Daniel O’Brien – President and Chief Executive Officer

William R. Gregozeski – Mont Blanc Capital Management AG Steve Neri – Gilford Securities

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Second Quarter 2013 Financials Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. (Operator Instructions) This conference is being recorded today, August 15, 2013. I would now like to turn the conference over to Mr. O’Brien. Please go ahead, sir. Daniel O’Brien: Thank you. Good morning. This is Dan O’Brien, CEO of Flexible Solutions. Safe Harbor provision, the Private Securities Litigation Reform Act of 1995 provides a Safe Harbor for forward-looking statements. Certain of the statements contained herein which are not historical facts are forward-looking statements with respect to events, the occurrence of which involve risks and uncertainties. These forward-looking statements may be impacted, either positively or negatively, by various factors. Information concerning potential factors that could affect the Company is detailed from time-to-time in the Company’s reports filed with the Securities and Exchange Commission. Welcome to the FSI conference call for the second quarter of 2013. Prior to commenting specifically on the financials, I’d like to speak about where we are in our major projects and what we expect for the next quarters. .: Our sugar to aspartic acid plant in Alberta is now in operation. Our corporate policy is not to provide volume information or details of production. Our revenue is ongoing. We’re depreciating the factory and the Taber production team is focused on continuous increases in quantity, efficiency and quality. Aspartic acid from the Taber plant is shipped to our Peru, Illinois plant, where it is converted to polyaspartic acid for onward sale through our customers. TPA is used in agriculture to increase crop yield, the method of action is through limiting crystal embryo growth between fertilizer ions in the soil, when embryonic crystals are preventing from transforming into fully crystalline form by TPA, the fertilizer remains available to plants further into the growing season. The firm but light attraction between the TPA and the fertilizer ions also prevents fertilizer run off, keeping fertilizer easily available to crops results and better yield with the same level of fertilization. In North America alone the wholesale market for this is estimated at over $2 billion a year and most crops are able to use TPA profitably. Sales into agriculture grew quickly in 2011 and that strength has carried forward into 2013 but with the dip in the growth rate we attribute to the weather conditions in 2012 and early 2013. Our internal sales team is focused on supporting the best distributors, helping the others improve their performance and identifying additional distribution opportunities. TPA in agriculture is a unique economic situation for all links availed to end user chain. With many products the economic value was good for all but one party most commonly the farmer who has asked to accept the soft values instead of the cash profit accruing to the other parties, not so for TPA. FSI earns a fair profit on manufacturing, distribution earns strong but selling to dealers. Dealers make good profit selling to growers, if the grower still earns a great profit from the extra crops he produces with the same land and fertilizer program more than 300 trials over the last 15 years have demonstrated that investing $20 an acre in TPA can payback 60 to 100 or more. We believe this is an excellent basis for long-term growth in sales. TPA is also a biodegradable way of treating oil filled water for net pipes from plugging with mineral scale. Our sales into this market are well-established and growing steadily, they can be subject to temporary reductions when production is cutback or when platforms are shut down for reconditioning. Industrially, TPA is used in high-quality dish and laundry detergents that wish to be as biodegradable as possible. TPA is also an excellent choice for water treatment processes like customers who need to accept the small cost premium compared to polyacrylates, we have recently identified two additional industrial users with significant volume potential and will be conducting trials and beginning sales over the next six to eight quarters. Q3, Q4 2014 we’re optimistic. Our products are best in the class and they’re due to less volatility in world economic conditions compared to last year. We are not able to meet specific growth predictions because even with loyal growing customers of new sales opportunities in multiple markets, our sales, our purchase order by purchase order rather than long-term uptake contracts, it’s unrealistic to give numerical guidance under these conditions. We are comfortable predicting that full-year 2013 will be higher than 2012. Our best estimate is that Q3 will resemble the year earlier period with some growth and that in Q4 we may say, it’s faster year-over-year growth due to pre-ordering of agricultural TPA for the 2014 