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<SEC-DOCUMENT>0001200952-05-000798.txt : 20050921
<SEC-HEADER>0001200952-05-000798.hdr.sgml : 20050921
<ACCEPTANCE-DATETIME>20050921113524
ACCESSION NUMBER:		0001200952-05-000798
CONFORMED SUBMISSION TYPE:	10QSB/A
PUBLIC DOCUMENT COUNT:		9
CONFORMED PERIOD OF REPORT:	20050630
FILED AS OF DATE:		20050921
DATE AS OF CHANGE:		20050921

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			FLEXIBLE SOLUTIONS INTERNATIONAL INC
		CENTRAL INDEX KEY:			0001069394
		STANDARD INDUSTRIAL CLASSIFICATION:	MISCELLANEOUS CHEMICAL PRODUCTS [2890]
		IRS NUMBER:				911922863
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10QSB/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31540
		FILM NUMBER:		051095089

	BUSINESS ADDRESS:	
		STREET 1:		2614 QUEENSWOOD DR
		CITY:			VICTORIA B C V8N 1X5
		STATE:			A1
		BUSINESS PHONE:		2504779969

	MAIL ADDRESS:	
		STREET 1:		2614 QUEENSWOOD DR
		CITY:			VICTORIA BC CANADA
		STATE:			A1
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB/A
<SEQUENCE>1
<FILENAME>fs_qa50630.txt
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10QSB/A
                               AMENDMENT NUMBER 1

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

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

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


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

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

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

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

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


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



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

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS

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

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



<PAGE>

                           INDEX TO FORM 10-QSB/A

                                                                           Page
                                                                           ----
PART I.    FINANCIAL INFORMATION                                              4

ITEM 1.    FINANCIAL STATEMENTS.                                              4

           (a)  CONSOLIDATED BALANCE SHEET AT JUNE 30, 2005.                  4

           (b)  CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS
                ENDED JUNE 30, 2005 AND 2004.                                 5

           (c)  CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
                ENDED JUNE 30, 2005 AND 2004.                                 6

           (d)  CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS
                ENDED JUNE 30, 2005 AND 2004.                                 7

           (e)  NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.         8

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.        17

ITEM 3.    CONTROLS AND PROCEDURES.                                          21

PART II    OTHER INFORMATION                                                 22

ITEM 1.    LEGAL PROCEEDINGS.                                                22

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.      23

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES.                                  23

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.              23

ITEM 5.    OTHER INFORMATION.                                                23

ITEM 6.    EXHIBITS.                                                         24

SIGNATURES                                                                   25


















                                     2
<PAGE>
                                EXPLANATORY NOTE

Flexible Solutions International, Inc. is filing this Amendment No. 1 to the our
Quarterly report on Form 10-QSB for the quarter ended June 30, 2005 to reflect
revised disclosures we have agreed to make in our reports based on comments that
we received from the Securities and Exchange Commission to our registration
statement on Form S-3 (File No. 333-124751), filed on May 10,2005, and to file
certain exhibits inadvertently omitted from the original report.

                           FORWARD-LOOKING STATEMENTS

         This document contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. All statements other
than statements of historical fact are "forward-looking statements" for purposes
of federal and state securities laws, including, but not limited to, any
projections of earnings, revenue or other financial items; any statements of the
plans, strategies and objectives of management for future operations; any
statements concerning proposed new services or developments; any statements
regarding future economic conditions or performance; any statements of belief;
and any statements of assumptions underlying any of the foregoing.

         Forward-looking statements may include the words "may," "could,"
"will," "estimate," "intend," "continue," "believe," "expect" or "anticipate" or
other similar words. These forward-looking statements present our estimates and
assumptions only as of the date of this report. Except for our ongoing
obligation to disclose material information as required by the federal
securities laws, we do not intend, and undertake no obligation, to update any
forward-looking statement.

         Although we believe that the expectations reflected in any of our
forward-looking statements are reasonable, actual results could differ
materially from those projected or assumed in any of our forward-looking
statements. Our future financial condition and results of operations, as well as
any forward-looking statements, are subject to change and inherent risks and
uncertainties. The factors impacting these risks and uncertainties include, but
are not limited to:

         o    increased competitive pressures from existing competitors and new
              entrants;
         o    increases in interest rates or our cost of borrowing or a default
              under any material debt agreements;
         o    deterioration in general or regional economic conditions;
         o    adverse state or federal legislation or regulation that increases
              the costs of compliance, or adverse findings by a regulator with
              respect to existing operations;
         o    loss of customers or sales weakness;
         o    inability to achieve future sales levels or other operating
              results;
         o    the unavailability of funds for capital expenditures; and
         o    operational inefficiencies in distribution or other systems.

         For a detailed description of these and other factors that could cause
actual results to differ materially from those expressed in any forward-looking
statement, please see "Risk Factors" in our Annual Report on Form 10-KSB for the
year ended December 31, 2004.



                                       3
<PAGE>

PART 1.  FINANCIAL INFORMATION

ITEM 1.           FINANCIAL STATEMENTS.

<TABLE>
<CAPTION>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Balance Sheets
June 30, 2005
(U.S. Dollars)
- ---------------------------------------------------------------------------------------------------------
                                                                   June 30                   December 31
                                                                    2005                        2004
                                                                 (Unaudited)
- ---------------------------------------------------------------------------------------------------------

Assets

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

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

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

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

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

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

Commitments and Contingencies (Notes 14 & 15)

See accompanying condensed notes to unaudited interim consolidated financial
statements.

                                       4
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Statements of Operations
For Six Months Ended June 30, 2005 and 2004
(U.S. Dollars)

- --------------------------------------------------------------------------------
                                                     Six Months Ended June 30
- --------------------------------------------------------------------------------
                                                    2005                2004
                                                (Unaudited)         (Unaudited)
- --------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

                                       5
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Statements of Operations
For Three Months Ended June 30, 2005 and 2004
(U.S. Dollars)

- --------------------------------------------------------------------------------
                                                   Three Months Ended June 30
- -------------------------------------------------------------------------------
                                                     2005              2004
                                                 (Unaudited)       (Unaudited)
- -------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

See accompanying condensed notes to unaudited interim consolidated financial
statements.
                                       6
<PAGE>
FLEXIBLE SOLUTIONS INTERNATIONAL INC.
Consolidated Statements of Cash Flows
For The Six Months Ended June 30, 2005 and 2004
(U.S. Dollars)

- -------------------------------------------------------------------------------
                                                         Six Months June 30
                                                         2005          2004
                                                     (Unaudited)   (Unaudited)
- -------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

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

See accompanying condensed notes to unaudited interim consolidated financial
statements.

                                       7
<PAGE>

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS ($$USD)

1.       BASIS OF PRESENTATION.

         These consolidated financial statements include the accounts of
Flexible Solutions International, Inc. ("we," "us" or "our"), and its
wholly-owned subsidiaries Flexible Solutions Ltd. ("Flexible Ltd."), NanoChem
Solutions Inc. ("NanoChem"), and Water$aver Global Solutions Inc. ("Water$avr").
All intercompany balances and transactions have been eliminated. We were
incorporated on May 12, 1998 in the State of Nevada and had no operations until
June 30, 1998.

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

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

         On May 2, 2002, we established Water$aver through the issuance of 100
shares of common stock.

         Pursuant to an asset purchase agreement dated May 26, 2004, we acquired
certain of the assets of Donlar Corporation ("Donlar") and, on June 9, 2004, we
distributed those assets to our newly-formed and wholly-owned subsidiary,
NanoChem. The purchase price of the transaction was $6,150,000, with
consideration consisting of a combination of cash and debt. Under the asset
purchase agreement, and as part of the consideration, we issued a promissory
note bearing interest at 4% to the principal secured holder of the assets of
Donlar to satisfy $3,150,000 of the purchase price. This promissory note was due
June 2, 2005 and all of the former Donlar assets were pledged as security. On
May 28, 2005, we retired the remaining debt owed under this promissory note by
paying such amount to the holder. The remainder of the purchase price, or
$3,000,000, was paid directly in cash.

         The following table summarizes the estimated fair value of the Donlar
assets acquired at the date of acquisition (June 9, 2004):

       Current assets                                       $ 1,126,805
       Property and equipment                                 5,023,195
       ---------------------------------------------------- ------------
                                                              6,150,000
       Acquisition costs assigned to property and equipment     314,724
       ---------------------------------------------------- ------------
       Total assets acquired                                $ 6,464,724
       ==================================================== ============

         The acquisition costs assigned to property and equipment are all direct
costs incurred by us to purchase the assets. These costs include due diligence
fees paid to outside parties investigating and identifying the assets, legal
costs directly attributable to the purchase of the assets, plus applicable
transfer taxes. These costs have been assigned to the individual assets based on
their proportional fair values and will be amortized based on the rates
associated with the related assets.

         On February 7, 2005, we incorporated two new subsidiaries in Nevada.
SeaHorse Systems Inc. was incorporated to research new applications of our
patented dispensing mechanism currently used for


                                       8
<PAGE>

our Eco$avr product. NanoDetect Technologies Inc. ("NanoDetect") was
incorporated to focus on ways to use our current technologies to detect
pathogens.

2.       SIGNIFICANT ACCOUNTING POLICIES.

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

         (a) Cash and Cash Equivalents. We consider all highly liquid
investments purchased with an original or remaining maturity of less than three
months at the date of purchase to be cash equivalents. Cash and cash equivalents
are maintained with several financial institutions.

         (b) Inventory. Inventory is valued at the lower of cost and net
realizable value. Cost is determined on a first-in, first-out basis. Cost of
sales includes all expenditures incurred in bringing the goods to the point of
sale. Inventorial costs and costs of sales include direct costs of the raw
material, inbound freight charges, warehousing costs, handling costs (receiving
and purchasing) and utilities and overhead expenses related to our manufacturing
and processing facilities.

         (c) Property, Equipment and Leaseholds. The following assets are
recorded at cost and depreciated using the following methods and using the
following annual rates:

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

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

         (d) Impairment of Long Lived Assets. We assess the recoverability of
our long lived assets by determining whether the carrying value of the long
lived assets can be recovered over their remaining lives through undiscounted
future operating cash flows using a discount rate reflecting in our average cost
of funds. The assessment of the recoverability will be impacted if estimated
future operating cash flows are not achieved. For the quarter ended June 30,
2005, no impairment charges have been recognized.

         (e) Foreign Currency. Our functional currency 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 our financial statements from our functional currency,
Canadian Dollars, into the reporting currency, U.S. Dollars, are excluded from
the determination of income and disclosed as other comprehensive income (loss)
in stockholders' equity.

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

         (f) Revenue Recognition. Revenue from product sales is recognized at
the time the product is shipped, since title and risk of loss is transferred to
the purchaser upon delivery to the carrier.


                                       9
<PAGE>

Shipments are made F.O.B. shipping point. We recognize revenue when there is
persuasive evidence of an arrangement, delivery has occurred, the fee is fixed
or determinable, collectibility is reasonably assured, and there are no
significant remaining performance obligations. When significant post-delivery
obligations exist, revenue is deferred until such obligations are fulfilled.
Provisions are made at the time the related revenue is recognized for estimated
product returns. Since our inception, product returns have been insignificant;
therefore no provision has been established for estimated product returns.

         (g) Stock Issued in Exchange for Services. The valuation of our common
stock issued to non-employees in exchange for services is valued at an estimated
fair market value as determined by our officers and directors based upon the
trading prices of our common stock on the dates of the stock transactions.

         (h) Stock Based Compensation. We apply the fair value based method of
accounting prescribed by Statement of Financial Accounting Standards ("SFAS")
No. 123 in accounting for stock issued in exchange for services to consultants
and non-employees.

         SFAS No. 123 encourages, but does not require, companies to record
compensation cost for stock-based compensation plans to employees at fair value.
We have chosen to account for stock-based compensation to employees and
directors using Accounting Principles Board ("APB") Opinion No. 25, "Accounting
for Stock Issued to Employees." Accordingly, compensation cost for stock options
for employees is measured as the excess, if any, of the quoted market price of
our common stock at the date of the grant over the amount an employee is
required to pay for the stock.

         We adopted the disclosure provisions of SFAS No. 123 for stock options
granted to employees and directors. We disclose on a supplemental basis, the
pro-forma effect of accounting for stock options awarded to employees and
directors, as if the fair value based method had been applied, using the
Black-Scholes model.

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

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

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

         (l) Financial Instruments.

                  (i) Fair Values. The fair market value of the financial
         instruments comprising cash, short-term investments, accounts
         receivable, loans receivable, accounts payable and accrued liabilities,
         and short-term loans payable were estimated to approximate their
         carrying values due to immediate or short-term maturity of these
         financial instruments.


                                       10
<PAGE>

                  (ii) Foreign Exchange and Interest Rate Risks. We are exposed
         to foreign exchange and interest rate risk to the extent that market
         value rate fluctuations materially differ from financial assets and
         liabilities subject to fixed long-term rates.

         (m) Recent Accounting Pronouncements.

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

                  (ii) In October 2001, FASB issued FAS No. 144, "Accounting for
         the Impairment or Disposal of Long-Lived Assets." FAS No. 144 addresses
         significant issues relating to the implementation of FAS No. 121,
         "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
         Assets to be Disposed Of," and develops a single accounting model,
         based on the framework established in FAS No. 121, for long-lived
         assets to be disposed of by sale, whether such assets are or are not
         deemed to be a business. FAS No. 144 also modifies the accounting and
         disclosure rules for discontinued operations. FAS No. 144 was adopted
         on January 1, 2002 and did not have any impact on our financial
         statements.

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

                  (iv) In December 2004, FASB issued revised SFAS No. 123(R),
         "Share-Based Payment," which replaces SFAS No. 123, "Accounting for
         Stock-Based Compensation," which superseded APB Opinion No. 25,
         "Accounting for Stock Issued to Employees." SFAS No. 123(R) requires
         the cost of all share-based payment transactions to be recognized in an
         entity's financial statements, establishes fair value as the
         measurement objective and requires entities to apply a fair-value-based
         measurement method in accounting for share-based payment transactions.
         SFAS No. 123(R) applies to all awards granted, modified, repurchased or
         cancelled after July 1, 2005, and unvested portions of previously
         issued and outstanding awards. We are currently evaluating the impact
         of adopting this statement.

                  (v) In November 2004, FASB issued SFAS No. 151, "Inventory
         Costs - an Amendment of ARB No. 43, Chapter 4," which clarifies the
         accounting for abnormal amounts of idle facility expense, freight,
         handling costs, and wasted material (spoilage), and also requires that
         the allocation of fixed production overhead be based on the normal
         capacity of an entity's production facilities. SFAS No. 151 is
         effective for inventory costs incurred during fiscal years beginning
         after June 15, 2005. We are currently evaluating the impact of adopting
         this statement.






                                       11
<PAGE>

3.       LOAN RECEIVABLE.

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

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

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

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

================================================================================

5.       PROPERTY, EQUIPMENT AND LEASEHOLDS.

                                            Accumulated     2005        2004
                                   Cost    Amortization     Net         Net
       ----------------------- ----------- ------------ ----------- -----------
       Buildings               $ 3,144,259  $  303,488  $ 2,840,771 $ 2,987,046
       Computer hardware            44,302      18,068       26,234      27,511
       Furniture and fixtures       15,265       4,674       10,591      11,515
       Office equipment             28,322      12,233       16,089      18,421
       Manufacturing equipment   2,141,071     491,376    1,649,695   1,785,858
       Trailer                       1,865         912          953       1,146
       Leasehold improvements       30,560      13,786       16,774      14,533
       Trade show booth              6,985       1,885        5,100       6,130
       Patents                      20,408           -       20,408
                                                                            -
       Land                        398,186           -      398,186     398,186
       ----------------------- ----------- ------------ ----------- -----------
                               $ 5,831,223  $  846,422  $ 4,984,801 $ 5,250,346
       ======================= =========== ============ =========== ===========

6.       INVESTMENT.
- --------------------------------------------------------------------------------

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

         Tatko Inc.                                     $ 271,000    $ 271,000
         Air Water Interface Delivery & Detection Inc.     76,000           -

                                                        $ 347,000    $ 271,000
================================================================================

         On May 31, 2003, we acquired an option to purchase a 20% interest in
the outstanding shares of Tatko Inc. ("Tatko") in exchange for the issuance to
Tatko of 100,000 shares of our common stock. The option to purchase the shares
of Tatko expires on May 31, 2008. The purchase of the option also included the
right to use the bio-chemicals and patents of Tatko in our products. As part of
the agreement, Tatko was required to supply us with samples of its specific
technologies so that we could adapt its processes to incorporate the
technologies of Tatko. Since then, we came to believe that Tatko had breached
its agreement and we demanded the return of our shares. Tatko refused and we
filed a lawsuit against Tatko. For further information on the status of this
lawsuit, please see Note 11(d) to these Notes to Unaudited Consolidated
Financial Statements (Contingencies). We believe that the patents developed by
Tatko are extremely beneficial to our future operations. Once the litigation
involving the return of the shares has been settled, we intend to negotiate with
Tatko to either enter into a normal supplier/customer relationship to acquire
Tatko's products or we intend to negotiate to acquire Tatko.



