þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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Nevada | 91-1922863 | |
(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
|
|
615 Discovery St.
Victoria, British Columbia, Canada
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V8T 5G4 | |
(Address of Issuer's Principal Executive Offices) | (Zip Code) |
Large accelerated filer | o | Accelerated filer | o |
Non-accelerated filer | o | Smaller reporting company | þ |
(Do not check if a smaller reporting company) |
Class of Stock | No. Shares Outstanding | Date |
Common | 13,169,991 | August 1, 2013 |
4 | ||||
5 | ||||
6 | ||||
7 | ||||
8 | ||||
21 | ||||
23 | ||||
24 | ||||
25 |
●
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Increased competitive pressures from existing competitors and new entrants;
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●
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Increases in interest rates or our cost of borrowing or a default under any material debt agreement;
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●
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Deterioration in general or regional economic conditions;
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●
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Adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;
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●
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Loss of customers or sales weakness;
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●
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Inability to achieve future sales levels or other operating results;
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●
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The unavailability of funds for capital expenditures; and
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●
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Operational inefficiencies in distribution or other systems.
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June 30,
2013
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December 31,
2012
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|||||||
Assets
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(Unaudited) | |||||||
Current
|
||||||||
Cash and cash equivalents
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$ | 512,363 | $ | 361,867 | ||||
Accounts receivable (Note 3)
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2,739,690 | 2,199,359 | ||||||
Inventory (Note 4)
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3,103,492 | 3,361,760 | ||||||
Prepaid expenses
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228,403 | 127,009 | ||||||
6,583,948 | 6,049,995 | |||||||
Property, equipment and leaseholds (Note 5)
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6,328,869 | 7,185,730 | ||||||
Patents (Note 6)
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180,093 | 200,512 | ||||||
Long term deposits (Note 7)
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7,494 | 7,893 | ||||||
Deferred tax asset
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292,111 | 292,111 | ||||||
$ | 13,392,515 | $ | 13,736,241 | |||||
Liabilities
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||||||||
Current
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||||||||
Accounts payable and accrued liabilities
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$ | 512,968 | $ | 677,969 | ||||
Deferred revenue
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257,172 | 312,556 | ||||||
Taxes payable
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(74,002 | ) | 45,998 | |||||
Short term line of credit (Note 8)
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1,400,000 | 1,205,000 | ||||||
Current portion of long term debt (Note 9)
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304,660 | 318,644 | ||||||
2,400,798 | 2,560,167 | |||||||
Long Term
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||||||||
Loans (Note 9)
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1,246,536 | 1,407,406 | ||||||
$ | 3,647,334 | $ | 3,967,573 | |||||
Stockholders’ Equity
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||||||||
Capital stock
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||||||||
Authorized
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||||||||
50,000,000 Common shares with a par value of $0.001 each
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||||||||
1,000,000 Preferred shares with a par value of $0.01 each
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||||||||
Issued and outstanding
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||||||||
13,169,991 (2012: 13,169,991) common shares
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13,170 | 13,170 | ||||||
Capital in excess of par value
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16,054,547 | 16,006,798 | ||||||
Other comprehensive income
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368,265 | 574,829 | ||||||