season. In 2014, we expect additional growth in revenue, with the usual lumpy quarter – because of customer behavior, weather, crop pricing and the other variables of our business. So the highlights of the financial results; sales for the quarter increased 30% to $4.88 million compared with $3.76 million for Q2 2012. The result is a gain of $70,000 or $0.01 per share in the 2013 period compared to a loss of $466,000 or $0.04 in the year earlier. Now that the Alberta factory is operating, biomass expense is no longer given in the news release. Instead, due to the generation of revenue from that facility expenses are included in operations. In addition, depreciation of the factory has begun and is being applied against income from all divisions. Our working capital is very adequate. Our sales tend to be larger during the first half of the year resulting in higher accounts receivable, lower cash and lower inventory that reverts the other one to the second half. The company’s growth is supported by its mostly unused $6.4 million line of credit with the Chicago base bank. Because of the outside effects of depreciation, stock option expenses and one-time items on the financials of the small companies, FSI provides a non-GAAP measure useful for judging year-over-year success. Operating cash flow is arrived at by removing depreciation, option expenses and one-time items from the statement of operations. For the first half of 2013, the operating cash flow was $905,000 and $0.07 a share compared to $1.17 million and $0.09 a share in 2012. Detailed information on how to reconcile GAAP with non-GAAP numbers is included in our news release of yesterday August 14. Net income and income tax as a result of our January 1, 2013 change in accounting for Taber, Alberta operations and its historical losses, our taxable income is greatly reduced until all the historical losses for Taber are applied against income. We suggest that reviewing the quarterly and annual changes in current assets, current liabilities and long-term debt will help some of the forward momentum of the company. And last our other product lines, Watersaver and Swimming pool divisions are being emphasized less than the NanoChem division, while maintaining the long-term opportunities and limiting cash and management costs. Swimming pool sales are steady and we think that a new distributor in Western Europe will have a significant upward effect on pool division revenue over the next year. Watersaver sales are little more difficult to predict. More continuing efforts in Turkey, Morocco, Chile, Senegal, parts of East Asia, Australia, United States, small sales are expected at intervals through the year. The drought last summer has continued in the Colorado River Basin resulting in several small sales this spring and dozens of increase some with quite large potential, the successful trial in 2012 on Lake Sahara, in Las Vegas has provided concrete evidence that Watersaver works safely in the U.S. Southwest, pays water at low costs to the water owner. The text of this speech will be available on our website by Friday the 16. And e-mail copies can be requested immediately from Jason Bloom at Jason@flexiblesolutions.com or by telephone at 1800-661-3560. Thank you, Charissa, the floor is now open for questions. : Our sugar to aspartic acid plant in Alberta is now in operation. Our corporate policy is not to provide volume information or details of production. Our revenue is ongoing. We’re depreciating the factory and the Taber production team is focused on continuous increases in quantity, efficiency and quality. Aspartic acid from the Taber plant is shipped to our Peru, Illinois plant, where it is converted to polyaspartic acid for onward sale through our customers. TPA is used in agriculture to increase crop yield, the method of action is through limiting crystal embryo growth between fertilizer ions in the soil, when embryonic crystals are preventing from transforming into fully crystalline form by TPA, the fertilizer remains available to plants further into the growing season. The firm but light attraction between the TPA and the fertilizer ions also prevents fertilizer run off, keeping fertilizer easily available to crops results and better yield with the same level of fertilization. In North America alone the wholesale market for this is estimated at over $2 billion a year and most crops are able to use TPA profitably. Sales into agriculture grew quickly in 2011 and that strength has carried forward into 2013 but with the dip in the growth rate we attribute to the weather conditions in 2012 and early 2013. Our internal sales team is focused on supporting the best distributors, helping the others improve their performance and identifying additional distribution opportunities. TPA in agriculture is a unique economic situation for all links availed to end user chain. With many products the economic value was good for all but one party most commonly the farmer who has asked to accept the soft values instead of the cash profit accruing to