                                       12
<PAGE>

         We have accounted for the cost of the investment in Tatko based on the
original fair market value of our common stock on May 31, 2003. We rely on the
accounting policies of SFAS No. 115, "Accounting for Certain Investments in Debt
and Equity Securities" and the guidelines of EITF No. 30-01, "The Meaning of
Other-Than-Temporary Impairment of Certain Investments" for assessing the
accounting treatment and carrying value of our investment in Tatko. In
accordance with these pronouncements, the investment is reviewed on a continuous
basis by analyzing the technology and operations of Tatko to ensure that the
carrying value is justified. We consider the investment to be impaired when the
fair value is less than its carrying amount. Since the investment does not have
a readily determinable fair value, we have taken the position that the fair
value assessment will be measured when an impairment indicator is present.

         In 2005, NanoDetect purchased 25.3 shares of equity in Air Water
Interface Delivery and Detection Inc. ("AWIDD") for a total cost of $76,000.
This investment represents only 2.5% of the issued and outstanding shares of
AWIDD, and accordingly will be accounted for under the cost method.

7.       STOCK OPTIONS.

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

         The following table summarizes stock option activity for the years
ended December 31, 2004 and 2003, and the six months ended June 30, 2005:

                                    Number    Exercise Price  Weighted Average
                                   of Shares  per Share       Exercise Price
       -------------------------- ----------- -------------- -----------------

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

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

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

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







                                       13
<PAGE>

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

                                 2004    2003    2002
                                 ----    ----    ----
       Expected life (years)      5.0     5.0     5.0
       Interest rate              3.50%   2.87%   3.00%
       Volatility                49.0%   49.0%   72.3%
       Dividend yield              - %     - %     - %
       ------------------------ ------- ------- ------

         During the quarter ended June 30, 2005, we granted 255,000 stock
options (June 30, 2004: 25,000 stock options) to consultants and have been
applying SFAS No. 123 using the Black-Scholes Option Pricing Model, which
resulted in additional consulting expense of $503,650 for the quarter ended June
30, 2005 (June 30, 2004: $ 135,230 additional consulting expense). During the
year ended December 31, 2003, we cancelled 2,000,000 stock options to
consultants pursuant to the terms of the underlying contract, resulting in a
recovery of consulting expense of $2,480,200.

8.       CAPITAL STOCK.

         During the six months ended June 30, 2005, we issued:

         (i)  2,000 shares of common stock with exercise prices per share equal
              to $1.40;

         (ii) 900,000 shares of common stock, along with warrants to purchase up
              to 900,000 shares of common stock at the exercise price of $3.75
              per share; and

         (iii) 87,400 shares of common stock, along with a warrant to purchase
              up to 87,400 shares of common stock at the exercise price of $3.75
              per share.

         During the year ended December 31, 2004, we issued:

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

         During the year ended December 31, 2003, we issued:

         (i)  100,000 shares of common stock valued at $271,000 to acquire an
              option to purchase a 20% interest in Tatko (see Note 7 to these
              Notes to Unaudited Consolidated Financial Statements (Stock
              Options)); and

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

9.       SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY.

         We operate in two segments: (a) energy and water conservation products,
and (b) biodegradable polymers and chemical additives, as summarized below:

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

                                       14
<PAGE>

drinking water sources.

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

         The accounting policies of the segments are the same as those described
in Note 2 to these Unaudited Consolidated Financial Statements (Significant
Accounting Policies). We evaluate performance based on profit or loss from
operations before income taxes, not including nonrecurring gains and losses and
foreign exchange gains and losses.

         Our reportable segments are strategic business units that offer
different, but synergistic products and services. They are managed separately
because each business requires different technology and marketing strategies.
For more information on the financial performance of our operating segments,
please see Item 2 (Management's Discussion and Analysis or Plan of Operation) of
Part I of this Quarterly Report on Form 10-QSB.

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

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

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

10.      COMMITMENTS.

         Property and Premises Leases. We are committed to minimum rental
payments for property and premises aggregating approximately $326,538 over the
term of two leases, the last expiring on June 30, 2009.

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

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

11.      CONTINGENCIES.

         (a) On November 13, 2003, Patrick Grant filed a lawsuit in the Circuit
Court of Cook County, Illinois against us, Water$avr and Daniel B. O'Brien, our
Chief Executive Officer. The plaintiff claims damages for breach of contract,
tortious interference with an agreement and various wrongful discharge claims.
The plaintiff seeks monetary damages in excess of $1,020,000 for the breach of
contract and tortious interference claims and unspecified compensatory and
punitive damages in the wrongful discharge claims. We completed mandatory
mediation ordered by the Circuit Court and will next appear in court for case
management, at which time the court will set discovery deadlines. We


                                       15
<PAGE>

         consider the case to be without merit and are planning to dispute the
         matter vigorously. In addition, we intend to file counterclaims against
         the plaintiff for failure to repay financial obligations owed to us of
         almost $40,000, as well as unspecified damages arising out of
         plaintiff's disclosure of confidential information to a client during
         his employment at Water$avr. No amounts have been recorded as
         receivable and no accrual has been made for any loss in our
         consolidated financial statements as the outcome of the claim filed by
         the plaintiff is not determinable.

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

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

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

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

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

         (e) In 2005, we filed a lawsuit in the Court of the Queen's Bench of
Alberta seeking indeterminate damages resulting from a breach of contract
against Calgary Diecast Corp. The contract was never completed and our raw
materials remain in the possession Calgary Diecast Corp. On April 25,


                                       16
<PAGE>

2005, the
Court ordered a judgment in favor of us in the amount of $48,723.

12.      COMPARATIVE FIGURES.

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

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

RESULTS OF OPERATIONS

         The following analysis and discussion pertains to our results of
operations for the three-month and six-month periods ended June 30, 2005,
compared to the results of operations for the three-month and six-month periods
ended June 30, 2004, and to changes in our financial condition from December 31,
2004 to June 30, 2005.

         Separate financial data for each of the Company's operating segments is
provided below. The Company evaluates the performance of the Company's operating
segments based on the following:

<TABLE>
<CAPTION>
                                                   JUNE 30
                                                                                    % CHANGE        % CHANGE
                                    2005            2004             2003           2005-2004       2004-2003
<S>                                <C>             <C>             <C>                      <C>          <C>
Sales
     Energy Segment                $ 765,621       $ 759,744       $ 1,942,562              1%           (61%)
     Polymer Segment               3,122,093         276,127                --  *        1031%            -- *

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

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

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

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

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

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

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

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

         Consolidated                      0               0                 0

Net Income (Loss)                 $ (424,119)     $ (578,150)       $  (49,297)            27%         (1072%)
</TABLE>

* Polymer segment data is not available as indicated. The Company's polymer
segment was formed after the acquisition of certain assets of the Donlar
Corporation in June 2004.


                                       17
<PAGE>

THREE MONTHS ENDED JUNE 30, 2005 AND 2004

         Sales for the three months ended June 30, 2005 were $1,868,133,
compared to $547,761 for the six months ended June 30, 2004, an increase of
$1,320,372, or 241%. The increase in sales was primarily attributable to the new
revenue provided by the Company's wholly-owned subsidiary, NanoChem Solutions
Inc., which was formed as the corporate entity used to acquire certain assets
from the bankruptcy estate of the Donlar Corporation.

         The Company's Energy segment had sales of $334,726 for the three months
ended June 30, 2004, compared to $271,634 for the three months ended June 30,
2004, an increase of 23%. The Company expects revenue in this segment to
increase in 2006 as brand recognition of its ECO$AVR(R) product line continues
to grow and the Company's marketing efforts of its WATER$AVR(R) product line
begin to produce increased sales. The Company's Polymer segment achieved sales
of $1,533,407 for the three months ended June 30, 2005, compared to $276,127 for
the three months ended June 30, 2004. This increase is in part due to a full
three months of sales from the new NanoChem Solutions subsidiary.

         The Company had a loss of 478,317, or $0.04 per share, compared to a
loss of $327,289, or $0.03 per share in the same period in 2004. The three
largest contributing factors to the loss were:

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

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

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

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

         For the three months ended June 30, 2005, the largest increases
were in the areas of wages ($202,388 versus $143,246), administrative salaries
($71,071 versus $32,697) and rent expense ($47,886 versus $30,867). The addition
of commission expense ($47,073 versus zero) is a result of successfully using
sales representatives for our swimming pool products and the Company feels the
increase in sales justifies this added expense. These increases are wholly
accounted for by the operating costs of the new divisions and represent a
permanent increase in operating costs related to the new level of sales. The
large increase in investor relations ($484,950 versus $57,947) has to do with
the stock options that vested in relation to the capital raising that closed on
April 14, 2005. This resulted in a non-cash transaction of $447,500 and without
this, the Company would have seen a decrease in this expense. The decreases in
advertising ($13,414 down from $49,062) and consulting ($47,535 down from
$114,138) are the result of


                                       18
<PAGE>

better cost control in these areas instituted by management over the past year
and are expected to maintain at these levels.

         The Company's Energy segment generated $883,544 in operating expenses
in the three months ended June 30, 2005, an increase of 58% over the same 2004
period. The increase is primarily attributable to the Company's extraordinary
stock option expense related to the capital raising in the six months ended June
30, 2005. The Company's Polymer segment incurred $410,148 in operating expenses
in the three months ended June 30, 2005, and an increase of 72% over the same
period the previous year. This is attributable to the fact that the NanoChem
Solutions subsidiary operated for the full 3 months period ending June 30, 2005
compared to 20 days in 2004, during the same period.

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

         The Company's Energy segment reported interest income of $886 in the
three month period ending June 30, 2005, compared to $27,354 in the same period
in 2004, a decrease of approximately 97% from 2004. This decrease in interest
income is due to the Company's use of capital to purchase assets and develop its
business.

         The Company reported a net loss of $478,317 for the three months ended
June 30, 2005, compared to a net loss of $327,289 for the three months ended
June 30, 2004.

         With the addition of the assets acquired from the Donlar Corporation,
the Company became a much larger Company with commensurate increases in most
expense segments. However, the Company was able to reduce certain expenses such
as advertising ($13,414 down from $49,062) and consulting ($47,535 down from
$114,138) as a direct result of better cost control in these areas instituted by
management over the past year and are expected to maintain at these levels. The
large increase in investor relations ($484,950 versus $57,947) has to do with
the stock options that vested in relation to the capital raising that closed on
April 14, 2005. This resulted in a non-cash transaction of $447,500 and without
this the Company would have seen a decrease in this expense.


SIX MONTHS ENDED JUNE 30, 2005 AND 2004

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

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

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

     o   The brand building, marketing and extra staffing costs in connection
         with sales of the Company's ECO$AVR(R) product incurred throughout the
         year that were not reflected in sales because there was still
         substantial "Tropical Fish" product with dealers that had been sold by
         the Company's


                                       19
<PAGE>

         discontinued distributor, Sunsolar Technologies. Management believes
         that very little old product is on shelves and that costs and revenue
         for the ECO$AVR(R) product will be better balanced in 2006.

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

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

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

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

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

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

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

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

                                       20
<PAGE>

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

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


LIQUIDITY AND CAPITAL RESOURCES

         The following section discusses the effects of changes in our balance
sheet and cash flow on our liquidity and capital resources.

         We had cash on hand of $752,130 as of the quarter ended June 30, 2005,
as compared to $558,795 for the period ended December 31, 2004. This increase is
primarily the result of the cashed raised in our private placement transactions
that closed during this quarter.

         As of June 30, 2005, we had working capital of $3,590,510, as compared
to a working capital deficit of $101,121 for the period ended December 31, 2004.
The increase in working capital primarily results from the cash raised in our
private placement transactions that closed during this quarter, as well as from
our increase in sales. The cash raised from the private placement transactions
was used to pay off the loan taken out for the purchase of the Donlar assets.
For more information on these private placement transactions, please see Item 2
(Unregistered Sales of Equity Securities and Use of Proceeds) of Part II of this
Quarterly Report on Form 10-QSB.

         We have no external sources of liquidity in the form of credit lines
from banks.

         Our management believes that our available cash will be sufficient to
fund our working capital requirements through December 31, 2005. Our management
further believes that available cash will be sufficient to implement our
expansion plans. No investment banking agreements are in place and there is no
guarantee that we will be able to raise capital in the future should that become
necessary.

ITEM 3.           CONTROLS AND PROCEDURES.

         We carried out an evaluation, under the supervision and with the
participation of management, including our principal executive officer and
principal financial officer, of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined under Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end
of the period covered by this quarterly report. Based upon that evaluation, our
principal executive officer and principal financial officer concluded that our
disclosure controls and procedures are effective in timely alerting them to
material information relating to us (including our consolidated subsidiary) that
is required to be included in our periodic reports filed with the Securities and
Exchange Commission.

         During the quarter ended June 30, 2005, there was no change in our
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.

                                       21
<PAGE>

PART 2.  OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS.

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

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

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

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

                                       22
<PAGE>

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

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

         In 2005, we filed a lawsuit in the Court of the Queen's Bench of
Alberta seeking indeterminate damages resulting from a breach of contract
against Calgary Diecast Corp. The contract was never completed and our raw
materials remain in the possession Calgary Diecast Corp. On April 25, 2005, the
Court ordered a judgment in favor of us in the amount of $48,723.

ITEM 2.           UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

         On April 8, 2005, we sold 900,000 shares of our common stock, at a per
share price of $3.75, to several accredited investors in a private placement
transaction exempt from the federal securities laws under Section 4(2) of the
Securities Act of 1933, as amended, and Rule 506 promulgated thereunder. In
connection with the private placement, we also issued warrants to the purchasers
to purchase up to an additional 900,000 shares of our common stock, at exercise
prices of $3.75 per share. When issued, the warrants were immediately
exercisable through April 8, 2009.

         On June 8, 2005, we sold 84,700 shares of our common stock, at a per
share price of $3.75, to an accredited investor in a private placement
transaction exempt from the federal securities laws under Section 4(2) of the
Securities Act of 1933, as amended, and Rule 506 promulgated thereunder. In
connection with the private placement, we also issued a warrant to the purchaser
to purchase up to an additional 84,700 shares of our common stock, at an
exercise price of $3.75 per share. When issued, the warrant was immediately
exercisable through June 8, 2009.

ITEM 3.           DEFAULTS UPON SENIOR SECURITIES.

         None.

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

         For the voting results of our 2005 Annual Shareholders Meeting held on
June 10, 2005, please refer to our Current Report on Form 8-K filed with the
Securities and Exchange Commission on June 29, 2005.

ITEM 5.           OTHER INFORMATION.

         None.








                                       23
<PAGE>

ITEM 6.           EXHIBITS.

         The following exhibits are attached hereto and filed herewith:

EXHIBIT
NUMBER                          DESCRIPTION OF EXHIBIT
- ------                          ----------------------

10.1     Securities Purchase Agreement, dated as of April 8, 2005, by and
         between the Registrant and the parties set forth therein. (1)

10.2     Form of Warrant, issued as of April 8, 2005. (1)

10.3     Registration Rights Agreement, Dated as of June 8, 2005, by and
         Between the Registrant and the Party Set Forth Therein. *

10.4     Subscription Agreement, dated as of May 24, 2005, by and
         between the Registrant and the parties set forth therein. *

10.5     Form of Warrant, issued as of June 8, 2005. *

10.6     Registration Rights Agreement, Dated as of June 8, 2005, by and
         Between the Registrant and the Party Set Forth Therein. *

31.1     Certification of Principal Executive Officer Pursuant to ss.302 of the
         Sarbanes-Oxley Act of 2002.*

31.2     Certification of Principal Financial Officer Pursuant to ss.302 of the
         Sarbanes-Oxley Act of 2002.*

32.1     Certification of Principal Executive Officer Pursuant to 18 U.S.C.
         ss.1350 and ss.906 of the Sarbanes-Oxley Act of 2002.*

32.2     Certification of Principal Financial Officer Pursuant to 18 U.S.C.
         ss.1350 and ss.906 of the Sarbanes-Oxley Act of 2002.*
- ----------
*        Filed herewith.

(1)      Incorporated herein by reference to the registrant's registration
         statement on form S-3/A (Amendment No. 1), filed with the Securities
         and Exchange Commission on June 27, 2005.


















                                       24
<PAGE>


                                    SIGNATURE

         In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized:

                                    FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

Date:  September 21, 2005           By: /s/ Daniel B. O'Brien
                                        -------------------------------------
                                        Daniel B. O'Brien
                                        President and Chief Executive Officer











































                                       25
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>2
<FILENAME>fs_qa50630x106.txt
<TEXT>
                                                                    EXHIBIT 10.6
                                    EXHIBIT B

                          REGISTRATION RIGHTS AGREEMENT


                  This Registration Rights Agreement (this "AGREEMENT") is made
and entered into as of June 8, 2005, by and among Flexible Solutions
International, Inc., a Nevada corporation (the "COMPANY"), and the investors
signatory hereto (each a "INVESTOR" and collectively, the "INVESTORS").

                  This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of June 8, 2005. by and among the Company and the Investors
(the "PURCHASE AGREEMENT").

                  The Company and the Investors hereby agree as follows:

1. Definitions. Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement will have the meanings given such terms in the
Purchase Agreement. As used in this Agreement, the following terms have the
respective meanings set forth in this Section 1:

                  "ADDITIONAL SHARES" means any shares of Common Stock issuable
to Investors in accordance with Section 4.7 of the Purchase Agreement.