Deficit
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(6,690,801 | ) | (6,826,129 | ) | ||||
Total Stockholders’ Equity
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9,745,181 | 9,768,668 | ||||||
Total Liabilities and Stockholders’ Equity
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$ | 13,392,515 | $ | 13,736,241 | ||||
Commitments and contingencies (Note 13) |
Three Months Ended June 30,
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||||||||
2013
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2012
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|||||||
Sales
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$ | 4,884,629 | $ | 3,761,729 | ||||
Cost of sales
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3,311,257 | 2,654,812 | ||||||
Gross profit
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1,573,372 | 1,106,917 | ||||||
Operating expenses
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||||||||
Wages
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468,524 | 468,088 | ||||||
Administrative salaries and benefits
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203,466 | 308,715 | ||||||
Advertising and promotion
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10,941 | 17,224 | ||||||
Investor relations and transfer agent fee
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58,768 | 54,753 | ||||||
Office and miscellaneous
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214,942 | 105,370 | ||||||
Insurance
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49,834 | 67,147 | ||||||
Interest expense
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46,484 | 26,615 | ||||||
Rent
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45,711 | 43,907 | ||||||
Consulting
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83,361 | 72,416 | ||||||
Professional fees
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81,948 | 163,820 | ||||||
Travel
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26,833 | 34,795 | ||||||
Telecommunications
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8,913 | 8,071 | ||||||
Shipping
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6,999 | 7,777 | ||||||
Research
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66,943 | 17,512 | ||||||
Commissions
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46,871 | 36,069 | ||||||
Bad debt expense
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27,225 | 76 | ||||||
Currency exchange
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4,483 | (9,790 | ) | |||||
Utilities
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38,957 | 30,347 | ||||||
Total operating expenses
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1,491,203 | 1,452,912 | ||||||
Income (loss) before other items and income tax
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82,169 | (345,995 | ) | |||||
Income (loss) before income tax
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82,169 | (345,995 | ) | |||||
Provision for income taxes
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(12,000 | ) | (120,000 | ) | ||||
Net income (loss)
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70,169 | (465,995 | ) | |||||
Other comprehensive income (loss)
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(129,507 | ) | (113,554 | ) | ||||
Comprehensive income (loss)
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(59,338 | ) | (579,549 | ) | ||||
Net income (loss) per share (basic and diluted)
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$ | 0.00 | $ | (0.04 | ) | |||
Weighted average number of common shares (basic)
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13,169,991 | 13,169,991 | ||||||
Weighted average number of common shares (diluted)
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13,169,991 | 13,169,991 |
Six Months Ended June 30,
|
||||||||
2013
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2012
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|||||||
Sales
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$ | 9,389,164 | $ | 8,955,800 | ||||
Cost of sales
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6,469,640 | 5,874,710 | ||||||
Gross profit
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2,919,524 | 3,081,090 | ||||||
Operating expenses
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||||||||
Wages
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921,390 | 856,651 | ||||||
Administrative salaries and benefits
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414,014 | 439,247 | ||||||
Advertising and promotion
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17,663 | 43,266 | ||||||
Investor relations and transfer agent fee
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115,516 | 113,763 | ||||||
Office and miscellaneous
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333,230 | 204,792 | ||||||
Insurance
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121,292 | 132,161 | ||||||
Interest expense