the other parties, not so for TPA. FSI earns a fair profit on manufacturing, distribution earns strong but selling to dealers. Dealers make good profit selling to growers, if the grower still earns a great profit from the extra crops he produces with the same land and fertilizer program more than 300 trials over the last 15 years have demonstrated that investing $20 an acre in TPA can payback 60 to 100 or more. We believe this is an excellent basis for long-term growth in sales. TPA is also a biodegradable way of treating oil filled water for net pipes from plugging with mineral scale. Our sales into this market are well-established and growing steadily, they can be subject to temporary reductions when production is cutback or when platforms are shut down for reconditioning. Industrially, TPA is used in high-quality dish and laundry detergents that wish to be as biodegradable as possible. TPA is also an excellent choice for water treatment processes like customers who need to accept the small cost premium compared to polyacrylates, we have recently identified two additional industrial users with significant volume potential and will be conducting trials and beginning sales over the next six to eight quarters. Q3, Q4 2014 we’re optimistic. Our products are best in the class and they’re due to less volatility in world economic conditions compared to last year. We are not able to meet specific growth predictions because even with loyal growing customers of new sales opportunities in multiple markets, our sales, our purchase order by purchase order rather than long-term uptake contracts, it’s unrealistic to give numerical guidance under these conditions. We are comfortable predicting that full-year 2013 will be higher than 2012. Our best estimate is that Q3 will resemble the year earlier period with some growth and that in Q4 we may say, it’s faster year-over-year growth due to pre-ordering of agricultural TPA for the 2014 season. In 2014, we expect additional growth in revenue, with the usual lumpy quarter – because of customer behavior, weather, crop pricing and the other variables of our business. So the highlights of the financial results; sales for the quarter increased 30% to $4.88 million compared with $3.76 million for Q2 2012. The result is a gain of $70,000 or $0.01 per share in the 2013 period compared to a loss of $466,000 or $0.04 in the year earlier. Now that the Alberta factory is operating, biomass expense is no longer given in the news release. Instead, due to the generation of revenue from that facility expenses are included in operations. In addition, depreciation of the factory has begun and is being applied against income from all divisions. Our working capital is very adequate. Our sales tend to be larger during the first half of the year resulting in higher accounts receivable, lower cash and lower inventory that reverts the other one to the second half. The company’s growth is supported by its mostly unused $6.4 million line of credit with the Chicago base bank. Because of the outside effects of depreciation, stock option expenses and one-time items on the financials of the small companies, FSI provides a non-GAAP measure useful for judging year-over-year success. Operating cash flow is arrived at by removing depreciation, option expenses and one-time items from the statement of operations. For the first half of 2013, the operating cash flow was $905,000 and $0.07 a share compared to $1.17 million and $0.09 a share in 2012. Detailed information on how to reconcile GAAP with non-GAAP numbers is included in our news release of yesterday August 14. Net income and income tax as a result of our January 1, 2013 change in accounting for Taber, Alberta operations and its historical losses, our taxable income is greatly reduced until all the historical losses for Taber are applied against income. We suggest that reviewing the quarterly and annual changes in current assets, current liabilities and long-term debt will help some of the forward momentum of the company. And last our other product lines, Watersaver and Swimming pool divisions are being emphasized less than the NanoChem division, while maintaining the long-term opportunities and limiting cash and management costs. Swimming pool sales are steady and we think that a new distributor in Western Europe will have a significant upward effect on pool division revenue over the next year. Watersaver sales are little more difficult to predict. More continuing efforts in Turkey, Morocco, Chile, Senegal, parts of East Asia, Australia, United States, small sales are expected at intervals through the year. The drought last summer has continued in the Colorado River Basin resulting in several small sales this spring and dozens of increase some with quite large potential, the successful trial in 2012 on Lake Sahara, in Las Vegas has provided concrete evidence that Watersaver works safely in the U.S. Southwest, pays water at low costs to the water owner. The text of this speech will be available on our website by Friday the 