ended December 31,
2000,  and Fiscal 1999,  ended December 31, 1999, was derived from the financial
statements  of the Company  which were audited by Smythe  Ratcliffe  independent
Chartered Accountants,  as indicated in their report which is included elsewhere
in this Annual Report.


The selected  financial  data was  extracted  from the more  detailed  financial
statements and related notes  included  herein and should be read in conjunction
with such financial  statements  and with the  information  appearing  under the
heading,  "Management's  Discussion  and  Analysis of  Financial  Condition  and
Results of Operations".

                                   Table No. 1
                             Selected Financial Data
                        ($ in 000, except per share data)


                                   Year Ended      Year Ended      Year Ended
                                   ----------      ----------      ----------

                                     12/31/00        12/31/99       12/31/98


Revenue                                $1,030            $759            $84
Net Income (Loss)                        $139            $103           ($18)
Earnings (Loss) per Share               $0.02           $0.01         ($0.01)
Dividends per Share                         0               0              0


Wtg. Avg. Shares                    9,131,316       9,131,316      4,102,469


Working Capital                          $333            $206           $139
Long - Term Debt                           $0              $0             $3
Shareholders' Equity                     $386            $256           $146
Total Assets                             $489            $359           $174




MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATION
--------------------

The  Company  was  incorporated  in the state of Nevada on May 12,  1998 and the
Company's wholly owned subsidiary,  Flexible Solutions Ltd., was incorporated on
January 25, 1991 in Victoria, British Columbia Canada.

                                       15
<PAGE>
On June 30, 1998 the Company  completed the acquisition of 100% of the shares of
Flexible  Solutions Ltd. The  acquisition  was effected  through the issuance of
7,000,000 shares of common stock by the Company with the former  shareholders of
the subsidiary  receiving 100% of the total shares then issued and  outstanding.
The transaction has been accounted for as a reverse take-over.

Since completing the process of acquiring Flexible Solutions Ltd., the Company's
operating  activities  have related  primarily to  marketing  its swimming  pool
chemicals  called   "HEAT$AVER",   the  "Tropical  Fish"  and  its  fresh  water
evaporation control chemical called "WATER$AVER".

Cash Balances
-------------

The Company  maintains  its major cash  balances at one  financial  institution,
Toronto  Dominion  Bank,  located in  Victoria,  British  Columbia  CANADA.  The
balances  are insured up to $40,200 or $60,000  (Cdn$) per account by the Canada
Deposit  Insurance  Corporation.  At December 31, 2000,  there were no uninsured
cash balances.


Liquidity and Capital Resources
-------------------------------


Fiscal 2000 and Fiscal 1999, Ended December 31st
------------------------------------------------

Cash provided by Fiscal 2000 Operating  Activities totaled $$158,126,  including
the  $138,971  net  income;   the  primary   adjusting  items  were  $13,489  in
depreciation,  ($31,544) in accounts receivable,  $43,047 in inventory, ($5,631)
in  prepaid  expenses,  ($14,589)  in  accounts  payable,  ($6,929)  in  accrued
liabilities, and $21,312 in income tax payable.


Cash used in 1999 Operating Activities totaled ($49,152), including the $102,848
net income; the primary adjusting items were $12,764 in depreciation, ($111,308)
in accounts  receivable,  ($131,225) in inventory,  ($520) in prepaid  expenses,
$5,444 in accounts payable, $3,559 in accrued liabilities, and $69,286 in income
tax  payable.  Cash flows from  financing  activities  included a repayment to a
shareholder of ($3,261).


At the end of  Fiscal  2000,  the  Company  had cash of  $192,280  and  accounts
receivable of $144,383.  Operating  expenses currently are averaging $24,155 per
month  and  sales are  averaging  $85,804  per  month.  The cost of these  sales
averages  $42,494  per  month.  At the  current  volume of  business  management
believes that it can sustain operations indefinitely without the addition of any
additional capital.  Additional capital will be necessary,  however,  should the
Company  decide to expand  operations.  If the


                                       16
<PAGE>
Company cannot raise additional capital, expansion will not be possible.

Management  currently  has plans to raise  additional  capital  during  the next
twelve  months  as  described   previously  in  Item  1,  Historical   Corporate
Development.


Results of Operations
---------------------


Fiscal 2000 and Fiscal 1999, Ended December 31st
------------------------------------------------

Operating  expenses for the fiscal year ended December 31, 2000 totaled $289,860
and the  Company  experienced  a net  profit of  $138,971  against  revenues  of
$1,029,649.  The major  expenses  during  this  period  were  wages of  $87,907,
professional fees of $38,701, office expenses of $9,028,  subcontracting fees of
$33,312,   shipping  of  $12,189,   travel  of  $10,454,   rent,  telephone  and
depreciation of $28,547, and administrative salaries and benefits of $37,234.

Operating  expenses for the fiscal year ended December 31, 1999 totaled $175,213
and the  Company  experienced  a net  profit of  $102,848  against  revenues  of
$769,218.  The  major  expenses  during  this  period  were  wages  of  $63,947,
commissions  of  $$20,957,  professional  fees of  $16,465,  office  expenses of
$9,028,  subcontracting fees of $12,801, stock promotion and transfer agent fees
of  $$8,048,  shipping  of $7,179,  travel of $6,607,  and rent,  telephone  and
depreciation of $19,565.