                  "EFFECTIVE DATE" means the date that the initial Registration
Statement filed pursuant to Section 2(a) is first declared effective by the
Commission.

                  "EFFECTIVENESS DATE" means (a) with respect to the initial
Registration Statement required to be filed under Section 2(a), the earlier of:
(a)(i) the 90th day following the Closing, and (ii) the fifth Trading Day
following the date on which the Company is notified by the Commission that the
initial Registration Statement will not be reviewed or is no longer subject to
further review and comments and (b) with respect to any additional Registration
Statements that may be required pursuant to Section 2(b), the earlier of (i) the
90th day following (x) if such Registration Statement is required because the
Commission shall have notified the Company in writing that certain Registrable
Securities were not eligible for inclusion on a previously filed Registration
Statement, the date or time on which the Commission shall indicate as being the
first date or time that such Registrable Securities may then be included in a
Registration Statement, (y) if the Company issues securities that require it to
issue Additional Shares under the Purchase Agreement, the day on which such
securities were issued, or (z) if such Registration Statement is required for a
reason other than as described in (x) or (y) above, the date on which the
Company first knows, or reasonably should have known, that such additional
Registration Statement(s) is required, and (ii) the fifth Trading Day following
the date on which the Company is notified by the Commission that such additional
Registration Statement will not be reviewed or is no longer subject to further
review and comments.

                  "EFFECTIVENESS PERIOD" has the meaning set forth in Section
2(a).

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

                  "FILING DATE" means (a) with respect to the initial
Registration Statement required to be filed under Section 2(a), the 30th day
following the Closing and (b) with respect to any additional Registration
Statements that may be required pursuant to Section 2(b), the 30th day following
(x) if such Registration Statement is required because the Commission shall have
notified the Company in writing that certain Registrable Securities were not
eligible for inclusion on a previously filed Registration Statement, the date or
time on which the Commission shall indicate as being the first date or time that
such Registrable Securities may then be included in a Registration Statement,
(y) if the Company issues securities that require it to issue Additional Shares
under the Purchase Agreement, the day on which such securities were issued, or
(z) if such Registration Statement is required for a reason other than as
described in (x) or (y) above, the date on which the Company first knows, or
reasonably should have known, that such additional Registration Statement(s) is
required.

                  "HOLDER" or "HOLDERS" means the holder or holders, as the case
may be, from time to time of Registrable Securities.

                  "INDEMNIFIED PARTY" has the meaning set forth in Section 5(c).

                  "INDEMNIFYING PARTY" has the meaning set forth in Section
5(c).

                  "LOSSES" has the meaning set forth in Section 5(a).

                  "NEW YORK COURTS" means the state and federal courts sitting
in the City of New York, Borough of Manhattan.

                  "PROCEEDING" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

                  "PROSPECTUS" means the prospectus included in a Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by a Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

                  "REGISTRABLE SECURITIES" means: (i) the Shares, (ii) the
Warrant Shares, (iii) any New Issue Securities acquired by a Holder pursuant to
Section 4.3 of the Purchase Agreement, (iv) any Additional Shares issued and/or
issuable pursuant to Section 4.7 of the Purchase Agreement, and (v) any
securities issued or issuable upon any stock split, dividend or other
distribution, recapitalization or similar event, or any conversion price
adjustment with respect to any of the securities referenced in (i), (ii), (iii),
or (iv) above.

                  "REGISTRATION STATEMENT" means each of the following: (i) the
initial registration statement required to be filed in accordance with Section
2(a) and (ii) each additional registration statement that may be required to be
filed under Section 2(b), and including, in each case, the Prospectus,
amendments and supplements to each such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by reference in
such registration statement.

                  "RULE 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

                  "RULE 415" means Rule 415 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

                  "RULE 424" means Rule 424 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended.

                  "SHARES" means the shares of Common Stock issued or issuable
to the Investors at Closing pursuant to the Purchase Agreement.

                  "WARRANTS" means the Common Stock purchase warrants issued or
issuable to the Investors pursuant to the Purchase Agreement.

                  "WARRANT SHARES" means the shares of Common Stock issued or
issuable upon exercise of the Warrants.

2. Registration.

(a) On or prior to each Filing Date, the Company shall prepare and file with the
Commission a Registration Statement covering the resale of all Registrable
Securities not already covered by an existing and effective Registration
Statement for an offering to be made on a continuous basis pursuant to Rule 415,
on Form S-3 (except if the Company is not then eligible to register for resale
the Registrable Securities on Form S-3, in which case such registration shall be
on another appropriate form for such purpose). Such Registration Statement shall
contain (except if otherwise required pursuant to written comments received from
the Commission upon a review of such Registration Statement) the "Plan of
Distribution" attached hereto as Annex A. The Company shall cause such
Registration Statement to be declared effective under the Securities Act as soon
as possible but, in any event, no later than its Effectiveness Date, and shall
use its reasonable best efforts to keep the Registration Statement continuously
effective under the Securities Act until the date which is the earlier of (i)
four years after its Effective Date, (ii) such time as all of the Registrable
Securities covered by such Registration Statement have been publicly sold by the
Holders, or (iii) such time as all of the Registrable Securities covered by such
Registration Statement may be sold by the Holders pursuant to Rule 144(k) as
determined by the counsel to the Company pursuant to a written opinion letter to
such effect, addressed and acceptable to the Company's transfer agent and the
affected Holders (the "EFFECTIVENESS PERIOD").

(b) If for any reason the Commission does not permit all of the Registrable
Securities to be included in the Registration Statement filed pursuant to
Section 2(a), or for any other reason any outstanding or then issuable
Registrable Securities are not then covered by an effective Registration
Statement, then the Company shall prepare and file by the Filing Date for such
Registration Statement, an additional Registration Statement covering the resale
of all Registrable Securities not already covered by an existing and effective
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415, on Form S-3 (except if the Company is not then eligible to register
for resale the Registrable Securities on Form S-3, in which case such
registration shall be on another appropriate form for such purpose). Each such
Registration Statement shall contain (except if otherwise required pursuant to
written comments received from the Commission upon a review of such Registration
Statement) the "Plan of Distribution" attached hereto as Annex A. The Company
shall use its best efforts to cause each such Registration Statement to be
declared effective under the Securities Act as soon as possible but, in any
event, by its Effectiveness Date, and shall use its reasonable best efforts to
keep such Registration Statement continuously effective under the Securities Act
during the entire Effectiveness Period.

(c) If: (i) a Registration Statement is not filed on or prior to its Filing Date
(if the Company files a Registration Statement without affording the Holders the
opportunity to review and comment on the same as required by Section 3(a) hereof
for at least two Business Days, the Company shall not be deemed to have
satisfied this clause (i)), or (ii) a Registration Statement is not declared
effective by the Commission on or prior to its required Effectiveness Date, or
(iii) after its Effective Date, without regard for the reason thereunder or
efforts therefore, such Registration Statement ceases for any reason to be
effective and available to the Holders as to all Registrable Securities to which
it is required to cover at any time prior to the expiration of its Effectiveness
Period for more than an aggregate of 30 Trading Days (which need not be
consecutive) (any such failure or breach being referred to as an "EVENT," and
for purposes of clauses (i) or (ii) the date on which such Event occurs, or for
purposes of clause (iii) the date which such 30 Trading Day-period is exceeded,
being referred to as "EVENT DATE"), then in addition to any other rights the
Holders may have hereunder or under applicable law: on the one-month anniversary
of each such Event Date, and on each monthly anniversary thereafter, the Company
shall pay to each Holder an amount in cash, as partial liquidated damages and
not as a penalty, equal to 1.0% of the aggregate Investment Amount paid by such
Holder pursuant to the Purchase Agreement until the applicable Event is cured.
The parties agree that the Company will not be liable for liquidated damages
under this Section in respect of the Warrants. The partial liquidated damages
pursuant to the terms hereof shall apply on a daily pro-rata basis for any
portion of a month prior to the cure of an Event, except in the case of the
first Event Date.

(d) Each Holder agrees to furnish to the Company a completed Questionnaire in
the form attached to this Agreement as Annex B (a "SELLING HOLDER
QUESTIONNAIRE"). The Company shall not be required to include the Registrable
Securities of a Holder in a Registration Statement and shall not be required to
pay any liquidated or other damages under Section 2(c) to any Holder who fails
to furnish to the Company a fully completed Selling Holder Questionnaire within
two Business Days of a request by the Company for such Selling Holder
Questionnaire (subject to the requirements set forth in Section 3(a)).

3. Registration Procedures.

                  In connection with the Company's registration obligations
hereunder, the Company shall:

(a) Not less than four Trading Days prior to the filing of a Registration
Statement or any related Prospectus or any amendment or supplement thereto, the
Company shall furnish to each Holder copies of the "Selling Stockholders"
section of such document, the "Plan of Distribution" and any risk factor
contained in such document that addresses specifically this transaction or the
Selling Stockholders, as proposed to be filed, which documents will be subject
to the review of such Holder for two Business Days after such Holder's receipt
thereof. The Company shall not file a Registration Statement, any Prospectus or
any amendments or supplements thereto in which the "Selling Stockholder" section
thereof differs from the disclosure received from a Holder in its Selling Holder
Questionnaire (as amended or supplemented).

(b) (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to each Registration Statement and the Prospectus
used in connection therewith as may be necessary to keep such Registration
Statement continuously effective as to the applicable Registrable Securities for
its Effectiveness Period and prepare and file with the Commission such
additional Registration Statements in order to register for resale under the
Securities Act all of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement,
and as so supplemented or amended to be filed pursuant to Rule 424; (iii)
respond as promptly as reasonably possible to any comments received from the
Commission with respect to each Registration Statement or any amendment thereto
and, as promptly as reasonably possible provide the Holders true and complete
copies of all correspondence from and to the Commission relating to such
Registration Statement that would not result in the disclosure to the Holders of
material and non-public information concerning the Company; and (iv) comply in
all material respects with the provisions of the Securities Act and the Exchange
Act with respect to the Registration Statements and the disposition of all
Registrable Securities covered by each Registration Statement.

(c) Notify the Holders as promptly as reasonably possible (notification via
electronic mail shall be sufficient) (and, in the case of (i)(A) below, not less
than three Trading Days prior to such filing) and (if requested by any such
Person) confirm such notice in writing no later than one Trading Day following
the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed; (B) when the
Commission notifies the Company whether there will be a "review" of such
Registration Statement and whenever the Commission comments in writing on such
Registration Statement (the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Holders that pertain to
the Holders as a Selling Stockholder or to the Plan of Distribution, but not
information which the Company believes would constitute material and non-public
information); and (C) with respect to each Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to a Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of a Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (v) of the occurrence of any
event or passage of time that makes the financial statements included in a
Registration Statement ineligible for inclusion therein or any statement made in
such Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to such Registration Statement, Prospectus or other
documents so that, in the case of such Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

(d) Use its reasonable best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of a
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.

(e) Furnish to each Holder, without charge, at least one conformed copy of each
Registration Statement and each amendment thereto and all exhibits to the extent
requested by such Person (including those previously furnished) promptly after
the filing of such documents with the Commission.

(f) Upon notification by the Commission that a Registration Statement will not
be reviewed or is no longer subject to further review and comments, the Company
shall request acceleration of such Registration Statement such that it becomes
effective at 5:00 p.m. (New York City time) on such Effective Date.

(g) Deliver to each Holder, by 9:00 a.m. (New York City time) on the day
following the Effective Date, without charge, an electronic copy of each
Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request. The
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto.

(h) Prior to any public offering of Registrable Securities, to register or
qualify or cooperate with the selling Holders in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of all jurisdictions within the United States, to
keep each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by the Registration Statements.

(i) Cooperate with the Holders to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be delivered to a
transferee pursuant to the Registration Statements, which certificates shall be
free, to the extent permitted by the Purchase Agreement, of all restrictive
legends, and to enable such Registrable Securities to be in such denominations
and registered in such names as any such Holders may request.

(j) Upon the occurrence of any event contemplated by Section 3(c)(v), as
promptly as reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the affected Registration Statements or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, no Registration Statement nor any Prospectus will
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

4. Registration Expenses. All fees and expenses incident to the performance of
or compliance with this Agreement by the Company shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to a Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be
made with any Trading Market on which the Common Stock is then listed for
trading, and (B) in compliance with applicable state securities or Blue Sky
laws), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if
the printing of prospectuses is reasonably requested by the holders of a
majority of the Registrable Securities included in the Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.

5. Indemnification.

(a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents, investment advisors, partners, members and
employees of each of them, each Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, agents and employees of each such controlling
Person, to the fullest extent permitted by applicable law, from and against any
and all losses, claims, damages, liabilities, costs (including, without
limitation, reasonable costs of preparation and reasonable attorneys' fees) and
expenses (collectively, "LOSSES"), as incurred, arising out of or relating to
any untrue or alleged untrue statement of a material fact contained in any
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
any Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except to the extent,
but only to the extent, that (1) such untrue statements or omissions are based
solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto
(it being understood that the Holder has approved Annex A hereto for this
purpose) or (2) in the case of an occurrence of an event of the type specified
in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of
an Advice or an amended or supplemented Prospectus, but only if and to the
extent that following the receipt of the Advice or the amended or supplemented
Prospectus the misstatement or omission giving rise to such Loss would have been
corrected. The Company shall notify the Holders promptly of the institution,
threat or assertion of any Proceeding of which the Company is aware in
connection with the transactions contemplated by this Agreement.

(b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and
employees, each Person who controls the Company (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, agents or employees of such controlling Persons, to the fullest extent
permitted by applicable law, from and against all Losses, as incurred, arising
solely out of or based solely upon: (x) such Holder's failure to comply with the
prospectus delivery requirements of the Securities Act or (y) any untrue
statement of a material fact contained in any Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising solely out of or based solely upon any omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading to the extent, but only to the extent that, (1) such
untrue statements or omissions are based solely upon information regarding such
Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in
the Registration Statement (it being understood that the Holder has approved
Annex A hereto for this purpose), such Prospectus or such form of Prospectus or
in any amendment or supplement thereto or (2) in the case of an occurrence of an
event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of
an outdated or defective Prospectus after the Company has notified such Holder
in writing that the Prospectus is outdated or defective and prior to the receipt
by such Holder of an Advice or an amended or supplemented Prospectus, but only
if and to the extent that following the receipt of the Advice or the amended or
supplemented Prospectus the misstatement or omission giving rise to such Loss
would have been corrected. In no event shall the liability of any selling Holder
hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.

(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought
or asserted against any Person entitled to indemnity hereunder (an "INDEMNIFIED
PARTY"), such Indemnified Party shall promptly notify the Person from whom
indemnity is sought (the "INDEMNIFYING PARTY") in writing, and the Indemnifying
Party shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all fees and
expenses incurred in connection with defense thereof; provided, that the failure
of any Indemnified Party to give such notice shall not relieve the Indemnifying
Party of its obligations or liabilities pursuant to this Agreement, except (and
only) to the extent that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or further review)
that such failure shall have proximately and materially adversely prejudiced the
Indemnifying Party.

                  An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in
writing to pay such fees and expenses; (2) the Indemnifying Party shall have
failed promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3)
the named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party
and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.

                  All fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within ten Trading Days of written notice thereof to the Indemnifying
Party (regardless of whether it is ultimately determined that an Indemnified
Party is not entitled to indemnification hereunder; provided, that the
Indemnifying Party may require such Indemnified Party to undertake to reimburse
all such fees and expenses to the extent it is finally judicially determined
that such Indemnified Party is not entitled to indemnification hereunder).

(d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is
unavailable to an Indemnified Party (by reason of public policy or otherwise),
then each Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as well
as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in Section 5(c), any reasonable attorneys' or other reasonable fees or expenses
incurred by such party in connection with any Proceeding to the extent such
party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.

                  The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall
be required to contribute, in the aggregate, any amount in excess of the amount
by which the proceeds actually received by such Holder from the sale of the
Registrable Securities subject to the Proceeding exceeds the amount of any
damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.

                  The indemnity and contribution agreements contained in this
Section are in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties.

6. Miscellaneous.

(a) Remedies. In the event of a breach by the Company or by a Holder, of any of
their obligations under this Agreement, each Holder or the Company, as the case
may be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

(b) No Piggyback on Registrations. Except as and to the extent specified in
Schedule 3.1(v) to the Purchase Agreement, neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto) may
include securities of the Company in a Registration Statement other than the
Registrable Securities, and the Company shall not during the Registration Period
enter into any agreement providing any such right to any of its security
holders.

(c) Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to the Registration
Statement.

(d) Discontinued Disposition. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(c), such Holder will
forthwith discontinue disposition of such Registrable Securities under the
Registration Statement until such Holder's receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (the "ADVICE") by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Company may provide appropriate stop orders to enforce the provisions of this
paragraph.

(e) Piggy-Back Registrations. If at any time during the Effectiveness Period
there is not an effective Registration Statement covering all of the Registrable
Securities (including, but not limited to, any Additional Shares) and the
Company shall determine to prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of others
under the Securities Act of any of its equity securities, other than on Form S-4
or Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in connection with
any acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, then the Company
shall send to each Holder written notice of such determination and, if within
fifteen days after receipt of such notice, any such Holder shall so request in
writing, the Company shall include in such registration statement all or any
part of such Registrable Securities (including, but not limited to, any
Additional Shares) such holder requests to be registered, subject to customary
underwriter cutbacks applicable to all holders of registration rights.