16. And e-mail copies can be requested immediately from Jason Bloom at Jason@flexiblesolutions.com or by telephone at 1800-661-3560. Thank you, Charissa, the floor is now open for questions. : Our sugar to aspartic acid plant in Alberta is now in operation. Our corporate policy is not to provide volume information or details of production. Our revenue is ongoing. We’re depreciating the factory and the Taber production team is focused on continuous increases in quantity, efficiency and quality. Aspartic acid from the Taber plant is shipped to our Peru, Illinois plant, where it is converted to polyaspartic acid for onward sale through our customers. TPA is used in agriculture to increase crop yield, the method of action is through limiting crystal embryo growth between fertilizer ions in the soil, when embryonic crystals are preventing from transforming into fully crystalline form by TPA, the fertilizer remains available to plants further into the growing season. The firm but light attraction between the TPA and the fertilizer ions also prevents fertilizer run off, keeping fertilizer easily available to crops results and better yield with the same level of fertilization. In North America alone the wholesale market for this is estimated at over $2 billion a year and most crops are able to use TPA profitably. Sales into agriculture grew quickly in 2011 and that strength has carried forward into 2013 but with the dip in the growth rate we attribute to the weather conditions in 2012 and early 2013. Our internal sales team is focused on supporting the best distributors, helping the others improve their performance and identifying additional distribution opportunities. TPA in agriculture is a unique economic situation for all links availed to end user chain. With many products the economic value was good for all but one party most commonly the farmer who has asked to accept the soft values instead of the cash profit accruing to the other parties, not so for TPA. FSI earns a fair profit on manufacturing, distribution earns strong but selling to dealers. Dealers make good profit selling to growers, if the grower still earns a great profit from the extra crops he produces with the same land and fertilizer program more than 300 trials over the last 15 years have demonstrated that investing $20 an acre in TPA can payback 60 to 100 or more. We believe this is an excellent basis for long-term growth in sales. TPA is also a biodegradable way of treating oil filled water for net pipes from plugging with mineral scale. Our sales into this market are well-established and growing steadily, they can be subject to temporary reductions when production is cutback or when platforms are shut down for reconditioning. Industrially, TPA is used in high-quality dish and laundry detergents that wish to be as biodegradable as possible. TPA is also an excellent choice for water treatment processes like customers who need to accept the small cost premium compared to polyacrylates, we have recently identified two additional industrial users with significant volume potential and will be conducting trials and beginning sales over the next six to eight quarters. Q3, Q4 2014 we’re optimistic. Our products are best in the class and they’re due to less volatility in world economic conditions compared to last year. We are not able to meet specific growth predictions because even with loyal growing customers of new sales opportunities in multiple markets, our sales, our purchase order by purchase order rather than long-term uptake contracts, it’s unrealistic to give numerical guidance under these conditions. We are comfortable predicting that full-year 2013 will be higher than 2012. Our best estimate is that Q3 will resemble the year earlier period with some growth and that in Q4 we may say, it’s faster year-over-year growth due to pre-ordering of agricultural TPA for the 2014 season. In 2014, we expect additional growth in revenue, with the usual lumpy quarter – because of customer behavior, weather, crop pricing and the other variables of our business. So the highlights of the financial results; sales for the quarter increased 30% to $4.88 million compared with $3.76 million for Q2 2012. The result is a gain of $70,000 or $0.01 per share in the 2013 period compared to a loss of $466,000 or $0.04 in the year earlier. Now that the Alberta factory is operating, biomass expense is no longer given in the news release. Instead, due to the generation of revenue from that facility expenses are included in operations. In addition, depreciation of the factory has begun and is being applied against income from all divisions. Our working capital is very adequate. Our sales tend to be larger during the first half of the year resulting in higher accounts receivable, lower cash and lower inventory that reverts the other one to the second half. The company’s growth is supported by its mostly unused $6.4 million line of credit with the Chicago base bank. Because of the outside effects of depreciation, stock option expenses and one-time