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<SEC-DOCUMENT>0000897069-05-002936.txt : 20061115
<SEC-HEADER>0000897069-05-002936.hdr.sgml : 20061115
<ACCEPTANCE-DATETIME>20051216142221
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000897069-05-002936
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20051216

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:		CORRESP

	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>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
</HEAD>
<BODY>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[FLEXIBLE SOLUTIONS
LETTERHEAD] </FONT></H1>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>December 15, 2005  </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>VIA EDGAR &#150;
CORRESPONDENCE FILING</U> </FONT></H1>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Securities and Exchange
Commission<BR>Division of Corporation Finance<BR>100 F Street, N.E., Mail Stop 7010  <BR>Washington, D.C. 20549<BR>Attn: Ms. Pamela A. Long  </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Re: </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Flexible
Solutions International, Inc. <BR>Registration Statement on Form S-3, filed on May 10,
2005 (File No. 333-124751); <BR>Annual Report on Form 10-KSB for the  Fiscal
Year Ended <BR>December&nbsp;31, 2004, filed on March 24, 2005 (File No. 1-31540;) and
<BR>Quarterly Report on Form 10-QSB  for the Fiscal Quarter Ended March
31, 2005, <BR>filed on May 13, 2005 (File No. 1-31540)</I></B></FONT><HR WIDTH=60% ALIGN=LEFT SIZE=1 COLOR=BLACK NOSHADE></TD>
</TR>
</TABLE>
<BR>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dear Ms. Long: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Flexible
Solutions International, Inc. (the &#147;<U>Company</U>&#148;), has reviewed the
Securities and Exchange Commission (the &#147;Commission&#148;) letter dated August 25,
2005 (the &#147;<U>August 25 Comment Letter</U>&#148;) regarding the Company&#146;s
Registration Statement on Form S-3 (the &#147;<U>Form S-3</U>&#148;), the Company&#146;s
Annual Report on Form 10-KSB for the fiscal year ended December 31, 2004 (the
&#147;<U>Form 10-KSB</U>&#148;) and the Company&#146;s Quarterly Report on Form 10-QSB for
the fiscal quarter ended March 31, 2005 (the &#147;<U>Form 10-QSB</U>&#148;), filed by the
Company on May 10, 2005, March 24, 2005 and May 13, 2005, respectively. The Company
responds to the August 25 Comment Letter as follows: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Response to Commission Comment 1 (&#147;General. Donlar Acquisition&#148;)</B> </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
response to discussions between counsel to the Company and the Staff of the Commission,
the Company respectfully informs the Commission that on December 8, 2005 it filed via
EDGAR correspondence a waiver request letter with the Commission requesting a waiver of
the Company&#146;s obligations under Items 310(c) and 310(d) of Regulation S-B. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Response to Commission Comment 2 (&#147;Note 1. Basis of Presentation&#148;)</B> </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
response to discussions between counsel to the Company and the Staff of the Commission,
the Company respectfully informs the Commission that on December 8, 2005 it filed via
EDGAR correspondence a waiver request letter with the Commission requesting a waiver of
the Company&#146;s obligations under paragraphs 51, 54 and 55 of Statement of Financial
Accounting Standards (&#147;<U>SFAS</U>&#148;) No. 141. </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Ms. Pamela A. Long <BR>Securities and
Exchange Commission <BR>December 15, 2005 <BR>Page 2 </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Response to Commission Comment 3 (&#147;Note 7. Investments&#148;)</B> </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Commission
has asked what consideration was given by the Company to the guidance provided by Emerging
Issues Task Force (&#147;<U>EITF</U>&#148;) Issue No. 02-14, <I>Whether an Investor Should
Apply the Equity Method of Accounting to Investments Other Than Common Stock if the
Investor Has the Ability to Exercise Significant Influence Over the Operating and
Financial Policies of the Investee</I>, with respect to the Company&#146;s option acquired
in 2003 to purchase twenty percent of the outstanding capital stock of Tatko, Inc.
(&#147;<U>Tatko</U>&#148;) in exchange for the issuance of 100,000 shares of the
Company&#146;s common stock. EITF Issue No. 02-14 provides that if an investor has the
ability to exercise significant influence over an investee, the equity method&#151;and not
the cost method&#151;should be used to account for such investment. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company determined to account for its acquisition of the Tatko option using the cost
method because it does not have significant influence over the operating or financial
policies of Tatko. While the Company does have the ability to exercise the option for the
nominal fee of $1, which would grant the Company the ability to obtain up to twenty
percent of Tatko&#146;s capital stock, the Company does not have the ability to control
Tatko&#146;s operations or financial policies. The agreement reached between the Company
and Tatko was essentially a supply agreement, which would allow the Company the right to
use Tatko&#146;s bio-chemicals and patents in the Company&#146;s products. In addition,
Tatko is a private company in its development stage and, to date, has been very slow in
supplying the Company with its products pursuant to the terms of the agreement.
