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 united
states

 SECURITIES
AND EXCHANGE COMMISSION

 WASHINGTON,
D.C. 20549

 FORM

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

 For
the Fiscal Year Ended December 31, 2023

 OR

 TRANSITION
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 Commission
File No. 001-31540

 (Exact
name of registrant as specified in its charter)

 Alberta

 71-1630889

 (State
 or other jurisdiction of incorporation or organization)

 (Employer
 Identification No.)

 6001
 54 Ave.

 Taber,
 Alberta, Canada

 T1G
 1X4

 (Address
 of Principal Executive Office)

 Zip
 Code

 Registrant's
telephone number, including Area Code: (403) 223-2995

 Securities
registered pursuant to Section 12(b) of the Act:

 Title
 of each class

 Trading
 Symbol

 Name
 of each exchange on which registered

 Common
 Stock, $0.001 par value

 FSI

 NYSE
 American

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

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

 Yes
 No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

 Yes
 No

by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes No

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes No

by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer",
"smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large
 accelerated filer

 Accelerated
 filer

 Non-accelerated
 filer

 Smaller
 reporting company

 Emerging
 growth company

 If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act by the registered public accounting firm
that prepared or issued its audit report. Yes No

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): Yes
 No

 As
of June 30, 2023 the aggregate market value of the Company's common stock held by non-affiliates was $ 19,343,103 based on the closing
price for shares of the Company's common stock on the NYSE American for that date.

 As
of March 29, 2024, the Company had 12,450,532 issued and outstanding shares of common stock.

 Documents
incorporated by reference: None

 The
terms "Flexible", "Company", "we", "us", and "our" are used to refer to Flexible
Solutions International, Inc. and its subsidiaries, unless the context otherwise requires.

 CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS

 This
Annual Report on Form 10-K for the year ended December 31, 2023 ("Annual Report"), including the Audited Consolidated Financial
Statements, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements include, without limitation, those statements relating to development of new products, our financial condition and our ability
to increase distribution of our products. Forward-looking statements can be identified by the use of forward-looking terminology, such
as "may," "will," "should," "expect," "anticipate," "estimate,"
"continue," "plans," "intends," or other similar terminology. These forward-looking statements are
not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual
outcomes and results may differ materially from what is anticipated or forecasted in these forward-looking statements due to numerous
factors, including, but not limited to, our ability to generate or obtain sufficient working capital to continue our operations, changes
in demand for our products, the timing of customer orders and deliveries and the impact of competitive products and pricing. In addition,
such statements could be affected by general industry and market conditions and growth rates, and general domestic and international
economic conditions.

 Although
we believe that the expectations reflected in these forward-looking statements are reasonable and achievable, such statements involve
risks and uncertainties and no assurance can be given that our actual results will be consistent with these forward-looking statements.
Except as otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events, changed circumstances or any other reason, after the date this Annual
Report is filed with the Securities and Exchange Commission.

 PART
I

 Item
 1.

 Description
 of Business

 We
were incorporated as Flexible Solutions Ltd., a British Columbia corporation on January 26, 1991. On May 12, 1998, we merged Flexible
Solutions Ltd. into Flexible Solutions International, Inc., a Nevada corporation. In connection with this merger, we issued 7,000,000
shares of common stock to the former shareholders of Flexible Solutions Ltd. in exchange for all of the outstanding shares of Flexible
Solutions Ltd.

 In
June 2004 we purchased 52 U.S. and 139 International Patents ("IP"), as well as a 56,780 sq. ft. manufacturing plant near
Chicago, Illinois from the bankruptcy estate of Donlar Corporation ("Donlar") for $6.15 million. The IP we acquired from
Donlar relates to water-soluble chemicals ("TPAs") which prevent corrosion and scaling in water pipes used in the petroleum,
chemical, utility and mining industries. TPAs are also used to enhance fertilizers and improve crop yields and as additives for household
laundry detergents, consumer care products and pesticides. These assets are held in our wholly owned subsidiary, NanoChem Solutions Inc. ("NanoChem"),
which has become our largest revenue generator.

 In
October 2018, we purchased 65% of ENP Investments, LLC, a manufacturing and distribution company
active in the areas of golf, turf and ornamental agriculture products.

 In
January 2019, we purchased 50% of a Florida based limited liability company engaged in international
sales of fertilizer additives. This purchase is accounted for as an equity accounted investment.

 In
2019, we changed our corporate domicile from Nevada to Alberta, Canada.

 In
January 2020, ENP Realty, LLC became a wholly owned subsidiary of ENP Investments, LLC and was renamed to ENP Mendota, LLC. ENP Mendota
owns a building that the Company occupies.

 In
June 2022, ENP Peru Investments, LLC became a wholly owned subsidiary with NanoChem owning 91.67% and ENP Investments, LLC owning
8.33%. of ENP Peru. In 2023, NanoChem purchased the
remaining 8.33% of shares to become sole owner. ENP Peru was previously accounted for under the equity method however, from 2022 it
is consolidated into the financial statements from the date control was obtained. ENP Peru owns a building the Company
occupies.

 In
June 2023, 317 Mendota LLC ("317 Mendota") was created to purchase real estate and the Company has 80% ownership with an
unrelated party (NCI) owning the remaining 20%. The Company occupies part of the building currently owned by 317 Mendota and
intends to rent out the remaining portion of the building. For financial reporting purposes, the assets, liabilities and earnings of
317 Mendota are consolidated into these financial statements. The NCI's ownership interest in 317 Mendota is recorded in
non-controlling interests in these consolidated financial statements.

 We
operate through a number of wholly-owned subsidiaries which are further discussed in Note 1 to the consolidated financial statements
included as part of this report. Unless otherwise indicated, all references to our business include the operations of these subsidiaries.

 Our
website is www.flexiblesolutions.com

 Our
Products

 Thermal
Polyaspartates ("TPAs")

 We
manufacture TPAs in our Peru, Illinois plant using a thermal polymerizing process. The multiple variants produced are optimized for individual
market verticals and sold for end use or through distribution.

 TPAs
for Oilfields. TPAs are used to reduce scale and corrosion in various "topside" water systems. They are used in place
of traditional phosphonate and other products when biodegradability is required by environmental regulations. We have the ability to
custom manufacture TPAs depending on the specific water conditions associated with any oil well. TPAs are also used in fracking fluids
to reduce the toxicity while maintaining equal function.

 TPAs
for the Agricultural Industry. TPAs have the ability to reduce fertilizer crystallization before, during and after application and
can also delay crystal formation between fertilizer and minerals present in the soil. Once crystallized, fertilizer and soil minerals
are not able to provide plant nourishment. As a result, in select conditions the use of TPAs either blended with fertilizer or applied
directly to crops can increase yields significantly. TPAs are designated for crop nutrient management programs and should not be confused
with crop protection and pesticides or other agricultural chemical applications. Depending on the application, TPA products are marketed
under a variety of brands including EX-10TM, AmisorbTM, LYNXTM, MAGNETTM, AmGroTM and VOLTTM. Markets of significance include corn, wheat,
soybeans, rice, potatoes, sugar beets, cotton, tomatoes, almonds and other high value per acre crops.

 TPAs
for Irrigation. The crystallization prevention ability of TPAs can also be useful in select irrigation conditions. By reducing calcium
carbonate scale propagation, TPAs can prevent early plugging of drip irrigation ports, reduce maintenance costs and lengthen the life
of equipment. TPAs compete with acid type scale removers, but have the advantage of a positive yield effect on the plant, as well as
an easier deployment formulation with liquid fertilizers when used as part of a "fertigation" program. Our TPAs for drip
irrigation scale prevention are marketed and sold through the same channels as TPAs used by the agricultural industry.

 TPAs
in Cleaning Products. TPA can replace polyacrylates in cleaning products which is valuable because TPA is biodegradable while polyacrylates
are not. In a cleaning product formulation, TPA prevents the re-deposition of dirt onto the surfaces to be cleaned allowing dirt to be
rinsed away.

 Nitrogen
Conservation Products for Agriculture. We manufacture and sell two conservation products and mixtures used for slowing nitrogen loss
from fields. One significant loss route for nitrogen fertilizer is enzymatic degradation by bacteria naturally present in soil. Our product,
SUN 27TM inhibits the bacterial action and keeps the nitrogen fertilizer available for plant growth. The second significant nitrogen
loss mechanism is de-nitrification. This is also caused by bacterial activity in soil resulting in oxygen being stripped from the fertilizer
leaving nitrogen gas. The gas can't be used by the plants and escapes into the atmosphere. Our N Savr 30TM product uses the most
effective active ingredients available to combat this cause of fertilizer loss. We sell SUN 27TM and N Savr 30TM through distributors
in North and South America under our trade names and under private labels.

 Food
and Nutritional Materials

 We
have installed custom equipment used to produce food and nutritional materials. All the ingredients we produce are custom products
for specific clients and are confidential. We anticipate that this market vertical will grow over time.

 HEATSAVR

 Our
studies indicate that approximately 70% of the energy lost from a swimming pool occurs through water evaporation. HEATSAVR is a
chemical product for use in swimming pools and spas that forms a thin, transparent layer on the water's surface. The transparent
layer slows the evaporation of water, allowing the water to retain a higher temperature for a longer period of time and thereby reducing
the energy required to maintain the desired temperature of the water. We have received reports from our commercial customers documenting
energy savings of between $2,400 and $6,000 per year when using HEATSAVR.

 In
outdoor pools, the HEATSAVR also provides convenience compared to pool blankets. It is often inconvenient to use conventional pool
blankets since a pool blanket must be removed and stored before the pool can be used. Pool blankets do not provide any energy savings
when not on the pool. Conversely, HEATSAVR eliminates the need to install, remove and store the blanket and works 24 hours a day.
In addition, the use of HEATSAVR in an indoor pool results in even greater energy savings since indoor pool locations use energy
not only to heat the pool water, but also to air condition the pool environment. By slowing the transfer of heat and water vapor from
the pool to the atmosphere of the pool enclosure, less energy is required to maintain a pool at the desired temperature and there is
a reduced load on the air-conditioning system. We also manufacture and sell products which automatically dispense HEATSAVR into
commercial size swimming pools or spas at the rate of one ounce per 400 sq. ft. of water surface per day.

 WATERSAVR

 This
product utilizes a patented variation of our HEATSAVR technology to reduce water evaporation in reservoirs, potable water storage tanks,
livestock watering ponds, aqueducts, canals and irrigation ditches. WATERSAVR may also be used for lawn and turf care and potted and
bedding plants.

 WATERSAVR
is sold in granulated form and can be applied by hand, by fully automated scheduled metering, or by an automatic dispenser.

 Tests
have indicated that WATERSAVR:

 Reduces
 daily water evaporation as much as 54%;

 Reduces
 monthly water evaporation as much as 37%;

 Is
 odorless;

 Has
 no effect on invertebrates or vertebrates;

 Has
 no anticipated effect on any current drinking water treatment processes; and

 Is
 biodegradable.

 We
have one part-time employee involved in the sales and marketing of WATERSAVR.

 Principal
Customers

 The
table below presents our revenue resulting from purchases by our major customers for the periods presented.

 Year Ended December 31,

 2023

 2022

 Company A

 $
 6,811,083

 $
 6,677,815

 Company B

 $
 10,260,870

 $
 12,938,735

 Company C

 $
 3,410,845

 $
 8,159,066

 Customers
with balances greater than 10% of our receivable balances as of each of the fiscal year ends presented are shown in the following table:

 Year Ended December 31,

 2023

 2022

 Company A

 $
 4,225,028

 $
 3,634,083

 Company B

 $
 2,073,813

 2,423,285

 Competition

 TPAs:
 Our TPA products have direct competition with Lanxess AG (spun out of Bayer AG) ("Lanxess"), a German manufacturer of
TPAs, which uses a patented process different from ours. We have cross-licensed each other's processes and either company can use
either process for the term of the patents involved. We believe that Lanxess has approximately the same production capacity and product
costs as we do. We believe that we can compete effectively with Lanxess by offering excellent customer service in oilfield sales, superior
distributor support in the agricultural marketplace and flexibility due to our relative size. In addition, we intend to continue to seek
market niches that are not the primary targets of Lanxess. There are other competitors based in Asia.

 Our
TPA products face indirect competition from other chemicals in every market in which we are active. For purposes of oilfield scale prevention,
phosphonates, phosphates and molibdonates provide the same effect. For crop enhancement, increased fertilizer levels can serve as a substitute
for TPAs. In irrigation scale control, acid washes are our prime competitor. Notwithstanding the above, we believe our competitive advantages
include:

 Biodegradability
 compared to competing oil field chemicals;

 Cost-effectiveness
 for crop enhancement compared to increased fertilizer use; and

 Environmental
 considerations, ease of formulation and increased crop yield opportunities in irrigation scale markets.

 HEATSAVR:
 Although we are aware of two other companies that manufacture products that compete with HEATSAVR, we believe our products are
more effective and safer. We maintain fair pricing equal to or lower than our competitors and protect our intellectual property carefully.
Our products are expected to maintain market share in the competitive pool market. HEATSAVR also competes with plastic pool blanket
products. However, we believe that HEATSAVR is more effective and convenient than pool blankets.

 WATERSAVR:
 WATERSAVR competes with solid and floating covers. We believe our WATERSAVR product is superior for the following reasons:
it is less expensive, requires little capital expenditure to deploy and can be started and stopped as water scarcity escalates or declines.
As water conservation is an important priority throughout the world, numerous researchers are working to develop solutions that may compete
with, or be superior to, WATERSAVR.

 Manufacturing

 Our
56,780 sq. ft. facility in Peru, Illinois manufactures our TPA products. Raw materials for TPA production are sourced from various manufacturers
throughout the world and we believe they are available in sufficient quantities for any increase in sales. Raw materials are, however,
derived from crude oil and are subject to price fluctuations related to world oil prices.

 Our
HEATSAVR products and dispensers are made from chemicals, plastics and other materials and parts that are readily available from
multiple suppliers. We have never experienced any shortage in the availability of raw materials and parts for these products and we do
not have any long term supply contracts for any of these items. We have these products made by outside parties without long term contracts.

 Our
WATERSAVR products are manufactured by a third party. We are not required to purchase any minimum quantity of this product.

 In
January 2020, ENP Investments, LLC acquired a 100% interest in ENP Realty, LLC and the 14,000 sq. ft. manufacturing facility in Mendota,
Illinois owned by this entity.

 Government
Regulations

 TPAs:
 In the industrial oil field and agricultural markets, we have received government approval for all TPAs currently sold.

 Nitrogen
Conservation Products: We have obtained all government approvals for the markets in which we sell these products.

 HEATSAVR:
 Chemical products for use in swimming pools are covered by a variety of governmental regulations in all countries where we sell these
products. These regulations cover packaging, labeling, and product safety. We believe our products are in compliance with these regulations.

 WATERSAVR:
 Our WATERSAVR product is subject to regulation in most countries, particularly for agricultural and drinking water uses. We
do not anticipate that governmental regulations will be an impediment to marketing WATERSAVR because the components in WATERSAVR
have historically been used in agriculture for many years for other purposes. Nevertheless, we may require county or state approval on
a case by case basis to sell WATERSAVR in the United States for agricultural and drinking water uses. We have received National
Sanitation Foundation approval for the use of WATERSAVR in drinking water in the United States.