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55,880 | 61,414 | ||||||
Rent
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91,710 | 91,102 | ||||||
Consulting
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161,616 | 141,357 | ||||||
Professional fees
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125,173 | 255,944 | ||||||
Travel
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61,784 | 64,149 | ||||||
Telecommunications
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15,736 | 14,821 | ||||||
Shipping
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14,213 | 16,965 | ||||||
Research
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80,155 | 37,677 | ||||||
Commissions
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86,340 | 112,772 | ||||||
Bad debt expense (recovery)
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27,225 | 76 | ||||||
Currency exchange
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5,030 | (3,560 | ) | |||||
Utilities
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68,285 | 64,410 | ||||||
2,716,252 | 2,647,007 | |||||||
Income (loss) before other items and income tax
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203,272 | 434,083 | ||||||
Gain on sale of equipment
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2,057 | 2,217 | ||||||
Interest income
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- | 361 | ||||||
Income (loss) before income tax
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205,329 | 436,661 | ||||||
Deferred tax (recovery)
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- | (10,000 | ) | |||||
Provision for income taxes
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(70,000 | ) | (690,000 | ) | ||||
Net income (loss)
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135,329 | (243,339 | ) | |||||
Other comprehensive income (loss)
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(206,564 | ) | (2,546 | ) | ||||
Comprehensive income (loss)
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$ | (71,235 | ) | $ | (245,885 | ) | ||
Net income (loss) per share (basic and diluted)
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$ | (0.01 | ) | $ | (0.02 | ) | ||
Weighted average number of common shares (basic)
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13,169,991 | 13,169,991 | ||||||
Weighted average number of common shares (diluted)
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13,169,991 | 13,169,991 |
Six Months Ended June 30,
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2013
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2012
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Operating activities
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||||||||
Net income (loss)
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$ | 135,329 | $ | (243,339 | ) | |||
Stock compensation expense
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59,500 | 64,689 | ||||||
Depreciation
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656,486 | 611,737 | ||||||
Changes in non-cash working capital items:
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||||||||
(Increase) Decrease in accounts receivable
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(548,219 | ) | (24,639 | ) | ||||
(Increase) Decrease in inventory
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236,544 | (302,096 | ) | |||||
(Increase) Decrease in prepaid expenses
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(106,564 | ) | (68,523 | ) | ||||
(Increase) Decrease in deferred tax assets
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- | (10,000 | ) | |||||
Increase (Decrease) in accounts payable
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(141,512 | ) | 185,066 | |||||
Increase (Decrease) in taxes payable
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(120,000 | ) | (147,000 | ) | ||||
Increase (Decrease) in deferred revenue
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(54,975 | ) | - | |||||
Cash provided by (used in) operating activities
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116,589 | 65,895 | ||||||
Investing activities
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||||||||
Acquisition of property and equipment
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(55,487 | ) | (85,532 | ) | ||||
Cash provided by (used in) investing activities
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(55,487 | ) | (85,532 | ) | ||||
Financing activities
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||||||||
Short term line of credit
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195,000 | 225,000 | ||||||
Loan (repayment)
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(84,488 | ) | (63,698 | ) | ||||
Purchase of common stock
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- | - | ||||||
Cash provided (used) by financing activities
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110,512 | 161,302 | ||||||
Effect of exchange rate changes on cash
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(21,118 | ) | (2,663 | ) | ||||