Consequently, the Company has asserted that Tatko has breached the agreement and has
demanded the return of its 100,000 shares. Until such time as the issue is settled, the
Company still maintains the right to acquire the twenty percent interest in Tatko. The
Company continues to monitor the investment in Tatko to ensure that there is no impairment
issue. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Response to Commission Comments 4, 5 and 6 (&#147;Note 11. Stock Options&#148;)</B> </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After
consideration given to the issues raised by the Commission in connection with the grant of
a stock option by the Company to Ondeo Nalco Company (&#147;<U>Ondeo</U>&#148;) in
September 2002, the Company has reassessed the agreement it entered into with Ondeo.
Following this reassessment, the Company has arrived at the conclusion that the accounting
treatment previously applied should be revised to reflect the current state of accounting
principles generally accepted in the United States. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
particular, the Company has reviewed: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          EITF
Issue No. 96-18, <I>Accounting for Equity Instruments That Are Issued to           Other
Than Employees for Acquiring, or in Conjunction with Selling, Goods or           Services</I>,
which addresses the measurement date for accounting for equity           instruments that
are issued to other than employees in exchange for goods and           services;  </FONT></P>




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<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Ms. Pamela A. Long <BR>Securities and
Exchange Commission <BR>December 15, 2005 <BR>Page 3 </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          EITF
Issue No. 00-18, <I>Accounting Recognition for Certain Transactions           Involving
Equity Instruments Granted to Other Than Employees</I>, which requires           the
recognition of fully vested, exercisable, non-forfeitable equity instruments           at
the time when they are issued; and  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          EITF
Issue No. 01-9, <I>Accounting for Consideration Given by a Vendor to a           Customer
(Including a Reseller of the Vendor&#146;s Products)</I>, which           addresses
various issues related to classification of the consideration given           from a
vendor to a reseller or another party that purchases the vendor&#146;s           products
and whether such consideration should be classified as a deduction from
          revenue.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
selecting its prior accounting treatment, the Company relied on the following: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          In
September 2002, the Company entered into a distribution agreement with Ondeo
          whereby Ondeo agreed to serve as the exclusive distributor of the Company&#146;s
          WATER$AVR&reg; products for so long as Ondeo maintained certain threshold sales
          levels as defined in the agreement;  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          As
consideration for signing the agreement, Ondeo was granted an option to
          purchase 2,000,000 shares of the Company&#146;s common stock; half of the
option           for one million shares was exercisable immediately at an exercise price
of $4.25           for each common share and the remaining half of the option for
1,000,000 shares           was exercisable after certain threshold sales targets were
achieved at a price           of $5.50 for each common share; and  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          The
distribution agreement and the corresponding stock option were cancellable           if
Ondeo did not meet the defined sales targets.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the time, however, the Company incorrectly believed that the entire option vested
immediately and, therefore, only considered SFAS No. 123, pursuant to which the Company
expensed the entire fair value of the option granted. However, upon reassessment of the
issue, the Company determined that half of the option did not vest immediately and it
therefore should have (even under SFAS No. 123) amortized the value of the option over the
vesting period in relation to the sales achieved by Ondeo. As a result, the Company has
elected to account for the forfeiture of the option as required by EITF Numbers 96-18,
00-18 and 01-9, by reversing previously recorded stock compensation expense. In addition,
the Company determined that in its prior accounting treatment of the stock option, in
accordance with EITF Numbers 96-18, 00-18 and 01-9, the Company should have: (i) selected
a measurement date when the performance of the distribution agreement was complete; and
(ii) amortized the stock compensation expense over the term of the distribution agreement
in relation to the sales achieved by Ondeo. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the time of execution of the distribution agreement, the Company expensed $2,704,000 in
connection with the stock option issued to Ondeo. By the fourth quarter of fiscal 2003,
the Company determined that Ondeo was not maintaining certain threshold sales levels as
stipulated in the agreement, which led to the Company&#146;s termination of the agreement
and the accompanying option. At that time, the Company reversed $2,480,200 that it
believed had been expensed in fiscal 2002. However, the Company has determined that the
actual amount that should have been reversed was the original $2,704,000. </FONT></P>




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<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Ms. Pamela A. Long <BR>Securities and
Exchange Commission <BR>December 15, 2005 <BR>Page 4 </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Had
the Company accounted for the stock option in accordance with EITF Numbers 96-18, 00-18
and 01-9, it would have selected a measurement date for the stock option at the end of the
initial term of the distribution agreement, which would have reflected the expensing of
the option compensation in a systematic and rational manner in relation to the sales
generated by Ondeo. Further, had the Company accounted for the option in accordance with
the EITF guidance set forth above, it would have only recorded a stock compensation
expense of $54,080 in the first quarter of fiscal 2003 because, while the agreement had
been executed in September 2002, no sales were generated by Ondeo until March 2003.