 Proprietary
Rights

 Our
success is dependent, in part, upon our proprietary technology. We rely on a combination of patent, copyright, trademarks, trade secrets
and nondisclosure agreements to protect our proprietary technology. We hold several US patents with various expiry dates. We have applied
for additional patents in new areas of invention and may extend these patents, if granted to other jurisdictions. There can be no assurance
that our patent applications will be granted or that any issued patent will be upheld as valid or prevent the development of competitive
products, which may be equivalent to or superior to our products. We have not received any claims alleging infringement of the intellectual
property rights of others, but there can be no assurance that we may not be subject to such claims in the future.

 Research
and Development

 We
spent $158,246 during the year ended December 31, 2023 and $99,275 during year ended December 31, 2022 on research and development. This
work relates primarily to the development of our water and energy conservation products, as well as new research in connection with our
TPA products.

 Employees

 As
of December 31, 2023, we had 46 employees, including one officer, 15 sales and customer support personnel, and 30 manufacturing personnel.
None of our employees are represented by a labor union and we have not experienced any work stoppages to date.

 Item
 1A.

 Risk Factors

 This
Form 10-K contains forward-looking information based on our current expectations. Because our actual results may differ materially from
any forward-looking statements made by us, this section includes a discussion of important factors that could affect our future operations
and result in a decline in the market price of our common stock.

 We
have in the past incurred significant operating losses and may not sustain profitability in the future.

 We
have in the past experienced operating losses and negative cash flow from operations. If our revenues decline, our results of operations
and liquidity may be materially and adversely affected. If we experience slower than anticipated revenue growth or if our operating expenses
exceed our expectations, we may not be profitable. We may not remain profitable in future periods.

 Fluctuations
in our operating results may cause our stock price to decline.

 Given
the nature of the markets in which we operate, we cannot reliably predict future revenues and profitability. Changes in competitive,
market and economic conditions may cause us to adjust our operations. A high proportion of our costs are fixed, due in part to our sales,
research and development and manufacturing costs. Thus, small declines in revenue could disproportionately affect our operating results.
Factors that may affect our operating results and the market price of our common stock include:

 Demand
 for and market acceptance of our products;

 Competitive
 pressures resulting in lower selling prices;

 Adverse
 changes in the level of economic activity in regions in which we do business;

 Adverse
 changes in the oil and gas industry on which we are particularly dependent;

 in the portions of our revenue represented by various products and customers;

 Delays
 or problems in the introduction of new products;

 The
 announcement or introduction of new products, services or technological innovations by our competitors;

 Variations
 in our product mix;

 The
 timing and amount of our expenditures in anticipation of future sales;

 costs of raw materials or supplies; and

 in the volume or timing of product orders.

 Our
operations are subject to seasonal fluctuation.

 Our
TPA business is the least seasonal, however there is a small increase in the spring related to inventory building for the crop season
in the United States and a small slowdown in December as oilfield customers run down stock in advance of year end, but otherwise, there
is little seasonal variation. We believe we are able to adequately respond to these seasonal fluctuations by reducing or increasing production
as needed. The foregoing is equally true of our nitrogen conservation products. The use of our swimming pool products increases in summer
months in most markets and results in our sales from January to June being greater than in July through December. Markets for our WATERSAVR
product are also seasonal, depending on the wet versus dry seasons in particular countries. We attempt to sell into a variety of countries
with different seasons on both sides of the equator in order to minimize seasonality.

 Interruptions
in our ability to purchase raw materials and components may adversely affect our profitability.

 We
purchase certain raw materials and components from third parties pursuant to purchase orders placed from time to time. Because we do
not have guaranteed long-term supply arrangements with our suppliers, any material interruption in our ability to purchase necessary
raw materials or components could have a material adverse effect on our business, financial condition and results of operations.

 Our
WATERSAVR product has not proven to be a revenue producing product and we may never recoup the cost associated with its development.

 The
marketing efforts of our WATERSAVR product may result in continued losses. We introduced our WATERSAVR product in June 2002
and, to date, we have delivered quantities for testing by potential customers, but only a few customers have ordered the product for
commercial use. This product can achieve success only if it is ordered in substantial quantities by commercial customers who have determined
that the water saving benefits of the product exceed the costs of purchase and deployment of the product. We can offer no assurance that
we will receive sufficient orders of this product to achieve profits or cover the expenses incurred to manufacture and market this product.
We have received National Sanitation Foundation approval for the use of WATERSAVR in drinking water in the United States. Nevertheless,
we may require county or state approval on a case by case basis. We expect to spend $50,000 on the marketing and production of our WATERSAVR
product in fiscal 2024.

 If
we do not introduce new products in a timely manner, our products could become obsolete and our operating results would suffer.

 Without
the timely introduction of new products and enhancements, our products could become obsolete over time, in which case our revenue and
operating results would suffer. The success of our new product offerings will depend upon several factors, including our ability to:

 Accurately
 anticipate customer needs;

 Innovate
 and develop new products and applications;

 Successfully
 commercialize new products in a timely manner;

 Price
 our products competitively and manufacture and deliver our products in sufficient volumes and on time; and

 Differentiate
 our products from our competitors' products.

 In
developing any new product, we may be required to make a substantial investment before we can determine the commercial viability of the
new product. If we fail to accurately foresee our customers' needs and future activities, we may invest heavily in research and
development of products that do not lead to significant revenues.

 We
are dependent upon certain customers.

 Among
our current customers, we have identified three that are sizable enough that the loss of any one would be significant. Any loss of one
or more of these customers could result in a substantial reduction in our revenues. See "Principal Customers" in Item 1 of
this report for further details.

 Economic,
political and other risks associated with international sales and operations could adversely affect our sales.

 Revenues
from shipments made outside of the United States accounted for approximately 21% of our revenues in the year ended December 31, 2023,
20% in the year ended December 31, 2022 and 32% in the year ended December 31, 2021. Since we sell our products worldwide, our business
is subject to risks associated with doing business internationally. We anticipate that revenues from international operations will continue
to represent a sizable portion of our total revenue. Accordingly, our future results could be harmed by a variety of factors, including:

 in foreign currency exchange rates;

 in a country's or region's political or economic conditions, particularly in developing or emerging markets;

 Longer
 payment cycles of foreign customers and difficulty of collecting receivables in foreign jurisdictions;

 Trade
 protection measures and import or export licensing requirements;

 Differing
 tax laws and changes in those laws;

 Difficulty
 in staffing and managing widespread operations;

 Differing
 laws regarding protection of intellectual property; and

 Differing
 regulatory requirements and changes in those requirements.

 We
are subject to credit risk and may be subject to substantial write-offs if one or more of our significant customers default on their
payment obligations to us.

 We
currently allow our major customers between 30 and 90 days to pay for each sale. This practice, while customary, presents an accounts
receivable write-off risk if one or more of our significant customers defaulted on their payment obligations to us. Any such write-off,
if substantial, would have a material adverse effect on our business and results of operations. See above principal customer information.

 Our
products can be hazardous if not handled, stored and used properly; litigation related to the handling, storage and safety of our products
would have a material adverse effect on our business and results of operations.

 Some
of our products are flammable and must be stored properly to avoid fire risk. Additionally, some of our products may cause irritation
to a person's eyes if they are exposed to the concentrated product. Although we label our products to warn of such risks, our sales
could be reduced if our products were considered dangerous to use or if they are implicated in causing personal injury or property damage.
We are not currently aware of any circumstances in which our products have caused harm or property damage to consumers. Nevertheless,
litigation regarding the handling, storage and safety of our products would have a material adverse effect on our business and results
of operations.

 Our
failure to comply with environmental regulations may create significant environmental liabilities and force us to modify our manufacturing
processes.

 We
are subject to various federal, state and local environmental laws, ordinances and regulations relating to the use, storage, handling
and disposal of chemicals. Under such laws, we may become liable for the costs of removal or remediation of these substances that have
been used by our consumers or in our operations. Such laws may impose liability without regard to whether we knew of, or caused, the
release of such substances. Any failure by us to comply with present or future regulations could subject us to substantial fines, suspension
of production, alteration of manufacturing processes or cessation of operations, any of which could have a material adverse effect on
our business, financial condition and results of operations.

 Our
failure to protect our intellectual property could impair our competitive position.

 While
we own certain patents and trademarks, some aspects of our business cannot be protected by patents or trademarks. Accordingly, in these
areas there are few legal barriers that prevent potential competitors from copying certain of our products, processes and technologies
or from otherwise entering into operations in direct competition with us..

 Our
products may infringe on the intellectual property rights of others, and resulting claims against us could be costly and prevent us from
making or selling certain products.

 Third
parties may seek to claim that our products and operations infringe on their patent s or other intellectual property rights. We
may incur significant expense in any legal proceedings to protect our proprietary rights or to defend infringement claims by third parties.
In addition, claims of third parties against us could result in awards of substantial damages or court orders that could effectively
prevent us from making, using or selling our products in the United States or internationally.

 A
product liability claim for damages could materially and adversely affect our financial condition and results of operations.

 Our
business exposes us to potential product liability risks. There are many factors beyond our control that could lead to liability claims,
including the failure of our products to work properly and the chance that consumers will use our products incorrectly or for purposes
for which they were not intended. There can be no assurance that the amount of product liability insurance that we carry will be sufficient
to protect us from product liability claims. A product liability claim in excess of the amount of insurance we carry could have a material
adverse effect on our business, financial condition and results of operations.

 Our
ongoing success is dependent upon the continued availability of certain key employees.

 Our
business would be adversely affected if the services of Daniel B. O'Brien ceased to be available to us since we currently do not
have any other employee with an equivalent level of expertise in and knowledge of our industry. If Mr. O'Brien no longer served
as our President and Chief Executive Officer, we would have to recruit one or more new executives, with no real assurance that we would
be able to engage a replacement executive with the required skills on satisfactory terms. The market for skilled employees is highly
competitive, especially for employees in the fields in which we operate. While our compensation programs are intended to attract and
retain qualified employees, there can be no assurance that we will be able to retain the services of all our key employees or a sufficient
number to execute our plans, nor can there be any assurances that we will be able to continue to attract new employees as required.

 Item
 1B.

 Unresolved
 Staff Comments.

 Not

 Item
 1C.

 Cybersecurity.

 Companies
such as ours face a variety of risks, including financial reporting, legal, credit, liquidity, operational, health, safety and cybersecurity
risks. The Board believes an effective risk management system will (1) identify the material risks that we face in a timely manner, (2)
communicate necessary information with respect to material risks to senior executives and, as appropriate, to our directors (3) implement
or oversee implementation of appropriate and responsive risk management and mitigation strategies consistent with our risk profile, and
(4) integrate risk management into our decision-making.

 Our
Board oversees risk management after receiving briefings from advisors and also based on its own analysis and conclusions regarding the
adequacy of our risk management processes. The Board continuously evaluates and manages material risks including geopolitical and enterprise
risks, financial risks, environmental risks, health and safety risks and cybersecurity risks.

 George
Murray, our Operations Manager, is responsible for assessing and managing cybersecurity risks. Mr. Murray is experienced in assessing
and managing cybersecurity risks due to his direct oversight of our internet and digital communications contractors.

 To
date we have not experienced any cybersecurity threats and any risks from cybersecurity threats have not materially affected, and are
not reasonably likely to materially affect, our business strategy, results of operations, or financial condition.

 Item
 2.

 Properties.

 We
lease a 6,400 sq. ft. facility in Naperville, Illinois which we use for offices and laboratories at a cost of $5,670 per month with a
lease effective to December 2025. We also lease a 1,300 sq. ft. facility in Mendota, Illinois used for offices at a cost of $880 per
month on a month by month basis. We own a 61,200 sq. ft. facility and a 56,780 sq. ft. facility in Peru, Illinois along with a 14,000
sq. ft facility in Mendota, Illinois which is used to manufacture our TPA line of products. In 2017, we purchased a 3,000 sq ft building
on 1 acre of land in Taber, Alberta. In 2023, the Company purchased an 80% share in 317 Mendota, a real estate company that was
set up to purchase a manufacturing building in Mendota, IL. ENP Investments now occupies part of this space.

 Item
 3.

 Legal
 Proceedings.

 None.

 Item
 4.

 Mine
 Safety Disclosures.

 Not

 PART
II

 Item
 5.

 Market
 for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities.

 Our
common stock is traded on the NYSE American under the symbol "FSI". The following is the range of high and low closing prices
for our common stock for the periods indicated:

 High

 Low

 Year Ended December 31, 2023

 First Quarter

 $
 3.35

 $
 2.86

 Second Quarter

 3.32

 2.60

 Third Quarter

 2.96

 3.51

 Fourth Quarter

 2.69

 1.37

 High

 Low

 Year Ended December 31, 2022

 First Quarter

 $
 4.44

 $
 3.01

 Second Quarter

 3.96

 2.23

 Third Quarter

 2.68

 1.56

 Fourth Quarter

 3.24

 2.38

 As
of March 29, 2024, we had approximately 3,400 shareholders.

 The
Company declared a special dividend of $0.05 per share on April 14, 2023, paid on May 16, 2023 to shareholders of record on April 28,
2023.

 None
of our officers or directors, nor any of our principal shareholders purchased, on our behalf, any shares of our common stock from third
parties either in a private transaction or as a result of purchases in the open market during the years ended December 31, 2023 and 2022.

 As
of March 29, 2024, we had 12,450,532 outstanding shares of common stock. The following table lists additional shares of our common stock,
including shares issuable upon the exercise of options which have not yet vested, which may be issued as of March 29, 2024:

 Number

 Note

 Of Shares

 Reference

 Shares issuable upon exercise of options granted to our officers, directors, employees, consultants, and third parties

 1,649,000

 A

 A.
Options are exercisable at prices ranging from $1.75 to $3.61 per share. See Item 11 of this report for more information concerning these
options.

 Item
 6.

 Selected
 Financial Data.

 Not

 Item
 7.

 Management's
 Discussion and Analysis of Financial Condition and Results of Operation.

 Results
of Operations

 We
have three product lines.

 The
first is a chemical ("EWCP") used in swimming pools and spas. The product forms a thin, transparent layer on the water's
surface. The transparent layer slows the evaporation of water, allowing the water to retain a higher temperature for a longer period
of time thereby reducing the energy required to maintain the desired temperature of the water. A modified version of EWCP can also be
used in reservoirs, potable water storage tanks, livestock watering pods, canals, and irrigation ditches for the purpose of reducing
evaporation.

 The
second product, biodegradable polymers ("TPAs"), is used by the petroleum, chemical, utility and mining industries to prevent
corrosion and scaling in water piping. TPAs can also be used to increase biodegradability in detergents and in the agriculture industry
to increase crop yields by enhancing fertilizer uptake.

 The
third product line is nitrogen conservation products used for the agriculture industry. These products decrease the loss of nitrogen
fertilizer after initial application and allows less fertilizer to be used. These products are made and sold by the Company's TPA
division.

 Material
changes in the line items in our Statement of Income and Comprehensive Income for the year ended December 31, 2023 as compared to the
same period last year, are discussed below:

 Item

 Increase
 (I) or Decrease (D)

 Reason

 Sales

 TPA
 products

 D

 Decreased
 customer orders along with decrease in pricing.

 Cost
 of goods sold, as a percentage of sales

 I

 raw material costs and increased wages to add and retain manufacturing employees along with added costs associated with obtaining
 new certifications.

 Wages

 I

 wages for employee retention.