(f) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this Section 6(f), may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the same shall be in writing and signed by the Company and the
Holders of no less than a majority in interest of the then outstanding
Registrable Securities. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of certain Holders and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of at
least a majority of the Registrable Securities to which such waiver or consent
relates.

(g) Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such
notice or communication is delivered via facsimile (provided the sender receives
a machine-generated confirmation of successful transmission) at the facsimile
number specified in this Section prior to 6:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified in this Section on a day that is not a Trading Day or later than 6:30
p.m. (New York City time) on any Trading Day, (c) the Trading Day following the
date of mailing, if sent by U.S. nationally recognized overnight courier
service, or (d) upon actual receipt by the party to whom such notice is required
to be given. The address for such notices and communications shall be as
follows:

         If to the Company:         Flexible Solutions International, Inc.
                                    615 Discovery Street
                                    Victoria, B.C.
                                    V8T 5G4, Canada
                                    Facsimile: 250.477.9912
                                    Telephone: 250.477.9969
                                    Attn:  Dan O'Brien

         If                         to an Investor: To the address set forth
                                    under such Investor's name on the signature
                                    pages hereto.

         If to any other Person who is then the registered Holder:

                                    To the address of such Holder as it appears
                                    in the stock transfer books of the Company

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.

(h) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Holder. The Company may not assign its rights
or obligations hereunder without the prior written consent of each Holder. Each
Holder may assign their respective rights hereunder in the manner and to the
Persons as permitted under the Purchase Agreement.

(i) Execution and Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.

(j) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all Proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement (whether brought
against a party hereto or its respective Affiliates, employees or agents) will
be commenced in the New York Courts. Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any New York Court, or that such
Proceeding has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law. Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any Proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. If either
party shall commence a Proceeding to enforce any provisions of this Agreement,
then the prevailing party in such Proceeding shall be reimbursed by the other
party for its attorney's fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.

(k) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

(l) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

(m) Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

(n) Independent Nature of Investors' Obligations and Rights. The obligations of
each Investor under this Agreement are several and not joint with the
obligations of each other Investor, and no Investor shall be responsible in any
way for the performance of the obligations of any other Investor under this
Agreement. Nothing contained herein or in any Transaction Document, and no
action taken by any Investor pursuant thereto, shall be deemed to constitute the
Investors as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Investors are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement or any other Transaction Document. Each Investor
acknowledges that no other Investor will be acting as agent of such Investor in
enforcing its rights under this Agreement. Each Investor shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement, and it shall not be necessary for any
other Investor to be joined as an additional party in any Proceeding for such
purpose. The Company acknowledges that each of the Investors has been provided
with the same Registration Rights Agreement for the purpose of closing a
transaction with multiple Investors and not because it was required or requested
to do so by any Investor.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                           SIGNATURE PAGES TO FOLLOW]


<PAGE>

                  IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.

                      FLEXIBLE SOLUTIONS INTERNATIONAL, INC.


                      By:_________________________________
                                Name: Dan O'Brien
                              Title: CEO, President



                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                     SIGNATURE PAGES OF INVESTORS TO FOLLOW]
<PAGE>
                  IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.


                      NAME OF INVESTING ENTITY

                      By:
                               ----------------------------------------------
                               Name:
                               Title:

                      ADDRESS FOR NOTICE

                      c/o:
                           --------------------------------------------------

                      Street:
                              -----------------------------------------------

                      City/State/Zip:
                                      ---------------------------------------

                      Attention:
                                 --------------------------------------------

                      Tel:
                               ----------------------------------------------

                      Fax:
                               ----------------------------------------------

                      Email:
                               ----------------------------------------------

<PAGE>
                                                                        Annex A

                              Plan of Distribution

         The Selling Stockholders and any of their pledgees, donees,
transferees, assignees and successors-in-interest may, from time to time, sell
any or all of their shares of Common Stock on any stock exchange, market or
trading facility on which the shares are traded or in private transactions.
These sales may be at fixed or negotiated prices. The Selling Stockholders may
use any one or more of the following methods when selling shares:

ordinary brokerage transactions and transactions in which the broker-dealer
solicits Investors;

block trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to facilitate
the transaction;

purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

an exchange distribution in accordance with the rules of the applicable
exchange;

privately negotiated transactions;

to cover short sales made after the date that this Registration Statement is
declared effective by the Commission;

broker-dealers may agree with the Selling Stockholders to sell a specified
number of such shares at a stipulated price per share;

a combination of any such methods of sale; and

any other method permitted pursuant to applicable law.

         The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

         Broker-dealers engaged by the Selling Stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.

         The Selling Stockholders may from time to time pledge or grant a
security interest in some or all of the Shares owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell shares of Common Stock from time to time under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933 amending the list of
selling stockholders to include the pledgee, transferee or other successors in
interest as selling stockholders under this prospectus.

         Upon the Company being notified in writing by a Selling Stockholder
that any material arrangement has been entered into with a broker-dealer for the
sale of Common Stock through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer, a
supplement to this prospectus will be filed, if required, pursuant to Rule
424(b) under the Securities Act, disclosing (i) the name of each such Selling
Stockholder and of the participating broker-dealer(s), (ii) the number of shares
involved, (iii) the price at which such the shares of Common Stock were sold,
(iv)the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not
conduct any investigation to verify the information set out or incorporated by
reference in this prospectus, and (vi) other facts material to the transaction.
In addition, upon the Company being notified in writing by a Selling Stockholder
that a donee or pledgee intends to sell more than 500 shares of Common Stock, a
supplement to this prospectus will be filed if then required in accordance with
applicable securities law.

         The Selling Stockholders also may transfer the shares of Common Stock
in other circumstances, in which case the transferees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.

         The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Discounts, concessions,
commissions and similar selling expenses, if any, that can be attributed to the
sale of Securities will be paid by the Selling Stockholder and/or the
purchasers. Each Selling Stockholder has represented and warranted to the
Company that it acquired the securities subject to this registration statement
in the ordinary course of such Selling Stockholder's business and, at the time
of its purchase of such securities such Selling Stockholder had no agreements or
understandings, directly or indirectly, with any person to distribute any such
securities.

         The Company has advised each Selling Stockholder that it may not use
shares registered on this Registration Statement to cover short sales of Common
Stock made prior to the date on which this Registration Statement shall have
been declared effective by the Commission. If a Selling Stockholder uses this
prospectus for any sale of the Common Stock, it will be subject to the
prospectus delivery requirements of the Securities Act. The Selling Stockholders
will be responsible to comply with the applicable provisions of the Securities
Act and Exchange Act, and the rules and regulations thereunder promulgated,
including, without limitation, Regulation M, as applicable to such Selling
Stockholders in connection with resales of their respective shares under this
Registration Statement.

         The Company is required to pay all fees and expenses incident to the
registration of the shares, but the Company will not receive any proceeds from
the sale of the Common Stock. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act. If the Selling Stockholders use this
prospectus for any sale of the Common Stock, they will be subject to the
prospectus delivery requirements of the Securities Act.
<PAGE>
                                                                        Annex B

                     FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

                 SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

The undersigned beneficial owner of common stock (the "COMMON STOCK"), of
Flexible Solutions International, Inc. (the "COMPANY") understands that the
Company has filed or intends to file with the Securities and Exchange Commission
(the "COMMISSION") a Registration Statement for the registration and resale of
the Registrable Securities, in accordance with the terms of the Registration
Rights Agreement, dated as of June 8, 2005 (the "REGISTRATION RIGHTS
AGREEMENT"), among the Company and the Investors named therein. A copy of the
Registration Rights Agreement is available from the Company upon request at the
address set forth below. All capitalized terms used and not otherwise defined
herein shall have the meanings ascribed thereto in the Registration Rights
Agreement.

The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:

                                  QUESTIONNAIRE

1.       NAME.

         (a)      Full Legal Name of Selling Securityholder


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


         (b)      Full Legal Name of Registered Holder (if not the same as (a)
                  above) through which Registrable Securities Listed in Item 3
                  below are held:


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


         (c)      Full Legal Name of Natural Control Person (which means a
                  natural person who directly or indirectly alone or with others
                  has power to vote or dispose of the securities covered by the
                  questionnaire):


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



2.  ADDRESS FOR NOTICES TO SELLING SECURITYHOLDER:


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

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

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Telephone:
          ----------------------------------------------------------------------
Fax:
Contact Person:

3.  BENEFICIAL OWNERSHIP OF REGISTRABLE SECURITIES:

                  Type and Number of Registrable Securities beneficially owned:


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

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

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



4.  BROKER-DEALER STATUS:

         (a) Are you a broker-dealer?

                                            Yes      No

         Note:  If yes, the Commission's staff has indicated that you should be
                identified as an underwriter in the Registration Statement.

         (b) Are you an affiliate of a broker-dealer?

                                            Yes      No

         (c)      If you are an affiliate of a broker-dealer, do you certify
                  that you bought the Registrable Securities in the ordinary
                  course of business, and at the time of the purchase of the
                  Registrable Securities to be resold, you had no agreements or
                  understandings, directly or indirectly, with any person to
                  distribute the Registrable Securities?

                                            Yes      No

         Note:  If no, the Commission's staff has indicated that you should be
                identified as an underwriter in the Registration Statement.

5. BENEFICIAL OWNERSHIP OF OTHER SECURITIES OF THE COMPANY OWNED BY THE SELLING
SECURITYHOLDER.

         Except as set forth below in this Item 5, the undersigned is not the
         beneficial or registered owner of any securities of the Company other
         than the Registrable Securities listed above in Item 3.

                  Type and Amount of Other Securities beneficially owned by the
Selling Securityholder:


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

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


6.  RELATIONSHIPS WITH THE COMPANY:

         Except as set forth below, neither the undersigned nor any of its
         affiliates, officers, directors or principal equity holders (owners of
         5% of more of the equity securities of the undersigned) has held any
         position or office or has had any other material relationship with the
         Company (or its predecessors or affiliates) during the past three
         years.

         State any exceptions here:


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

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



The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof and prior to the Effective Date for the Registration Statement.

By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Registration Statement
and the related prospectus.

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

Dated:                Beneficial Owner:
       ---------------                  ----------------------------------------

                      By:
                           -----------------------------------------------------
                           Name:
                           Title:

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

                                    [                 ]






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>3
<FILENAME>fs_qa50630x105.txt
<TEXT>
                                                                    EXHIBIT 10.5

NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED
BY SUCH SECURITIES.



                     FLEXIBLE SOLUTIONS INTERNATIONAL, INC.


                                     WARRANT


Warrant No. PICTET1                           Original Issue Date:  June 8, 2005

         FLEXIBLE SOLUTIONS INTERNATIONAL, INC., a Nevada corporation (the
"COMPANY"), hereby certifies that, for value received, PICTET ET CIE, GENEVA or
its registered assigns (the "HOLDER"), is entitled to purchase from the Company
up to a total of 87,400 shares of Common Stock (each such share, a "WARRANT
SHARE" and all such shares, the "WARRANT SHARES"), at any time and from time to
time from and after the Original Issue Date and through and including June 8,
2009 (the "EXPIRATION DATE"), and subject to the following terms and conditions:

1. Definitions. As used in this Warrant, the following terms shall have the
respective definitions set forth in this Section 1. Capitalized terms that are
used and not defined in this Warrant that are defined in the Purchase Agreement
(as defined below) shall have the respective definitions set forth in the
Purchase Agreement.

         "BUSINESS DAY" means any day except Saturday, Sunday and any day which
is a federal legal holiday or a day on which banking institutions in the State
of New York or Victoria, British Columbia are authorized or required by law or
other governmental action to close.

         "COMMON STOCK" means the common stock of the Company, par value $.001
per share, and any securities into which such common stock may hereafter be
reclassified.

         "EXERCISE PRICE" means $4.50, subject to adjustment in accordance with
Section 9.

         "FUNDAMENTAL TRANSACTION" means any of the following: (1) the Company
effects any merger or consolidation of the Company with or into another Person,
(2) the Company effects any sale of all or substantially all of its assets in
one or a series of related transactions, (3) any tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, or (4) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property.

         "ORIGINAL ISSUE DATE" means the Original Issue Date first set forth on
the first page of this Warrant.

         "NEW YORK COURTS" means the state and federal courts sitting in the
City of New York, Borough of Manhattan.

         "PURCHASE AGREEMENT" means the Subscription Agreement, dated May 24,
2005, to which the Company and the original Holder are parties.

         "TRADING DAY" means (i) a day on which the Common Stock is traded on a
Trading Market (other than the OTC Bulletin Board), or (ii) if the Common Stock
is not listed on a Trading Market (other than the OTC Bulletin Board), a day on
which the Common Stock is traded in the over-the-counter market, as reported by
the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any
Trading Market, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding to its functions
of reporting prices); provided, that in the event that the Common Stock is not
listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day
shall mean a Business Day.

2. Registration of Warrant. The Company shall register this Warrant upon records
to be maintained by the Company for that purpose (the "WARRANT REGISTER"), in
the name of the record Holder hereof from time to time. The Company may deem and
treat the registered Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary.

3. Registration of Transfers. The Company shall register the transfer of any
portion of this Warrant in the Warrant Register, upon surrender of this Warrant,
with the Form of Assignment attached hereto duly completed and signed, to the
Company at its address specified herein. Upon any such registration or transfer,
a new Warrant to purchase Common Stock, in substantially the form of this
Warrant (any such new Warrant, a "NEW Warrant"), evidencing the portion of this
Warrant so transferred shall be issued to the transferee and a New Warrant
evidencing the remaining portion of this Warrant not so transferred, if any,
shall be issued to the transferring Holder. The acceptance of the New Warrant by
the transferee thereof shall be deemed the acceptance by such transferee of all
of the rights and obligations of a holder of a Warrant.

4. Exercise and Duration of Warrants. This Warrant shall be exercisable by the
registered Holder at any time and from time to time on or after the Original
Issue Date and through and including the Expiration Date. At 6:30 p.m., New York
City time on the Expiration Date, the portion of this Warrant not exercised
prior thereto shall be and become void and of no value. The Company may not call
or redeem any portion of this Warrant without the prior written consent of the
affected Holder.

5. Delivery of Warrant Shares.

(a) To effect exercises hereunder, the Holder shall not be required to
physically surrender this Warrant unless the aggregate Warrant Shares
represented by this Warrant is being exercised. Upon delivery of the Exercise
Notice (in the form attached hereto) to the Company (with the attached Warrant
Shares Exercise Log) at its address for notice set forth herein and upon payment
of the Exercise Price multiplied by the number of Warrant Shares that the Holder
intends to purchase hereunder, the Company shall promptly (but in no event later
than three Trading Days after the Date of Exercise (as defined herein)) issue
and deliver to the Holder, a certificate for the Warrant Shares issuable upon
such exercise, which, unless otherwise required by the Purchase Agreement, shall
be free of restrictive legends. The Company shall, upon request of the Holder
and subsequent to the date on which a registration statement covering the resale
of the Warrant Shares has been declared effective by the Securities and Exchange
Commission, use its reasonable best efforts to deliver Warrant Shares hereunder
electronically through the Depository Trust Corporation or another established
clearing corporation performing similar functions, if available, provided, that,
the Company may, but will not be required to, change its procedures now in
effect. A "DATE OF EXERCISE" means the date on which the Holder shall have
delivered to the Company: (i) the Exercise Notice (with the Warrant Exercise Log
attached to it), appropriately completed and duly signed and (ii) if such Holder
is not utilizing the cashless exercise provisions set forth in this Warrant,
payment of the Exercise Price for the number of Warrant Shares so indicated by
the Holder to be purchased.

(b) If by the third Trading Day after a Date of Exercise the Company fails to
deliver the required number of Warrant Shares in the manner required pursuant to
Section 5(a), then the Holder will have the right to rescind such exercise.

(c) If by the seventh Trading Day after a Date of Exercise the Company fails to
deliver the required number of Warrant Shares in the manner required pursuant to
Section 5(a), and if after such seventh Trading Day and prior to the receipt of
such Warrant Shares, the Holder purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of the Warrant Shares which the Holder anticipated receiving upon such
exercise (a "BUY-IN"), then the Company shall (1) pay in cash to the Holder the
amount by which (x) the Holder's total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y) the
amount obtained by multiplying (A) the number of Warrant Shares that the Company
was required to deliver to the Holder in connection with the exercise at issue
by (B) the closing bid price of the Common Stock on the Date of Exercise and (2)
at the option of the Holder, either reinstate the portion of the Warrant and
equivalent number of Warrant Shares for which such exercise was not honored or
deliver to the Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and delivery
obligations hereunder. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In.

(d) If this Warrant is exercised in accordance with Section 10(a), upon receipt
of immediately available funds from the Holder, the Company's obligations to
issue and deliver Warrant Shares in accordance with the terms hereof are
absolute and unconditional, irrespective of any action or inaction by the Holder
to enforce the same, any waiver or consent with respect to any provision hereof,
the recovery of any judgment against any Person or any action to enforce the
same, or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to
the Company or any violation or alleged violation of law by the Holder or any
other Person, and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the Holder in connection with the
issuance of Warrant Shares. Nothing herein shall limit a Holder's right to
pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company's failure to timely deliver
certificates representing Warrant Shares upon exercise of the Warrant as
required pursuant to the terms hereof.