Moreover, once the Company terminated the distribution agreement and accompanying option,
if the Company had initially accounted for the stock option correctly, the $54,080 stock
compensation expense would have been reversed. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to the issues identified above, the Commission has asked how it was appropriate
to classify the amount recorded related to this option as an operating expense rather than
a reduction of revenue as set forth in EITF Issue 01-9. EITF Issue 01-9 primarily
addresses whether consideration given to a customer as a sales incentive or other benefit
should be an adjustment of the selling price, a cost incurred by the vendor and expensed
accordingly, or a reduction of revenue. The consensus reached by the EITF was that cash
consideration given by a vendor to a customer is presumed to be a reduction of the selling
price and therefore should be characterized as reduction of revenue when recognized by the
vendor. However, paragraphs 9 and 10 of EITF Issue 01-9 provide that when the
consideration consists of a free product (or anything other than cash), the cost of the
consideration should be characterized as an expense. Since the consideration given to
Ondeo was essentially a &#147;free&#148; product (i.e. a separate deliverable), the proper
accounting treatment should have been to expense the cost rather than to deduct the amount
from revenue. In light of the above, and because of the immateriality of the amounts
involved (i.e. $54,080 for one fiscal quarter), the Company has recorded the incentive as
an operating expense rather than as a cost of sale. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
response to the Commission&#146;s comments, and for the reasons set forth above, on
December 5, 2005, the Company filed via EDGAR the following reports: (i) amended and
restated annual reports on Form 10-KSB for each of the years ended December 31, 2002, 2003
and 2004; and (ii) amended and restated quarterly reports on Form 10-QSB for each of the
quarters ended September 30, 2002, 2003 and 2004, March 31, 2003, 2004 and 2005, and June
30, 2003, 2004 and 2005 (collectively, the &#147;<U>restated reports</U>&#148;). In each
of these restated reports, the Company has included the following disclosure: </FONT></P>


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<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Ms. Pamela A. Long <BR>Securities and
Exchange Commission <BR>December 15, 2005 <BR>Page 5 </FONT></P>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Restated
Financial Statements</B> </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
accompanying financial statements have been restated to correct stock-based compensation
expense. In October 2005, while completing a registration statement for securities issued
in the second quarter of 2005, we determined that certain disclosures made in connection
with our stock-based compensation expense required adjustment. In September 2002, we
entered into a distribution agreement with Ondeo whereby Ondeo agreed to serve as the
exclusive distributor of our WATER$AVR&reg; products for so long as Ondeo maintained a
certain threshold sales level as defined in the agreement. As consideration for signing
the agreement, Ondeo was granted an option to purchase 2,000,000 shares of our common
stock. Half of the option for one million shares was exercisable immediately at an
exercise price of $4.25 for each common share. The remaining half of the option for
1,000,000 shares was exercisable after certain threshold sales targets were achieved at a
price of $5.50 for each common share.  </FONT>
</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
determining the stock-based compensation expense for the nine months ended September 30,
2002, we expensed the entire fair value of the stock option believing that the option
fully vested upon the signing of the agreement. In our October 2005 review, however, we
determined that: (i) first, as stated above, half of the option to purchase 1,000,000
shares of common stock did not vest and was not exercisable until the threshold sales
target had been met, which would not be until five years after the signing of the
distribution agreement; and (ii) second, we did not consider Emerging Issues Task Force (&#147;EITF&#148;)
No. 96-18, <I>Accounting for Equity Instruments That are Issued to Other Than Employees
for </I><I>Acquiring, or in Conjunction with Selling Goods or Services</I>; EITF No.