 Administrative
 salaries

 I

 wages for employee retention.

 Insurance

 I

 Prior
 year increase in assets and in sales resulted in higher insurance costs.

 Interest
 expense

 I

 debt resulted in increased interest expense.

 Office
 and miscellaneous

 I

 Increase
 in property tax associated with more properties along with various other one time costs.

 Travel

 I

 Travel
 has resumed as COVID-19 has become an endemic.

 Professional
 fees

 D

 Decreased
 due to one time costs associated with the planned merger with Lygos in 2022.

 Lease
 expense

 D

 Purchases
 of ENP Mendota and ENP Peru, the businesses we were renting from, reduced our lease expense.

 The
factors that will most significantly affect future operating results will be:

 The
 sale price of crude oil which is used in the manufacture of aspartic acid we import from China. Aspartic acid is a key ingredient
 in our TPA product. If tariffs increase and if relief is not available, some customers may experience price increases;

 Activity
 in the oil and gas industry, as we sell our TPA product to oil and gas companies; and

 Drought
 conditions, since we also sell our TPA product to farmers.

 Other
than the foregoing we do not know of any trends, events or uncertainties that have had, or are reasonably expected to have, a material
impact on our revenues or expenses.

 Capital
Resources and Liquidity

 Our
sources and (uses) of cash for the years ended December 31, 2023 and 2022 are shown below:

 2023

 2022

 Cash provided by operations

 $
 6,989,966

 $
 1,476,903

 Purchase of investments

 (470,000
)

 -

 Redemption of investments

 Distributions from equity investments

 201,034

 265,001

 Acquisition of ENP Peru, LLC

 -

 (499,329
)

 Non-Controlling Interest of 317 Mendota LLC

 -

 Long-term deposits

 815,714

 -

 Sale of property and equipment

 5,411

 -

 Purchases of property and equipment

 (4,990,675
)

 (1,981,307
)

 Advances (repayment) of short term line of credit

 (1,008,112
)

 517,772

 Repayment of long term debt

 (725,824
)

 (2,292,819
)

 Proceeds of long term debt

 2,686,682

 3,230,798

 Dividends paid

 (626,777
)

 -

 Lease payments

 (58,080
)

 (58,611
)

 Distributions to non-controlling interests

 (719,439
)

 (689,434
)

 Sale of common stock

 13,600

 140,620

 Impact of foreign exchange rates

 (30,069
)

 We
have sufficient cash resources to meets our future commitments and cash flow requirements for the coming year. As of December 31, 2023,
our working capital was $20,172,833 (2022 - $20,692,527) and we have no substantial commitments or capital requirements that require
significant outlays of cash over the coming fiscal year.

 We
are committed to minimum rental payments for property and premises aggregating approximately $142,380 over the term of two leases, the
last expiring on December 31, 2025.

 Commitments
for rent in the next two years are as follows:

 2024

 $
 70,440

 2025

 $
 71,940

 Other
than as disclosed above, we do not know of any trends, demands, commitments, events or uncertainties that will result in, or that are
reasonable likely to result in, our liquidity increasing or decreasing in any material way.

 Other
than as disclosed above, we do not know of any significant changes in our expected sources and uses of cash.

 We
do not have any commitments or arrangements from any person to provide us with any equity capital.

 Critical
Accounting Policies and Estimates

 Allowances
for Product Returns. We grant certain of our customers the right to return product which they are unable to sell. Upon sale, we evaluate
the need to record a provision for product returns based on our historical experience, economic trends and changes in customer demand.

 Allowances
for Doubtful Accounts Receivable. We evaluate our accounts receivable to determine if they will ultimately be collected. This evaluation
includes significant judgments and estimates, including an analysis of receivables aging and a review of large accounts. If, for example,
the financial condition of a customer deteriorates resulting in an impairment of its ability to pay or a pattern of late payment develops,
an allowance may be required.

 Provisions
for Inventory Obsolescence. We may need to record a provision for estimated obsolescence and shrinkage of inventory. Our estimates consider the cost of inventory, the estimated market value, the shelf life of the inventory and our historical experience. If there
are changes to these estimates, provisions for inventory obsolescence may be necessary.

 Valuation
of Goodwill and Intangible Assets. We review goodwill and intangible assets to determine if there are qualitative factors which exist
which may indicate that the carrying value exceeds the fair value. Our estimates are based upon an assessment of market conditions and
expected future cash flows to be generated by the reporting units and related assets. If factors exist which indicate that the carrying
value exceeds the fair value, an impairment charge against the goodwill and intangible assets could be required.

 Useful
Lives of Property, Equipment and Leaseholds and Intangible Assets. We amortize and depreciate our property, equipment and leaseholds
and intangible assets based on their estimated useful lives. We estimate the expected useful lives based on the expected term over which
the asset is expected to continue to generate economic benefit for our company. If there are differences between the expected useful
lives and the actual useful lives of the asset, impairment of property, equipment and leaseholds or intangible assets could be necessary.

 Revenue
Recognition. We follow a five-step model for revenue recognition. The five steps are: (1) identification of the contract(s) with
the customer, (2) identification of the performance obligation(s) in the contract(s), (3) determination of the transaction price, (4)
allocation of the transaction price to the performance obligation, and (5) recognition of revenue when (or as) the performance obligation
is satisfied. We fulfill our performance obligations when control of product transfers to the customer, which is generally at the time
the product is shipped since risk of loss is transferred to the purchaser upon delivery to the carrier. For shipments which are F.O.B.
shipping point, we have elected to account for shipping and handling activities as a fulfillment cost rather than as an additional promised
service and performance obligation.

 Stock
Based Compensation The fair value of share-based payments are subject to the limitations of the Black-Scholes option pricing model
that incorporates market data and involves uncertainty in estimates used by management in the assumptions. Because the Black-Scholes
option pricing model requires the inputs of highly subjective assumptions, including the volatility of share prices, changes in subjective
input assumptions can materially affect the estimate.

 Income
Taxes Tax interpretations, regulations and legislation in the various jurisdictions in which the Company operates are subject to
change and interpretation. As such, income taxes are subject to measurement uncertainty. Assessing the recoverability of deferred tax
assets requires the Company to make estimates related to the expectations of future taxable income and the application of existing tax
laws. To the extent that future taxable income differs significantly from estimates, the ability of the Company to realize deferred tax
assets could be impacted.

 Privately
Held Equity Investments The recoverability of privately held equity investments requires management to make certain assumptions and
estimates. Changes in these assumptions and estimates could result in materially different results.

 See
Note 2 to the consolidated financial statements included as part of this report for a description of our significant accounting policies.

 Recent
Accounting Pronouncements

 We
have evaluated recent accounting pronouncements issued since January 1, 2023 and determined that the adoption of these recent accounting
pronouncements will not have a material effect on our consolidated financial statements.

 Item
 7A.

 Quantitative
 and Qualitative Disclosures About Market Risk.

 Not

 Item
 8.

 Financial
 Statements and Supplementary Data.

SOLUTIONS INTERNATIONAL, INC. AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

 Page

 Report of Independent Registered Public Accounting Firm, Smythe LLP (PCAOB ID NO: 995)

 Consolidated Balance Sheets as of December 31, 2023 and 2022

 Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2023 and 2022

 Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022

 Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2023 and 2022

 Notes to Consolidated Financial Statements

 Report
of Independent Registered Public Accounting Firm

 To
the Stockholders and the Board of Directors of Flexible Solutions International, Inc.

 Opinion
on the Consolidated Financial Statements

 We
have audited the accompanying consolidated financial statements of Flexible Solutions International, Inc. and its subsidiaries (the "Company")
which comprise the consolidated balance sheets as of December 31, 2023 and 2022, and the related consolidated statements of income and
comprehensive income, cash flows and stockholders' equity for the years then ended, and the related notes (collectively referred
to as the "consolidated financial statements").

 In
our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the
Company as of December 31, 2023 and 2022, and the consolidated results of its operations and its consolidated cash flows for the years
then ended, in conformity with accounting principles generally accepted in the United States of America.

 Basis
for Opinion

 These
consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part
of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing
an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audits provide a reasonable basis for our opinion.

 Critical
Audit Matter

 The
critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material
to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication
of this critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we
are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts
or disclosures to which it relates.

 F- 1

 Valuation
of inventory

 At
December 31, 2023, the Company's inventory balance was $11,134,889. As discussed in Note 2 to the consolidated financial statements,
the Company records inventory at the lower of cost on a first-in, first-out or weighted average basis and net realizable value. To determine
inventory valuation, management conducts regular reviews of overhead costs and the calculation to allocate these expenditures to inventory
cost.

 We
identified the assessment of valuation of inventory as a critical audit matter. Auditing management's inventory valuation involved
significant judgment because the estimates are based on several factors. In particular, in estimating inventory cost inputs, management
developed assumptions such as the allocation of overhead expenditures to inventory cost.

 The
primary procedures we performed to address this critical audit matter included:

 Obtained
 an understanding and reviewed the appropriateness of the Company's costing methodology
 of inventory, including the allocation of overhead costs to inventory.

 Performed
 substantive procedures over the inputs of costing of inventory, including overhead costs by agreeing inputs to third party source
 documentation.

 Tested
 management's allocation of overhead costs between inventory products by assessing the appropriateness of the allocation method
 and recalculated the formula used to determine computational accuracy.

 Tested
 the reliability of reports used by management in inventory costing by agreeing the report inputs to underlying records.

 Performed
 observations of inventory held at year-end for any signs of obsolescence and held discussions with management and operational personnel
 to identify any slow-moving inventory.

 Chartered
Professional Accountants

 Vancouver,
Canada

 April 1, 2024

 We
have served as the Company's auditor since 2019.

 F- 2

Balance Sheets

 As
at December 31

 (U.S.

 December
 31, 2023

 December
 31, 2022

 Assets

 Current

 Cash

 $
 5,017,583

 $
 6,115,099

 Term deposits (Note 2)

 2,690,241

 700,000

 Accounts receivable, net (Note 4)

 9,843,056

 9,449,857

 Inventories (Note 5)

 11,134,889

 14,419,430

 Prepaid expenses and deposits

 1,540,923

 310,297

 Total current assets

 30,226,692

 30,994,683

 Property, equipment and leaseholds, net (Note 6)

 13,171,787

 9,709,288

 Right of use assets (Note 3)

 167,222

 Intangible assets (Note 8)

 2,280,000

 2,440,000

 Long term deposits (Note 9)

 824,254

 8,540

 Investments (Note 10)

 6,033,960

 5,458,895

 Goodwill (Note 8)

 2,534,275

 2,534,275

 Deferred tax asset (Note 13)

 284,794

 274,289

 Total Assets

 $
 55,471,055

 $
 51,587,192

 Liabilities

 Current

 Accounts payable

 $
 1,984,592

 $
 873,904

 Accrued liabilities

 284,131

 959,856

 Deferred revenue

 148,292

 387,763

 Income taxes payable

 4,485,213

 4,486,350

 Short term line of credit (Note 11)

 1,810,479

 2,818,591

 Current portion of lease liability (Note 3)

 59,520

 58,080

 Current portion of long term debt (Note 12)

 1,281,632

 717,612

 Total current liabilities

 10,053,859

 10,302,156

 Lease liability (Note 3)

 55,773

 109,142

 Deferred income tax liability (Note 13)

 260,047

 500,459

 Long term debt (Note 12)

 6,833,304

 5,436,465

 Total Liabilities

 17,202,983

 16,348,222

 Stockholders' Equity

 Capital stock (Note 16)

 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:

 12,435,532 (December 31, 2022: 12,426,260) common shares

 12,436

 12,426

 Common stock, value

 12,436

 12,426

 Capital in excess of par value

 17,932,015

 17,523,345

 Other comprehensive loss

 ( 795,146
)

 ( 805,799
)

 Accumulated earnings

 18,053,051

 15,903,964

 Total stockholders' equity – controlling interest

 35,202,356

 32,633,936

 Non-controlling interests (Note 17)

 3,065,716

 2,605,034

 Total Stockholders' Equity

 38,268,072

 35,238,970

 Total Liabilities and Stockholders' Equity

 $
 55,471,055

 $
 51,587,192

 See
Notes to Consolidated Financial Statements.

 F- 3

Statements of Income and Comprehensive Income

 For
the Years Ended December 31

 (U.S.

 2023

 2022

 Sales

 $
 38,324,806

 $
 45,840,469

 Cost of sales (Note 6, 7 & 8)

 27,987,451

 31,971,596

 Gross profit

 10,337,355

 13,868,873

 Operating expenses

 Wages

 2,659,654

 2,537,783

 Administrative salaries and benefits

 1,205,007

 1,032,394

 Insurance

 861,501

 683,272

 Office and miscellaneous

 508,376

 350,126

 Interest expense

 498,666

 292,949

 Consulting

 324,327

 312,171

 Travel

 264,563

 171,369

 Professional fees

 238,466

 660,821

 Investor relations and transfer agent fee

 222,650

 179,505

 Advertising and promotion

 194,308

 182,609

 Research

 158,246

 99,275

 Lease expense

 97,806

 149,446

 Telecommunications

 55,093

 42,098

 Commissions

 35,623

 30,732

 Utilities

 26,854

 29,517

 Shipping

 24,060

 23,469

 Currency exchange

 ( 37,632
)

 23,091

 Bad debt expense

 -

 17,869

 Total operating expenses

 7,337,568

 6,818,496

 Operating income

 2,999,787

 7,050,377

 Gain on sale of asset (Note 6)

 4,589

 -

 Gain on investments (Note 10)

 505,065

 341,424

 Gain on previously held equity interest (Note 10)

 -

 335,051

 Interest income

 113,809

 132,233

 Income before income tax

 3,623,250

 7,859,085

 Income taxes (Note 13)

 Deferred income tax recovery

 250,917

 71,295

 Current income tax expense

 ( 118,182
)

 ( 217,151
)

 Net income for the year

 3,755,985

 Net income attributable to non-controlling interests

 ( 980,121
)

 ( 691,625
)

 Net income attributable to controlling interest

 $

 $
 7,021,604

 Income per share (basic) (Note 14)

 $
 0.22

 $
 0.57

 Income per share (diluted) (Note 14)

 $
 0.22

 $
 0.56

 Weighted average number of common shares (basic)

 12,434,886

 12,379,316

 Weighted average number of common shares (diluted)

 12,489,467

 12,466,415

 Other comprehensive income:

 Net income

 $
 3,755,985

 $

 Unrealized gain (loss) on foreign currency transactions

)

 Total comprehensive income

 3,766,638

 7,683,160

 Comprehensive income – non-controlling interest

 ( 980,121
)

 ( 691,625
)

 Comprehensive income attributable to controlling interests

 $
 2,786,517

 $
 6,991,535

 See
Notes to Consolidated Financial Statements.

 F- 4

Statements of Cash Flows

 For
Years Ended December 31

 (U.S.