6. Charges, Taxes and Expenses. Issuance and delivery of Warrant Shares upon
exercise of this Warrant shall be made without charge to the Holder for any
issue or transfer tax, withholding tax, transfer agent fee or other incidental
tax or expense in respect of the issuance of such certificates, all of which
taxes and expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or Warrants in a name other than that of the Holder. The Holder shall be
responsible for all other tax liability that may arise as a result of holding or
transferring this Warrant or receiving Warrant Shares upon exercise hereof.

7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable indemnity (which shall not include a surety bond), if requested.
Applicants for a New Warrant under such circumstances shall also comply with
such other reasonable regulations and procedures and pay such other reasonable
third-party costs as the Company may prescribe. If a New Warrant is requested as
a result of a mutilation of this Warrant, then the Holder shall deliver such
mutilated Warrant to the Company as a condition precedent to the Company's
obligation to issue the New Warrant.

8. Reservation of Warrant Shares. The Company covenants that it will at all
times reserve and keep available out of the aggregate of its authorized but
unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant as herein
provided, the number of Warrant Shares which are then issuable and deliverable
upon the exercise of this entire Warrant, free from preemptive rights or any
other contingent purchase rights of Persons other than the Holder (taking into
account the adjustments and restrictions of Section 9). The Company covenants
that all Warrant Shares so issuable and deliverable shall, upon issuance and the
payment of the applicable Exercise Price in accordance with the terms hereof, be
duly and validly authorized, issued and fully paid and nonassessable.

9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable
upon exercise of this Warrant are subject to adjustment from time to time as set
forth in this Section 9.

(a) Stock Dividends and Splits. If the Company, at any time while this Warrant
is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes
a distribution on any class of capital stock that is payable in shares of Common
Stock, (ii) subdivides outstanding shares of Common Stock into a larger number
of shares, or (iii) combines outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such
event. Any adjustment made pursuant to clause (i) of this paragraph shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.

(b) Fundamental Transactions. If, at any time while this Warrant is outstanding
there is a Fundamental Transaction, then the Holder shall have the right
thereafter to receive, upon exercise of this Warrant, the same amount and kind
of securities, cash or property as it would have been entitled to receive upon
the occurrence of such Fundamental Transaction if it had been, immediately prior
to such Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant (the "ALTERNATE CONSIDERATION").
For purposes of any such exercise, the determination of the Exercise Price shall
be appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such Fundamental
Transaction. At the Holder's option and request, any successor to the Company or
surviving entity in such Fundamental Transaction shall, either (1) issue to the
Holder a new warrant substantially in the form of this Warrant and consistent
with the foregoing provisions and evidencing the Holder's right to purchase the
Alternate Consideration for the aggregate Exercise Price upon exercise thereof,
or (2) purchase the Warrant from the Holder for a purchase price, payable in
cash within five Trading Days after such request (or, if later, on the effective
date of the Fundamental Transaction), equal to the Black Scholes value of the
remaining unexercised portion of this Warrant on the date of such request. The
terms of any agreement pursuant to which a Fundamental Transaction is effected
shall include terms requiring any such successor or surviving entity to comply
with the provisions of this paragraph (c) and insuring that the Warrant (or any
such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.

(c) Subsequent Equity Sales.

(i) If the Company or any subsidiary thereof, as applicable, shall at any time
issue shares of Common Stock or Common Stock Equivalents entitling any Person to
acquire shares of Common Stock, at a price per share less than the Threshold
Price (if the holder of the Common Stock or Common Stock Equivalent so issued
shall at any time, whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices or otherwise, or
due to warrants, options or rights issued in connection with such issuance, be
entitled to receive shares of Common Stock at a price less than the Threshold
Price, such issuance shall be deemed to have occurred for less than the
Threshold Price), then, (A) if such issuance occurs prior to the one-year
anniversary of the Closing Date, the Exercise Price shall be reduced to equal
such lower price, and (B) if such issuance occurs subsequent to the one year
anniversary of the Closing Date, the Exercise Price shall be multiplied by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to the issuance of such shares of Common Stock or
such Common Stock Equivalents plus the number of shares of Common Stock which
the offering price for such shares of Common Stock or Common Stock Equivalents
would purchase at the closing price of the Common Stock on the Closing Date, and
the denominator of which shall be the sum of the number of shares of Common
Stock outstanding immediately prior to such issuance plus the number of shares
of Common Stock so issued or issuable. Such adjustment shall be made whenever
such Common Stock or Common Stock Equivalents are issued. The Company shall
notify the Holder in writing, no later than the Trading Day following the
issuance of any Common Stock or Common Stock Equivalent subject to this section,
indicating therein the applicable issuance price, or of applicable reset price,
exchange price, conversion price and other pricing terms. If prior to the
one-year anniversary of the Closing Date, the Company enters into any
understanding or agreement to issue or sell securities, or otherwise engages in
discussions with any Person in connection with a potential issuance or sale of
securities that would trigger an adjustment to the Exercise Price, then
notwithstanding the fact that such actual issuance of Common Stock or Common
Stock Equivalents occurs after the one-year anniversary of the Closing Date,
such issuance will be treated as if it had occurred prior to the one-year
anniversary of the Closing Date.

(ii) For purposes of this subsection 9(c), the following subsections (c)(ii)(l)
to (c)(ii)(6) shall also be applicable:

(1) Issuance of Rights or Options. In case at any time the Company shall in any
manner grant (directly and not by assumption in a merger or otherwise) any
warrants or other rights to subscribe for or to purchase, or any options for the
purchase of, Common Stock or any stock or security convertible into or
exchangeable for Common Stock (such warrants, rights or options being called
"OPTIONS" and such convertible or exchangeable stock or securities being called
"CONVERTIBLE SECURITIES") whether or not such Options or the right to convert or
exchange any such Convertible Securities are immediately exercisable, and the
price per share for which Common Stock is issuable upon the exercise of such
Options or upon the conversion or exchange of such Convertible Securities
(determined by dividing (i) the sum (which sum shall constitute the applicable
consideration) of (x) the total amount, if any, received or receivable by the
Company as consideration for the granting of such Options, plus (y) the
aggregate amount of additional consideration payable to the Company upon the
exercise of all such Options, plus (z), in the case of such Options which relate
to Convertible Securities, the aggregate amount of additional consideration, if
any, payable upon the issue or sale of such Convertible Securities and upon the
conversion or exchange thereof, by (ii) the total maximum number of shares of
Common Stock issuable upon the exercise of such Options or upon the conversion
or exchange of all such Convertible Securities issuable upon the exercise of
such Options) shall be less than the Threshold Price in effect immediately prior
to the time of the granting of such Options, then the total number of shares of
Common Stock issuable upon the exercise of such Options or upon conversion or
exchange of the total amount of such Convertible Securities issuable upon the
exercise of such Options shall be deemed to have been issued for such price per
share as of the date of granting of such Options or the issuance of such
Convertible Securities and thereafter shall be deemed to be outstanding for
purposes of adjusting the Exercise Price. Except as otherwise provided in
subsection 9(c)(ii)(3), no adjustment of the Exercise Price shall be made upon
the actual issue of such Common Stock or of such Convertible Securities upon
exercise of such Options or upon the actual issue of such Common Stock upon
conversion or exchange of such Convertible Securities.

(2) Issuance of Convertible Securities. In case the Company shall in any manner
issue (directly and not by assumption in a merger or otherwise) or sell any
Convertible Securities, whether or not the rights to exchange or convert any
such Convertible Securities are immediately exercisable, and the price per share
for which Common Stock is issuable upon such conversion or exchange (determined
by dividing (i) the sum (which sum shall constitute the applicable
consideration) of (x) the total amount received or receivable by the Company as
consideration for the issue or sale of such Convertible Securities, plus (y) the
aggregate amount of additional consideration, if any, payable to the Company
upon the conversion or exchange thereof, by (ii) the total number of shares of
Common Stock issuable upon the conversion or exchange of all such Convertible
Securities) shall be less than the Threshold Price in effect immediately prior
to the time of such issue or sale, then the total maximum number of shares of
Common Stock issuable upon conversion or exchange of all such Convertible
Securities shall be deemed to have been issued for such price per share as of
the date of the issue or sale of such Convertible Securities and thereafter
shall be deemed to be outstanding for purposes of adjusting the Exercise Price,
provided that (a) except as otherwise provided in subsection 9(c)(ii)(3), no
adjustment of the Exercise Price shall be made upon the actual issuance of such
Common Stock upon conversion or exchange of such Convertible Securities and (b)
no further adjustment of the Exercise Price shall be made by reason of the issue
or sale of Convertible Securities upon exercise of any Options to purchase any
such Convertible Securities for which adjustments of the Exercise Price have
been made pursuant to the other provisions of subsection 9(c).

(3) Change in Option Price or Conversion Rate. Upon the happening of any of the
following events, namely, if the purchase price provided for in any Option
referred to in subsection 9(c)(ii)(l) hereof, the additional consideration, if
any, payable upon the conversion or exchange of any Convertible Securities
referred to in subsections 9(c)(ii)(l) or 9(c)(ii)(2), or the rate at which
Convertible Securities referred to in subsections 9(c)(ii)(l) or 9(c)(ii)(2) are
convertible into or exchangeable for Common Stock shall change at any time
(including, but not limited to, changes under or by reason of provisions
designed to protect against dilution), the Exercise Price in effect at the time
of such event shall forthwith be readjusted to the Exercise Price which would
have been in effect at such time had such Options or Convertible Securities
still outstanding provided for such changed purchase price, additional
consideration or conversion rate, as the case may be, at the time initially
granted, issued or sold. On the termination of any Option for which any
adjustment was made pursuant to this subsection 9(c) or any right to convert or
exchange Convertible Securities for which any adjustment was made pursuant to
this subsection 9(c) (including without limitation upon the redemption or
purchase for consideration of such Convertible Securities by the Company), the
Exercise Price then in effect hereunder shall forthwith be changed to the
Exercise Price which would have been in effect at the time of such termination
had such Option or Convertible Securities, to the extent outstanding immediately
prior to such termination, never been issued.

(4) Stock Dividends. Subject to the provisions of this Section 9(c), in case the
Company shall declare a dividend or make any other distribution upon any stock
of the Company (other than the Common Stock) payable in Common Stock, Options or
Convertible Securities, then any Common Stock, Options or Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without consideration.

(5) Consideration for Stock. In case any shares of Common Stock, Options or
Convertible Securities shall be issued or sold for cash, the consideration
received therefor shall be deemed to be the net amount received by the Company
therefor, after deduction therefrom of any expenses incurred or any underwriting
commissions or concessions paid or allowed by the Company in connection
therewith. In case any shares of Common Stock, Options or Convertible Securities
shall be issued or sold for a consideration other than cash, the amount of the
consideration other than cash received by the Company shall be deemed to be the
fair value of such consideration as determined in good faith by the Board of
Directors of the Company, after deduction of any expenses incurred or any
underwriting commissions or concessions paid or allowed by the Company in
connection therewith. In case any Options shall be issued in connection with the
issue and sale of other securities of the Company, together comprising one
integral transaction in which no specific consideration is allocated to such
Options by the parties thereto, such Options shall be deemed to have been issued
for such consideration as determined in good faith by the Board of Directors of
the Company. If Common Stock, Options or Convertible Securities shall be issued
or sold by the Company and, in connection therewith, other Options or
Convertible Securities (the "ADDITIONAL RIGHTS") are issued, then the
consideration received or deemed to be received by the Company shall be reduced
by the fair market value of the Additional Rights (as determined using the
Black-Scholes option pricing model or another method mutually agreed to by the
Company and the Holder). The Board of Directors of the Company shall respond
promptly, in writing, to an inquiry by the Holders as to the fair market value
of the Additional Rights. In the event that the Board of Directors of the
Company and the Holders are unable to agree upon the fair market value of the
Additional Rights, the Company and the Holders shall jointly select an
appraiser, who is experienced in such matters. The decision of such appraiser
shall be final and conclusive, and the cost of such appraiser shall be borne
evenly by the Company and the Holder.

(6) Record Date. In case the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them (i) to receive a dividend or
other distribution payable in Common Stock, Options or Convertible Securities or
(ii) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be.

(iii) Notwithstanding the foregoing, no adjustment will be made under this
paragraph (c) in respect of: (i) the issuance of securities upon the exercise or
conversion of any Common Stock or Common Stock Equivalents issued by the Company
prior to the date hereof (but will apply to any amendments, modifications and
reissuances thereof), (ii) the grant of options, warrants or other Common Stock
Equivalents under any duly authorized Company stock option, restricted stock
plan or stock purchase plan whether now existing or hereafter approved by the
Company and its stockholders in the future (but not as to any amendments or
other modifications to the amount of Common Stock issuable thereunder, the terms
set forth therein, or the exercise price set forth therein) and the issuance of
Common Stock in respect thereof, or (iii) up to an aggregate of [20% of the
outstanding Common Stock prior to such acquisition] shares of Common Stock
issued as consideration for the acquisition of another company or business in
which the shareholders of the Company do not have an ownership interest, which
acquisition has been approved by the Board of Directors of the Company.

(d) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise
Price pursuant to this Section 9, the number of Warrant Shares that may be
purchased upon exercise of this Warrant shall be increased or decreased
proportionately, so that after such adjustment the aggregate Exercise Price
payable hereunder for the adjusted number of Warrant Shares shall be the same as
the aggregate Exercise Price in effect immediately prior to such adjustment.

(e) Calculations. All calculations under this Section 9 shall be made to the
nearest cent or the nearest 1/100th of a share, as applicable. The number of
shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the disposition of any
such shares shall be considered an issue or sale of Common Stock.

(f) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to
this Section 9, the Company at its expense will promptly compute such adjustment
in accordance with the terms of this Warrant and prepare a certificate setting
forth such adjustment, including a statement of the adjusted Exercise Price and
adjusted number or type of Warrant Shares or other securities issuable upon
exercise of this Warrant (as applicable), describing the transactions giving
rise to such adjustments and showing in detail the facts upon which such
adjustment is based. Upon written request, the Company will promptly deliver a
copy of each such certificate to the Holder and to the Company's Transfer Agent.

(g) Notice of Corporate Events. If the Company (i) declares a dividend or any
other distribution of cash, securities or other property in respect of its
Common Stock, including without limitation any granting of rights or warrants to
subscribe for or purchase any capital stock of the Company or any Subsidiary,
(ii) authorizes or approves, enters into any agreement contemplating or solicits
stockholder approval for any Fundamental Transaction or (iii) authorizes the
voluntary dissolution, liquidation or winding up of the affairs of the Company,
then the Company shall deliver to the Holder a notice describing the material
terms and conditions of such transaction (but only to the extent such disclosure
would not result in the dissemination of material, non-public information to the
Holder) at least 10 calendar days prior to the applicable record or effective
date on which a Person would need to hold Common Stock in order to participate
in or vote with respect to such transaction, and the Company will take all steps
reasonably necessary in order to insure that the Holder is given the practical
opportunity to exercise this Warrant prior to such time so as to participate in
or vote with respect to such transaction; provided, however, that the failure to
deliver such notice or any defect therein shall not affect the validity of the
corporate action required to be described in such notice.

10. Payment of Exercise Price. The Holder may pay the Exercise Price in one of
the following manners:

(a) Cash Exercise. The Holder may deliver immediately available funds; or

(b) Cashless Exercise. After the earlier to occur of (i) 90 days following the
Closing Date and (ii) the Effectiveness Date (as defined in the Registration
Rights Agreement) of the Registration Statement, if an Exercise Notice is
delivered at a time when a registration statement permitting the Holder to
resell the Warrant Shares is not then effective or the prospectus forming a part
thereof is not then available to the Holder for the resale of the Warrant
Shares, then the Holder may notify the Company in an Exercise Notice of its
election to utilize cashless exercise, in which event the Company shall issue to
the Holder the number of Warrant Shares determined as follows:

                                    X = Y [(A-B)/A]

                           where:

                                    X = the number of Warrant Shares to be
                                    issued to the Holder. Y = the number of
                                    Warrant Shares with respect to which this
                                    Warrant is being exercised.

                                    A = the average of the closing prices for
                                    the five Trading Days immediately prior to
                                    (but not including) the Exercise Date.

                                    B = the Exercise Price.

For purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced, on
the date this Warrant was originally issued.

11. Limitations on Exercise.

(a) Notwithstanding anything to the contrary contained herein, the number of
Warrant Shares that may be acquired by the Holder upon any exercise of this
Warrant (or otherwise in respect hereof) shall be limited to the extent
necessary to insure that, following such exercise (or other issuance), the total
number of shares of Common Stock then beneficially owned by such Holder and its
Affiliates and any other Persons whose beneficial ownership of Common Stock
would be aggregated with the Holder's for purposes of Section 13(d) of the
Exchange Act, does not exceed 4.999% of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. This provision shall
not restrict the number of shares of Common Stock which a Holder may receive or
beneficially own in order to determine the amount of securities or other
consideration that such Holder may receive in the event of a Fundamental
Transaction as contemplated in Section 9 of this Warrant. By written notice to
the Company, an Investor may waive the provisions of this Section 11(a) as to
itself but any such waiver will not be effective until the 61st day after
delivery thereof and such waiver shall have no effect on any other Investor.