00-18, <I>Accounting Recognition for </I><I>Certain Transactions involving Equity
Instruments Granted to Other Than Employees</I>; and EITF No. 01-9, <I>Accounting for
Consideration Given by a Vendor to a Customer</I>.  </FONT>
</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the three months ended March 31, 2003, Ondeo achieved the first threshold sales target,
and accordingly, we should have recorded a corresponding stock-based compensation expense
of $54,080. However, since the entire stock-based compensation expense had been recorded
in the September 30, 2002 interim financial statements and in the year ended December 31,
2002, we did not record any additional stock-based compensation expense as a result of
the attained first threshold level.  </FONT>
</TD>
</TR>
</TABLE>
<BR>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Ms. Pamela A. Long <BR>Securities and
Exchange Commission <BR>December 15, 2005 <BR>Page 6 </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the fourth quarter of the year ended December 31, 2003, we determined that Ondeo was not
going to attain the minimum sales targets stipulated in the agreement. Consequently, the
agreement and corresponding stock option was cancelled. We accounted for the cancellation
of the stock option in accordance with Statement of Financial Accounting Standard No. 123
similar to a forfeiture of stock options and reversed $2,480,200 of the stock-based
compensation expense previously recorded in fiscal 2002. Had we accounted for the
cancellation of the stock option correctly, we would have reversed the amended
stock-based compensation expense of $54,080 that was recorded in the first quarter ended
March 31, 2003.  </FONT>
</TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
light of the above, the net effect of the adjustments to the financial statements is as
follows:  </FONT>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          Approximately
$2,704,000 in stock-based compensation expense recorded in                September 2002
has been reversed;  </FONT>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          Approximately
$54,080 in stock-based compensation expense has been recorded in                the
quarter ended March 31, 2003, as Ondeo met the first sales threshold under
               the agreement;  </FONT>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          Approximately
$54,080 in stock-based compensation expense has been reversed in                the year
ended December 31, 2003, as Ondeo failed to meet subsequent sales
               thresholds under the agreement, resulting in the cancellation of the stock
               option;  </FONT>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          As
stated above, we previously recorded a stock-based compensation expense of
               $2,704,000 in December 2002. As a result of cancelling the stock option,
we                previously recorded a recovery of $2,480,000 of stock-based
compensation expense                at December 31, 2003. This $2,480,000 recovery has
been reversed, in conjunction                with the reversal of $2,704,000 in
stock-based compensation expense originally                recorded; and  </FONT>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          For
the periods ended March 31, 2004 to June 30, 2005, the net effect of these
               adjustments is to decrease capital in excess of par value by approximately
               $223,800 and increase retained earnings by approximately $223,800.  </FONT>
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<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are presently unaware of any evidence that the restatements described above are due to
any material noncompliance by us, as a result of misconduct, with any financial reporting
requirement under the federal securities laws. Our audit committee of the board of
directors is working with our management and our accountants to assure that we are taking
the appropriate approach to resolving the issues related to the restatements, as well as
any further issues that may be identified during the course of its review.  </FONT>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Ms. Pamela A. Long <BR>Securities and
Exchange Commission <BR>December 15, 2005 <BR>Page 7 </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
respect to its amendments to its Form 10-KSB and its Form 10-QSB, the Company respectfully
informs the Commission that on December 5, 2005, the Company filed via EDGAR the restated
reports. The restated reports do not reflect events occurring after the original filing of
each restated report, nor do they modify any of the disclosures contained therein, or in
the accompanying financial statements and notes thereto, in any way other than by: (i) the
amendments identified above; (ii) the amendments identified in the Company&#146;s response
to the Commission&#146;s letter dated June 3, 2005; and (iii) the amendments identified in
the Company&#146;s response to the Commission&#146;s letter dated July 12, 2005.
Notwithstanding the above, each of the restated reports has been amended as a result of,
and to reflect, the restatement described above in <I>Response to Commission Comments 4, 5
and 6 (&#147;Note 11. Stock Options&#148;)</I>, and to revise the disclosure of the
Company&#146;s description of business, legal proceedings, management&#146;s discussion
and analysis, risk factors, unregistered sales of equity securities, directors and
executive officers, and principal accountant fees and services, as well as to generally
reflect the current disclosure requirements of Form 10-KSB and Form 10-QSB. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
you have any further comments regarding this letter, the responses contained herein or the
responses to the Form 10-KSB, the Form 10-QSB, or the restated reports, please contact
directly the attorney for the Company, Deepak Nanda, at (310) 975-7912 with any questions
or comments regarding this matter. Mr. Nanda&#146;s facsimile number is (310) 557-8475. </FONT></P>


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     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
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     <TD WIDTH=50% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
     <TD WIDTH=50% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Very truly yours,</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>FLEXIBLE SOLUTIONS INTERNATIONAL, INC.</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><BR><BR>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>/s/ Daniel B. O'Brien</U></FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Daniel B. O'Brien</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>President and Chief Executive Officer</FONT></TD></TR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>cc:  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Chris
Edwards (via EDGAR only)          <BR>Matt Franker (via EDGAR only)          <BR>Nudrat Salik
(via EDGAR only)          <BR>Marie Trimeloni (via EDGAR only)         <BR>Andrew B. Serwin
         <BR>Deepak Nanda</FONT></TD>
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