 2023

 2022

 Operating activities

 Net income for the year

 $
 3,755,985

 $

 Adjustments to reconcile net income to net cash:

 Stock based compensation

 395,080

 399,148

 Depreciation and amortization

 1,686,319

 1,277,431

 Lease right of use financing

 6,151

 8,566

 Lease right of use amortization

 51,929

 50,045

 Gain on investments

 ( 505,065
)

 ( 341,424
)

 Gain on sale of asset

 ( 4,589
)

 -

 Bad debt expense

 -

 17,869

 Deferred income tax recovery

 ( 250,917
)

 ( 71,295
)

 Gain on acquisition of ENP Peru, LLC

 -

 ( 335,051
)

 Changes in non-cash working capital items:

 Increase in accounts receivable

 ( 393,199
)

 ( 2,338,397
)

 Decrease (increase) in inventories

 3,284,541

 ( 4,124,022
)

 Decrease (increase) in prepaid expenses and deposits

 ( 1,230,626
)

 131,864

 Increase (decrease) in accounts payable and accrued liabilities

 434,964

 ( 700,191
)

 Decrease in income taxes payable

 ( 1,137
)

 ( 249,628
)

 (Decrease) increase in deferred revenue

 ( 239,471
)

 38,759

 Cash provided by operating activities

 6,989,965

 1,476,903

 Investing activities

 Purchase of investments

 ( 470,000
)

 -

 Redemption of investments

 -

 Distributions received from equity investments

 201,034

 265,001

 Non-controlling interest of 317 Mendota

 -

 Long term deposits

 ( 815,714
)

 -

 Proceeds from sale of asset

 5,411

 -

 Purchase of property and equipment

 ( 4,990,675
)

 ( 1,981,307
)

 Acquisition of ENP Peru, LLC

 -

 ( 499,329
)

 Cash used in investing activities

 ( 5,669,944
)

 ( 2,215,635
)

 Financing activities

 (Repayment) advance of short term line of credit

 ( 1,008,112
)

 517,772

 Repayment of long term debt

 ( 725,823
)

 ( 2,292,819
)

 Proceeds of long term debt

 2,686,682

 3,230,798

 Lease payments

 ( 58,080
)

 ( 58,611
)

 Dividends paid

 ( 626,777
)

 -

 Distribution to non-controlling interest

 ( 719,439
)

 ( 689,434
)

 Common stock issued

 13,600

 140,620

 Cash provided by (used in) financing activities

 ( 437,949
)

 848,326

 Effect of exchange rate changes on cash

)

 Inflow of cash

 892,725

 79,525

 Cash resources, beginning

 6,815,099

 6,735,574

 Cash resources, ending

 $
 7,707,824

 $
 6,815,099

 Cash resources are comprised of:

 Cash

 $
 5,017,583

 $
 6,115,099

 Term deposits

 2,690,241

 700,000

 Cash resources

 $
 7,707,824

 $
 6,815,099

 Supplemental disclosure of cash flow information:

 Income taxes paid

 $
 119,319

 $
 158,966

 Interest paid

 498,666

 292,949

 See
Notes to Consolidated Financial Statements.

 F- 5

Statements of Stockholders' Equity

 For
the Years Ended December 31, 2023 and 2022

 (U.S.

 Shares

 Par Value

 Capital in
 Excess of
 Par Value

 Earnings

 Other
 Comprehensive
 Income

 Total

 Non-
 Controlling
 Interests

 Total
 Stockholders'
 Equity

 Balance December 31, 2021

 12,355,246

 $
 12,355

 $
 16,983,648

 $
 8,882,360

 $
 ( 775,730
)

 $
 25,102,633

 $
 2,602,843

 $
 27,705,476

 Translation adjustment

 —

 —

 —

 —

)

)

 —

)

 Net income

 —

 —

 —

 7,021,604

 —

 7,021,604

 691,625

 Common stock issued

 71,014

 140,549

 —

 —

 140,620

 —

 140,620

 Distributions to noncontrolling interests

 —

 —

 —

 —

 —

 —

 ( 689,434
)

 ( 689,434
)

 Stock-based compensation

 —

 —

 399,148

 —

 —

 399,148

 —

 399,148

 Balance December 31, 2022

 12,426,260

 $
 12,426

 $
 17,523,345

 $
 15,903,964

 $
 ( 805,799
)

 $
 32,633,936

 $
 2,605,034

 $
 35,238,970

 Balance

 12,426,260

 $
 12,426

 $
 17,523,345

 $
 15,903,964

 $
 ( 805,799
)

 $
 32,633,936

 $
 2,605,034

 $
 35,238,970

 Translation adjustment

 —

 —

 —

 —

 —

 Dividends paid

 —

 —

 —

 ( 626,777
)

 —

 ( 626,777
)

 —

 ( 626,777
)

 Non-controlling interest of 317 Mendota LLC

 —

 —

 —

 —

 —

 —

 Net income

 —

 —

 —

 —

 980,121

 3,755,985

 Common stock issued

 9,272

 13,590

 —

 —

 13,600

 —

 13,600

 Distributions to noncontrolling interests

 —

 —

 —

 —

 —

 —

 ( 719,439
)

 ( 719,439
)

 Stock-based compensation

 —

 —

 395,080

 —

 —

 395,080

 —

 395,080

 Balance December 31, 2023

 12,435,532

 $
 12,436

 $
 17,932,015

 $
 18,053,051

 $
 ( 795,146
)

 $
 35,202,356

 $
 3,065,716

 $
 38,268,072

 Balance

 12,435,532

 $
 12,436

 $
 17,932,015

 $
 18,053,051

 $
 ( 795,146
)

 $
 35,202,356

 $
 3,065,716

 $
 38,268,072

 See
Notes to Consolidated Financial Statements.

 F- 6

 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

 December
31, 2023 and 2022

 (U.S.

 1.
 BASIS OF PRESENTATION

 These
consolidated financial statements ("consolidated financial statements") include the accounts of Flexible Solutions International,
Inc. (the "Company"), its wholly-owned subsidiaries Flexible Fermentation Ltd., NanoChem Solutions Inc. ("NanoChem"),
Flexible Solutions Ltd., Flexible Biomass LP, FS Biomass Inc., NCS Deferred Corp., Natural Chem SEZC Ltd., InnFlex Holdings Inc., ENP
Peru Investments LLC ("ENP Peru"), its 80 % controlling interest in 317 Mendota LLC ("317 Mendota"), and its 65 %
controlling interest in ENP Investments, LLC ("ENP Investments") and ENP Mendota, LLC ("ENP Mendota"). All inter-company
balances and transactions have been eliminated upon consolidation. The Company was incorporated on May 12, 1998 in the State of Nevada
and in 2019, the Company redomiciled into Alberta, Canada.

 In
2022, NanoChem purchased an additional 50 % in ENP Peru, increasing its share to 91.67 %. ENP Investments owns the remaining 8.33 %, of
which the Company has a 65 % interest. In 2023, NanoChem purchased the remaining 8.33 % of shares to become sole owner. ENP Peru was previously
accounted for under the equity method however, it is now consolidated into the financial statements from the date control was obtained.

 In
2023, the Company purchased an 80 %
interest in 317 Mendota, a newly incorporated company established to purchase a large manufacturing building. ENP Investments will
occupy part of this building, freeing up more space in the building owned by ENP Peru for NanoChem. The Company intends to rent the
remainder of the space to suitable tenants. The remaining 20 %
non-controlling interest is held by unrelated parties.

 The
Company and its subsidiaries develop, manufacture and market specialty chemicals which slow the evaporation of water. One product, HEATSAVR,
is marketed for use in swimming pools and spas where its use, by slowing the evaporation of water, allows the water to retain a higher
temperature for a longer period of time and thereby reduces the energy required to maintain the desired temperature of the water in the
pool. Another product, WATERSAVR, is marketed for water conservation in irrigation canals, aquaculture, and reservoirs where its
use slows water loss due to evaporation. In addition to the water conservation products, the Company also manufactures and markets water-soluble
chemicals utilizing thermal polyaspartate biopolymers (hereinafter referred to as "TPAs"), which are beta-proteins manufactured
from the common biological amino acid, L-aspartic. TPAs can be formulated to prevent corrosion and scaling in water piping within the
petroleum, chemical, utility and mining industries. TPAs are also used as proteins to enhance fertilizers in improving crop yields and
can be used as additives for household laundry detergents, consumer care products and pesticides. The TPA division also manufactures
two nitrogen conservation products for agriculture that slows nitrogen loss from fields.

 F- 7

 2.
 SIGNIFICANT ACCOUNTING POLICIES

 These
consolidated financial statements have been prepared on a historical cost basis, except where otherwise noted, in accordance with accounting
principles generally accepted in the United States applicable to a going concern and reflect the policies outlined below.

 (a)
 Cash and Cash Equivalents.

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

 (b)
 Term Deposits.

 The
Company has four term deposits that are maintained by commercials banks. The first term deposit is for $ 680,000 and matures in
January 2024. This deposit pays 5.0 % interest and if withdrawn before maturity, the greater of the loss of accrued interest or $ 150,
plus 1% of the principal shall be levied. The second term deposit is for $ 300,000 and
matures in February 2024. Paying 1.3 %
interest, it can be withdrawn by the Company at any point without prior notice or penalty. The third term deposit is for $ 710,241, matures
in May 2024 and pays interest at a rate of 3.00 %.
If withdrawn before maturity, the greater of the loss of accrued interest or $ 150,
plus 1% of the principal shall be levied. The fourth term deposit is for $ 1,000,000 and
matures in May 2024. This deposit pays 3.85 %
and if withdrawn before maturity, the greater of the loss of accrued interest or $ 150,
plus 1% of the principal shall be levied.

 (c)
 Inventories and Cost of Sales.

 The
Company has three major classes of inventory: completed goods, work in progress and raw materials and supplies. In all classes inventories
are stated at the lower of cost and net realizable value. Cost is determined on a first-in, first-out basis or weighted average cost
formula to inventories in different subsidiaries. Cost of sales includes all expenditures incurred in bringing the goods to the point
of sale. Inventory 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 the Company's manufacturing and processing facilities.
Shipping and handling charges billed to customers are included in revenue (2023 - $ 522,033; 2022 - $ 433,015). Shipping and handling costs
incurred are included in cost of goods sold (2023 - $ 944,811; 2022 - $ 913,890).

 (d)
 Allowance for Doubtful Accounts.

 The
Company provides an allowance for doubtful accounts when management estimates collectability to be uncertain. Accounts receivable are
continually reviewed to determine which, if any, accounts are doubtful of collection. In making the determination of the appropriate
allowance amount, the Company considers current economic and industry conditions, relationships with each significant customer, overall
customer credit-worthiness and historical experience.

 (e)
 Property, Equipment, Leaseholds and Intangible Assets.

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

 SCHEDULE OF METHOD OF DEPRECIATION

 Computer
 hardware

 30%

 Manufacturing
 equipment

 20%

 Office
 equipment

 20%

 Boat

 20%

 Building
 and improvements

 10%

 Trailer

 30%

 Automobiles

 over 5 years

 Patents

 over 17 years

 Technology

 over 10 years

 Leasehold
 improvements

 over lease term

 Customer
 relationships

 over 15 years

 Software

 over 3 years

 F- 8

 (f)
 Impairment of Long-Lived Assets.

 In
accordance with FASB Codification Topic 360, Property, Plant and Equipment (ASC 360), the Company reviews long-lived assets, including,
but not limited to, property, equipment and leaseholds, patents and other assets, for impairment annually or whenever events or changes
in circumstances indicate the carrying amounts of assets may not be recoverable. The carrying value of long-lived assets is assessed
for impairment by evaluating operating performance and future undiscounted cash flows of the underlying assets. If the expected future
cash flows of an asset is less than its carrying value, an impairment measurement is indicated. Impairment charges are recorded to the
extent that an asset's carrying value exceeds its fair value. Accordingly, actual results could vary significantly from such estimates.
There were no impairment charges during the periods presented.

 (g)
 Foreign Currency.

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

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

 (h)
 Revenue Recognition.

 The
Company generates revenue primarily from energy and water conservation products and biodegradable polymers, as further discussed in Note
18.

 The
Company follows a five-step model for revenue recognition. The five steps are: (1) identification of the contract(s) with the customer,
(2) identification of the performance obligation(s) in the contract(s), (3) determination of the transaction price, (4) allocation of
the transaction price to the performance obligation, and (5) recognition of revenue when (or as) the performance obligation is satisfied.
The Company has fulfilled its performance obligations when control transfers to the customer, which is generally at the time the product
is shipped since risk of loss is transferred to the purchaser upon delivery to the carrier. For shipments which are free-on-board shipping
point, the Company has elected to account for shipping and handling activities as a fulfillment cost rather than as an additional promised
service and performance obligation.

 Since
the Company's inception, product returns have been insignificant; therefore, no provision has been established for estimated product
returns.

 Deferred
revenues consist of products sold to distributors with payment terms greater than the Company's customary business terms due to
lack of credit history or operating in a new market in which the Company has no prior experience. The Company defers the recognition
of revenue until the criteria for revenue recognition has been met and payments become due or cash is received from these distributors.

 (i)
 Stock Issued in Exchange for Services.

 The
Company's common stock issued in exchange for services is valued at estimated fair market value based upon trading prices of the
Company's common stock on the dates of the stock transactions. The corresponding expense of the services rendered is recognized
over the period that the services are performed.

 F- 9

 (j)
 Stock-based Compensation.

 The
Company recognizes compensation expense for all share-based payments in accordance with FASB Codification Topic 718, Compensation
— Stock Compensation (ASC 718). Under the fair value recognition provisions of ASC 718, the Company recognizes share-based
compensation expense, net of an estimated forfeiture rate, over the requisite service period of the award.

 The
fair value at grant date of stock options is estimated using the Black-Scholes option-pricing model. Compensation expense is recognized
on a straight-line basis over the stock option vesting period based on the estimated number of stock options that are expected to vest.
Shares are issued from treasury upon exercise of stock options.

 (k)
 Other Comprehensive Income.

 Other
comprehensive income refers to revenues, expenses, gains and losses that under generally accepted accounting principles are included
in comprehensive income, but are excluded from net income as these amounts are recorded directly as an adjustment to stockholders'
equity. The Company's other comprehensive income is comprised only of unrealized foreign exchange gains and losses related to the
translation of subsidiaries' functional currency into the reporting currency.

 (l)
 Income Per Share.

 Basic
earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding
in the period. Diluted earnings per share are calculated giving effect to the potential dilution of the exercise of options and warrants.
Common equivalent shares, composed of incremental common shares issuable upon the exercise of stock options and warrants are included
in diluted net income per share to the extent that these shares are dilutive. Common equivalent shares that have an anti-dilutive effect
on net income (loss) per share have been excluded from the calculation of diluted weighted average shares outstanding for the years ended
December 31, 2023 and 2022.

 (m)
 Use of Estimates.

 The
preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States 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.

 Estimates
and underlying assumptions are reviewed at each period end. Revisions to accounting estimates are recognized in the period in which the
estimates are revised and in any future periods affected.

 Significant
areas requiring the use of management estimates include assumptions and estimates relating to the valuation of goodwill and
intangible assets, valuation of assets acquired at fair value, asset impairment analysis, share-based payments, valuation allowances
for deferred income tax assets, determination of useful lives of property, equipment and leaseholds and intangible assets,
recoverability of accounts receivable, recoverability of investments, discount rates for right of use assets and the costing and
recoverable value of inventory.

 (n)
 Fair Value of Financial Instruments.

 Fair
value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal
or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.
The standard describes a fair value hierarchy based on three levels of inputs described below, of which the first two are considered
observable and the last unobservable, that may be used to measure fair value.

 F- 10

 Level
 1 – Quoted prices in active markets for identical assets or liabilities.

 Level
 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets
 or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable
 market data for substantially the full term of the assets or liabilities.