In Fiscal 2000 total revenue rose because of increased  sales  penetration  into
the U.S. market. During Fiscal 2000, cost of sales decreased from 54% to 49% and
operating  expenses as a percentage of sales  increase  slightly from 23% during
Fiscal 1999 to 28% during Fiscal 2000.
















                                       17
<PAGE>
In Fiscal 1999 income rose because sales of the Tropical Fish product  increased
from less that 50,000 units to in excess of 400,000 units.  HEAT$AVER sales also
grew,  but only by a small amount.  The tropical fish increase in sales occurred
primarily  because Fiscal 1999 was the Company's  first full season of sales for
that  product  and the  beginning  of sales into the United  States  through the
Company's distributor.  Net income rose for the same reasons plus the following:
product  development  on the Tropical  Fish product was  successfully  completed
thereby reducing expenses in that area. Production processes also improved as is
evidenced by the fact that in Fiscal  1998,  37 Tropical  Fish were  produced by
each  employee  per hour and during  Fiscal 1999 that number grew to 75 Tropical
Fish per employee per hour.

The Tropical Fish product is priced at $1.68, or $2.50(Cdn$) in Canada and $2.00
in the United  States.  The Company  currently  offers no rebates,  discounts or
promotional prices for the Tropical Fish product.

Income Taxes
------------

All tax returns due for the Company have been filed.

Inflation
---------

The  Company's  results of  operations  have not been  affected by inflation and
management does not expect inflation to have a material impact on its operations
in the future.

Subsequent Event
----------------

On January 15, 2001, 100,000 share purchase options were exercised.  As a result
of this  transaction,  the Company  received an additional  $25,000 in cash. The
issued stock is restricted, subject to Rule 144.

ITEM 3. DESCRIPTION OF PROPERTY
-------------------------------

The Company utilizes the residence of its sole officer and director,  Mr. Daniel
O'Brien, for offices. No monthly fee is paid to Mr. O'Brien for rent.

The Company also maintains an administrative  facility at 4002 Dawnview Crescent
in Victoria,  British Columbia.  This facility consists of 2000 square feet. The
Company has a one year lease,  expiring on December 31, 2001, the terms of which
call for a monthly payment of $900.00

The Company also rents a 1,000 square foot factory  facility from Rolex Plastics
Ltd.  of  Victoria,  British  Columbia.  The  factory


                                       18
<PAGE>
is located at 1746 Island  Highway,  Victoria,  British  Columbia  V9B 1H8.  The
monthly  rent for the  factory is $690.  The  Company  rents the  facility  on a
month-to-month basis and has not executed a formal lease agreement.

The Company also maintains a warehouse facility in Quebec. It is located at 2701
Sabourin  Street,  and is in St. Laurent,  Quebec.  The building  belongs to the
Company's  distributor  and is provided by the distributor for no charge because
it saves him $0.05 in shipping on each "Fish" product.





































                                       19
<PAGE>
ITEM 4.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
------------------------------------------------------------
         MANAGEMENT
         ----------

The Registrant is a publicly-owned corporation, the shares of which are owned by
United States and Canadian residents.  The Registrant is not controlled directly
or indirectly by another corporation or any foreign government.

Table No. 2 lists as of December 31, 2000 all  persons/companies  the Registrant
is aware of as being the beneficial  owner of more than five percent (5%) of the
common stock of the Registrant.

                                   Table No. 2
                            Five Percent Shareholders

Title                              Amount and Nature Percent
  of                               of Beneficial     of
Class   Name of Beneficial Owner   Ownership         Class #

Common  Daniel B. O'Brien  (1)     4,650,000          50.0%
Common  Robert N. O'Brien  (2)     1,750,000          18.3%
Common  Beat Aschmann                700,000           7.7%
Common  Sundstrand Ltd.              580,000           6.4%
  TOTAL                            7,680,000          82.4%(3)

# Based on 9,131,316  shares  outstanding as of December 31, 2000 and options to
purchase shares of common stock.

1.  4,550,000 of these shares are  restricted  pursuant to Rule 144.  100,000 of
    these shares represent  currently  exercisable share purchase options with a
    strike  price of $0.25.  Mr.  O'Brien's  address is 2624  Queenswood  Drive,
    Victoria, British Columbia CANADA V8N 1X5.
2.  1,750,000 of these shares are restricted pursuant to Rule 144. Dr. O'Brien's
    address is 2624 Queenswood Drive, Victoria, British Columbia CANADA V8N 1X5.
3.  Does not reflect  share  purchase  options for 60,000 shares of common stock
    issued as follows:  20,000  shares with a strike price of $0.25 issued to an
    employee;  20,000  shares  with a strike  price of $0.25  issued to  another
    employee;  and, 20,000 shares with a strike price of $0.25 issued to another
    employee.

Table No. 3 lists as of December 31, 2000 all Directors  and Executive  Officers
who beneficially own the  Registrant's  voting  securities and the amount of the
Registrant's  voting securities owned by the Directors and Executive Officers as
a group.