Inflow (outflow) of cash
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150,496 | 139,002 | ||||||
Cash and cash equivalents, beginning
|
381,867 | 506,905 | ||||||
Cash and cash equivalents, ending
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$ | 512,363 | $ | 645,907 | ||||
Supplemental disclosure of cash flow information:
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||||||||
Income taxes paid
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$ | 190,000 | $ | 827,000 | ||||
Interest paid
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$ | 77,349 | $ | 61,414 |
Computer hardware
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30% Declining balance
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|
Automobile
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30% Declining balance
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Furniture and fixtures
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20% Declining balance
|
|
Manufacturing equipment
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20% Declining balance
|
|
Office equipment
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20% Declining balance
|
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Building and improvements
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10% Declining balance
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Leasehold improvements
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Straight-line over lease term
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●
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Level 1 – Quoted prices in active markets for identical assets or liabilities
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●
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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.
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●
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Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
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June 30,
2013
|
December 31,
2012 |
|||||||
Accounts receivable
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$ | 2,778,559 | $ | 2,212,448 | ||||
Allowances for doubtful accounts
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(38,869 | ) | (13,089 | ) | ||||
$ | 2,739,690 | $ | 2,199,359 |
June 30,
2013
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December 31,
2012
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|||||||
Completed goods
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$ | 1,764,464 | $ | 1,740,186 | ||||
Works in progress
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760 | 31,593 | ||||||
Raw materials
|
1,338,268 | 1,589,981 | ||||||
$ | 3,103,492 | $ | 3,361,760 |
June 30,
2013 |
Accumulated
|
June 30,
2013 |
||||||||||
Cost
|
Depreciation
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Net
|
||||||||||
Buildings
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$ | 5,255,879 | $ | 2,266,482 | $ | 2,989,397 | ||||||
Computer hardware
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102,916 | 88,315 | 14,601 | |||||||||
Furniture and fixtures
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27,309 | 21,886 | 5,423 | |||||||||
Office equipment
|
22,653 | 19,970 | 2,683 | |||||||||
Manufacturing equipment
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5,881,378 | 3,121,740 | 2,759,638 | |||||||||
Trailer
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16,415 | 13,664 | 2,751 | |||||||||
Technology
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129,890 | 38,967 | 90,923 | |||||||||
Land
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463,453 | — | 463,453 | |||||||||
$ | 11,899,893 | $ | 5,571,024 | $ | 6,328,869 |
December 31,
2012 |
Accumulated
|
December 31,
2012 |
||||||||||
Cost
|
Depreciation
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Net
|
||||||||||
Buildings
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$ | 5,372,327 | $ | 2,122,396 | $ | 3,249,931 | ||||||
Computer hardware
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106,457 | 88,811 | 17,646 | |||||||||
Furniture and fixtures
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28,385 | 22,155 | 6,230 | |||||||||
Office equipment
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23,946 | 20,795 | 3,151 | |||||||||
Manufacturing equipment
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6,039,836 | 2,725,324 | 3,314,512 | |||||||||
Trailer
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17,353 | 13,930 | 3,423 | |||||||||
Technology
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137,308 | 27,461 | 109,847 | |||||||||
Truck
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11,951 | 9,512 | 2,439 | |||||||||
Land
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478,551 | — | 478,551 | |||||||||
$ | 12,216,114 | $ | 5,030,384 | $ | 7,185,730 |
Land
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$ | 264,360 | ||
Building
|
833,178 | |||
Building improvements