 Level
 3 — Unobservable inputs that are supported by little or no market activity which is significant to the fair value of the assets
 or liabilities.

 The
fair values of cash, term deposits, accounts receivable, accounts payable, accrued liabilities and the short term line of credit for
all periods presented approximate their respective carrying amounts due to the short term nature of these financial instruments.

 The
fair value of the long term debt and lease liabilities for all periods presented approximate their respective carrying amounts due to
these financial instruments being at market rates.

 (o)
 Contingencies.

 Certain
conditions may exist as of the date the consolidated financial statements are issued which may result in a loss to the Company but which
will only be resolved when one or more future events occur or fail to occur. The Company's management and its legal counsel assess
such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related
to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company's
legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount
of relief sought or expected to be sought therein.

 If
the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability
can be estimated, the estimated liability would be accrued in the Company's consolidated financial statements. If the assessment
indicates that a potential material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated,
then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would
be disclosed.

 Loss
contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.
Legal fees associated with loss contingencies are expensed as incurred. The Company is not aware of any contingencies at the date of
these consolidated financial statements.

 (p)
 Income Taxes.

 Income
taxes are computed by multiplying the Company's taxable net income by the Company's effective tax rates. Deferred income
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial
statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss carry-forwards, if any.
Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change
in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided to reduce the
carrying amount of deferred income tax assets if it is considered more likely than not that some portion, or all, of the deferred income
tax assets will not be realized.

 In
accordance with FASB Codification Topic 740, Income taxes (ASC 740) under the liability method, it is the Company's policy
to provide for uncertain tax positions and the related interest and penalties based upon management's assessment of whether a tax
benefit is more likely than not to be sustained upon examination by tax authorities. At December 31, 2023, the Company believes it has
appropriately accounted for any unrecognized tax benefits. To the extent the Company prevails in matters for which a liability for an
unrecognized benefit is established or is required to pay amounts in excess of the liability, the Company's effective tax rate
in a given financial statement period may be affected. Interest and penalties associated with the Company's tax positions are recorded
as interest expense in the consolidated statements of income and comprehensive income.

 F- 11

 (q)
 Risk Management.

 The
Company's credit risk is primarily attributable to its accounts receivable. The amounts presented in the accompanying consolidated
balance sheets are net of allowances for doubtful accounts, estimated by the Company's management based on prior experience and
the current economic environment. The Company is exposed to credit-related losses in the event of non-payment by customers. Credit exposure
is minimized by dealing with only credit worthy counterparties.. Revenue for the Company's three primary customers totaled $ 20,482,798
( 53 %) for the year ended December 31, 2023 (2022 - $ 27,775,616 or 61 %). Accounts receivable for the Company's three primary customers
totaled $ 6,561,164 ( 67 %) at December 31, 2023 (2022 - $ 6,124,424 or 65 %).

 The
credit risk on cash is limited because the Company limits its exposure to credit loss by placing its cash with major financial institutions.
The Company maintains cash balances at financial institutions which at times exceed federally insured amounts. The Company has not experienced
any losses in such accounts.

 The
Company is exposed to foreign risk to the extent that market value rate fluctuations materially differ for financial assets and liabilities
denominated in foreign currencies.

 In
order to manage its exposure to foreign exchange risks, the Company is closely monitoring the fluctuations in the foreign currency exchange
rates and the impact on the value of cash, accounts receivable, and accounts payable and accrued liabilities. The Company has not hedged
its exposure to currency fluctuations.

 The
Company is exposed to interest rate risk to the extent that the fair value or future cash flows for financial liabilities will
fluctuate as a result of changes in market interest rates. The Company is exposed to interest rate risk on its long-term debt
subject to fixed long-term interest rates.

 In
order to manage its exposure to interest rate risk, the Company is closely monitoring fluctuations in market interest risks and will
refinance its long-term debt where possible to obtain more favourable rates.

 (r)
 Equity Method Investment.

 The
Company accounts for investments using the equity method of accounting if the investment provides the Company the ability to exercise
significant influence, but not control, over the investee. Significant influence is generally deemed to exist if the Company's
ownership interest in the voting stock of the investee ranges between 20% and 50%, although other factors, such as representation on
the investee's board of directors, are considered in determining whether the equity method of accounting is appropriate. Under
the equity method of accounting, the investment is initially recorded at cost in the consolidated balance sheets under other assets and
adjusted for dividends received and the Company's share of the investee's earnings or losses together with other-than-temporary
impairments which are recorded through other income (loss), net in the consolidated statements of operations and comprehensive income
(loss).

 (s)
 Goodwill and Intangible Assets.

 Goodwill
represents the excess of the purchase price of an acquired entity over the amounts assigned to the assets acquired and liabilities assumed.
Goodwill is not amortized, but is reviewed for impairment annually or more frequently if certain impairment conditions arise. The Company
performs an annual goodwill impairment review in the fourth quarter of each year at the reporting unit level. The evaluation begins with
a qualitative assessment of the factors that could impact the significant inputs used to estimate fair value. If after performing the
qualitative assessment, it is determined that it is more likely than not that the fair value of a reporting unit is greater than its
carrying amount, including goodwill, then no further analysis is necessary. However, if the results of the qualitative test are unclear,
the Company performs a quantitative test, which involves comparing the fair value of a reporting unit with its carrying amount, including
goodwill. The Company uses an income-based valuation method, determining the present value of future cash flows, to estimate the fair
value of a reporting unit. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered
not impaired, and no further analysis is necessary. If the fair value of the reporting unit is less than its carrying amount, goodwill
impairment would be recognized equal to the amount of the carrying value in excess of the reporting unit's fair value, limited
to the total amount of goodwill allocated to the reporting unit.

 F- 12

 Intangible
assets primarily include trademarks and trade secrets with indefinite lives and customer-relationships with finite lives. Intangible
assets with indefinite lives are not amortized but are tested for impairment on an annual basis, or more frequently if indicators of
impairment are present. Indefinite lived intangible assets are assessed using either a qualitative or a quantitative approach. The qualitative
assessment evaluates factors including macro-economic conditions, industry and company-specific factors, legal and regulatory environments,
and historical company performance in assessing fair value. If it is determined that it is more likely than not that the fair value of
the intangible asset is less than its carrying value, a quantitative test is then performed. Otherwise, no further testing is required.
When using a quantitative approach, the Company compares the fair value of the intangible asset to its carrying amount. If the estimated
fair value of the intangible asset is less than the carrying amount of the intangible asset, impairment is indicated, requiring recognition
of an impairment charge for the differential.

 In
accordance with FASB Codification Topic 350, Intangibles – Goodwill and Other, (ASC 350), qualitative assessments of goodwill
and indefinite-lived intangible assets were performed in 2023 and 2022. Based on the results of the assessment, it was determined that
it is more likely than not the reporting unit, customer lists and trademarks had a fair value in excess of their carrying amounts. Accordingly,
no further impairment testing was completed and no impairment charges related to goodwill or indefinite-lived intangibles were recognized
during the year ended December 31, 2023.

 Finite-lived
intangible assets are amortized on a straight-line basis over their estimated useful lives. The Company reviews for impairment indicators
of finite-lived intangibles and other long-lived assets as described in the "Impairment of Long Lived Assets" significant
accounting policy.

 (t)
 Recent Accounting Pronouncements.

 The
Company has implemented all applicable new accounting pronouncements that are in effect. Those pronouncements did not have any material
impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other
new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 3.
 LEASES

 Leases are evaluated and classified as either operating or finance leases by the lessee
and as either operating, sales-type or direct financing leases by the lessor. For leases with terms greater than 12 months, the Company
records the related right-of-use ("ROU") asset and lease obligation at the present value of lease payments over the term.
Leases may include fixed rental escalation clauses, renewal options and / or termination options that are factored into the determination
of lease payments when appropriate. The Company's operating leases are included in ROU assets, lease liabilities-current portion
and lease liability-long term portion in the accompanying consolidated balance sheets. ROU assets represent the Company's right
to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the
lease. The Company's leases do not usually provide a readily determinable implicit rate; therefore, an estimate of the Company's
incremental borrowing rate is used to discount the lease payments based on information available at the lease commencement date. The
discount rate used was 5.5 %.

 F- 13

 The
table below summarizes the right-of-use asset and lease liability for the years ended December 31, 2023 and 2022:

 SUMMARY OF RIGHT-OF-USE ASSET AND LEASE LIABILITY

 Right of Use Assets

 Balance at December 31, 2021

 $
 217,267

 ( 50,045
)

 Balance at December 31, 2022

 $
 167,222

 ( 51,929
)

 Balance at December 31, 2023

 $

 Lease Liability

 Balance at December 31, 2021

 $
 217,267

 Lease interest expense

 8,566

 Payments

 ( 58,611
)

 Balance at December 31, 2022

 $
 167,222

 Lease interest expense

 6,151

 Payments

 ( 58,080
)

 Balance at December 31, 2023

 $

 Short-term portion

 $
 59,520

 Long-term portion

 55,773

 Total

 $

 Undiscounted
rent payments are as follows:

 SCHEDULE OF UNDISCOUNTED RENT PAYMENTS

 2024

 59,520

 2025

 61,020

 Total

 $
 120,540

 Impact of discounting

 ( 5,247
)

 Lease liability, December 31, 2023

 $

 4.
 ACCOUNTS RECEIVABLE

 SCHEDULE OF ACCOUNTS RECEIVABLE

 2023

 2022

 Accounts receivable

 $
 10,133,249

 $
 9,739,150

 Allowances for doubtful accounts

 ( 290,193
)

 ( 289,293
)

 Total accounts receivable

 $
 9,843,056

 $
 9,449,857

 5.
 INVENTORIES

 SCHEDULE OF INVENTORY

 2023

 2022

 Completed goods

 $
 2,682,158

 $
 3,806,646

 Raw materials and supplies

 8,452,731

 10,612,784

 Total inventory

 $
 11,134,889

 $
 14,419,430

 6.
 PROPERTY, EQUIPMENT AND LEASEHOLDS

 SCHEDULE OF PROPERTY, EQUIPMENT AND LEASEHOLDS

 2023

 2023

 Cost

 Net

 Buildings and improvements

 $
 12,341,605

 $
 3,896,887

 $
 8,444,718

 Automobiles

 196,255

 140,040

 56,215

 Computer hardware

 43,493

 43,123

 Office equipment

 134,130

 121,925

 12,205

 Manufacturing equipment

 10,008,395

 5,791,615

 4,216,780

 Trailers

 9,071

 8,164

 Land

 440,592

 —

 440,592

 Leasehold improvements

 88,872

 88,872

 —

 Technology

 103,292

 103,292

 —

 $
 23,365,705

 $
 10,193,918

 $
 13,171,787

 F- 14

 2022

 2022

 Cost

 Net

 Buildings and improvements

 $
 8,775,629

 $
 3,310,920

 $
 5,464,709

 Automobiles

 196,255

 107,055

 89,200

 Computer hardware

 43,432

 42,663

 Office equipment

 133,280

 112,782

 20,498

 Manufacturing equipment

 8,634,063

 4,891,736

 3,742,327

 Trailers

 8,857

 7,592

 1,265

 Boat

 34,400

 27,907

 6,493

 Leasehold improvements

 88,872

 88,872

 —

 Technology

 100,860

 100,860

 —

 Land

 384,027

 —

 384,027

 $
 18,399,675

 $
 8,690,387

 $
 9,709,288

 Amount
of depreciation expense for 2023 was: $ 1,526,319 (2022 - $ 1,103,732) and is included in cost of sales in the consolidated statements
of income and comprehensive income.

 In 2023, the Company sold
the boat and $ 4,589
was recognized as a gain on sales of asset in the consolidated statements of income and comprehensive income.

 7.
 PATENTS

 SCHEDULE OF PATENTS

 2023
 Cost

 Amortization

 2023
 Net

 Patents

 $
 200,444

 $
 200,444

 $
 -

 2022
 Cost

 Amortization

 2022
 Net

 Patents

 $
 195,725

 $
 195,725

 $
 -

 The
amount of amortization for 2023 was $ nil (2022 - $ 13,699) and was included in cost of sales in the consolidated statements of income
and comprehensive income. The movement in cost relates solely to foreign exchange differences.

 8.
 GOODWILL AND INTANGIBLE ASSETS

 SCHEDULE OF GOODWILL AND INDEFINITE LIVED INTANGIBLE ASSETS

 Goodwill

 Balance as of December 31, 2022 and 2023

 $
 2,534,275

 Indefinite Lived Intangible Assets

 Balance as of December 31, 2022 and 2023

 $
 770,000

 Goodwill
relates to the acquisition of ENP Investments. Indefinite lived intangible assets consist of trade secrets and trademarks related to
the acquisition of ENP Investments.

 Definite Life Intangible Assets

 Balance as of December 31, 2021

 $
 1,830,000

 Amortization

 ( 160,000
)

 Balance as of December 31, 2022

 1,670,000

 Amortization

 ( 160,000
)

 Balances as of December 31, 2023

 $
 1,510,000

 The
amount of amortization for 2023 was $ 160,000 (2022 - $ 160,000) and was included in cost of sales in the consolidated statements of income
and comprehensive income.

 F- 15

 Definite
lived intangible assets consist of customer relationships and software related to the acquisition of ENP Investments.

 Estimated
amortization expense over the next five years is as follows:

 SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSE

 2024

 $

 2025

 2026

 2027

 2028

 9.
 LONG TERM DEPOSITS

 The
Company has security deposits that are long term in nature which consist of damage deposits held by landlords and deposits held by various
vendors for equipment purchases.

 SCHEDULE OF LONG TERM DEPOSITS

 2023

 2022

 Long term deposits

 $
 824,254

 $
 8,540

 10.
 INVESTMENTS

 ( a)
 T he Company previously held a 50 %
ownership interest in ENP Peru, split between NanoChem ( 41.67 %)
and ENP Investments ( 8.33 %),
which was acquired in fiscal 2016. ENP Peru is located in Illinois and leases warehouse space to other entities in the Company. In
June 2022, NanoChem acquired an additional 50 %
ownership interest at a cost of $ 506,659
paid through a new $ 259,000
mortgage and cash on hand. The 35 %
non-controlling interest of the 8.33 %
owned by ENP Investments is included in non-controlling interest in these consolidated financial statements. The Company's
investment in ENP Peru was previously accounted for using the equity method, however, it is now consolidated into the consolidated
financial statements from the date control was obtained. In June 2023, NanoChem purchased the remaining 8.33 %
of ENP Peru from ENP Investments to become full owner.

 It
was determined that ENP Peru did not meet the definition of a business in accordance with FASB Codification Topic 805, Business Combinations
 (ASC 805), and the acquisition was accounted for as an asset acquisition. The following table summarizes the final purchase
price allocation of the consideration paid to the respective fair values of the assets acquired and liabilities assumed in ENP Peru as
of the acquisition date. The gain on acquisition of ENP Peru represents a gain on remeasurement of the Company's equity method
investment immediately prior to the acquisition date.

