UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

For the quarterly period ended March 31, 2026

OR

For the transition period from ________ to ________

Commission File Number: 001-31540

FLEXIBLE SOLUTIONS INTERNATIONAL INC.

(Exact Name of registrant as Specified in Its Charter)

Alberta, Canada 

Registrant’s telephone number: (403) 223-2995

N/A

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

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate 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 ☐

Indicate 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

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. ☐

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

FORM 10-Q

Index

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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

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

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.

PART I FINANCIAL INFORMATION

Item 1. Financial Statements.

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

(U.S. Dollars - Unaudited)

— See Notes to Unaudited Condensed Interim Consolidated Financial Statements —

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(U.S. Dollars — Unaudited)

— See Notes to Unaudited Condensed Interim Consolidated Financial Statements —

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. Dollars — Unaudited)

— See Notes to Unaudited Condensed Interim Consolidated Financial Statements —

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(U.S. Dollars – Unaudited)

— See Notes to Unaudited Condensed Interim Consolidated Financial Statements —

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(U.S. Dollars – Unaudited)

— See Notes to Unaudited Condensed Interim Consolidated Financial Statements —

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2026

(U.S. Dollars - Unaudited)

1. BASIS OF PRESENTATION

These condensed interim 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. (“Natural Chem”), Pana Chem Solutions Inc. (“Pana Chem”), InnFlex Holdings Inc., ENP Peru Investments LLC (“ENP Peru”), its 65% controlling interest in ENP Investments, LLC (“ENP Investments”) and ENP Mendota, LLC (“ENP Mendota”) and its former 80% controlling interest in 317 Mendota LLC (“317 Mendota”) that was dissolved in March 2026 (see Note 12). 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 2023, the Company purchased an 80% interest in 317 Mendota, a newly incorporated company established to purchase a large manufacturing building. The remaining 20% non-controlling interest was held by unrelated parties. The manufacturing building was sold in October 2025 and ENP Investments leases space in building from the new owner (see Note 3).

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 and has installed custom equipment for production of food and nutritional materials. All the ingredients the Company produces are custom products for specific clients and are confidential. The Company anticipates that this market vertical will grow over time. The Company also manufactures food grade products that are made and sold by the TPA division. The TPA division recognizes research and development income from time to time.

2. SIGNIFICANT ACCOUNTING POLICIES

These condensed interim 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.

In the opinion of management, the accompanying unaudited condensed interim consolidated financial statements contain all adjustments (all of which are of a normal recurring nature) and disclosures necessary for a fair statement of the Company’s financial position as of March 31, 2026 and the results of its operations and cash flows for the three months then ended. The consolidated balance sheet as of December 31, 2025 is derived from the December 31, 2025 audited financial statements. The unaudited condensed interim consolidated financial statements do not include all disclosures required of annual consolidated financial statements and, accordingly, should be read in conjunction with our annual financial statements for the year ended December 31, 2025. Operating results for the three months ended March 31, 2026 may not be indicative of results expected for the full year ending December 31, 2026.

The Company recorded income tax expense for the three months ended March 31, 2026 despite reporting a pre-tax loss. The estimated effective tax rate for the period differs from the U.S. federal statutory rate primarily due to the accrual of interest and penalties on unfiled federal and state tax returns. The uncertain tax position underlying these returns was resolved during the year ended December 31, 2025, but interest and penalties continue to accrue until the returns are filed. These amounts are recognized as a component of income tax expense.

(a) Term Deposits.

Term deposits with original maturities greater than three months but less than one year are classified as current assets and carried at amortized cost, which approximates fair value. Interest income is recognized on the accrual basis.

At March 31, 2026, the Company had two term deposits that are maintained by commercial banks. The first term deposit is for $322,752 and matures in February 2027. This deposit pays 3% interest and, if withdrawn before maturity, a penalty may be applied. The second term deposit is for $330,058, matures in August 2026 and pays interest at a rate of 3%. If withdrawn before maturity, a penalty may be applied. A third term deposit for $761,074, matured in March 2026 and was not renewed.

(b) 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 or net realizable value with cost determined using either weighted average cost or the first-in, first-out (FIFO) method, depending on the entity. 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. The Company periodically reviews its inventory for slow-moving or obsolete items and writes down the inventory carrying value to its estimated net realizable value based on assumptions about future demand and market conditions.

The Company accounts for shipping and handling activities as fulfillment costs and shipping and handling charges included in the consolidated statements of income and comprehensive income are as follows:

 SCHEDULE OF SHIPPING AND HANDLING CHARGES

(c) Risk Management and Concentrations.

The Company’s credit risk is primarily attributable to its accounts receivable. The amounts presented in the 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.