|
883,474 | |||
Manufacturing equipment
|
2,714,629 | |||
Trailer
|
2,752 | |||
Technology
|
90,923 |
June 30,
2013 Cost |
Accumulated
Amortization
|
June 30,
2013 Net |
||||||||||
Patents
|
$ | 252,087 | $ | 71,993 | $ | 180,093 |
December 31,
2012
Cost |
Accumulated
Amortization
|
December 31,
2012
Net |
||||||||||
Patents
|
$ | 266,680 | $ | 65,939 | $ | 200,512 |
2013
|
$ | 19,233 | ||
2014
|
19,233 | |||
2015
|
19,233 | |||
2016
|
19,233 | |||
2017
|
19,233 |
June 30, 2013 |
December 31, 2012 | |||||||
Long term deposits | $ | 7,494 | $ | 7,893 |
Amount Due
(in CDN funds)
|
Payment Due Date
|
||
$ | 182,160 |
December 31, 2013
|
|
$ | 182,160 |
December 31, 2014
|
|
$ | 182,161 |
December 31, 2015
|
2013
|
$ | 90,299 | ||
2014
|
$ | 75,249 |
June 30, 2013 |
December 31, 2012 | |||||||
Continuity
|
||||||||
Balance, January 1
|
$ | 1,726,050 | 1,976,992 | |||||
Less: Payments on loan
|
81,604 | 310,384 | ||||||
Effect of exchange rate
|
(93,250 | ) | 59,442 | |||||
Balance
|
$ | 1,551,196 | $ | 1,726,050 |
Outstanding balance at:
|
||||||||
a) Long term debt – AAFC
|
$ | 519,594 | $ | 549,268 | ||||
b) Long term debt – AFSC
|
1,031,602 | 1,176,782 | ||||||
Long term debt
|
$ | 1,551,196 | $ | 1,726,050 | ||||
Less: current portion
|
(304,660 | ) | (318,644 | ) | ||||
Balance
|
$ | 1,246,536 | $ | 1,407,406 |
Number of shares
|
Exercise price
per share
|
Weighted average exercise price
|
||||||||||
Balance, December 31, 2011
|
1,193,700 | $ | 1.50 - 3.60 | $ | 2.04 | |||||||
Granted
|
94,000 | $ | 2.00 – 2.22 | $ | 2.14 | |||||||
Cancelled or expired
|
(288,700 | ) | $ | 1.50 – 3.60 | $ | 2.35 | ||||||
Balance, December 31, 2012
|
999,000 | $ | 1.21 – 2.45 | $ | 1.96 | |||||||
Granted
|
183,000 | $ | 1.21 | $ | 1.21 | |||||||
Cancelled or expired
|
(68,000 | ) | $ | 3.60 | $ | 3.60 | ||||||
Balance, June 30, 2013
|
1,114,000 | $ | 1.21 – 2.45 | $ | 1.74 | |||||||
Exercisable, June 30, 2013
|
714,000 | $ | 1.50 – 2.45 | $ | 1.92 |
2013
|
2012
|
|||||||
Expected life – years
|
5.0 | 5.0 | ||||||
Interest rate
|
0.36 | % | 0.36 – 0.38 | % | ||||
Volatility
|
51 | % | 51 – 58 | % | ||||
Dividend yield
|
— | % | — | % | ||||
Weighted average fair value of options granted
|
$ | 0.38 | $ | 0.38 |
EWCP
|
BPCA
|
Total
|
||||||||||
Revenue
|
$ | 503,703 | $ | 8,885,461 | $ | 9,389,164 | ||||||
Interest revenue
|
0 | 0 | 0 | |||||||||
Interest expense
|
24,938 | 30,942 | 55,880 | |||||||||
Depreciation and amortization
|
546,806 | 109,680 | 656,486 | |||||||||
Segment profit (loss)
|
(1,492,301 | ) | 1,627,630 | 135,329 | ||||||||
Segment assets
|
4,657,366 | 1,851,596 | 6,508,962 | |||||||||
Expenditures for segment assets
|
55,487 | - | 55,487 |
EWCP
|
BPCA
|
Total
|
||||||||||
Revenue
|
$ | 548,333 | $ | 8,407,467 | $ | 8,955,800 | ||||||
Interest revenue
|
352 | 9 | 361 | |||||||||
Interest expense
|
30,647 | 30,767 | 61,414 | |||||||||
Depreciation and amortization
|
484,831 | 126,955 | 611,786 | |||||||||
Segment profit (loss)
|
(1,362,229 | ) | 1,118,890 | (243,339 | ) | |||||||
Segment assets
|
5,798,357 | 2,087,331 | 7,885,710 | |||||||||
Expenditures for segment assets
|
70,028 | 15,504 | 85,532 |
Six Months Ended
June 30,
2013 |
Six Months Ended
June 30,
2012 |
|||||||
Canada
|
$ | 513,294 | $ | 635,030 | ||||
United States and abroad
|
8,875,870 | 8,320,770 | ||||||
Total
|
$ | 9,389,164 | $ | 8,955,800 |
June 30,
2013 |
December 31,
2012 |
|||||||
Canada
|
$ | 4,657,366 | $ | 5,424,966 | ||||
United States
|
1,851,596 | 1,961,276 | ||||||
Total
|
$ | 6,508,962 | $ | 7,386,242 |
2013
|
68,797 | |||
2014
|
453,731 |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATION AND FINANCIAL CONDITION.
|
Item |
Increase (I) or
Decrease (D)
|
Reason | ||
Sales | ||||
EWCP products | D | Increased orders in the previous period contributed to decreased orders in this period. | ||
BPCA products
|
I
|
Increased sales across all market verticals due to increased success in sales activity.
|
||
Gross Profit, as a % of sales
|
D
|
Start of production at Taber plant increased depreciation; high oil prices increased aspartic acid costs.
|
||
Wages
|
I
|
To ensure employee retention and increase the sales force in anticipation of future increased sales.
|
||
Office and miscellaneous | I | Construction admin costs allocated to general admin costs now that the Taber plant is operational. | ||
Professional fess | D | Reduced litigation resulted in reduced professional fees. | ||
Commissions | D | Uncommissionable sales increased against commissionable sales. |
Item |
Increase (I) or
Decrease (D)
|
Reason | ||
Sales | ||||
EWCP products | D | Increased orders in the previous periods contributed to decreased orders in this period. | ||
BPCA products
|
I
|
Increased sales across all market verticals due to increased success in sales activity.
|
||
Gross Profit, as a % of sales
|
I
|
Increased sales.
|
||
Office and miscellaneous
|
I
|
Construction admin costs are now allocated to general admin costs now that the plant is operational.
|
||
Professional fess
|
D
|
Reduced litigation resulted in reduced professional fees.