 SCHEDULE OF FAIR VALUES OF THE ASSETS ACQUIRED AND LIABILITIES ASSUMED

 Purchase consideration

 $
 506,659

 Assets acquired:

 Cash

 7,330

 Building

 3,750,000

 Land

 150,000

 Liabilities assumed:

 Deferred tax liability

 ( 174,582
)

 Long term debt

 ( 2,849,500
)

 Total identifiable net assets:

 883,248

 Excess of assets acquired over consideration

 376,589

 Less investment eliminated upon consolidation

 ( 41,538
)

 Gain on acquisition of ENP Peru

 $
 335,051

 F- 16

 A
summary of the Company's investment follows:

 SCHEDULE OF EQUITY METHOD INVESTMENT

 Balance, December 31, 2021

 $
 3,822

 Return of equity

 ( 3,822
)

 Gain in equity method investment

 22,642

 22,642

 Return of equity

 ( 8,750
)

 Gain in equity method investment

 27,646

 Investment eliminated upon consolidation

 ( 41,538
)

 Balance, June 30 and December 31, 2023

 $
 -

 ( b)
 In
December 2018, the Company invested $ 200,000
in Applied Holding Corp. ("Applied"). Applied is a captive insurance company and the Company received a non-convertible
promissory note for its investment which becomes due in 2021 but may be extended with notice for a maximum of two years. During the
year ended December 31, 2021, the Company entered an agreement with Applied to extend the maturity date of this promissory note to December
2023. In October 2023, the Company received the payment of $ 200,000
to settle the promissory note and the balance of this investment at December 31, 2023 is $ nil
(2022 - $ 200,000). In accordance with
FASB Codification Topic 321, Investments – Equity Securities ( ASC 321), the Company has elected to account for this
investment at cost.

 ( c) In
December 2018, the Company invested $ 500,000 in Trio Opportunity Corp. ("Trio"), a privately held entity and a further
$ 470,000 was invested in April 2023. Trio is a real estate investment vehicle and the Company received 97,000 non-voting Class B
shares at $ 10.00 /share. In accordance with ASC 321, the Company has elected to account for this investment at cost.

 (d) In
January 2019, the Company invested in a Florida based LLC that is engaged in international sales of fertilizer additives. The
Company accounts for this investment using the equity method of accounting. According to the operating agreement, the Company has a
 50 % interest in the profit and loss of the Florida based LLC but does not have control. A
summary of the Company's investment follows:

 SCHEDULE OF EQUITY METHOD INVESTMENT

 Balance, December 31, 2021

 $
 3,701,368

 Gain in equity method investment

 307,527

 Return of equity

 ( 250,000
)

 3,758,895

 Gain in equity method investment

 505,065

 Return of equity

 ( 200,000
)

 Balance, December 31, 2023

 $
 4,063,960

 Summarized
profit and loss information related to the equity accounted investment is as follows:

 SUMMARY OF PROFIT AND LOSS INFORMATION RELATED TO EQUITY ACCOUNTED INVESTMENT

 2023

 2022

 Net sales

 $
 16,043,468

 $
 18,103,070

 Gross profit

 4,668,177

 4,204,311

 Net income

 $
 1,010,128

 $
 615,055

the year ended December 31, 2023, the Company had sales of $ 10,260,870 (2022 - $ 12,938,735) to the Florida Based LLC, of which $ 2,073,813
is included within Accounts Receivable as at December 31, 2023 (2022 - $ 2,423,285).

 (e)
 In December 2020, the Company invested $ 500,000 in Lygos Inc. ("Lygos"), a privately held entity, under a Simple Agreement
for Future Equity ("SAFE") agreement. Lygos is a company developing a sustainable aspartic acid microbe strain. In 2021,
the Company made a second SAFE investment of $ 500,000 for a total of $ 1,000,000. In accordance with ASC 321, the Company has elected
to account for this investment at cost.

 F- 17

 11.
 SHORT-TERM LINE OF CREDIT

 ( a)

 In June 2023, ENP Investments renewed the
line of credit with Stock Yards Bank and Trust ("Stock Yards"), increasing the limit by $ 500,000
 from the previous line of credit. The revolving
line of credit is for an aggregate amount of up to the lesser of (i) $ 4,500,000,
or (ii) 50-80% of eligible domestic accounts receivable plus 50 %
of inventory, capped at $ 2,000,000.
Interest on the unpaid principal balance of this loan will be calculated using the greater of prime or 8.25%. The interest rate at December
31, 2023 is 8.5 %
(December 31, 2022 - 7.5 %).

 The
revolving line of credit contains customary affirmative and negative covenants, including the following: compliance with laws, provisions
of financial statements and periodic reports, payment of taxes, maintenance of inventory and insurance, maintenance of operating accounts
at Stock Yards, Stock Yard's access to collateral, formation or acquisition of subsidiaries, incurrence of indebtedness, dispositions
of assets, granting liens, changes in business, ownership or business locations, engaging in mergers and acquisitions, making investments
or distributions and affiliate transactions. NanoChem is a guarantor of 65 % of all the principal and other loan costs not to exceed $ 2,925,000.
The non-controlling interest is the guarantor of the remaining 35 % of all the principal and other loan costs not to exceed $ 1,575,000.
As of December 31, 2023, ENP Investments was in compliance with all loan covenants.

 To
secure the repayment of any amounts borrowed under the revolving line of credit, the Company granted Stock Yards a security interest
in substantially all of the assets of ENP Investments, exclusive of intellectual property assets.

 Short-term
borrowings outstanding under the revolving line as of December 31, 2023 were $ 1,810,479 (2022 - $ 2,477,794).

 (b)
 In June 2023, the Company renewed the line of credit with Stock Yards Bank and Trust
("Stock Yards"). The revolving line of credit is for an aggregate amount of up to the lesser of (i) $ 4,000,000,
or (ii) 80 %
of eligible domestic accounts receivable and certain foreign accounts receivable plus 50 %
of inventory, capped at $ 2,000,000.
Interest on the unpaid principal balance of this loan will be calculated using the greater of prime or 8.25%. The prime interest
rate at December 31, 2023 was 8.5 %
(2022 - 7.5 %).

 The
revolving line of credit contains customary affirmative and negative covenants, including the following: compliance with laws, provision
of financial statements and periodic reports, payment of taxes, maintenance of inventory and insurance, maintenance of operating accounts
at Stock Yards, Stock Yards access to collateral, formation or acquisition of subsidiaries, incurrence of indebtedness, dispositions
of assets, granting liens, changes in business, ownership or business locations, engaging in mergers and acquisitions, making investments
or distributions and affiliate transactions. The covenants also require that the Company maintain a minimum ratio of qualifying financial
assets to the sum of qualifying financial obligations. As of December 31, 2023, the Company was in compliance with all loan covenants.

 To
secure repayment of any amounts borrowed under the revolving line of credit, the Company granted Stock Yards a security interest in substantially
all of the assets of NanoChem, exclusive of intellectual property assets.

 Short-term
borrowings outstanding under the revolving line as of December 31, 2023 were $ nil (2022 - $ 340,797). This amount was repaid in full during
the year ended December 31, 2023.

 12.
 LONG TERM DEBT

 ( a)
 In
October 2020, NanoChem signed a loan for $ 1,980,947
with Midland States Bank ("Midland") with a rate of 3.85 %
to be repaid over 5
years with equal monthly payments including interest. The money was used to retire the debt at BMO Harris Bank
("Harris") related to the loan to purchase a 65 %
interest in ENP Investments. In June 2022, the loan was paid in full with funds from Stock Yards. Interest expense for the year
ended December 31, 2023 was $ nil
(2022 - $ 30,334).
The balance owing at December 31, 2023 was $ nil
(2022 - $ nil).

 ( b)
 In October 2020, NanoChem signed a loan for
$ 894,253 with Midland with an interest rate 3.85 % to be repaid over two years with equal monthly payments including interest. The funds
were used to replace the loan at Harris for the purchase of new manufacturing equipment. In June 2022, the loan was paid in full with
funds from Stock Yards. Interest expense for the year ended December 31, 2023 was $ nil (2022 - $ 5,816). The balance owing at December
31, 2023 was $ nil (2022 - $ nil)

 F- 18

 (c) In
January 2020, ENP Mendota refinanced its mortgage and signed a loan for $ 450,000 with Stock Yards to be repaid over 10 years with
monthly installments plus interest. Interest for the first five years is at 4.35 % and it will be adjusted for the last five years to
the Cincinnati Federal Home Bank Loan 5 year fixed index plus 4.5 %. Interest expense for the year ended December 31, 2023 was
$ 17,911 (2022 - $ 17,107). The balance owing at December 31, 2023 was $ 399,269 (2022 - $ 415,430).

 To secure repayment of any amounts borrowed under the mortgage, the Company granted Stock Yards a security interest
in real property under the mortgage and all rents on said property.

 (d) In
June 2022, NanoChem signed a loan for $ 1,935,000 with Stock Yards with an interest rate of 4.90 % to be repaid over three years with
equal monthly payments including interest. The funds were used to replace the loans at Midland for the purchase of the 65 % interest
in ENP Investments and the new manufacturing equipment. Interest expense for the year ended December 31, 2023 was $ 66,957 (2022 -
$ 45,113). The balance owing at December 31, 2023 was $ 1,004,747 (2022 - $ 1,632,672).

 (e) In
January 2020 ENP Peru signed a $ 3,000,000 loan with an interest rate 4.35 % to be repaid over ten years with equal monthly payments
including interest. Upon the purchase of the remainder of ENP Peru in June 2022, the Company assumed the first mortgage at Stock
Yards with a balance of $ 2,849,500. Interest expense for the year ended December 31, 2023 was $ 122,544 (2022 - $ 62,679). The balance
owing at December 31, 2023 was $ 2,737,232 (2022 - $ 2,813,015).

 (f)
 In June 2022, ENP Peru obtained a second mortgage for $ 259,000 with Stock Yards to be repaid over 10 years with monthly installments
plus interest with an interest rate of 5.4 %. Interest expense for the year ended December 31, 2023 was $ 13,877 (2022 - $ 7,077). The balance
owing at December 31, 2023 was $ 250,207 (2022 - $ 256,162).

 (g)
 In December 2022, NanoChem signed a three year loan for up to $ 2,000,000 with Stock Yards with an interest rate of 6.5 %. Interest
only payments are required for the first 18 months with interest and principal being paid in the last 18 months. The funds are being
used to purchase new manufacturing equipment. Interest expense for the year ended December 31, 2023 was $ 67,397 (2022 - $ 23,632). The
balance owing at December 31, 2023 was $ 1,475,188 (2022 - $ 1,036,798).

 (h)
 In June 2023, 317 Mendota signed a five year loan for up to $ 3,240,000 with Stock Yards to purchase a building and any necessary
renovations. Interest only payments are required for the first 12 months with interest and principal being paid the remaining four years
and a lump sum due in June 2028. Interest expense for the year ended December 31, 2023 was $ 95,396 (2022 - $ nil). The balance owing at
December 31, 2023 was $ 2,248,292 (2022 - $ nil).

 As
of December 31, 2023, Company was in compliance with all loan covenants.

 SCHEDULE OF LOAN COVENANTS

 Continuity

 December 31, 2023

 December 31, 2022

 Balance, January 1

 $
 6,154,077

 $
 2,366,598

 Balance, beginning of period

 $
 6,154,077

 $
 2,366,598

 Plus: Proceeds from loans

 2,686,682

 3,230,798

 Plus: Loan acquired with acquisition of ENP Peru

 -

 2,849,500

 Less: Payments on loan

 ( 725,823
)

 ( 2,292,819
)

 Balance, end of period

 $
 8,114,936

 $
 6,154,077

 SCHEDULE OF OUTSTANDING BALANCE LOAN

 Outstanding balance at December 31,

 December 31, 2023

 December 31, 2022

 a) Long term debt – Midland States Bank

 $
 -

 $
 -

 b) Long term debt – Midland States Bank

 -

 -

 c) Long term debt – Stock Yards Bank & Trust

 399,269

 415,430

 d) Long term debt – Stock Yards Bank & Trust

 1,004,748

 1,632,672

 e) Long term debt – Stock Yards Bank & Trust

 2,737,232

 2,813,015

 f) Long term debt – Stock Yards Bank & Trust

 250,207

 256,162

 g) Long term debt – Stock Yards Bank & Trust

 1,475,188

 1,036,798

 h) Long term debt – Stock Yards Bank & Trust

 2,248,292

 —

 Long-term debt

 8,114,936

 6,154,077

 Less: current portion

 ( 1,281,632
)

 ( 717,612
)

 Long-term debt non current

 $
 6,833,304

 $
 5,436,465

 F- 19

 13.
 INCOME TAXES

 The
provision for income tax expense (benefit) is comprised of the following:

 SCHEDULE OF PROVISION FOR INCOME TAX EXPENSE (BENEFIT)

 2023

 2022

 Current tax, federal

 $
 753,683

 $
 1,017,059

 Current tax, state

 340,952

 460,098

 Current tax, foreign

 151,236

 216,082

 Current tax

 1,245,871

 1,693,239

 Income tax recovery

 ( 1,127,689
)

 ( 1,476,088
)

 Current tax, total

 118,182

 217,151

 Deferred income tax, federal

 ( 172,763
)

 ( 49,088

 Deferred income tax, state

 ( 78,154
)

 ( 22,207

 Deferred income tax, foreign

 -

 -

 Deferred income tax, total

 ( 250,917
)

 ( 71,295

 Total

 $
 ( 132,735
)

 $
 145,856

 The
following table reconciles the income tax expense at the U.S. Federal statutory rate to income tax expense at the Company's effective
tax rates.

 SCHEDULE OF RECONCILIATION OF INCOME TAXES

 2023

 2022

 Income before tax

 $
 3,623,250

 $
 7,859,085

 US statutory tax rates

 30.50
 %

 30.50
 %

 Expected income tax

 1,105,091

 2,397,021

 Non-deductible items

 362,554

 ( 243,167
)

 Change in estimates and other

 ( 1,585,427
)

 ( 2,004,041
)

 Foreign tax rate difference

 ( 92,379
)

 ( 226,611
)

 Change in valuation allowance

 77,426

 ( 222,654
)

 Total income taxes

 ( 132,735
)

 145,856

 Current income tax expense

 118,182

 217,151

 Deferred tax recovery

 ( 250,917
)

 ( 71,295
)

 Total income tax expense (recovery)

 $
 ( 132,735
)

 $
 145,856

 Included
in current income tax expense for the year ended December 31, 2023 is a recovery of $ 1,127,689 (2022 - $ 1,476,088) for a revision of
estimated current taxes payable for previous years.

 Deferred
taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes. Deferred tax assets (liabilities) at December 31, 2023 and 2022 are comprised of the following:

 SCHEDULE OF DEFERRED TAX ASSETS (LIABILITIES)

 2023

 2022

 Canada

 Non capital loss carryforwards

 $
 855,176

 $
 891,954

 Intangible assets

 -

 -

 Property, equipment and leaseholds

 30,916

 47,279

 886,092

 939,233

 Valuation allowance

 ( 886,092
)

 ( 939,233
)

 Net deferred tax asset

 $
 -

 $
 -

 US

 2023

 2022

 Net operating loss carryforwards

 $
 -

 $
 -

 Intangible assets

 ( 11,346
)

 ( 6,070
)

 Investments

 -

 ( 7,676
)

 Property, equipment and leaseholds

 ( 248,701
)

 ( 486,713
)

 Property, equipment and leaseholds

 284,794

 274,289

 Financial instruments

 -

 -

 Deferred tax asset not recognized

 -

 -

 Net deferred tax asset (liability)

 $
 24,747

 $
 ( 226,170
)

 The
Company has non-capital loss carryforwards of approximately $ 3,718,155 (2022 - $ 3,878,060) which may be carried forward to apply against
future year income tax for Canadian income tax purposes, subject to the final determination by taxation authorities, expiring in the
following years:

 SCHEDULE OF NON OPERATING LOSS CARRYFORWARDS

 Loss

 2030

 407,947

 2031

 941,856

 2032

 615,878

 2037

 1,692,555

 2039

 48,048

 2040

 11,871

 Total

 3,718,155

 As
at December 31, 2023, the Company has no net operating loss carryforwards available for US tax purposes.