                                       20
<PAGE>
                                   Table No. 3
                Shareholdings of Directors and Executive Officers


Title                                 Amount and Nature Percent
  of                                      of Beneficial      of
Class   Name of Beneficial Owner              Ownership Class #

Common  Daniel B. O'Brien  Pres. & Director (1)          4,650,000    50.0%
Common  Robert N. O'Brien  Director   (2)                1,750,000    18.3%
Common  John H. Bientjes   Director   (3)                   80,000     1.0%
Total                                                    6,480,000    69.3%

# Based on 9,131,316  shares  outstanding as of December 31, 2000 and options to
purchase shares of common stock.

1.  4,550,000 of these shares are  restricted  pursuant to Rule 144.  100,000 of
    these shares represent  currently  exercisable share purchase options with a
    strike  price of $0.25.  Mr.  O'Brien's  address is 2624  Queenswood  Drive,
    Victoria, British Columbia CANADA V8N 1X5.
2.  1,750,000 of these shares are restricted pursuant to Rule 144.
3.  Does not reflect  share  purchase  options for 60,000 shares of common stock
    issued as follows:  20,000  shares with a strike price of $0.25 issued to an
    employee;  20,000  shares  with a strike  price of $0.25  issued to  another
    employee;  and, 20,000 shares with a strike price of $0.25 issued to another
    employee.

ITEM 5.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
---------------------------------------------------------------------

Table No. 4 lists as of  December  31,  2000 the names of the  Directors  of the
Company.  The Directors have served in their  respective  capacities since their
election and/or  appointment and will serve until the next Annual  Shareholders'
Meeting or until a successor  is duly  elected,  unless the office is vacated in
accordance with the Articles/By-Laws of the Company. All Directors are residents
and citizens of Canada.

                                   Table No. 4
                                    Directors

                                                 Date First
                                                    Elected
Name                              Age          or Appointed

Daniel B. O'Brien                  43           May 12, 1998
Dr. Robert N. O'Brien              78      February 19, 2000
John H. Bientjes                   47      February 19, 2000

                                       21
<PAGE>
Table No. 5 lists, as of December 31, 2000, the names of the Executive  Officers
of the Company.  The  Executive  Officers  serve at the pleasure of the Board of
Directors. All Executive Officers are residents/citizens of Canada.


                                   Table No. 5
                               Executive Officers

Name                Position    Date of Board Approval
------------------  ----------  ----------------------

Daniel B. O'Brien   President        May 12, 1998


Business Experience
-------------------

Daniel B. O'Brien:  Mr.  O'Brien is President and a Director of the Company.  He
has been  employed  by the  Company  since May 12,  1998.  His  responsibilities
include coordinating strategy,  planning,  and product development.  Mr. O'Brien
devotes 100% of his time to the affairs of the Company.  He has been involved in
the swimming pool industry since 1991 at which time he founded a private company
called  Flexible  Solutions Ltd.  which was purchased by the Company,  through a
share exchange, in August 1998. Prior to his involvement with Flexible Solutions
Ltd., Mr.  O'Brien was a teacher at Brentwood  College where he was in charge of
Outdoor Education.

Dr.  Robert  N.  O'Brien:  Dr.  O'Brien  is a member of the  Company's  Board of
Directors.  He was elected to this  position on February 19, 2000.  Dr.  O'Brien
received  his  Bachelor  of Applied  Science in  Chemical  Engineering  from the
University  of British  Columbia  in 1951;  his  Masters  of Applied  Science in
Metallurgical  Engineering  from the University of British Columbia in 1952; his
Ph.D. in Metallurgy  from the University of Manchester in 1955;  and, was a Post
Doctoral  Fellow in Pure Chemistry at the University of Ottawa from 1955 through
1957. He has held various  academic  positions  since 1957 at the  University of
Alberta,  the  University  of  California  at  Berkley,  and the  University  of
Victoria.  Most  recently,  he was a Professor of Chemistry at the University of
Victoria  from 1968  until 1986 at which  time he was given the  designation  of
Professor  Emeritus at the University of Victoria.  While teaching,  Dr. O'Brien
acted as a consultant and served on the British Columbia  Research  Council.  In
1987, Dr. O'Brien founded the Vancouver Island Advanced  Technology and Research
Association.

John H. Bientjes:  Mr. Bientjes is a member of the Company's Board of Directors.
He was elected to this  position on February 19,  2000.  Mr.  Bientjes  attended
Simon Fraser  University  in Vancouver,  British  Columbia and graduated in 1976
with a Bachelor of Arts


                                       22
<PAGE>
Degree in Economics  and  Commerce.  For the past fifteen  years he has been the
manager of the Commercial  Aquatic Supplies Division of D.B. Perks & Associates,
Ltd.,  located in Vancouver,  British Columbia,  a company that markets supplies
and equipment to commercial  pools which are primarily owned by  municipalities.
His primary  responsibilities at D.B. Perks & Associates,  Ltd. are in the areas
of purchasing, sales and customer service.

There have been no events  during the last five  years that are  material  to an
evaluation  of the ability or integrity  of any  director,  person  nominated to
become a director, executive officer, promoter or control person including:

a) any bankruptcy petition filed by or against any business of which such person
was a general partner or executive  officer either at the time of the bankruptcy
or within two years prior to that time;

b) any  conviction  in a  criminal  proceeding  or being  subject  to a  pending
criminal proceeding (excluding traffic violations and other minor offenses);

c) being subject to any order,  judgment, or decree, not subsequently  reversed,
suspended  or  vacated,  of any  court of  competent  jurisdiction,  permanently
enjoining,  barring, suspending or otherwise limiting his/her involvement in any
type of business, securities or banking activities;

d) being found by a court of competent  jurisdiction  (in a civil  action),  the
Commission  or the  Commodity  Futures  Trading  Commission  to have  violated a
federal or state  securities or  commodities  law, and the judgment has not been
reversed, suspended, or vacated.