|
||
Commission | I | Commissionable sales increased against uncommissionable sales. |
2013
|
2012
|
|||||||
Cash provided by (used by) operations | 117,663 | 65,985 | ||||||
Purchases of equipment | (55,487 | ) | (85,532 | ) | ||||
Advances from short term line of credit | 195,000 | 225,000 | ||||||
Repayment of loans | (84,488 | ) | (63,698 | ) | ||||
Changes in exchange rates | (22,192 | ) | (2,663 | ) |
2013
|
111,901 | |||
2014
|
46,971 |
Number
|
Description
|
|
3.1
|
Amended and Restated Certificate of Incorporation of the registrant. (1)
|
|
3.2
|
Bylaws of the registrant. (1)
|
|
Certification of Principal Executive Officer Pursuant to §302 of the Sarbanes-Oxley Act of 2002.*
|
||
Certification of Principal Financial Officer Pursuant to §302 of the Sarbanes-Oxley Act of 2002.*
|
||
Certification of Principal Executive and Financial Officer Pursuant to 18 U.S.C. §1350 and §906 of the Sarbanes-Oxley Act of 2002.*
|
Flexible Solutions International, Inc. | |||
Date: August 14, 2013
|
By:
|
/s/ Daniel B. O’Brien | |
Name: | Daniel B. O’Brien | ||
Title: | President and Principal Executive Officer | ||
By: | /s/ Daniel B. O’Brien | ||
Name: | Daniel B. O’Brien | ||
Title: | Principal Financial and Accounting Officer |
Date: August 14, 2013
|
By:
|
/s/ Daniel B. O’Brien | |
Daniel O’Brien | |||
Principal Executive Officer |
Date: August 14, 2013
|
By:
|
/s/ Daniel B. O’Brien | |
Daniel O’Brien | |||
Principal Financial Officer |
Date: August 14, 2013
|
By:
|
/s/ Daniel B. O’Brien | |
Daniel O’Brien | |||
Principal Executive and Financial Officer |
12. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 12. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY | The Company operates in two segments:
(a) Development and marketing of two lines of energy and water conservation products (as shown under the column heading EWCP below), which consists of a (i) liquid swimming pool blanket which saves energy and water by inhibiting evaporation from the pool surface, and (ii) food-safe powdered form of the active ingredient within the liquid blanket and which is designed to be used in still or slow moving drinking water sources.
(b) Manufacture of biodegradable polymers (BCPAs) 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 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 Companys 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.
Six months ended June 30, 2013:
Six months ended June 30, 2012:
The sales generated in the United States and Canada are as follows:
The Companys property, equipment, leasehold and patents are located in Canada and the United States as follows:
Three customers accounted for $5,642,839 (60%) of sales made during the six months ended June 30, 2012 (2012 - $4,865,542 or 54%). |
12. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY (Details 1) (USD $)
|
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Sales generated | $ 9,389,164 | $ 8,955,800 |
Canada [Member]
|
||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Sales generated | 513,294 | 635,030 |
United States [Member]
|
||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Sales generated | $ 8,875,870 | $ 8,320,770 |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMREPHENSIVE INCOME (LOSS) (Unaudited) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Income Statement [Abstract] | ||||
Sales | $ 4,884,629 | $ 3,761,729 | $ 9,389,164 | $ 8,955,800 |
Cost of sales | 3,311,257 | 2,654,812 | 6,469,640 | 5,874,710 |
Gross profit | 1,573,372 | 1,106,917 | 2,919,524 | 3,081,090 |
Operating expenses | ||||
Wages | 468,524 | 468,088 | 921,390 | 856,651 |
Administrative salaries and benefits | 203,466 | 308,715 | 414,014 | 439,247 |
Advertising and promotion | 10,941 | 17,224 | 17,663 | 43,266 |
Investor relations and transfer agent fee | 58,768 | 54,753 | 115,516 | 113,763 |
Office and miscellaneous | 214,942 | 105,370 | 333,230 | 204,792 |
Insurance | 49,834 | 67,147 | 121,292 | 132,161 |
Interest expense | 46,484 | 26,615 | 55,880 | 61,414 |
Rent | 45,711 | 43,907 | 91,710 | 91,102 |
Consulting | 83,361 | 72,416 | 161,616 | 141,357 |
Professional fees | 81,948 | 163,820 | 125,173 | 255,944 |
Travel | 26,833 | 34,795 | 61,784 | 64,149 |
Telecommunications | 8,913 | 8,071 | 15,736 | 14,821 |
Shipping | 6,999 | 7,777 | 14,213 | 16,965 |