(b) Notwithstanding anything to the contrary contained herein, the number of
Warrant Shares that may be acquired by the Holder upon any exercise of this
Warrant (or otherwise in respect hereof) shall be limited to the extent
necessary to insure that, following such exercise (or other issuance), the total
number of shares of Common Stock then beneficially owned by such Holder and its
Affiliates and any other Persons whose beneficial ownership of Common Stock
would be aggregated with the Holder's for purposes of Section 13(d) of the
Exchange Act, does not exceed 9.999% of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. This provision shall
not restrict the number of shares of Common Stock which a Holder may receive or
beneficially own in order to determine the amount of securities or other
consideration that such Holder may receive in the event of a Fundamental
Transaction as contemplated in Section 9 of this Warrant. This restriction may
not be waived.

(c) Notwithstanding anything to the contrary in this Warrant, if the Company has
not previously obtained Stockholder Approval, then the Company may not issue
shares of Common Stock in excess of the Issuable Maximum upon exercises of this
Warrant. The "Issuable Maximum" means, as of any date, a number of shares of
Common Stock equal to [20% of the issued and outstanding Common Stock]. Each
Investor shall be entitled to a portion of the Issuable Maximum equal to the
quotient obtained by dividing: (x) the number of Shares issued and sold to such
Investor on the Closing Date plus any Additional Shares issued to such Investor
thereafter by (y) the aggregate number of Shares issued and sold by the Company
on the Closing Date plus any Additional Shares issued to any Investor
thereafter. If any Investor shall no longer hold Warrants, then such Investor's
remaining portion of the Issuable Maximum shall be allocated pro-rata among the
remaining Investors, giving effect to the Company's desire to allocate this
limitation among the class of securities known as the Warrants. If on any
Exercise Date, or at such time as an Investor shall notify the Company that the
condition in (A) following this clause shall be in effect: (A) the aggregate
number of shares of Common Stock that would then be issuable upon exercise in
full of all then outstanding Warrants would exceed the Issuable Maximum on such
date, and (B) the Company shall not have previously obtained the vote of
shareholders, as may be required by the applicable rules and regulations of the
American Stock Exchange (or any successor entity or any other Trading Market on
which the Company's securities then trade), applicable to approve the issuance
of shares of Common Stock in excess of the Issuable Maximum pursuant to the
terms hereof (the "STOCKHOLDER APPROVAL"), then, the Company shall issue to the
Investor a number of shares of Common Stock equal to the Issuable Maximum and,
with respect to the remainder of the aggregate Warrants then held by the
Investors for which an exercise would result in an issuance of shares of Common
Stock in excess of the Issuable Maximum, the Company must use its best efforts
to seek and obtain Stockholder Approval as soon as possible, but in any event
not later than the 90th day following such Exercise Date or the date of such
request. The Company and the Holder understand and agree that Warrant Shares
issued to and then held by the Holder as a result of exercises of Warrants shall
not be entitled to cast votes on any resolution to obtain Stockholder Approval
pursuant hereto.

12. No Fractional Shares. No fractional shares of Warrant Shares will be issued
in connection with any exercise of this Warrant. In lieu of any fractional
shares which would, otherwise be issuable, the Company shall pay cash equal to
the product of such fraction multiplied by the closing price of one Warrant
Share as reported by the applicable Trading Market on the date of exercise.

13. Notices. Any and all notices or other communications or deliveries hereunder
(including, without limitation, any Exercise Notice) shall be in writing and
shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section prior to 5:30 p.m. (New York City
time) on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day or
later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the Trading
Day following the date of mailing, if sent by nationally recognized overnight
courier service, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The addresses for such communications shall be: (i) if to
the Company, to Flexible Solutions International, Inc., 615 Discovery Street,
Victoria, B.C., V8T 5G4, Canada, Attn: Dan O'Brien, or to FACSIMILE NO.:
250.477.9912 (or such other address as the Company shall indicate in writing in
accordance with this Section), or (ii) if to the Holder, to the address or
facsimile number appearing on the Warrant Register or such other address or
facsimile number as the Holder may provide to the Company in accordance with
this Section.

14. Warrant Agent. The Company shall serve as warrant agent under this Warrant.
Upon 10 days' notice to the Holder, the Company may appoint a new warrant agent.
Any corporation into which the Company or any new warrant agent may be merged or
any corporation resulting from any consolidation to which the Company or any new
warrant agent shall be a party or any corporation to which the Company or any
new warrant agent transfers substantially all of its corporate trust or
shareholders services business shall be a successor warrant agent under this
Warrant without any further act. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed (by first class
mail, postage prepaid) to the Holder at the Holder's last address as shown on
the Warrant Register.

15. Miscellaneous.

(a) This Warrant shall be binding on and inure to the benefit of the parties
hereto and their respective successors and assigns. Subject to the preceding
sentence, nothing in this Warrant shall be construed to give to any Person other
than the Company and the Holder any legal or equitable right, remedy or cause of
action under this Warrant. This Warrant may be amended only in writing signed by
the Company and the Holder and their successors and assigns.

(b) All questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York (except for
matters governed by corporate law in the State of Nevada), without regard to the
principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of this
Warrant and the transactions herein contemplated ("PROCEEDINGS") (whether
brought against a party hereto or its respective Affiliates, employees or
agents) shall be commenced exclusively in the New York Courts. Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the New York Courts
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any New York Court, or that such
Proceeding has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Warrant and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. Each party hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law,
any and all right to trial by jury in any legal proceeding arising out of or
relating to this Warrant or the transactions contemplated hereby. If either
party shall commence a Proceeding to enforce any provisions of this Warrant,
then the prevailing party in such Proceeding shall be reimbursed by the other
party for its attorney's fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.

(c) The headings herein are for convenience only, do not constitute a part of
this Warrant and shall not be deemed to limit or affect any of the provisions
hereof.

(d) In case any one or more of the provisions of this Warrant shall be invalid
or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Warrant shall not in any way be affected
or impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.

(e) Prior to exercise of this Warrant, the Holder hereof shall not, by reason of
being a Holder, be entitled to any rights of a stockholder with respect to the
Warrant Shares.



<PAGE>


         IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.


                                        FLEXIBLE SOLUTIONS INTERNATIONAL, INC.



                                        By:
                                           --------------------------
                                            Name: Dan O'Brien
                                            Title:  CEO, President

<PAGE>

                                 EXERCISE NOTICE
                     FLEXIBLE SOLUTIONS INTERNATIONAL, INC.
                           WARRANT DATED JUNE 8, 2005


The undersigned Holder hereby irrevocably elects to purchase _____________
shares of Common Stock pursuant to the above referenced Warrant. Capitalized
terms used herein and not otherwise defined have the respective meanings set
forth in the Warrant.

(1) The undersigned Holder hereby exercises its right to purchase
_________________ Warrant Shares pursuant to the Warrant.

(2) The Holder intends that payment of the Exercise Price shall be made as
(check one):

                      ____"Cash Exercise" under Section 10

                    ____"Cashless Exercise" under Section 10

(3) If the holder has elected a Cash Exercise, the holder shall pay the sum of
$____________ to the Company in accordance with the terms of the Warrant.

(4) Pursuant to this Exercise Notice, the Company shall deliver to the holder
_______________ Warrant Shares in accordance with the terms of the Warrant.

(5) By its delivery of this Exercise Notice, the undersigned represents and
warrants to the Company that in giving effect to the exercise evidenced hereby
the Holder will not beneficially own in excess of the number of shares of Common
Stock (determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934) permitted to be owned under Section 11 of this Warrant to which
this notice relates.

Dated:                      ,             Name of Holder:
       ---------------------  -------

                                          Pictet et Cie, Geneva

                                          By:
                                          Name:
                                          Title:

                                          (Signature must conform in all
                                          respects to name of holder as
                                          specified on the face of the Warrant)






<PAGE>

                           Warrant Shares Exercise Log



- ---- ------------------------- ------------------------ ---------------------
Date Number of Warrant Shares  Number of Warrant Shares Number  of   Warrant
     Available to be Exercised Exercised                Shares  Remaining to
                                                        be Exercised
- ---- ------------------------- ------------------------ ---------------------
<PAGE>

                     FLEXIBLE SOLUTIONS INTERNATIONAL, INC.
                     WARRANT ORIGINALLY ISSUED JUNE 8, 2005
                               WARRANT NO. PICTET1


                               FORM OF ASSIGNMENT


         [To be completed and signed only upon transfer of Warrant]

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________ the right represented by the
above-captioned Warrant to purchase ____________ shares of Common Stock to which
such Warrant relates and appoints ________________ attorney to transfer said
right on the books of the Company with full power of substitution in the
premises.

Dated:   _______________, ____


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

                                          (Signature must conform in all
                                          respects to name of holder as
                                          specified on the face of the Warrant)



                                          -------------------------------------
                                          Address of Transferee



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

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


In the presence of:


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




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>4
<FILENAME>fs_qa50630x104.txt
<TEXT>
                                                                   EXHIBIT 10.4
                             SUBSCRIPTION AGREEMENT

         Agreement, made this 24th day of May, 2005, by and between FLEXIBLE
SOLUTIONS INTERNATIONAL INC., a Nevada corporation (the "Company"), and Pictet
International Management (the "Subscriber").

         In consideration of the mutual promises and covenants herein contained,
the parties hereto agree as follows:

                                    ARTICLE I
                                  SUBSCRIPTION

         1.01 Subscription Offer. Subject to the terms and conditions hereof and
to acceptance by the Company, Subscriber hereby irrevocably offers to purchase
87,400 units of common stock with warrant exercisable for four years at a price
of $4.50 (the "securities") at a price of US$ 3.75 per share, for a total price
of $327,750. The purchase price is payable in full by wire transfer to Flexible
Solutions International Inc retainage account and to be released to Flexible
Solutions International by written authorization from the subscriber to the bank
upon receipt of the purchased share certificate and warrant agreement in good
order.

         1.02 Acceptance of Subscription. The Company reserves the right to
reject Subscriber's offer in whole or in part, for any reason, and to allocate
less than the maximum number of Securities the Subscriber hereby offers to
purchase. Any sale of Securities to Subscriber shall not be deemed to occur
until the Subscriber's offer is accepted in writing by the Company. Subscriber
shall not have any recourse against the Company if a purchase offer is rejected
in whole or in part. The Company shall reasonably notify the Subscriber in
writing of the acceptance of the purchase offer. If the purchase offer is
accepted, the Company will confirm in writing the Subscriber's purchase of the
Securities. If the purchase off is rejected in whole or in part, the Company
will promptly return to Subscriber, without deduction or interest, all or a
rateable portion of the subscription price, as the case may be, together with
all executed documents tendered by the Subscriber. If the purchase offer is
rejected in part only, Subscriber shall immediately complete, execute, and
deliver to the Company new subscription documents for the appropriate reduced
amount.

         1.03 Restrictions on Securities. The Securities have not been
registered under the Securities Act of 1933 (the `Act") or any applicable state
securities laws.

         1.04 Term Sheet. The term sheet immediately below shall govern the
specifics of the units subscribed for.

ISSUER            Flexible Solutions International ("FSI" or the "Company')

ISSUE             Common stock with Warrants

PRICING           $3.75

WARRANTS.         FSI will issue warrants to purchase 100% of the number of
                  shares of common stock that will be purchased at closing. The
                  warrants will have a 4 year life. The exercise price will be
                  120% ($4.50) percent of the Threshold Price. The shares
                  underlying the Warrants will be subject to the same
                  registration requirements as the Shares.

REGISTRATION      FSI will agree to file a registration statement covering all
                  shares and warrants within 30 days of closing. A 1% per month
                  cash penalty will accrue for the first thirty days thereafter,
                  and then 1 % per month thereafter. FSI will use its best
                  efforts to have the registration statement declared effective
                  within 90 days of closing.

PRICE PROTECTION  For the first 12 months following this financing, in the event
                  the Company issues common stock, or securities convertible or
                  exchangeable into common stock, at a price less than the
                  Purchase Price then the Purchase Price and the Warrant
                  Exercise Price will be changed to this price. Carve outs to be
                  provided for employee options and strategic financings. After
                  the Price Protection period standard weighted average
                  anti-dilution will apply to the warrants.
<PAGE>
FUTURE            FINANCINGS Investors shall have the right of participation in
                  any future equity or equity linked financings by the Company
                  for a period of 18 months following the closing in order to
                  maintain their percentage ownership in the Company.





                                   ARTITCLE II
                          REPRESENTAIONS AND WARRANTIES

         2.00 The Company warrants that it has the authority to accept the
subscription and issue the shares and warrants subscribed for.

         2.01 The Company warrants that to its knowledge, no shares of common
stock are entitled to pre-emptive or similar rights.

         2.02 The Company warrants that the shares will be issued as fully paid
for and nonassessable.

         2.03 Status of Subscriber. Subscriber, if an individual, is at least 21
years of age. If an association, each individual member of the association is at
least 21 years of age.

        2.04 Access to Information. Because of Subscriber's pre-existing
business or personal relationship with the Company or with the officers and
directors of the Company, or by reason of the business or financial experience
of Subscriber or his professional advisors who are unaffiliated with a and who
are not compensated by the Company, or an affiliate thereof, Subscriber had the
capacity to protect his own interests in connection with the offer and sale of
the Securities.

        2.05 Understanding of Investment Risks. Subscriber understands that
there is a limited market for the Securities and no assurance that a wider
market will develop, and that realization of the objectives of the Company is
subject to significant economic and business risks.

         2.06 Understanding of Nature of Securities. Subscriber understands
that:

         a) The Securities have not been registered under the Act or any state
securities laws:

         b) The Securities cannot be sold or transferred for value without
registration under the Act and applicable state laws or exemption therefrom:


         c) Only the Company can register the Securities under the Act and
applicable state securities laws:

         d) The Company has made representation to Subscriber that the Company
will register the Securities under the Act or any applicable state securities
laws by filing a registration statement within 30 days of receipt of the
subscription and will use its best efforts to ensure that the registration
statement becomes effective within 90 days of the subscription.

         2.07 Investment Intent. Subscriber represents and warrants that:

         a) Subscriber is acquiring the Securities for the Subscriber's own
account and not for or on behalf of any other person;

         b) Subscriber is acquiring the Securities for investment and not for
distribution or with the intent to divide Subscriber's participation with others
or of reselling or otherwise distributing the Securities;


         c) Neither Subscriber not anyone acting on Subscriber's behalf has paid
any commission or other remuneration to any person in connection with the
purchase of the Securities; and

         d) Subscriber will not sell the Securities without registration under
the Act and any applicable state securities law or exemption there-from.

        2.06 Residence of Subscriber. The residence of Subscriber set forth
below is the true and correct residence of Subscriber and he or she has no
present intention of becoming a resident or domiciliary of any other state,
county or jurisdiction.

        2.07 Further Assurances. Subscriber will execute and deliver to the
Company any document, or do any other act or thing, which the Company may
reasonably request in connection with the acquisition of the Securities.

        2.08 Non-disclosure. Subscriber has not distributed any written
materials furnished to Subscriber by the Company to anyone other than the
Subscriber's professional advisors.

        2.09 Ability to Bear Economic Risk. Subscriber is able to bear the
economic risk of an investment in the Securities and to maintain his investment
in the Securities for an indefinite period of time, and, further, could bear a
total loss of the investment and not change his standard of living, which
existed at the time of such investment.

         2.10 For Partnerships, Corporations, Trusts, or Other Entities Only. If
the Subscriber is a partnership, corporation, trust, or other entity,

         a) Subscriber has enclosed with this agreement appropriate evidence of
the authority of the individual executing this agreement to act on its behalf .

         b) Subscriber has the full power and authority to execute this
Subscription Agreement on behalf of such entity and to make the representation
and warranties made herein on its behalf and this investment in the Company has
been affirmatively authorized by the governing board of such entity and is not
prohibited by the governing documents of he entity.


                                   ARTICLE III
                            MISCELLANEOUS PROVISIONS

        3.01 Captions and Headings. The Article and Section headings throughout
this Agreement are for convenience of reference only and shall in no way be
deemed to define, limit or add to any provision of this Agreement.

        3.02 Entire Agreement; Amendment. This Agreement states the entire
agreement and understanding of the parties and shall supersede all prior
agreements and understanding. No Amendment of the Agreement shall be made
without the express written consent of the parties.

        3.03 Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect any other provision hereof, which
shall be construed in all respects as if such invalid or unenforceable provision
were omitted.

         3.04 Governing Law. This agreement shall be governed and construed in
accordance with the laws of the State of Nevada.

        3.05 Notices. All notices, requests, demands, consents, and other
communications hereunder shall be transmitted in writing and shall be deemed to
have been duly given when hand delivered or sent by certified mail, postage
prepaid, with return receipt requested, addresses to the parties as follows: to
the Company, at 2614 Queenswood Drive, Victoria, British Columbia, V8N 1X5, and
to Subscriber, at the address indicated below. Any party may change its address
for purposes of this Section by giving notice as provided herein.







IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.

                                       "Company"

                                       Flexible Solutions International Inc.