Family Relationships
--------------------

Dan O'Brien, the President of the Company is the son of Dr. Robert N. O'Brien, a
Director of the Company.  Other than that there are no relationships between any
of the officers or directors of the Company.

Other Relationships/Arrangements
--------------------------------

There are no arrangements or understandings between any two or more Directors or
Executive  Officers,  pursuant  to which  he/she was  selected  as a Director or
Executive Officer.  There are no material arrangements or understandings between
any two or more Directors or Executive Officers.

                                       23
<PAGE>
ITEM 6.  EXECUTIVE COMPENSATION
-------------------------------

The Company has no formal plan for  compensating its Directors for their service
in their  capacity as  Directors.  Directors are entitled to  reimbursement  for
reasonable travel and other  out-of-pocket  expenses incurred in connection with
attendance  at meetings of the Board of  Directors.  The Board of Directors  may
award special  remuneration to any Director  undertaking any special services on
behalf of the Company  other than  services  ordinarily  required of a Director.
During Fiscal 1999, no Director received and/or accrued any compensation for his
services  as  a  Director,  including  committee  participation  and/or  special
assignments.

Mr. O'Brien  receives a salary of $20,100 and is also  reimbursed for reasonable
expenses  incurred in the management of the Company's  wholly owned  subsidiary,
Flexible Solutions Ltd.

The  Company  has no  formal  stock  option  plan  which  has been  approved  by
regulatory  authorities or other long-term  compensation program other than that
described in the preceding paragraph.

During Fiscal 2000, no funds were set aside or accrued by the Company to provide
pension, retirement or similar benefits for Directors or Executive Officers.

The Company has no plans or arrangements in respect of remuneration  received or
that may be  received  by  Executive  Officers  of the Company in Fiscal 2001 to
compensate  such officers in the event of termination of employment (as a result
of resignation,  retirement,  change of control) or a change of responsibilities
following  a change of  control,  where the value of such  compensation  exceeds
$60,000 per Executive Officer.

ITEM 7.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------------------------------------------------------

The Company was  incorporated  for the purpose of acquiring  Flexible  Solutions
Ltd. The value of Flexible Solutions Ltd. and the determination of the number of
shares  to be  issued  to its  owners  were not made  independently  or based on
appraisals.  Accordingly,  the  transactions  between the  Company and  Flexible
Solutions Ltd. cannot be deemed to be an arm's length transaction.  By the terms
of the Agreement and Plan of Share Exchange, the Company issued 7,000,000 shares
of its  common  stock to  Flexible  Solutions  Ltd.,  a company  owned by Daniel
O'Brien,  the president of the Company; Dr. Robert N. O'Brien, a Director of the
Company; and, Beat Aschmann.

                                       24
<PAGE>
Other than described above,  there have been no transactions  since May 12, 1998
(Date of Inception), or proposed transactions, which have materially affected or
will materially affect the Company in which any Director,  Executive Officer, or
beneficial  holder of more than 10% of the  outstanding  common stock, or any of
their respective  relatives,  spouses,  associates or affiliates has had or will
have any direct or material indirect interest.


ITEM 8.  DESCRIPTION OF SECURITIES
----------------------------------

The authorized  capital of the  Registrant is 50,000,000  shares of common stock
with a par value of $0.001 per share and  1,000,000  shares of  preferred  stock
with a par value of $0.01 per  share.  9,131,316  shares of common  stock and no
shares of preferred  stock were issued and outstanding at December 31, 2000, the
end of the most recent fiscal year.

Common Stock:

All shares of the Company's Common Stock have equal voting rights, with one vote
per share, on all matters submitted to the stockholders for their consideration.
The shares of Common Stock do not have cumulative voting rights.

Subject to the prior  rights of the  holders of any  series of  preferred  stock
which may be issued,  holders of Common Stock are entitled to receive dividends,
when and if  declared  by the Board of  Directors,  out of funds of the  Company
legally available therefor.

Holders  of shares of Common  Stock do not have any  preemptive  rights or other
rights to subscribe for  additional  shares,  or any conversion  rights.  Upon a
liquidation,  dissolution,  or winding up of the affairs of the Company, holders
of the Common  Stock will be entitled to share  ratably in the assets  available
for distribution to such  stockholders  after the payment of all liabilities and
after the liquidation preference of any preferred stock outstanding at the time.

There are no sinking fund provisions applicable to the Common Stock.

Preferred Stock:

The Articles of  Incorporation  authorize  the Board of  Directors to issue,  by
resolution,  1,000,000  shares of  preferred  stock,  in  classes,  having  such
designations, powers, preferences, rights, and limitations and on such terms and
conditions as the Board of Directors may from time to time determine,  including
the  rights,


                                       25
<PAGE>
if  any,  of the  holders  of such  preferred  stock  with  respect  to  voting,
dividends, redemptions, liquidation and conversion.