 Accounting
for Uncertainty for Income Tax

 As at December 31, 2023 and 2022, the Company's consolidated balance
sheets did not reflect an asset for uncertain tax positions but did account for accrued penalties or interest associated with income taxes
not yet filed. The Company has no income tax examinations in progress.

 14.
 INCOME PER SHARE

 The
Company presents both basic and diluted income per share on the face of its consolidated statements of income. Basic and diluted income
per share are calculated as follows:

 SCHEDULE OF BASIC AND DILUTED LOSS PER SHARE

 2023

 2022

 Net income attributable to controlling interest

 $

 $
 7,021,604

 Weighted average common shares outstanding:

 Basic

 12,434,886

 12,379,316

 Diluted

 12,489,467

 12,466,415

 Net income per common share attributable to controlling interest:

 Basic

 $
 0.22

 $
 0.57

 Diluted

 $
 0.22

 $
 0.56

 F- 21

 Certain
stock options whose terms and conditions are described in Note 15, "Stock Options" could potentially dilute basic EPS in
the future, but were not included in the computation of diluted EPS because to do so would have been anti-dilutive. Those anti-dilutive
options are as follows.

 SCHEDULE OF ANTI-DILUTIVE OPTIONS

 2023

 2022

 Anti-dilutive options

 740,000

 1,304,000

 There
were no preferred shares issued and outstanding during the years ended December 31, 2023 and 2022.

 15.
 STOCK OPTIONS

 The
Company has a stock option plan ("Plan"). The purpose of this Plan is to provide additional incentives to key employees,
officers, directors and consultants of the Company and its subsidiaries in order to help attract and retain the best available personnel
for positions of responsibility and otherwise promote the success of the Company's business. It is intended that options issued
under this Plan constitute non-qualified stock options. The general terms of awards under the option plan are that 100 % of the options
granted will vest the year following the grant unless a executive employee is granted a multi-year stock option grant where an equal
amount vests over the next 5 years. The maximum term of options granted is 5 years and the exercise price for all options are issued
for not less than fair market value at the date of the grant.

 The
following table summarizes the Company's stock option activities for the years ended December 31, 2023 and 2022:

 SCHEDULE OF STOCK OPTION ACTIVITIES

 Number of

 shares

 Exercise
price per share

 Weighted
average
exercise price

 Balance, December 31, 2021

 789,500

 $
 1.42 – 4.13

 $
 2.78

 Granted

 981,000

 $
 3.55 – 3.61

 $
 3.55

 Cancelled or expired

 ( 13,486
)

 $
 1.70 – 3.61

 $
 2.32

 Exercised

 ( 71,014
)

 $
 1.42 – 2.44

 $
 1.98

 1,686,000

 $
 1.70 – 4.13

 $
 3.26

 Cancelled or expired

 ( 564,000
)

 $
 3.46 – 4.13

 $
 3.55

 Exercised

 ( 8,000
)

 $
 1.70

 $
 1.70

 Balance, December 31, 2023

 1,114,000

 $
 1.75 – 3.61

 $
 3.13

 Exercisable, December 31, 2023

 754,000

 $
 1.75
– 3.61

 $
 2.93

 The
weighted-average remaining contractual life of outstanding options is 2.90 years.

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

 SCHEDULE OF STOCK OPTION FAIR VALUE ASSUMPTIONS

 2022

 Expected life – years

 3.0

 Interest rate

 1.76 – 3.64
 %

 Volatility

 66.01 - 69.66
 %

 Weighted average fair value of options granted

 $
 1.46 – 1.65

the year ended December 31, 2023, the Company granted nil (2022 – 46,000) stock options to consultants and has applied ASC 718
using the Black-Scholes option-pricing model, which resulted in expenses of $ nil (2022 - $ 14,850). Options granted in other years resulted
in additional expenses of $ 62,241 (2022 – $ 62,187). During the year ended December 31, 2023, employees were granted nil (2022 –
 935,000) stock options, which resulted in expenses of $ nil (2022 – $ 172,731). Options granted in other years resulted in additional
expenses in the amount of $ 328,769 for employees during the year ended December 31, 2023 (2022 - $ 149,380). There were 8,000 employee
and nil consultant stock options exercised during the year ended December 31, 2023 (2022 – 54,500 employee; 16,514 consultant).

 F- 22

 As
of December 31, 2023, there was approximately $ 375,351 of compensation expense related to non-vested awards. This expense is expected
to be recognized over a weighted average period of 2.5 years.

 The
aggregate intrinsic value of vested options outstanding at December 31, 2023 is $ nil (2022 – $ 69,190). The intrinsic value of options
exercised during the year ended December 31, 2023 was $ 11,520 (2022 - $ 96,989).

 16.
 CAPITAL STOCK

the year ended December 31, 2023, 8,000 shares were issued upon the exercise of employee stock options (2022 – 54,500) and nil
shares were issued upon the exercise of consultant stock options (2022 – 16,514).

the year ended December 31, 2023, the Company issued 1,272 shares to a consultant for services rendered, resulting in an expense of $ 4,070
on the consolidated statements of income and comprehensive income for the year ended December 31, 2023 (2022 - $ nil).

 In
the year ended December 31, 2023, the Company announced a special dividend of $ 0.05
per share that was paid on May 16, 2023 to shareholders (2022 - $ nil).

 17.
 NON-CONTROLLING INTERESTS

 ( a)
 ENP Investments is a limited liability corporation
("LLC") that manufactures and distributes golf, turf and ornamental agriculture products in Mendota, Illinois. The Company
owns a 65 % interest in ENP Investments through its wholly-owned subsidiary NanoChem. An unrelated party ("NCI") owns the
remaining 35 % interest in ENP Investments. ENP Mendota is a wholly owned subsidiary of ENP Investments. ENP Mendota is a LLC that leases
warehouse space. For financial reporting purposes, the assets, liabilities and earnings of both of the LLC's are consolidated into
these financial statements. The NCI's ownership interest in ENP Investments is recorded in non-controlling interests in these consolidated
financial statements. The non-controlling interest represents NCI's interest in the earnings and equity of ENP Investments. ENP
Investments is allocated to the TPA segment.

 ENP
Investments makes cash distributions to its equity owners based on formulas defined within its Ownership Interest Purchase Agreement
dated October 1, 2018. Distributions are defined in the Ownership Interest Purchase Agreement as cash on hand to the extent it exceeds
current and anticipated long-term and short-term needs, including, without limitation, needs for operating expenses, debt service, acquisitions,
reserves, and mandatory distributions, if any.

 From
the effective date of acquisition onward, the minimum distributions requirements under the Ownership Interest Purchase Agreement were
satisfied. The total distribution from the effective date of acquisition onward was $ 3,225,957.

OF DISTRIBUTIONS

 Balance, December 31, 2021

 $
 2,602,843

 Distribution

 ( 689,434
)

 Non-controlling interest share of income

 691,625

 2,605,034

 Distribution

 ( 719,439
)

 Non-controlling interest share of income

 1,015,604

 Balance, December 31, 2023

 $
 2,901,199

the year ended December 31, 2023, the Company had sales of $ 6,811,083 (2022 - $ 6,667,815) to the NCI, of which $ 4,225,028 is included
within Accounts Receivable as of December 31, 2023 (2022 – $ 3,634,083).

 F- 23

 b)
 317 Mendota is a LLC that owns real estate that the Company intends to occupy part of while renting out the excess. The Company
owns a 80 % interest in 317 Mendota and an unrelated party ("317 NCI") owns the remaining 20 % interest in 317 Mendota. For
financial reporting purposes, the assets, liabilities and earnings of 317 Mendota are consolidated into these financial statements. The
317 NCI's ownership interest in 317 Mendota is recorded in non-controlling interests in these consolidated financial statements.
The non-controlling interest represents 317 NCI's interest in the earnings and equity of 317 Mendota. 317 Mendota is allocated
to the TPA segment as that is the intended use of the building.

OF NON CONTROLLING INTEREST RELATED TO ACQUISITION

 $
 -

 Acquisition

 Non-controlling interest share of loss

 ( 35,483
)

 Balance, December 31, 2023

 $
 164,517

 18.
 SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY

 The
Company operates in two segments:

 (a)
 Energy and water conservation products (as shown under the column heading "EWCP" below), which consists of a (i) liquid
swimming pool blankets which save energy and water by inhibiting evaporation from the pool surface, and (ii) food-safe powdered form
of the active ingredient within the liquid blankets and which are designed to be used in still or slow moving drinking water sources.

 (b)
 Biodegradable polymers, also known as TPA's (as shown under the column heading "BCPA" below), used by the petroleum,
chemical, utility and mining industries to prevent corrosion and scaling in water piping. This product can also be used in detergents
to increase biodegradability and in agriculture to increase crop yields by enhancing fertilizer uptake.

 The
third product line is nitrogen conservation products used for the agriculture industry. These products decrease the loss of nitrogen
fertilizer after initial application and allows less fertilizer to be used. These products are made and sold by the Company's TPA
division.

 The
accounting policies of the segments are the same as those described in Note 2, Significant Accounting Policies. The Company evaluates
performance based on profit or loss from operations before income taxes, not including nonrecurring gains and losses and foreign exchange
gains and losses

 The
Company's 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.

 Year
ended December 31, 2023:

OF REPORTABLE SEGMENTS

 EWCP

 BCPA

 Sales

 $
 572,845

 $
 37,751,961

 $
 38,324,806

 Interest expense

 498,279

 498,666

 17,411

 1,668,908

 1,686,319

 Current and deferred income tax recovery (expense)

 ( 35,341
)

 168,076

 132,735

 Segment profit

 ( 256,390
)

 3,032,254

 Segment assets

 4,843,123

 50,627,932

 55,471,055

 Expenditures for segment assets

 -

 4,990,675

 4,990,675

 F- 24

 Year
ended December 31, 2022:

 EWCP

 BCPA

 Sales

 $
 528,462

 $
 45,312,007

 $
 45,840,469

 Interest expense

 -

 292,949

 292,949

 33,876

 1,243,555

 1,277,431

 Current and deferred income tax expense

 18,898

 126,958

 145,856

 Segment profit

 ( 334,525
)

 8,047,754

 Segment assets

 2,810,091

 48,777,101

 51,587,192

 Expenditures for segment assets

 -

 1,981,307

 1,981,307

 Sales
by territory are shown below:

OF REVENUE GENERATED IN UNITED STATES AND CANADA

 2023

 2022

 Canada

 $
 755,844

 $
 552,123

 United States and abroad

 37,568,962

 45,288,346

 Total

 $
 38,324,806

 $
 45,840,469

 The
Company's long-lived assets (property, equipment, leaseholds, right of use assets, intangibles, and goodwill) are located in Canada
and the United States as follows:

OF LONG-LIVED ASSETS ARE LOCATED IN CANADA AND UNITED STATE

 2023

 2022

 Canada

 $
 142,577

 $
 150,890

 United States

 17,958,778

 14,699,896

 Total

 $
 18,101,355

 $
 14,850,786

 Three
customers accounted for $ 20,482,798 ( 53 %) of sales made in 2023 (2022 - $ 27,775,616 or 61 %).

 19.
 SUBSEQUENT EVENTS

 In January 2024, the Company issued
 15,000 shares upon the exercise of consultant stock options.

 In January 2024, the Company granted
 494,000 stock options to employees and 56,000 stock options to consultants.

 In
March 2024, the Company terminated its lease in Naperville, IL. All operations are now consolidated in the Peru, IL locations.

 F- 25

 Item
 9.

 in and Disagreements with Accountants on Accounting and Financial Disclosure.

 None.

 Item
 9A.

 Controls
 and Procedures.

 We
maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic reports
to the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and regulations,
and that such information is accumulated and communicated to our management, including our principal executive officer and principal
financial officer, as appropriate, to allow timely decisions regarding required disclosure. Our disclosure controls and procedures are
designed to provide a reasonable level of assurance of reaching our desired disclosure control objectives.

 As
of the end of the period covered by this Annual Report on Form 10-K for the year ended December 31, 2023 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). Based upon that evaluation, our principal executive officer and principal financial
officer concluded that our disclosure controls and procedures are effective.

 Management's
Report on Internal Control Over Financial Reporting

 Our
management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment
of the effectiveness of internal control over financial reporting. As defined by the Securities and Exchange Commission, internal control
over financial reporting is a process designed by, or under the supervision of our principal executive officer and principal financial
officer and implemented by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of our financial statements in accordance with U.S. generally accepted accounting principles.

 Our
internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that,
in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets; (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of our financial statements in accordance with U.S. generally accepted
accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management
and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition
of our assets that could have a material effect on the financial statements.

 Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.

 In
connection with the preparation of our annual financial statements, management has undertaken an assessment of the effectiveness of our
internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission, or the 2013 COSO Framework. Management's assessment
included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of
those controls.

 Based
on this evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2023.

 There
was no change in our internal control over financial reporting that occurred during the period covered by this report that has materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 Item
 9B.

 Other
 Information.

 None of our directors or officers
 adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation
S-K) during the quarterly period ending December 31, 2023.

 Item 9C.
 Disclosures Regarding Foreign Jurisdictions That Prevent Inspections.

 Not applicable.

 Item
 10.

 Directors,
 Executive Officers and Corporate Governance.

 Name

 Age

 Position

 B. O'Brien

 President,
 Chief Executive Officer, Principal Financial and Accounting Officer and a Director

 John
 H. Bientjes

 Robert
 Helina

 Tom
 Fyles

 Ben
 Seaman

 David
 Fynn

B. O'Brien has served as our President, Chief Executive Officer and Principal Financial and Accounting Officer, as well as a director
since June 1998. He has been involved in the swimming pool industry since 1990, when he founded our subsidiary, Flexible Solutions Ltd.
From 1990 to 1998 Mr. O'Brien was also a teacher at Brentwood College where he was in charge of outdoor education.

 John
H. Bientjes has been a director since 2000. From 1984 to 2018, Mr. Bientjes served as the manager of the Commercial Aquatic Supplies
Division of D.B. Perks & Associates, Ltd., located in Vancouver, British Columbia, a company that markets supplies and equipment
to commercial swimming pools which are primarily owned by municipalities. Mr. Bientjes retired in 2018. Mr. Bientjes graduated in 1976
from Simon Fraser University in Vancouver, British Columbia with a Bachelor of Arts Degree in Economics and Commerce.

 Robert
T. Helina has been a director since 2011. Mr. Helina has been involved in the financial services industry for over 30 years which has
given him extensive knowledge in business, economics and finance. His specialty is in Corporate Finance and Capital Markets. Mr. Helina
holds a Bachelor of Arts degree from Trinity Western University.

 Thomas
M. Fyles has been a director since 2012. Dr. Fyles holds chemistry degrees from the University of Victoria (B.Sc. 1974) and York University
(Ph. D. 1977). Following postdoctoral work in France, he joined the Chemistry Department at the University of Victoria in 1979 where he
progressed through the academic ranks to Professor (1992), Chair (2001 – 2006; 2008), and, on his retirement, Professor Emeritus
(2017). His research program spanned analytical, synthetic, and physical chemistry with an emphasis on sensors, membranes, and water
treatment processes.