Total revenue for the Company’s three primary customers in each period is as follows:

 SCHEDULE OF RESEARCH AND DEVELOPMENT SERVICES REVENUE

Total accounts receivable for the Company’s three primary product sales customers for the three months ended March 31, 2026 and the full year December 31, 2025 is as follows:

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.

(d) Reclassification.

Certain prior year amounts have been reclassified to conform to the 2026 financial statements presentation. Reclassifications had no effect on net income (loss), cash flows, or stockholders’ equity as previously reported.

(e) Recent Accounting Pronouncements.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement. The new disclosure requirements are effective for the Company’s annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted, and may be applied either prospectively or retrospectively. The Company is currently evaluating the ASU to determine its impact on its condensed interim consolidated financial statements and disclosures.

Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

3. LEASES

Panama Operating Lease

In 2024, the Company executed a contract to lease 37,500 sq. ft for manufacturing space with a lease term of 122 months with the option to renew the lease for a further 36 months at the end and total payments during the term, starting at $31,324 per month with a 3% increase each year, or $3,461,568 in total. The Company recorded the present value of the lease payments over the term as a lease liability and an ROU asset. The Company’s incremental borrowing rate of 7% was used as the discount rate since the rate implicit in the lease was not readily determinable.

The lease liability related to this operating lease, which represents the present value of the lease payments, and the corresponding ROU asset were both $2,341,339 at inception of the lease. As of March 31, 2026, the ROU asset was $2,067,018 (December 31, 2025 - $2,111,027) and the lease liability was $2,586,253 (December 31, 2025 - $2,543,723). During the three months ended March 31, 2026, the Company recognized $86,539 (2025 – nil) of lease expense related to this lease in “Selling, general and administrative” in the consolidated statements of income and comprehensive income. There were no payments made or expense recorded for this lease in 2024. The Company is waiting for final requirements to be met by the lessor before starting to pay rent. At December 31, 2025 and March 31, 2026, the difference between the ROU asset and lease liability is attributable to the timing of the commencement of rent payments.

Mendota, Illinois Operating Leases

In October 2025, in connection with the sale of a building previously occupied by the Company’s subsidiary ENP Investments (see Note 6), ENP Investments entered into operating leases with the new owner for a total of 125,500 square feet of manufacturing and office space, comprised of two lease sections. The Company’s incremental borrowing rate of 7% was used as the discount rate for both leases as the implicit rate was not readily determinable.

Section A (110,000 sq. ft.): Initial term of 60 months with an option to renew. Monthly base rent begins at $27,492 and escalates at approximately 3.6% annually, for total undiscounted payments of $1,771,552. At inception, both the ROU asset and lease liability were recorded at $1,483,227. The option to renew was not considered in calculating the initial carrying values. As of March 31, 2026, both the ROU asset and lease liability were $1,368,664 (December 31, 2025 - $1,426,447). For the three months ended March 31, 2026, operating lease expense of $82,475 (2025 – $nil) was recognized in “Cost of sales” in the condensed interim consolidated statements of loss and comprehensive income (loss).

Section B (15,500 sq. ft.): Initial term of 60 months with an option to renew. Monthly base rent begins at $4,856 and escalates at approximately 3.6% annually, for total undiscounted payments of $312,625. At inception, both the ROU asset and lease liability were recorded at $263,383. The option to renew was not considered in calculating the initial carrying values. As of March 31, 2026, both the ROU asset and lease liability were $242,870 (December 31, 2025 - $253,213). For the three months ended March 31, 2026, operating lease expense of $14,567 (2025 – $nil) was recognized in “Cost of sales” in the condensed interim consolidated statements of loss and comprehensive income (loss).

The following table summarizes expense and cash payments for operating leases during the periods noted:

SCHEDULE OF CASH PAYMENTS FOR OPERATING LEASE

The following table contains the weighted average remaining lease term and discount rate for operating leases as of the end of the period:

SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERM AND DISCOUNT RATE

The table below presents a maturity analysis of the future minimum lease payments for operating leases as of March 31, 2026:

 SUMMARY OF RIGHT-OF-USE ASSET AND LEASE LIABILITY 

4. ACCOUNTS RECEIVABLE

 SCHEDULE OF ACCOUNTS RECEIVABLE 

5. INVENTORIES

 SCHEDULE OF INVENTORY

6. PROPERTY, EQUIPMENT AND LEASEHOLDS

 SCHEDULE OF PROPERTY AND EQUIPMENT

Amount of depreciation expense for three months ended March 31, 2026 was: $469,495 (2025 - $425,198) and is included in cost of sales in the condensed interim consolidated statements of operations and comprehensive income (loss).

In late 2025, management committed to a plan to sell the 14,000 sq. ft. former manufacturing facility located in Mendota, IL. As of March 31, 2026 and December 31, 2025, the carrying value of the property has been reclassified to Property Held for Sale on the consolidated balance sheet at its estimated net realizable value of $425,000.