                                       By: Dan O'Brien, President
                                       Authorized Officer




                                       "Subscriber(s)"




Name(s) exactly as you wish your interest
in the company to be registered            1) ______________________________
                                           (please print)

                                           2)
                                           _________________________________
                                           (please print)


Title, if Subscriber is not a person       1)  _____________________________

                                           2)  _____________________________


Signatures                                 1)  _____________________________
                                           (signature)

                                           2)
                                           _________________________________
                                           (signature)


Primary Address                            1)  _____________________________

                                           2)  _____________________________


Mailing Address (if different from above)  1)  _____________________________

                                           2)  _____________________________


Contact Telephone Number(s)                1)  _____________________________

                                           2)  _____________________________


Tax Identification Number                  1)  _____________________________

                                           2)  _____________________________


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>5
<FILENAME>fs_qa50630x103.txt
<TEXT>
                                                                    EXHIBIT 10.3

                          REGISTRATION RIGHTS AGREEMENT


                  This Registration Rights Agreement (this "AGREEMENT") is made
and entered into as of April , 2005, by and among Flexible Solutions
International, Inc., a Nevada corporation (the "COMPANY"), and the investors
signatory hereto (each a "INVESTOR" and collectively, the "INVESTORS").

                  This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of April , 2005. by and among the Company and the Investors
(the "PURCHASE AGREEMENT").

                  The Company and the Investors hereby agree as follows:

1. Definitions. Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement will have the meanings given such terms in the
Purchase Agreement. As used in this Agreement, the following terms have the
respective meanings set forth in this Section 1:

                  "ADDITIONAL SHARES" means any shares of Common Stock issuable
to Investors in accordance with Section 4.7 of the Purchase Agreement.

                  "EFFECTIVE DATE" means the date that the initial Registration
Statement filed pursuant to Section 2(a) is first declared effective by the
Commission.

                  "EFFECTIVENESS DATE" means (a) with respect to the initial
Registration Statement required to be filed under Section 2(a), the earlier of:
(a)(i) the 90th day following the Closing, and (ii) the fifth Trading Day
following the date on which the Company is notified by the Commission that the
initial Registration Statement will not be reviewed or is no longer subject to
further review and comments and (b) with respect to any additional Registration
Statements that may be required pursuant to Section 2(b), the earlier of (i) the
90th day following (x) if such Registration Statement is required because the
Commission shall have notified the Company in writing that certain Registrable
Securities were not eligible for inclusion on a previously filed Registration
Statement, the date or time on which the Commission shall indicate as being the
first date or time that such Registrable Securities may then be included in a
Registration Statement, (y) if the Company issues securities that require it to
issue Additional Shares under the Purchase Agreement, the day on which such
securities were issued, or (z) if such Registration Statement is required for a
reason other than as described in (x) or (y) above, the date on which the
Company first knows, or reasonably should have known, that such additional
Registration Statement(s) is required, and (ii) the fifth Trading Day following
the date on which the Company is notified by the Commission that such additional
Registration Statement will not be reviewed or is no longer subject to further
review and comments.

                  "EFFECTIVENESS PERIOD" has the meaning set forth in Section
2(a).

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

                  "FILING DATE" means (a) with respect to the initial
Registration Statement required to be filed under Section 2(a), the 30th day
following the Closing and (b) with respect to any additional Registration
Statements that may be required pursuant to Section 2(b), the 30th day following
(x) if such Registration Statement is required because the Commission shall have
notified the Company in writing that certain Registrable Securities were not
eligible for inclusion on a previously filed Registration Statement, the date or
time on which the Commission shall indicate as being the first date or time that
such Registrable Securities may then be included in a Registration Statement,
(y) if the Company issues securities that require it to issue Additional Shares
under the Purchase Agreement, the day on which such securities were issued, or
(z) if such Registration Statement is required for a reason other than as
described in (x) or (y) above, the date on which the Company first knows, or
reasonably should have known, that such additional Registration Statement(s) is
required.

                  "HOLDER" or "HOLDERS" means the holder or holders, as the case
may be, from time to time of Registrable Securities.

                  "INDEMNIFIED PARTY" has the meaning set forth in Section 5(c).

                  "INDEMNIFYING PARTY" has the meaning set forth in Section
5(c).

                  "LOSSES" has the meaning set forth in Section 5(a).

                  "NEW YORK COURTS" means the state and federal courts sitting
in the City of New York, Borough of Manhattan.

                  "PROCEEDING" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

                  "PROSPECTUS" means the prospectus included in a Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by a Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

                  "REGISTRABLE SECURITIES" means: (i) the Shares, (ii) the
Warrant Shares, (iii) any New Issue Securities acquired by a Holder pursuant to
Section 4.3 of the Purchase Agreement, (iv) any Additional Shares issued and/or
issuable pursuant to Section 4.7 of the Purchase Agreement, and (v) any
securities issued or issuable upon any stock split, dividend or other
distribution, recapitalization or similar event, or any conversion price
adjustment with respect to any of the securities referenced in (i), (ii), (iii),
or (iv) above.

                  "REGISTRATION STATEMENT" means each of the following: (i) the
initial registration statement required to be filed in accordance with Section
2(a) and (ii) each additional registration statement that may be required to be
filed under Section 2(b), and including, in each case, the Prospectus,
amendments and supplements to each such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by reference in
such registration statement.

                  "RULE 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

                  "RULE 415" means Rule 415 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

                  "RULE 424" means Rule 424 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended.

                  "SHARES" means the shares of Common Stock issued or issuable
to the Investors at Closing pursuant to the Purchase Agreement.

                  "WARRANTS" means the Common Stock purchase warrants issued or
issuable to the Investors pursuant to the Purchase Agreement.

                  "WARRANT SHARES" means the shares of Common Stock issued or
issuable upon exercise of the Warrants.

2. Registration.

(a) On or prior to each Filing Date, the Company shall prepare and file with the
Commission a Registration Statement covering the resale of all Registrable
Securities not already covered by an existing and effective Registration
Statement for an offering to be made on a continuous basis pursuant to Rule 415,
on Form S-3 (except if the Company is not then eligible to register for resale
the Registrable Securities on Form S-3, in which case such registration shall be
on another appropriate form for such purpose). Such Registration Statement shall
contain (except if otherwise required pursuant to written comments received from
the Commission upon a review of such Registration Statement) the "Plan of
Distribution" attached hereto as Annex A. The Company shall cause such
Registration Statement to be declared effective under the Securities Act as soon
as possible but, in any event, no later than its Effectiveness Date, and shall
use its reasonable best efforts to keep the Registration Statement continuously
effective under the Securities Act until the date which is the earlier of (i)
four years after its Effective Date, (ii) such time as all of the Registrable
Securities covered by such Registration Statement have been publicly sold by the
Holders, or (iii) such time as all of the Registrable Securities covered by such
Registration Statement may be sold by the Holders pursuant to Rule 144(k) as
determined by the counsel to the Company pursuant to a written opinion letter to
such effect, addressed and acceptable to the Company's transfer agent and the
affected Holders (the "EFFECTIVENESS PERIOD").

(b) If for any reason the Commission does not permit all of the Registrable
Securities to be included in the Registration Statement filed pursuant to
Section 2(a), or for any other reason any outstanding or then issuable
Registrable Securities are not then covered by an effective Registration
Statement, then the Company shall prepare and file by the Filing Date for such
Registration Statement, an additional Registration Statement covering the resale
of all Registrable Securities not already covered by an existing and effective
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415, on Form S-3 (except if the Company is not then eligible to register
for resale the Registrable Securities on Form S-3, in which case such
registration shall be on another appropriate form for such purpose). Each such
Registration Statement shall contain (except if otherwise required pursuant to
written comments received from the Commission upon a review of such Registration
Statement) the "Plan of Distribution" attached hereto as Annex A. The Company
shall use its best efforts to cause each such Registration Statement to be
declared effective under the Securities Act as soon as possible but, in any
event, by its Effectiveness Date, and shall use its reasonable best efforts to
keep such Registration Statement continuously effective under the Securities Act
during the entire Effectiveness Period.

(c) If: (i) a Registration Statement is not filed on or prior to its Filing Date
(if the Company files a Registration Statement without affording the Holders the
opportunity to review and comment on the same as required by Section 3(a) hereof
for at least two Business Days, the Company shall not be deemed to have
satisfied this clause (i)), or (ii) a Registration Statement is not declared
effective by the Commission on or prior to its required Effectiveness Date, or
(iii) after its Effective Date, without regard for the reason thereunder or
efforts therefore, such Registration Statement ceases for any reason to be
effective and available to the Holders as to all Registrable Securities to which
it is required to cover at any time prior to the expiration of its Effectiveness
Period for more than an aggregate of 30 Trading Days (which need not be
consecutive) (any such failure or breach being referred to as an "EVENT," and
for purposes of clauses (i) or (ii) the date on which such Event occurs, or for
purposes of clause (iii) the date which such 30 Trading Day-period is exceeded,
being referred to as "EVENT DATE"), then in addition to any other rights the
Holders may have hereunder or under applicable law: on the one-month anniversary
of each such Event Date, and on each monthly anniversary thereafter, the Company
shall pay to each Holder an amount in cash, as partial liquidated damages and
not as a penalty, equal to 1.0% of the aggregate Investment Amount paid by such
Holder pursuant to the Purchase Agreement until the applicable Event is cured.
The parties agree that the Company will not be liable for liquidated damages
under this Section in respect of the Warrants. The partial liquidated damages
pursuant to the terms hereof shall apply on a daily pro-rata basis for any
portion of a month prior to the cure of an Event, except in the case of the
first Event Date.

(d) Each Holder agrees to furnish to the Company a completed Questionnaire in
the form attached to this Agreement as Annex B (a "SELLING HOLDER
QUESTIONNAIRE"). The Company shall not be required to include the Registrable
Securities of a Holder in a Registration Statement and shall not be required to
pay any liquidated or other damages under Section 2(c) to any Holder who fails
to furnish to the Company a fully completed Selling Holder Questionnaire within
two Business Days of a request by the Company for such Selling Holder
Questionnaire (subject to the requirements set forth in Section 3(a)).

3. Registration Procedures.

                  In connection with the Company's registration obligations
hereunder, the Company shall:

(a) Not less than four Trading Days prior to the filing of a Registration
Statement or any related Prospectus or any amendment or supplement thereto, the
Company shall furnish to each Holder copies of the "Selling Stockholders"
section of such document, the "Plan of Distribution" and any risk factor
contained in such document that addresses specifically this transaction or the
Selling Stockholders, as proposed to be filed, which documents will be subject
to the review of such Holder for two Business Days after such Holder's receipt
thereof. The Company shall not file a Registration Statement, any Prospectus or
any amendments or supplements thereto in which the "Selling Stockholder" section
thereof differs from the disclosure received from a Holder in its Selling Holder
Questionnaire (as amended or supplemented).

(b) (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to each Registration Statement and the Prospectus
used in connection therewith as may be necessary to keep such Registration
Statement continuously effective as to the applicable Registrable Securities for
its Effectiveness Period and prepare and file with the Commission such
additional Registration Statements in order to register for resale under the
Securities Act all of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement,
and as so supplemented or amended to be filed pursuant to Rule 424; (iii)
respond as promptly as reasonably possible to any comments received from the
Commission with respect to each Registration Statement or any amendment thereto
and, as promptly as reasonably possible provide the Holders true and complete
copies of all correspondence from and to the Commission relating to such
Registration Statement that would not result in the disclosure to the Holders of
material and non-public information concerning the Company; and (iv) comply in
all material respects with the provisions of the Securities Act and the Exchange
Act with respect to the Registration Statements and the disposition of all
Registrable Securities covered by each Registration Statement.

(c) Notify the Holders as promptly as reasonably possible (notification via
electronic mail shall be sufficient) (and, in the case of (i)(A) below, not less
than three Trading Days prior to such filing) and (if requested by any such
Person) confirm such notice in writing no later than one Trading Day following
the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed; (B) when the
Commission notifies the Company whether there will be a "review" of such
Registration Statement and whenever the Commission comments in writing on such
Registration Statement (the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Holders that pertain to
the Holders as a Selling Stockholder or to the Plan of Distribution, but not
information which the Company believes would constitute material and non-public
information); and (C) with respect to each Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to a Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of a Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (v) of the occurrence of any
event or passage of time that makes the financial statements included in a
Registration Statement ineligible for inclusion therein or any statement made in
such Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to such Registration Statement, Prospectus or other
documents so that, in the case of such Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

(d) Use its reasonable best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of a
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.

(e) Furnish to each Holder, without charge, at least one conformed copy of each
Registration Statement and each amendment thereto and all exhibits to the extent
requested by such Person (including those previously furnished) promptly after
the filing of such documents with the Commission.

(f) Upon notification by the Commission that a Registration Statement will not
be reviewed or is no longer subject to further review and comments, the Company
shall request acceleration of such Registration Statement such that it becomes
effective at 5:00 p.m. (New York City time) on such Effective Date.

(g) Deliver to each Holder, by 9:00 a.m. (New York City time) on the day
following the Effective Date, without charge, an electronic copy of each
Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request. The
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto.

(h) Prior to any public offering of Registrable Securities, to register or
qualify or cooperate with the selling Holders in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of all jurisdictions within the United States, to
keep each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by the Registration Statements.

(i) Cooperate with the Holders to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be delivered to a
transferee pursuant to the Registration Statements, which certificates shall be
free, to the extent permitted by the Purchase Agreement, of all restrictive
legends, and to enable such Registrable Securities to be in such denominations
and registered in such names as any such Holders may request.

(j) Upon the occurrence of any event contemplated by Section 3(c)(v), as
promptly as reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the affected Registration Statements or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, no Registration Statement nor any Prospectus will
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

4. Registration Expenses. All fees and expenses incident to the performance of
or compliance with this Agreement by the Company shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to a Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be
made with any Trading Market on which the Common Stock is then listed for
trading, and (B) in compliance with applicable state securities or Blue Sky
laws), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if
the printing of prospectuses is reasonably requested by the holders of a
majority of the Registrable Securities included in the Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.

5. Indemnification.

(a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents, investment advisors, partners, members and
employees of each of them, each Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, agents and employees of each such controlling
Person, to the fullest extent permitted by applicable law, from and against any
and all losses, claims, damages, liabilities, costs (including, without
limitation, reasonable costs of preparation and reasonable attorneys' fees) and
expenses (collectively, "LOSSES"), as incurred, arising out of or relating to
any untrue or alleged untrue statement of a material fact contained in any
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
any Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except to the extent,
but only to the extent, that (1) such untrue statements or omissions are based
solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto
(it being understood that the Holder has approved Annex A hereto for this
purpose) or (2) in the case of an occurrence of an event of the type specified
in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of
an Advice or an amended or supplemented Prospectus, but only if and to the
extent that following the receipt of the Advice or the amended or supplemented
Prospectus the misstatement or omission giving rise to such Loss would have been
corrected. The Company shall notify the Holders promptly of the institution,
threat or assertion of any Proceeding of which the Company is aware in
connection with the transactions contemplated by this Agreement.

(b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and
employees, each Person who controls the Company (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, agents or employees of such controlling Persons, to the fullest extent
permitted by applicable law, from and against all Losses, as incurred, arising
solely out of or based solely upon: (x) such Holder's failure to comply with the
prospectus delivery requirements of the Securities Act or (y) any untrue
statement of a material fact contained in any Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising solely out of or based solely upon any omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading to the extent, but only to the extent that, (1) such
untrue statements or omissions are based solely upon information regarding such
Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in
the Registration Statement (it being understood that the Holder has approved
Annex A hereto for this purpose), such Prospectus or such form of Prospectus or
in any amendment or supplement thereto or (2) in the case of an occurrence of an
event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of
an outdated or defective Prospectus after the Company has notified such Holder
in writing that the Prospectus is outdated or defective and prior to the receipt
by such Holder of an Advice or an amended or supplemented Prospectus, but only
if and to the extent that following the receipt of the Advice or the amended or
supplemented Prospectus the misstatement or omission giving rise to such Loss
would have been corrected. In no event shall the liability of any selling Holder
hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.

(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought
or asserted against any Person entitled to indemnity hereunder (an "INDEMNIFIED
PARTY"), such Indemnified Party shall promptly notify the Person from whom
indemnity is sought (the "INDEMNIFYING PARTY") in writing, and the Indemnifying
Party shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all fees and
expenses incurred in connection with defense thereof; provided, that the failure
of any Indemnified Party to give such notice shall not relieve the Indemnifying
Party of its obligations or liabilities pursuant to this Agreement, except (and
only) to the extent that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or further review)
that such failure shall have proximately and materially adversely prejudiced the
Indemnifying Party.

                  An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in
writing to pay such fees and expenses; (2) the Indemnifying Party shall have
failed promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3)
the named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party
and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.

                  All fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within ten Trading Days of written notice thereof to the Indemnifying
Party (regardless of whether it is ultimately determined that an Indemnified
Party is not entitled to indemnification hereunder; provided, that the
Indemnifying Party may require such Indemnified Party to undertake to reimburse
all such fees and expenses to the extent it is finally judicially determined
that such Indemnified Party is not entitled to indemnification hereunder).

(d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is
unavailable to an Indemnified Party (by reason of public policy or otherwise),
then each Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as well
as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in Section 5(c), any reasonable attorneys' or other reasonable fees or expenses
incurred by such party in connection with any Proceeding to the extent such
party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.