Debt Securities to be Registered. Not applicable.
--------------------------------
American Depository Receipts.  Not applicable.
----------------------------
Other Securities to be Registered.  Not applicable.
---------------------------------


































                                       26
<PAGE>
                                     PART II

ITEM 1.  MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
----------------------------------------------------------
         COMMON EQUITY AND OTHER SHAREHOLDER MATTERS
         -------------------------------------------


The  Company's  common  stock  trades on the OTC  Bulletin  Board in the  United
States,  having the trading symbol "FXSO" and CUSIP #33938T 10 4. Trading volume
and high/low/closing prices, on a quarterly basis, since the stock began trading
on the OTC Bulletin on June 16, 2000 are shown in Table No. 7.


                                   Table No. 7
                           FXSO Stock Trading Activity


------------------------- ------ ------ ------ ----------

        Quarter           High   Low    Close     Volume

------------------------- ------ ------ ------ ----------
     Ending 6/30/00       $0.27  $0.27  $0.27     58,000

------------------------- ------ ------ ------ ----------
     Ending 9/30/00       $0.94  $0.25  $0.65  1,259,500

------------------------- ------ ------ ------ ----------
    Ending 12/31/00       $0.81  $0.63  $0.69    522,100

------------------------- ------ ------ ------ ----------


The Company's  common stock is issued in registered  form.  American  Securities
Transfer and Trust  (located in Denver,  Colorado) is the registrar and transfer
agent for the common stock.

On December 28, 2000 the  shareholders'  list for the  Company's  common  shares
showed twenty six (26) registered shareholders and 9,131,316 shares outstanding.

The Company has not  declared any  dividends  since  incorporation  and does not
anticipate that it will do so in the foreseeable  future.  The present policy of
the Company is to retain future earnings for use in its operations and expansion
of its business.

ITEM 2.  LEGAL PROCEEDINGS
--------------------------

The Company knows of no material,  active or pending legal  proceedings  against
them; nor is the Company  involved as a plaintiff in any material  proceeding or
pending litigation.

The Company knows of no active or pending  proceedings against anyone that might
materially adversely affect an interest of the Company.









                                       27
<PAGE>
ITEM 3.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
------------------------------------------------------

                                 Not Applicable


ITEM 4.  RECENT SALES OF UNREGISTERED SECURITIES
------------------------------------------------

On August 17, 1998, the Company completed an offering of 1,050,000 shares of its
Common Stock at $0.01 per share, raising gross proceeds of $10,500.


On September 7, 1998, the Company completed an offering of 500,000 shares of its
Common Stock at $0.05 per share, raising gross proceeds of $25,000.

On November 13, 1998, the Company  completed an offering of 1,000,000  shares of
its Common Stock at $0.25 per share, raising gross proceeds of $145,329 (581,316
shares sold).

The  shares of common  stock in all of the  foregoing  offerings,  were  offered
pursuant to an exemption to registration provided under Section 3(b), Regulation
D, Rule 504 of the Securities Act of 1933, as amended and under the exemption to
registration under Section 11-51-308(1)(p) of the Colorado Securities Act.

The claim for  exception  under Rule 504 of  Regulation  D was based on the fact
that the Company was not subject to the reporting  requirements of section 13 or
15(d)  of the  Exchange  Act;  was  not an  investment  company;  and  was not a
development  stage company that had no business plan or purpose or had indicated
that its business plan was to engage in a merger or  acquisition.  The terms and
conditions of Reg. 230.501 and Reg. 230.502 (a), (c) and (d) were also satisfied
and the  aggregate  offering  did not  exceed  $1,000,000,  less  the  aggregate
offering price for all securities sold within the twelve months before the start
of and during the offerings.

All  investors in the above  offerings  were  unrelated  persons,  companies and
partnerships;  no officers,  directors,  employees or affiliates participated in
the offerings.

ITEM 5.  INDEMNIFICATION OF DIRECTORS AND OFFICERS
--------------------------------------------------

The Company's By-Laws address indemnification under Article VI, Sections 6.1 and
6.1.

To the fullest  extent  permitted by the laws of the State of Nevada  (currently
set forth in NRS 78.751),  as the same now exists or may hereafter be amended or
supplemented,  the Company


                                       28
<PAGE>
shall  indemnify its directors  and officers,  including  payment of expenses as
they are incurred and in advance of the final  disposition of any action,  suit,
or proceeding. Employees, agents, and other persons may be similarly indemnified
by the Company,  including advancement of expenses, in such case or cases and to
the  extent set forth in a  resolution  or  resolutions  adopted by the Board of
Directors. No amendment of this Section shall have any effect on indemnification
or  advancement  of expenses  relating to any event arising prior to the date of
such amendment.

To the fullest  extent  permitted by the laws of the State of Nevada  (currently
set forth in NRS 78.752),  as the same now exists or may hereafter be amended or
supplemented,  the Company may purchase and  maintain  insurance  and make other
financial  arrangements  on  behalf  of any  person  who  is or was a  director,
officer,  employee, or agent of the Company, or is or was serving at the request
of  the  Company  as  a  director,   officer,  employee,  or  agent  of  another
corporation,  partnership,  joint venture,  trust, or other enterprise,  for any
liability  asserted  against such person and liability  and expense  incurred by
such person in its  capacity  as a director,  officer,  employee,  or agent,  or
arising out of such person's status as such,  whether or not the Corporation has
the authority to indemnify such person against such liability and expenses.