Research | 66,943 | 17,512 | 80,155 | 37,677 |
Commissions | 46,871 | 36,069 | 86,340 | 112,772 |
Bad debt expense (recovery) | 27,225 | 76 | 27,225 | 76 |
Currency exchange | 4,483 | (9,790) | 5,030 | (3,560) |
Utilities | 38,957 | 30,347 | 68,285 | 64,410 |
Total operating expenses | 1,491,203 | 1,452,912 | 2,716,252 | 2,647,007 |
Income (loss) before other items and income tax | 82,169 | (345,995) | 203,272 | 434,083 |
Income (loss) before income tax | 82,169 | (345,995) | ||
Gain on sale of equipment | 2,057 | 2,217 | ||
Interest income | 361 | |||
Deferred tax (recovery) | (10,000) | |||
Provision for income taxes | (12,000) | (120,000) | (70,000) | (690,000) |
Net income (loss) | 70,169 | (465,995) | 135,329 | (243,339) |
Other comprehensive income (loss) | (129,507) | (113,554) | (206,564) | (2,546) |
Comprehensive income (loss) | $ (59,338) | $ (579,549) | $ (71,235) | $ (245,885) |
Net income (loss) per share (basic and diluted) | $ 0 | $ (0.04) | $ (0.01) | $ (0.02) |
Weighted average number of common shares (basic) | 13,169,991 | 13,169,991 | 13,169,991 | 13,169,991 |
Weighted average number of common shares (diluted) | 13,169,991 | 13,169,991 | 13,169,991 | 13,169,991 |
5. PROPERTY, PLANT & EQUIPMENT
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 5. PROPERTY, PLANT & EQUIPMENT |
Amount of depreciation expense for 2013: $646,523 (2012: $605,728)
The following carrying amount of capital assets held by Flexible Solutions Ltd. serves as collateral for the AFSC loan. (See Note 9b):
|
5. PROPERTY, PLANT & EQUIPMENT (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Property Plant Equipment Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant & equipment |
|
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Capital assets | The following carrying amount of capital assets held by Flexible Solutions Ltd. serves as collateral for the AFSC loan. (See Note 9b):
|
13. COMMITMENTS (Details) (USD $)
|
Jun. 30, 2013
|
---|---|
Commitments Details | |
2013 | $ 68,797 |
2014 | $ 453,731 |
13. COMMITMENTS
|
6 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||
Notes to Financial Statements | |||||||||||
Note 13. COMMITMENTS | The Company is committed to minimum rental payments for property and premises aggregating approximately $114,170 over the term of three leases, the last expiring on July 31, 2014.
Commitments in each of the next two years are approximately as follows:
|
9. LONG TERM DEBT (Details Narrative) (USD $)
|
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
AAFC [Member]
|
||
Debt Instrument [Line Items] | ||
Balance owing | $ 519,594 | $ 549,268 |
AAFC [Member] | Canadian Dollars
|
||
Debt Instrument [Line Items] | ||
Eligible loan amount | 1,000,000 | |
Balance owing | 546,481 | 546,481 |
AFSC [Member]
|
||
Debt Instrument [Line Items] | ||
Borrowing balance | 1,031,602 | 1,176,782 |
AFSC [Member] | Canadian Dollars
|
||
Debt Instrument [Line Items] | ||
Eligible loan amount | 2,000,000 | |
Borrowing balance | $ 1,084,984 | $ 1,170,811 |
13. COMMITMENTS (Details Narrative) (USD $)
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Commitments Details Narrative | |
Minimum rental payments for property and premises | $ 114,170 |
Lease expiry date | Jul. 31, 2014 |
5. PROPERTY, PLANT & EQUIPMENT (Details Narrative) (USD $)
|
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Property Plant Equipment Details Narrative | ||
Depreciation expense | $ 646,523 | $ 605,728 |
9. LONG TERM DEBT (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long Term Debt Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-interest bearing loan repayment | The repayment schedule is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest loan Repayment | The Company has committed to the following repayments:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding balance loan |
|
7. LONG TERM DEPOSITS (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||
Long Term Deposits Tables | |||||||||||||||||||||||||||||||||||||
Long Term Deposits | The Company has reclassified certain security deposits to better reflect their long term nature. Long term deposits consist of damage deposits held by landlords and security deposits held by various vendors.
|
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