                  The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall
be required to contribute, in the aggregate, any amount in excess of the amount
by which the proceeds actually received by such Holder from the sale of the
Registrable Securities subject to the Proceeding exceeds the amount of any
damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.

                  The indemnity and contribution agreements contained in this
Section are in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties.

6. Miscellaneous.

(a) Remedies. In the event of a breach by the Company or by a Holder, of any of
their obligations under this Agreement, each Holder or the Company, as the case
may be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

(b) No Piggyback on Registrations. Except as and to the extent specified in
Schedule 3.1(v) to the Purchase Agreement, neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto) may
include securities of the Company in a Registration Statement other than the
Registrable Securities, and the Company shall not during the Registration Period
enter into any agreement providing any such right to any of its security
holders.

(c) Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to the Registration
Statement.

(d) Discontinued Disposition. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(c), such Holder will
forthwith discontinue disposition of such Registrable Securities under the
Registration Statement until such Holder's receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (the "ADVICE") by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Company may provide appropriate stop orders to enforce the provisions of this
paragraph.

(e) Piggy-Back Registrations. If at any time during the Effectiveness Period
there is not an effective Registration Statement covering all of the Registrable
Securities (including, but not limited to, any Additional Shares) and the
Company shall determine to prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of others
under the Securities Act of any of its equity securities, other than on Form S-4
or Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in connection with
any acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, then the Company
shall send to each Holder written notice of such determination and, if within
fifteen days after receipt of such notice, any such Holder shall so request in
writing, the Company shall include in such registration statement all or any
part of such Registrable Securities (including, but not limited to, any
Additional Shares) such holder requests to be registered, subject to customary
underwriter cutbacks applicable to all holders of registration rights.

(f) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this Section 6(f), may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the same shall be in writing and signed by the Company and the
Holders of no less than a majority in interest of the then outstanding
Registrable Securities. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of certain Holders and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of at
least a majority of the Registrable Securities to which such waiver or consent
relates.

(g) Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such
notice or communication is delivered via facsimile (provided the sender receives
a machine-generated confirmation of successful transmission) at the facsimile
number specified in this Section prior to 6:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified in this Section on a day that is not a Trading Day or later than 6:30
p.m. (New York City time) on any Trading Day, (c) the Trading Day following the
date of mailing, if sent by U.S. nationally recognized overnight courier
service, or (d) upon actual receipt by the party to whom such notice is required
to be given. The address for such notices and communications shall be as
follows:

         If to the Company:         Flexible Solutions International, Inc.
                                    615 Discovery Street
                                    Victoria, B.C.
                                    V8T 5G4, Canada
                                    Facsimile: 250.477.9912
                                    Telephone: 250.477.9969
                                    Attn:  Dan O'Brien

         If                         to an Investor: To the address set forth
                                    under such Investor's name on the signature
                                    pages hereto.

         If to any other Person who is then the registered Holder:

                                    To the address of such Holder as it appears
                                    in the stock transfer books of the Company

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.

(h) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Holder. The Company may not assign its rights
or obligations hereunder without the prior written consent of each Holder. Each
Holder may assign their respective rights hereunder in the manner and to the
Persons as permitted under the Purchase Agreement.

(i) Execution and Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.

(j) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all Proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement (whether brought
against a party hereto or its respective Affiliates, employees or agents) will
be commenced in the New York Courts. Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any New York Court, or that such
Proceeding has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law. Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any Proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. If either
party shall commence a Proceeding to enforce any provisions of this Agreement,
then the prevailing party in such Proceeding shall be reimbursed by the other
party for its attorney's fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.

(k) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

(l) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

(m) Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

(n) Independent Nature of Investors' Obligations and Rights. The obligations of
each Investor under this Agreement are several and not joint with the
obligations of each other Investor, and no Investor shall be responsible in any
way for the performance of the obligations of any other Investor under this
Agreement. Nothing contained herein or in any Transaction Document, and no
action taken by any Investor pursuant thereto, shall be deemed to constitute the
Investors as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Investors are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement or any other Transaction Document. Each Investor
acknowledges that no other Investor will be acting as agent of such Investor in
enforcing its rights under this Agreement. Each Investor shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement, and it shall not be necessary for any
other Investor to be joined as an additional party in any Proceeding for such
purpose. The Company acknowledges that each of the Investors has been provided
with the same Registration Rights Agreement for the purpose of closing a
transaction with multiple Investors and not because it was required or requested
to do so by any Investor.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                           SIGNATURE PAGES TO FOLLOW]
<PAGE>
                  IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.

                      FLEXIBLE SOLUTIONS INTERNATIONAL, INC.


                      By:_________________________________
                                Name: Dan O'Brien
                              Title: CEO, President



                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                     SIGNATURE PAGES OF INVESTORS TO FOLLOW]

<PAGE>

                  IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.


                      NAME OF INVESTING ENTITY



                      By:
                               -------------------------------------------------
                               Name:
                               Title:

                      ADDRESS FOR NOTICE

                      c/o:
                           -----------------------------------------------------

                      Street:
                              --------------------------------------------------

                      City/State/Zip:
                                      ------------------------------------------

                      Attention:
                                 -----------------------------------------------

                      Tel:
                               -------------------------------------------------

                      Fax:
                               -------------------------------------------------

                      Email:
                               -------------------------------------------------

<PAGE>
                                                                         Annex A

                              Plan of Distribution

         The Selling Stockholders and any of their pledgees, donees,
transferees, assignees and successors-in-interest may, from time to time, sell
any or all of their shares of Common Stock on any stock exchange, market or
trading facility on which the shares are traded or in private transactions.
These sales may be at fixed or negotiated prices. The Selling Stockholders may
use any one or more of the following methods when selling shares:

ordinary brokerage transactions and transactions in which the broker-dealer
solicits Investors;

block trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to facilitate
the transaction;

purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

an exchange distribution in accordance with the rules of the applicable
exchange;

privately negotiated transactions;

to cover short sales made after the date that this Registration Statement is
declared effective by the Commission;

broker-dealers may agree with the Selling Stockholders to sell a specified
number of such shares at a stipulated price per share;

a combination of any such methods of sale; and

any other method permitted pursuant to applicable law.

         The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

         Broker-dealers engaged by the Selling Stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.

         The Selling Stockholders may from time to time pledge or grant a
security interest in some or all of the Shares owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell shares of Common Stock from time to time under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933 amending the list of
selling stockholders to include the pledgee, transferee or other successors in
interest as selling stockholders under this prospectus.

         Upon the Company being notified in writing by a Selling Stockholder
that any material arrangement has been entered into with a broker-dealer for the
sale of Common Stock through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer, a
supplement to this prospectus will be filed, if required, pursuant to Rule
424(b) under the Securities Act, disclosing (i) the name of each such Selling
Stockholder and of the participating broker-dealer(s), (ii) the number of shares
involved, (iii) the price at which such the shares of Common Stock were sold,
(iv)the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not
conduct any investigation to verify the information set out or incorporated by
reference in this prospectus, and (vi) other facts material to the transaction.
In addition, upon the Company being notified in writing by a Selling Stockholder
that a donee or pledgee intends to sell more than 500 shares of Common Stock, a
supplement to this prospectus will be filed if then required in accordance with
applicable securities law.

         The Selling Stockholders also may transfer the shares of Common Stock
in other circumstances, in which case the transferees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.

         The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Discounts, concessions,
commissions and similar selling expenses, if any, that can be attributed to the
sale of Securities will be paid by the Selling Stockholder and/or the
purchasers. Each Selling Stockholder has represented and warranted to the
Company that it acquired the securities subject to this registration statement
in the ordinary course of such Selling Stockholder's business and, at the time
of its purchase of such securities such Selling Stockholder had no agreements or
understandings, directly or indirectly, with any person to distribute any such
securities.

         The Company has advised each Selling Stockholder that it may not use
shares registered on this Registration Statement to cover short sales of Common
Stock made prior to the date on which this Registration Statement shall have
been declared effective by the Commission. If a Selling Stockholder uses this
prospectus for any sale of the Common Stock, it will be subject to the
prospectus delivery requirements of the Securities Act. The Selling Stockholders
will be responsible to comply with the applicable provisions of the Securities
Act and Exchange Act, and the rules and regulations thereunder promulgated,
including, without limitation, Regulation M, as applicable to such Selling
Stockholders in connection with resales of their respective shares under this
Registration Statement.

         The Company is required to pay all fees and expenses incident to the
registration of the shares, but the Company will not receive any proceeds from
the sale of the Common Stock. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act. If the Selling Stockholders use this
prospectus for any sale of the Common Stock, they will be subject to the
prospectus delivery requirements of the Securities Act.

<PAGE>
                                                                         Annex B

                     FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

                 SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

The undersigned beneficial owner of common stock (the "COMMON STOCK"), of
Flexible Solutions International, Inc. (the "COMPANY") understands that the
Company has filed or intends to file with the Securities and Exchange Commission
(the "COMMISSION") a Registration Statement for the registration and resale of
the Registrable Securities, in accordance with the terms of the Registration
Rights Agreement, dated as of April , 2005 (the "REGISTRATION RIGHTS
AGREEMENT"), among the Company and the Investors named therein. A copy of the
Registration Rights Agreement is available from the Company upon request at the
address set forth below. All capitalized terms used and not otherwise defined
herein shall have the meanings ascribed thereto in the Registration Rights
Agreement.

The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:

                                  QUESTIONNAIRE

1.       NAME.

         (a)      Full Legal Name of Selling Securityholder


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


         (b)      Full Legal Name of Registered Holder (if not the same as (a)
                  above) through which Registrable Securities Listed in Item 3
                  below are held:


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


         (c)      Full Legal Name of Natural Control Person (which means a
                  natural person who directly or indirectly alone or with others
                  has power to vote or dispose of the securities covered by the
                  questionnaire):


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



2.  ADDRESS FOR NOTICES TO SELLING SECURITYHOLDER:


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

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

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Telephone:
          ----------------------------------------------------------------------
Fax:
Contact Person:

3.  BENEFICIAL OWNERSHIP OF REGISTRABLE SECURITIES:

                  Type and Number of Registrable Securities beneficially owned:


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

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

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



4.  BROKER-DEALER STATUS:

         (a) Are you a broker-dealer?

                                            Yes      No

         Note:    If yes, the Commission's staff has indicated that you should
                  be identified as an underwriter in the Registration Statement.

         (b)     Are you an affiliate of a broker-dealer?

                                            Yes      No

         (c)     If you are an affiliate of a broker-dealer, do you certify that
                 you bought the Registrable Securities in the ordinary course of
                 business, and at the time of the purchase of the Registrable
                 Securities to be resold, you had no agreements or
                 understandings, directly or indirectly, with any person to
                 distribute the Registrable Securities?

                                            Yes      No

         Note:    If no, the Commission's staff has indicated that you should be
                  identified as an underwriter in the Registration Statement.

5. BENEFICIAL OWNERSHIP OF OTHER SECURITIES OF THE COMPANY OWNED BY THE SELLING
SECURITYHOLDER.

         Except as set forth below in this Item 5, the undersigned is not the
         beneficial or registered owner of any securities of the Company other
         than the Registrable Securities listed above in Item 3.

                  Type and Amount of Other Securities beneficially owned by the
Selling Securityholder:


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

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


6.  RELATIONSHIPS WITH THE COMPANY:

         Except as set forth below, neither the undersigned nor any of its
         affiliates, officers, directors or principal equity holders (owners of
         5% of more of the equity securities of the undersigned) has held any
         position or office or has had any other material relationship with the
         Company (or its predecessors or affiliates) during the past three
         years.

         State any exceptions here:


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

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



The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof and prior to the Effective Date for the Registration Statement.

By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Registration Statement
and the related prospectus.

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

Dated:                        Beneficial Owner:
       --------------                           --------------------------------

                              By:
                                   ---------------------------------------------
                                   Name:
                                   Title:

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

                                    [                 ]






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>6
<FILENAME>fs_qa50630x311.txt
<TEXT>
                                                                    EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002 AND RULE 13A-14(A) OR 15D-14(A) UNDER THE SECURITIES
EXCHANGE ACT OF 1934

   I, Daniel B. O'Brien, certify that:

1.       I have reviewed this Quarterly Report on Form 10-QSB/A (Amendment No.
         1) of Flexible Solutions International, Inc. for the quarter ended June
         30, 2005;

2.       Based on my knowledge, this report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this report, fairly present in all material
         respects the financial condition, results of operations and cash flows
         of the small business issuer as of, and for, the periods presented in
         this report;

4.       The small business issuer's other certifying officer(s) and I are
         responsible for establishing and maintaining disclosure controls and
         procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
         for the small business issuer and have:

a.       Designed such disclosure controls and procedures, or caused such
         disclosure controls and procedures to be designed under our
         supervision, to ensure that material information relating to the small
         business issuer, including its consolidated subsidiaries, is made known
         to us by others within those entities, particularly during the period
         in which this report is being prepared;

b.       Evaluated the effectiveness of the small business issuer's disclosure
         controls and procedures and presented in this report our conclusions
         about the effectiveness of the disclosure controls and procedures, as
         of the end of the period covered by this report based on such
         evaluation; and

c.       Disclosed in this report any change in the small business issuer's
         internal control over financial reporting that occurred during the
         small business issuer's most recent fiscal quarter that has materially
         affected, or is reasonably likely to materially affect, the small
         business issuer's internal control over financial reporting;

5.       The small business issuer's other certifying officer(s) and I have
         disclosed, based on our most recent evaluation of internal control over
         financial reporting, to the small business issuer's auditors and the
         audit committee of the small business issuer's board of directors (or
         persons performing the equivalent functions):

         a. All significant deficiencies and material weaknesses in the design
         or operation of internal control over financial reporting which are
         reasonably likely to adversely affect the small business issuer's
         ability to record, process, summarize and report financial information;
         and

         b. Any fraud, whether or not material, that involves management or
         other employees who have a significant role in the small business
         issuer's internal control over financial reporting.

Date:  September 21, 2005                  /s/  DANIEL B. O'BRIEN
                                           ----------------------
                                           Daniel B. O'Brien
                                           President and Chief Executive Officer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>7
<FILENAME>fs_qa50630x312.txt
<TEXT>
                                                                    EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002 AND RULE 13A-14(A) OR 15D-14(A) UNDER THE SECURITIES
EXCHANGE ACT OF 1934

   I, Fred J. Kupel, certify that:

1. I have reviewed this Quarterly Report on Form 10-QSB/A (Amendment No. 1) of
Flexible Solutions International, Inc. for the quarter ended June 30, 2005;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the small business
issuer as of, and for, the periods presented in this report;

4. The small business issuer's other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and
have:

                  a. Designed such disclosure controls and procedures, or caused
         such disclosure controls and procedures to be designed under our
         supervision, to ensure that material information relating to the small
         business issuer, including its consolidated subsidiaries, is made known
         to us by others within those entities, particularly during the period
         in which this report is being prepared;

                  b. Evaluated the effectiveness of the small business issuer's
         disclosure controls and procedures and presented in this report our
         conclusions about the effectiveness of the disclosure controls and
         procedures, as of the end of the period covered by this report based on
         such evaluation; and

                  c. Disclosed in this report any change in the small business
         issuer's internal control over financial reporting that occurred during
         the small business issuer's most recent fiscal quarter that has
         materially affected, or is reasonably likely to materially affect, the
         small business issuer's internal control over financial reporting;

5. The small business issuer's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the small business issuer's auditors and the audit committee of
the small business issuer's board of directors (or persons performing the
equivalent functions):

                  a. All significant deficiencies and material weaknesses in the
         design or operation of internal control over financial reporting which
         are reasonably likely to adversely affect the small business issuer's
         ability to record, process, summarize and report financial information;
         and

                  b. Any fraud, whether or not material, that involves
         management or other employees who have a significant role in the small
         business issuer's internal control over financial reporting.

Date:  September 21, 2005                                /s/  FRED J. KUPEL
                                                         ------------------
                                                         Fred J. Kupel
                                                         Chief Financial Officer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>8
<FILENAME>fs_qa50630x321.txt
<TEXT>
                                                                    EXHIBIT 32.1

                 CERTIFICATE OF THE PRINCIPAL EXECUTIVE OFFICER
                       PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

         Solely for the purposes of complying with 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, the
undersigned Principal Executive Officer of Flexible Solutions International,
Inc. (the "Company"), hereby certify that, to the best of my knowledge, the
Quarterly Report on Form 10-QSB/A (Amendment No. 1) of the Company for the
quarter ended June 30, 2005 (the "Report") fully complies with the requirements
of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the
information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Company.


/s/ DANIEL B. O'BRIEN
Daniel B. O'Brien
President and Chief Executive Officer

September 21, 2005
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>9
<FILENAME>fs_qa50630x322.txt
<TEXT>
                                                                    EXHIBIT 32.2

                   CERTIFICATE OF THE CHIEF FINANCIAL OFFICER
                       PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

         Solely for the purposes of complying with 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, the
undersigned Chief Financial Officer of Flexible Solutions International, Inc.
(the "Company"), hereby certify that, to the best of my knowledge, the Quarterly
Report on Form 10-QSB/A (Amendment No. 1) of the Company for the quarter ended
June 30, 2005 (the "Report") fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information
contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.


/s/ FRED J. KUPEL
Fred J. Kupel
Chief Financial Officer

September 21, 2005

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