                                    PART F/S

ITEM 1.  FINANCIAL STATEMENTS
-----------------------------

The  financial  statements  and notes  thereto  as  required  under Item #13 are
attached hereto and found  immediately  following the text of this  Registration
Statement.   The  audit  report  of  Smthe  Ratcliffe,   independent   Chartered
Accountants,  for the  audited  financial  statements  for  Fiscal  2000,  ended
December 31, 2000 and notes thereto is included herein immediately preceding the
audited financial statements.


(A-1) Audited Financial Statements: Fiscal 2000
-----------------------------------------------

Auditors' Report, dated February 14, 2001

Consolidated Balance Sheet at 12/31/00 and 12/31/99

Consolidated Statement of Operations for the Year Ended 12/31/00 and 12/31/99

Consolidated  Statement of Stockholders' Equity for the Years Ended 12/31/00 and
12/31/99



                                       29
<PAGE>
Consolidated Statement of Cash Flows for the Years Ended 12/31/00 and 12/31/99

Notes to Consolidated Financial Statements


                                    PART III
ITEM 1.  INDEX TO EXHIBITS:


Exhibit Number                      Description


2                  Incorporated by reference to Form 10-SB and Form 10-Q's

3.1                Incorporated by reference to Form 10-SB and Form 10-Q's

3.2                Incorporated by reference to Form 10-SB and Form 10-Q's

4.1                Incorporated by reference to Form 10-SB and Form 10-Q's

4.3                Incorporated by reference to Form 10-SB and Form 10-Q's

10.1               Incorporated by reference to Form 10-SB and Form 10-Q's

10.2               Incorporated by reference to Form 10-SB and Form 10-Q's

21                 Incorporated by reference to Form 10-SB and Form 10-Q's









                                       30
<PAGE>
FLEXIBLE SOLUTIONS
  INTERNATIONAL INC.

Consolidated Financial Statements
December 31, 2000
(U.S. Dollars)







INDEX                                                       Page

Report of Independent Chartered Accountants to
  the Board of Directors and Stockholders                    1

Financial Statements

Consolidated Balance Sheets                                  2

Consolidated Statements of Operations                        3

Consolidated Statements of Stockholders' Equity              4

Consolidated Statements of Cash Flows                        5

Notes to Consolidated Financial Statements                  6-10



<PAGE>

                   REPORT OF INDEPENDENT CHARTERED ACCOUNTANTS


TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
OF FLEXIBLE SOLUTIONS INTERNATIONAL INC.

We  have  audited  the  consolidated   balance  sheets  of  Flexible   Solutions
International  Inc.  as at  December  31,  2000 and  1999  and the  consolidated
statements of operations, stockholders' equity and cash flows for the years then
ended.  These  financial  statements  are the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform an audit to obtain  reasonable  assurance  about  whether the  financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  these consolidated  financial statements present fairly, in all
material  respects,  the  consolidated  financial  position of the Company as at
December 31, 2000 and 1999 and the results of its  operations and its cash flows
for each of the  years  then  ended in  conformity  with  accounting  principles
generally accepted in the United States of America.









SMYTHE RATCLIFFE

Chartered Accountants

Vancouver, British Columbia
February 14, 2001


<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Balance Sheets
December 31
(U.S. Dollars)

-----------------------------------------------------------------------------------
                                                               2000         1999
-----------------------------------------------------------------------------------
<S>                                                          <C>          <C>
Assets

Current
  Cash                                                       $192,280      $59,441
  Accounts receivable (note 4)                                144,383      112,839
  Inventory                                                    93,513      136,560
  Prepaid expenses                                              6,151          520
                                                             --------     --------
Total Current Assets                                          436,327      309,360

Property and Equipment (note 5)                                53,064       49,782
                                                             --------     --------
Total Assets                                                 $489,391     $359,142
                                                             ========     ========

Liabilities

Current
  Accounts payable                                            $12,422      $27,011
  Accrued liabilities                                               0        6,929
  Income tax payable                                           90,598       69,286
                                                             --------     --------
Total Current Liabilities                                     103,020      103,226

Stockholders' Equity

Capital Stock

Authorized
  50,000,000 Common shares with a par value of $0.001 each
   1,000,000 Preferred shares with a par value of $0.01 each
Issued
   9,131,316 Common shares                                      9,131        9,131
Capital in Excess of Par Value                                163,653      163,653
Other Comprehensive Income (Loss)                             (1,839)        6,677
Retained Earnings                                             215,426       76,455
                                                             --------     --------
                                                              386,371      255,916
                                                             --------     --------

Total Liabilities and Stockholders' Equity                   $489,391     $359,142
                                                             ========     ========
</TABLE>

See notes to consolidated financial statements.

                                       2
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Statements of Operations
Years Ended December 31
(U.S. Dollars)

--------------------------------------------------------------------------------
                                                    2000                1999
--------------------------------------------------------------------------------


Sales                                           $1,029,649            $759,218
Cost of Sales (Exclusive of Depreciation)          509,933             413,849
                                                ----------          ----------
Gross Profit                                       519,716             345,369

Operating Expenses
  Wages                                             87,907              63,467
  Bad debt expense                                  51,282                   0
  Administrative salaries and benefits              37,234               4,524
  Professional fees                                 36,701              16,465
  Subcontracting                                    33,312              12,801
  Shipping                                          12,189               7,179
  Rent                                              11,445               4,442
  Travel                                            10,454               6,607
  Office                                             9,028              11,456
  Telephone                                          3,613               2,359
  Commission                                         1,982              20,957
  Stock promotion and transfer agent fee               568               8,048
  Currency exchange                               (19,344)               4,144
  Depreciation                                      13,489              12,764
                                                ----------          ----------
                                                   289,860             175,213
                                                ----------          ----------
Income Before Income Tax                           229,856             170,156
Income Tax                                          90,885              67,308
                                                ----------          ----------
Net Income                                        $138,971            $102,848
                                                ==========          ==========

Net Income Per Share                                $ 0.02              $ 0.01
                                                ==========          ==========

Weighted Average Number of Shares                9,131,316           9,131,316
                                                ==========          ==========

See notes to consolidated financial statements.