7. INVESTMENTS

The Company’s investments at March 31, 2026 and December 31, 2025 consisted of the following:

SCHEDULE OF COMPANY’S INVESTMENTS 

In January 2019, the Company invested in a Florida based LLC that is engaged in international sales of fertilizer additives. According to the operating agreement, the Company had a 50% interest in the profit and loss of the Florida based LLC but did not have control. In August 2024, the Company sold a 30.1% interest in the Florida based LLC to a third party for consideration of $2,000,000. In addition, the Company entered into a subsequent agreement for the sale of its remaining 19.9% interest over the next five years for an additional $4,000,000. Starting in 2025, the Company will sell a further 3.98% per year upon receipt of that year’s $800,000 payment. In December 2025, the purchaser advised that there would be a delay in funding the 2025 tranche and that they would pay the $100,000 penalty in January 2026. This payment was made by the Florida based LLC, and not the third party, and was applied to the outstanding Accounts Receivable due from the Florida based LLC. At March 31, 2026, the Company continues to account for this investment using the equity investment as it exercises significant influence.

A summary of the activity associated with the Company’s investment in the Florida based LLC during the three months ended March 31, 2026 and the year ended December 31, 2025 is follows:

 SCHEDULE OF EQUITY METHOD INVESTMENT

Summarized profit and loss information related to the Florida based LLC is as follows:

 SUMMARY OF PROFIT AND LOSS INFORMATION RELATED TO EQUITY ACCOUNTED INVESTMENT

During the three months ended March 31, 2026, the Company had sales of $498,418 (2025 - $1,856,395) to the Florida based LLC. At March 31, 2026, the Florida based LLC had a balance of $592,188 included within Accounts Receivable (December 31, 2025 - $980,638).

8. SHORT TERM LINES OF CREDIT

(a) In June 2025, ENP Investments 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) $5,000,000, or (ii) 50-80% of eligible domestic accounts receivable plus 50% of inventory, capped at $2,500,000. Interest on the unpaid principal balance of this loan will be calculated using the greater of prime or 4.0%. The interest rate at March 31, 2026 is 6.75% (December 31, 2025 – 6.75%).

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 $3,250,000. The non-controlling interest is the guarantor of the remaining 35% of all the principal and other loan costs not to exceed $1,750,000.

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.

The balance outstanding under this revolving line as of March 31, 2026 was $3,812,187 (December 31, 2025 - $2,092,097).

(b) In August 2025, 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) $2,000,000, or (ii) 80% of eligible domestic accounts receivable plus 50% of inventory, capped at $1,000,000. Interest on the unpaid principal balance of this loan will be calculated using the greater of prime or 4.0%. The interest rate at March 31, 2026 is 6.75% (December 31, 2025 – 6.75%).

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.

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.

The balance outstanding under this revolving line as of March 31, 2026 was $984,257 (December 31, 2025 - $56,289).

9. LONG TERM DEBT

Long term debt, all of which is with StockYards Bank and Trust, at March 31, 2026 and December 31, 2025 consisted of the following:

 SCHEDULE OF LONG TERM DEBT

The following table summarizes the scheduled annual future principal payments as of March 31, 2026:

SCHEDULE OF ANNUAL FUTURE PRINCIPAL PAYMENTS 

10. STOCK BASED COMPENSATION

During the three months ended March 31, 2026 and 2025, the Company recognized stock based compensation associated with stock options as follows:

 SCHEDULE OF RECOGNIZED STOCK BASED COMPENSATION

The following table summarizes the Company’s stock option activities for the three months ended March 31, 2026 and the full year ended December 31, 2025:

 SCHEDULE OF STOCK OPTION ACTIVITIES

During the three months ended March 31, 2026 and 2025, the Company did not grant any stock based compensation to employees or consultants.

As of March 31, 2026, the weighted-average remaining contractual life of outstanding and exercisable options is 2.5 years and 2.3 years, respectively. As of March 31, 2026, there was approximately $302,111 of compensation expense related to non-vested options that is expected to be recognized over a weighted average period of 1.2 years.

The aggregate intrinsic value of options outstanding and exercisable at March 31, 2026 is $4,317,960 and $2,832,560, respectively. During the three months ended March 31, 2026, the intrinsic value of stock options exercised was $49,000 (2025 - $419,350).

During the year ended December 31, 2025, the Company granted 50,000 shares as a stock award. The total fair value of the stock award was $350,000 with 10,000 shares vested upon issuance and 10,000 shares vest on each anniversary date through 2029. As of March 31, 2026, there was approximately $217,440 of compensation related to the 40,000 non-vested shares of the stock award that is expected to be recognized through 2029.