 Ben
Seaman has been a director since 2016. Mr. Seaman has been the CEO of Eartheasy.com Sustainable Living Ltd since 2007, growing the company
from $50K to over $25M in annual revenue. His company has contributed over $1M towards clean water projects in Kenya since 2013, and
has been recognized internationally by the Stockholm Challenge Award and the Outdoor Industry Inspiration Award in 2016. Prior to 2007,
he worked in sales and investor relations at Flexible Solutions. Mr. Seaman graduated from the University of Victoria with a Bachelor
of Science degree in 2004. He has significant experience in launching new products, marketing, distribution and e-commerce in both the
US and Canada. He's a strong believer in the triple bottom line approach to business, giving consideration to social and environmental
issues in addition to financial performance.

 David
Fynn has been a director since 2016. Mr. David Fynn is a Canadian Chartered Professional Accountant and services individuals/companies
in many sectors including mining and commodities in his private practice. Mr. Fynn worked as a senior manager with KPMG in Canada and
Ernst & Young in the United Kingdom and Saudi Arabia. Since 1996 he has been the principal of D.A. Fynn & Associates Inc., an
accounting firm.

 Directors
are elected annually and hold office until the next annual meeting of our stockholders and until their successors are elected and qualified.
All executive offices are chosen by the board of directors and serve at the board's discretion.

 John
Bientjes, Thomas Fyles, Ben Seaman and David Fynn are independent directors as that term is defined in section 803 of the listing standards
of the NYSE American.

 Our
Audit Committee, consisting of John Bientjes, Ben Seaman and David Fynn all of whom have strong financial backgrounds, facilitates and
maintains open communications with our board of directors, senior management and our independent auditors. Our Audit Committee also serves
as an independent and objective party which monitors our financial reporting process and internal control system. In addition, our Audit
Committee reviews and appraises the efforts of our independent auditors. Our Audit Committee meets periodically with management and our
independent auditors. John Bientjes and David Fynn meet the SEC's definition of an audit committee financial expert. Each member
of the Audit Committee is "independent" as that term is defined in Section 803 of the listing standards of the NYSE American.

 Our
Compensation Committee, consisting of John Bientjes, Ben Seaman and David Fynn, establishes salary, incentive and other forms of compensation
for our Chief Executive Officer and administers our Stock Option Plan. None of our officers participated in deliberations of the compensation
committee concerning executive officer compensation. During the year ended December 31, 2023 none of our executive officers served as
a member of the compensation committee or as a director of another entity, one of whose executive officers served on our compensation
committee or as one of our directors.

 We
have adopted a Code of Ethics that applies to our Chief Executive Officer, our Chief Financial Officer and our Principal Accounting Officer,
as well as our other senior management and financial staff. Interested persons may obtain a copy of our Code of Ethics from our website
at www.flexiblesolutions.com.

 We
believe our directors benefit us for the following reasons:

 Name

 Reason

 B. O'Brien

 Long
 standing relationship with us.

 John
 J. Bientjes

 Long
 standing relationship with us.

 Robert
 Helina

 Corporate
 finance experience.

 Dr.
 Thomas Fyles

 Scientific
 expertise.

 Ben
 Seaman

 Younger
 generation businessman increases our awareness of internet sales and adds value to our audit and compensation committees

 David
 Fynn

 Experienced
 accountant adds value to our audit and compensation committees

 Item
 11.

 Executive
 Compensation.

 Summary
Compensation Table

 The
following table shows in summary form the compensation earned by (i) our Chief Executive Officer and (ii) by each other executive officer
who earned in excess of $100,000 during the two fiscal years ended December 31, 2023.

 Name and Principal Position

 Fiscal Year

 Salary (1)

 Bonus (2)

 Restricted Stock Awards (3)

 Options Awards (4)

 All Other Annual Compensation (5)

 Total

 Daniel B. O'Brien

 2023

 $
 785,368

 —

 —

 $
 (660,000
)

 —

 $
 125,368

 President, Chief Executive Financial and Accounting Officer

 2022

 $
 769,293

 —

 —

 $
 660,000

 —

 $
 1,429,293

 (1)

 The
 dollar value of base salary (cash and non-cash) earned.

 (2)

 The
 dollar value of bonus (cash and non-cash) earned.

 (3)

 the periods covered by the table, the value of the shares of restricted stock issued as compensation for services to the persons
 listed in the table.

 (4)

 The
 value of all stock options granted during the periods covered by the table. The options granted to Daniel O'Brien in 2022 were
 cancelled in 2023.

 (5)

 All
 other compensation received that we could not properly report in any other column of the table.

the year ended December 31, 2012, the Company determined that Daniel B. O'Brien, the Company's President and Chief Executive
Officer, was underpaid. Accordingly, the Company increased Mr. O'Brien's annual salary to twice that which was paid to the
highest paid employee of the Company. Mr. O'Brien requested his salary be dropped by $100,000/year during 2019 and the Compensation
committee agreed. The Company expects that Mr. O'Brien's salary for the year ending December 31, 2023 will again be twice
the annual salary, less $100,000, paid to the Company's highest paid employee, excluding Mr. O'Brien.

 In
the fall of 2023, Daniel O'Brien, CEO, relocated to Grand Cayman in order to help with international sales. He requested that his
salary be reduced to a flat $600,000 per year with annual increases at the same rate as other employees receive. The compensation committee
agreed and granted Mr. O'Brien's request.

 Non-Qualified
Stock Option Plan

 In
August 2014 we adopted a Non-Qualified Stock Option Plan which authorizes the issuance of up to 1,500,000 shares of our common stock
to persons that exercise options granted pursuant to the Plan. Our employees, directors and officers, and consultants or advisors are
eligible to be granted options pursuant to the Non-Qualified Plan.

 The
Plan is administered by our Compensation Committee. The Committee is vested with the authority to determine the number of shares issuable
upon the exercise of the options, the exercise price and expiration date of the options, and when, and upon what conditions options granted
under the Plan will vest or otherwise be subject to forfeiture and cancellation.

the fiscal year ended December 31, 2023 we issued nil options pursuant to the Non-Qualified Plan (2022 – 5,000).

 As
of December 31, 2023, options to purchase 542,000 shares of our common stock were outstanding under our Non-Qualified Stock Option Plan.
The exercise price of these options varies between $1.75 and $3.61 per share and the options expire at various dates between on January
31, 2024 and December 31, 2026.

 Stock
Option Plans

 In
2022 we adopted a Stock Incentive Plan which authorizes the issuance of up to 1,500,000 shares of our common stock to persons that exercise
options granted pursuant to the Plan. Our employees, directors and officers, and consultants or advisors are eligible to be granted options
pursuant to the Stock Incentive Plan.

 The
Plan is administered by our Compensation Committee. The Committee is vested with the authority to determine the number of shares issuable
upon the exercise of the options, the exercise price and expiration date of the options, and when, and upon what conditions options granted
under the Plan will vest or otherwise be subject to forfeiture and cancellation.

the fiscal year ended December 31, 2023 we issued nil options pursuant to the Stock Incentive Plan (2022 – 976,000).

 As
of December 31, 2023, options to purchase 572,000 shares of our common stock were outstanding under our Stock Incentive Plan. The exercise
price of these options are $3.55 per share and the options expire on December 31, 2027.

 Summary

 The
following table shows the weighted average exercise price of the outstanding options granted pursuant to both our Non-Qualified Stock
Option Plan and Stock Incentive Plan as of December 31, 2023, our most recently completed fiscal year.

 Plan Category

 Number of Securities
 to be Issued Upon
 Exercise of
 Outstanding Options,
 Warrants and Rights

 Weighted-Average
 Exercise Price of
 Outstanding Options,
 Warrants and Rights

 Number of Securities
 Remaining Available for
 Future Issuance Under
 Equity Compensation
 Plans (Excluding
 Securities Reflected
 in Column (a))

 (a)

 (b)

 (c)

 Non-Qualified Stock Option Plan

 542,000

 $
 2.40

 57,000

 Stock Incentive Plan

 572,000

 $
 3.55

 524,000

 Both our Non-Qualified Stock Option
Plan and Stock Incentive Plan have been approved by our shareholders.

 No
options were exercised by our executive officers during the fiscal year ended December 31, 2023.

Compensation

 We
reimburse directors for any expenses incurred in attending board meetings. We also compensate directors $6,000 annually for each year
that they serve with an additional $4,000 paid to the head of the Audit Committee -

 Our
directors received the following compensation in 2023:

 Name

 Paid in Cash

 Stock Awards (1)

 Option Awards (2)

 John H. Bientjes

 $
 10,000

 —

 —

 Robert Helina

 $
 6,000

 Tom Fyles

 $
 6,000

 —

 —

 Ben Seaman

 $
 6,000

 —

 —

 David Fynn

 $
 6,000

 —

 —

 (1)

 The
 fair value of stock issued for services computed in accordance with ASC 718 on the date of grant.

 (2)

 The
 fair value of options granted computed in accordance with ASC 718 on the date of grant.

B. O'Brien was not compensated for serving as a director during 2023.

 Insider Trading Arrangements and Policies

 We are committed to promoting
high standards of ethical business conduct and compliance with applicable laws, rules and regulations. As part of this commitment, we
have adopted our Insider Trading Policy governing the purchase, sale, and/or other dispositions of our securities by our directors, officers,
employees and others that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations. A
copy of our Insider Trading Policy is filed as Exhibit 19 to this Annual Report on Form 10-K.

 Item
 12.

 Security
 Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 The
following table shows the beneficial ownership of our common stock as of March 30, 2023 by (i) each stockholder who is known by us to
own beneficially more than five percent of our outstanding common stock, (ii) each of our officers and directors, and (iii) by all of
our executive officers and directors as a group.

 Shares (1)

 Percentage Ownership

 Daniel B. O'Brien

 4,270,156

 34.3
 %

 6001 54 Ave.

 Taber, AB

 Canada T1G 1X4

 John Bientjes

 %

 46081 Greenwood Dr.

 Chilliwack, BC

 Canada V2R 4C9

 Robert Helina

 25,000

 0.2
 %

 6001 54 Ave.

 Taber, AB

 Canada T1G 1X4

 Dr. Thomas Fyles

 20,000

 0.2
 %

 Box 3065

 Victoria, BC

 Canada V8W 3V6

 Ben Seaman

 %

 Unit 605 5 E. Cordova St.

 Vancouver BC

 Canada V6A 0A5

 David Fynn

 %

 202-2526 Yale Court,

 Abbotsford, BC

 Canada V2S 8G9

 All officers and directors

 as a group (6 persons)

 4,315,156

 34.7
 %

 Other Principal Shareholders

 Comprehensive Financial Planning, Inc.

 1,351,221

 10.9
 %

 (1)

 Includes
 shares which may be acquired on the exercise of the stock options, all of which were exercisable as of March 29, 2023, listed below.

 Name

 No. of Options

 Exercise Price

 Expiration Date

 Robert Helina

 5,000

 $
 2.44

 December 31, 2024

 5,000

 $
 2.44

 December 31, 2025

 5,000

 $
 3.61

 December 31, 2026

 5,000

 $
 3.55

 December 31, 2027

 Item
 13.

 Certain
 Relationships and Related Transactions, Director Independence.

 Not

 Item
 14.

 Principal
 Accountant Fees and Services.

 Smythe
LLP examined our consolidated financial statements for the years ended December 31, 2023 and 2022.

 Audit
Fees

 Smythe
LLP was paid $127,487 in the fiscal year ended December 31, 2023 for professional services rendered in the audit of our annual financial
statements and for the reviews of the condensed interim financial statements included in our quarterly reports on Form 10-Q during that
fiscal year. Smythe LLP was paid $128,456 for professional services rendered in the audit of our annual financial statements and for
the reviews of the condensed interim financial statements included in our quarterly reports on Form 10-Q during fiscal 2022.

 Tax
Fees

 Smythe
LLP has been retained to file our taxes for the fiscal years ended December 31, 2018 and onwards. Smythe LLP was paid $14,079 in the
fiscal year ended December 31, 2023 for professional services rendered in preparing our taxes.

 All
Other Fees

 Smythe
LLP was not paid any other fees for professional services during the fiscal years ended December 31, 2023 and 2022.

 Audit
Committee Pre-Approval Policies

 Rules
adopted by the SEC in order to implement requirements of the Sarbanes-Oxley Act of 2002 require public company audit committees to pre-approve
audit and non-audit services. Our Audit Committee has adopted a policy for the pre-approval of all audit, audit-related and tax services,
and permissible non-audit services provided by our independent auditors. The policy provides for an annual review of an audit plan and
budget for the upcoming annual financial statement audit, and entering into an engagement letter with the independent auditors covering
the scope of the audit and the fees to be paid. Our Audit Committee may also from time-to-time review and approve in advance other specific
audit, audit-related, tax or permissible non-audit services. In addition, our Audit Committee may from time-to-time give pre-approval
for audit services, audit-related services, tax services or other non-audit services by setting forth such pre-approved services on a
schedule containing a description of, budget for, and time period for such pre-approved services. The policy requires our Audit Committee
to be informed of each service and the policies do not include any delegation of our Audit Committee's responsibilities to management.
Our Audit Committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated
will report any pre-approval decisions to our Audit Committee at its next scheduled meeting.

the year ended December 31, 2023 our Audit Committee approved all of the fees paid to Smythe LLP. Our Audit Committee has determined
that the rendering of all non-audit services by Smythe LLP is compatible with maintaining its independence.

 Item
 15.

 Exhibits,
 Financial Statement Schedules.

 Number

 Description

 3.1

 Articles of Incorporation of the Registrant. (1)

 3.2

 Bylaws of the Registrant. (1)

 Insider Trading Policy and Procedures

 21.1

 Subsidiaries. (2)

 23.1

 Consent of Independent Accountants.

 31.1

 Certification of Principal Executive Officer Pursuant to §302 of the Sarbanes-Oxley Act of 2002.

 31.2

 Certification of Principal Financial Officer Pursuant to §302 of the Sarbanes-Oxley Act of 2002.

 32.1

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

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 Cover

 (1)

 Previously
 filed as an exhibit to our Registration Statement on Form 10-SB filed with the Commission on February 22, 2000, and incorporated
 herein by reference.

 (2)

 Previously
 filed as an exhibit to our Registration Statement on Form SB-2 filed with the Commission on January 22, 2003, and incorporated herein
 by reference.

 SIGNATURES

 In
accordance with the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

 March

 Flexible
 Solutions International, Inc.

 By:

 /s/
 Daniel B. O'Brien

 Name:

 B. O'Brien

 Title:

 President
 and Chief Executive Officer

 In
accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated:

 Signature

 Title

 Date

 /s/
 Daniel B. O'Brien

 President,
 Principal Executive Officer, Principal Financial and Accounting Officer and a Director

 March

 B. O'Brien

 /s/
 John H. Bientjes

 March

 John
 H. Bientjes

 /s/
 Robert T. Helina

 March

 Robert
 T. Helina

 /s/
 Thomas Fyles

 March

 Thomas
 Fyles

 /s/
 Ben Seaman

 March

 Ben
 Seaman

 /s/
 David Fynn

 March

 David
 Fynn