                                        3

<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Statements of Stockholders' Equity
Years Ended December 31, 2000 and 1999
(U.S. Dollars)

---------------------------- --------- --------- ---------- ---------- ------------- ---------------
                                                 Capital in Retained       Other          Total
                                                 Excess of  Earnings   Comprehensive  Stockholders'
                               Shares  Par Value Par Value  Deficit)   Income (Loss)      Equity
---------------------------- --------- --------- ---------- ---------- ------------- ---------------
<S>                          <C>       <C>       <C>        <C>        <C>           <C>
Shares Issued in Exchange
  for 100% of Flexible
  Solutions Ltd.             7,000,000   $7,000         $0   $(8,363)            $0        $(1,363)

Shares Issued for Cash
  (August and October 1998)  2,131,316    2,131    178,698          0             0         180,829
Share Issue Costs                    0        0   (15,045)          0             0        (15,045)
Translation Adjustment               0        0          0          0         (376)           (376)
Net Loss                             0        0          0   (18,030)             0        (18,030)
---------------------------- --------- --------- ---------- ---------- ------------- ---------------

Balance, December 31, 1998   9,131,316    9,131    163,653   (26,393)         (376)         146,015

Translation Adjustment               0        0          0          0         7,053           7,053
Net Income                           0        0          0    102,848             0         102,848
---------------------------- --------- --------- ---------- ---------- ------------- ---------------

Balance, December 31, 1999   9,131,316    9,131    163,653     76,455         6,677         255,916

Translation Adjustment               0        0          0          0       (8,516)         (8,516)

Net Income                           0        0          0    138,971             0         138,971
---------------------------- --------- --------- ---------- ---------- ------------- ---------------


Balance, December 31, 2000   9,131,316   $9,131   $163,653   $215,426      $(1,839)        $386,371
---------------------------- --------- --------- ---------- ---------- ------------- ---------------
</TABLE>




See notes to consolidated financial statements.

                                       4

<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Statements of Cash Flows
Years Ended December 31
(U.S. Dollars)

--------------------------------------------------------------------------------
                                                        2000             1999
--------------------------------------------------------------------------------


Operating Activities
  Net income                                          $138,971         $102,848
  Adjustments to reconcile net income to net cash,
    provided by (used in) operating activities
    Depreciation                                        13,489           12,764
    Changes in Non-Cash Working Capital
    Accounts receivable                               (31,544)        (111,308)
    Inventory                                           43,047        (131,225)
    Prepaid expenses                                   (5,631)            (520)
    Accounts payable                                  (14,589)            5,444
    Accrued liabilities                                (6,929)            3,559
    Income tax payable                                  21,312           69,286
                                                     ---------
Cash Provided by (Used in) Operating Activities        158,126         (49,152)

Investing Activities
  Acquisition of equipment                            (16,771)         (52,409)

Financing Activities
  Repayment to shareholder                                   0          (3,261)

Effect of Exchange Rate Changes on Cash                (8,516)            7,053

Inflow (Outflow) of Cash                               132,839         (97,769)
Cash, Beginning of Year                                 59,441          157,210

Cash, End of Year                                     $192,280          $59,441

See notes to consolidated financial statements.

                                       5
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Notes to Consolidated Financial Statements
Years Ended December 31, 2000 and 1999
(U.S. Dollars)


1.       OPERATIONS AND BASIS OF PRESENTATION

         These financial  statements  include the accounts of Flexible Solutions
         International  Inc. and its wholly owned subsidiary  Flexible Solutions
         Ltd. ("the Company").  All  intercompany  balances and transactions are
         eliminated.  The parent  company was  incorporated  May 12, 1998 in the
         State of Nevada and had no operations  until June 30, 1998 as described
         below.

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

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

         The Company is engaged in the  development  and marketing of a swimming
         pool chemical designed as an energy saving liquid pool blanket.

2.       COMPARATIVE FIGURES

         Certain of the comparative figures are reclassified to conform with the
         current years' presentation.

3.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (a)      Foreign currency

                  The functional currency of the Company is the Canadian dollar.
                  The  translation  of the  Canadian  dollar  to  the  reporting
                  currency  of the U.S.  dollar  is  performed  for  assets  and
                  liabilities  using  exchange  rates in effect  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
                  the determination of income.