11. CAPITAL STOCK

During the three months ended March 31, 2026, 15,000 shares were issued upon the exercise of stock options (2025 – 132,000).

12. 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 condensed interim 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. See Note 13.

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 $4,862,387.

  SCHEDULE OF DISTRIBUTIONS

During the three months ended March 31, 2026, the Company had sales of $895,953 (2025 - $830,483) to NCI. At March 31, 2026, the NCI had a balance of $7,554,641 included within Accounts Receivable (December 31, 2025 – $6,652,611).

b) 317 Mendota was a LLC that owned real estate that the Company occupied part of while the excess was rented out. In October 2025, the Company sold the building but continues to rent from the new owner (see Note 3). 317 Mendota was dissolved in March 2026. In connection with the dissolution, the Company received $72,953 in cash. The transaction was accounted for as an equity transaction, with the Company’s share recorded as capital in excess of par value; no gain or loss was recognized in the consolidated statements of operations. The Company owned an 80% interest in 317 Mendota and an unrelated party (“317 NCI”) owned the remaining 20% interest in 317 Mendota. For financial reporting purposes, the assets, liabilities and earnings of 317 Mendota were consolidated into these financial statements. The 317 NCI’s ownership interest in 317 Mendota was recorded in non-controlling interests in these condensed interim consolidated financial statements. The non-controlling interest represented 317 NCI’s interest in the earnings and equity of 317 Mendota.

  SCHEDULE OF NON CONTROLLING INTEREST RELATED TO ACQUISITION

13. SEGMENTED DISCLOSURE, 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 Company also manufactures food grade products that are made and sold by the TPA division.

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. The economic factors that impact the nature, amount, timing, and uncertainty of revenue and cash flows vary among the Company’s operating segments and the geographical regions in which they operate. This operating segment structure is used by the Chief Operating Decision Maker (“CODM”), who has been determined to be the Chief Executive Officer, to make key operating decisions and assess performance of the Company. The CODM evaluates segment operating performance, and makes resource allocation and performance evaluation decisions, based on gross profit and net operating income.

Three months ended March 31, 2026:

 SCHEDULE OF REPORTABLE SEGMENTS

Three months ended March 31, 2025:

Sales by territory are shown below:

   SCHEDULE OF REVENUE GENERATED IN UNITED STATES AND CANADA 

The Company’s long-lived assets (property, equipment and leaseholds, right of use assets, intangibles, and goodwill) by territory as follows:

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

Three primary customers accounted for $4,639,124 (56%) of sales during the three-month period ended March 31, 2026 (2025 - $3,665,235 or 49%).

14. SUBSEQUENT EVENTS

None.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

The Company manufactures and markets biodegradable polymers which are used in the oil, gas and agriculture industries. The Company also develops, manufactures and markets specialty chemicals that slow the evaporation of water.

Results of Operations

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.

The Company also manufactures food grade products that are made and sold by the TPA division.

Material changes in the Company’s Statement of Operations for three months ended March 31, 2026 compared to the same period in the prior year are discussed below:

Three Months ended March 31, 2026

Three primary customers accounted for 56% of the Company’s sales during the three months ended March 31, 2026 (2025 - 49%). The amount of revenue (all from the sale of TPA products) attributable to each customer is shown below.

*not a primary customer in that period

Customers with balances greater than 10% of our receivables as of March 31, 2026 and December 31, 2025 are shown below:

*less than 10% at period end

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

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

The Company’s sources and (uses) of cash for the three months ended March 31, 2026 and 2025 are shown below:

The Company has sufficient cash resources to meets its future commitments and cash flow requirements for the coming year. As of March 31, 2026, working capital was $20,878,345 (December 31, 2025 - $22,173,434) and the Company has no substantial commitments that require significant outlays of cash over the coming fiscal year.

The Company does not anticipate any capital requirements for the twelve months ending March 31, 2027.

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.

There have been no significant changes to the critical accounting estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Form 10-K.

Item 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Under the direction and with the participation of our management, including our Principal Executive and Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2026. We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic reports with the Securities and Exchange Commission 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 and 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 desired disclosure control objectives. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were ineffective. In 2026, the Company will implement new procedures to improve its disclosure controls and procedures.

Changes in Internal Control over Financial Reporting

At December 31, 2025, management identified material weaknesses in our internal control over financial reporting (“ICFR”) related to a material adjustment identified during the audit process indicating that controls over the financial statement close and review process were not operating effectively to prevent or detect misstatements on a timely basis. Because of the material weaknesses described above, we implemented new procedures to improve our financial statement close and review process during the quarter ended March 31, 2026. Remediation is in progress and is anticipated to be fully in place by the fourth quarter of 2026.

PART II

Item 5. 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 March 31, 2026

Item 6. Exhibits.

* Filed with this report.

SIGNATURES

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

May 15, 2026