                                       6
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Notes to Consolidated Financial Statements
Years Ended December 31, 2000 and 1999
(U.S. Dollars)



3.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         (b)      Use of estimates

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

         (c)      Inventory

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

         (d)      Property and equipment

                  Property and  equipment  are recorded at cost and  depreciated
                  using the declining  balance  method and the following  annual
                  rates:

                              Manufacturing equipment            - 20%
                              Trailer                            - 30%
                              Computer hardware                  - 30%
                              Furniture and fixtures             - 20%
                              Office equipment                   - 20%

         (e)      Revenue recognition

                  Revenue  from  product  sales  is  recognized  at the time the
                  product  is  shipped.  Provisions  are  made at the  time  the
                  related revenue is recognized for estimated  product  returns.
                  Since  the  Company's  inception,  product  returns  have been
                  insignificant; therefore no provision has been established for
                  estimated product returns.

         (f)      Financial instruments

                  The Company's financial  instruments consist of cash, accounts
                  receivable,  accounts payable and accrued  liabilities.  It is
                  management's  opinion  that  the  Company  is not  exposed  to
                  significant  interest,  currency or credit risks  arising from
                  these financial instruments. The fair value of these financial
                  instruments  approximate  their  carrying  values due to their
                  short maturities.

         (g)      Income per share calculation

                  Income per share is  calculated  by dividing net income by the
                  weighted average number of shares outstanding.


                                       7
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Notes to Consolidated Financial Statements
Years Ended December 31, 2000 and 1999
(U.S. Dollars)



4.       ACCOUNTS RECEIVABLE

         As at the  year  ended  December  31,  1999 no  provision  was made for
         uncollectible accounts as management considered all accounts receivable
         as being collectible.

         During the year ended  December  31, 2000 the Company  provided  for an
         allowance and later wrote off an account  aggregating $51,282 which had
         since become  uncollectible.  As at the balance sheet date no provision
         has been made for  uncollectible  accounts as management  considers all
         current accounts receivable as being collectible.

5.       PROPERTY AND EQUIPMENT

                                                        2000
                                                    Accumulated
                                           Cost     Depreciation         Net
                                        --------    ------------    --------


         Manufacturing equipment         $75,757       $26,602       $49,155
         Trailer                           1,510           770           740
         Computer hardware                 1,039           530           509
         Furniture and fixtures            3,087           769         2,318
         Office equipment                    534           192           342
                                        --------      --------      --------
                                         $81,927       $28,863       $53,064
                                        ========      ========      ========

                                                        1999
                                                    Accumulated       Net Book
                                           Cost     Depreciation        Value
                                        --------      --------      --------

         Manufacturing equipment         $61,127       $14,313       $46,814
         Trailer                           1,510           453         1,057
         Computer hardware                 1,039           312           727
         Furniture and fixtures              946           189           757
         Office equipment                    534           107           427
                                        --------      --------      --------
                                         $65,156       $15,374       $49,782
                                        ========      ========      ========






                                       8

<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Notes to Consolidated Financial Statements
Years Ended December 31, 2000 and 1999
(U.S. Dollars)



6.      COMPREHENSIVE INCOME

         ------------------------------------------ --------- ---------
                                                       2000      1999
         ------------------------------------------ --------- ---------

         Net income                                  138,971   102,848
         Other comprehensive income (loss)           (8,516)     7,053
         ------------------------------------------ --------- ---------

         Comprehensive income                       $130,455  $109,901
         ------------------------------------------ --------- ---------

7.      INCOME TAX

        Total income tax expense  differs from the amounts  computed by applying
        the combined Canadian federal and provincial statutory rate of 45.62% to
        income before income taxes as a result of the following

         ------------------------------------------------ ---------- ----------
                                                             2000       1999
         ------------------------------------------------ ---------- ----------

         Expected tax expense (benefit) at statutory rate  $104,860    $77,625
         Increase (decrease) resulting from
           Manufacturing and processing deduction          (16,090)   (11,911)
         Deferred income tax asset arising from
             operating loss carry forward                         0          0
         Other                                                2,115      1,594
         ------------------------------------------------ ---------- ----------

                                                            $90,885    $67,308
         ------------------------------------------------ ---------- ----------

8.      EARNINGS PER SHARE

         -------------------------- ----------- ------------- ------------------
                                     Net Income     Shares        Per Share
                                    (Numerator) (Denominator)      Amount
         -------------------------- ----------- ------------- ------------------

         2000
         Basic earnings per share
         Net income                   $138,971     9,131,316        $ 0.02



         1999
         Basic earnings per share
         Net income                   $102,848     9,131,316        $ 0.01
         -------------------------- ----------- ------------- ------------------

         There were no preferred  shares  issued and  outstanding  for the years
         ended December 31, 2000 and 1999.

         There  were no  dilutive  securities  outstanding  for the years  ended
         December 31, 2000 and 1999.


                                       9
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Notes to Consolidated Financial Statements
Years Ended December 31, 2000 and 1999
(U.S. Dollars)



9.      SEGMENTED AND SIGNIFICANT CUSTOMER INFORMATION

        The Company operates in a single segment,  involving the development and
        marketing  of a swimming  pool  chemical  designed  as an energy  saving
        liquid pool blanket.  In 2000, 3% of the Company's  sales were in United
        States of America,  the remainder were earned in Canada.  In 1999, 28.8%
        of the Company's  sales were in United States of America,  the remainder
        were earned in Canada.

        All the Company's  long-lived assets are located in Canada.  The Company
        had 1 major customer,  Sunsolar Energy  Technologies which comprised 96%
        and 70% of total  sales for the years ended  December  31, 2000 and 1999
        respectively. There were no significant concentrations of credit risk.





























                                       10