items on the financials of the small companies, FSI provides a non-GAAP measure useful for judging year-over-year success. Operating cash flow is arrived at by removing depreciation, option expenses and one-time items from the statement of operations. For the first half of 2013, the operating cash flow was $905,000 and $0.07 a share compared to $1.17 million and $0.09 a share in 2012. Detailed information on how to reconcile GAAP with non-GAAP numbers is included in our news release of yesterday August 14. Net income and income tax as a result of our January 1, 2013 change in accounting for Taber, Alberta operations and its historical losses, our taxable income is greatly reduced until all the historical losses for Taber are applied against income. We suggest that reviewing the quarterly and annual changes in current assets, current liabilities and long-term debt will help some of the forward momentum of the company. And last our other product lines, Watersaver and Swimming pool divisions are being emphasized less than the NanoChem division, while maintaining the long-term opportunities and limiting cash and management costs. Swimming pool sales are steady and we think that a new distributor in Western Europe will have a significant upward effect on pool division revenue over the next year. Watersaver sales are little more difficult to predict. More continuing efforts in Turkey, Morocco, Chile, Senegal, parts of East Asia, Australia, United States, small sales are expected at intervals through the year. The drought last summer has continued in the Colorado River Basin resulting in several small sales this spring and dozens of increase some with quite large potential, the successful trial in 2012 on Lake Sahara, in Las Vegas has provided concrete evidence that Watersaver works safely in the U.S. Southwest, pays water at low costs to the water owner. The text of this speech will be available on our website by Friday the 16. And e-mail copies can be requested immediately from Jason Bloom at Jason@flexiblesolutions.com or by telephone at 1800-661-3560. Thank you, Charissa, the floor is now open for questions. : Our sugar to aspartic acid plant in Alberta is now in operation. Our corporate policy is not to provide volume information or details of production. Our revenue is ongoing. We’re depreciating the factory and the Taber production team is focused on continuous increases in quantity, efficiency and quality. Aspartic acid from the Taber plant is shipped to our Peru, Illinois plant, where it is converted to polyaspartic acid for onward sale through our customers. TPA is used in agriculture to increase crop yield, the method of action is through limiting crystal embryo growth between fertilizer ions in the soil, when embryonic crystals are preventing from transforming into fully crystalline form by TPA, the fertilizer remains available to plants further into the growing season. The firm but light attraction between the TPA and the fertilizer ions also prevents fertilizer run off, keeping fertilizer easily available to crops results and better yield with the same level of fertilization. In North America alone the wholesale market for this is estimated at over $2 billion a year and most crops are able to use TPA profitably. Sales into agriculture grew quickly in 2011 and that strength has carried forward into 2013 but with the dip in the growth rate we attribute to the weather conditions in 2012 and early 2013. Our internal sales team is focused on supporting the best distributors, helping the others improve their performance and identifying additional distribution opportunities. TPA in agriculture is a unique economic situation for all links availed to end user chain. With many products the economic value was good for all but one party most commonly the farmer who has asked to accept the soft values instead of the cash profit accruing to the other parties, not so for TPA. FSI earns a fair profit on manufacturing, distribution earns strong but selling to dealers. Dealers make good profit selling to growers, if the grower still earns a great profit from the extra crops he produces with the same land and fertilizer program more than 300 trials over the last 15 years have demonstrated that investing $20 an acre in TPA can payback 60 to 100 or more. We believe this is an excellent basis for long-term growth in sales. TPA is also a biodegradable way of treating oil filled water for net pipes from plugging with mineral scale. Our sales into this market are well-established and growing steadily, they can be subject to temporary reductions when production is cutback or when platforms are shut down for reconditioning. Industrially, TPA is used in high-quality dish and laundry detergents that wish to be as biodegradable as possible. TPA is also an excellent choice for water treatment processes like customers who need to accept the small cost premium compared to polyacrylates, we have recently identified two additional industrial users with significant volume potential and will be conducting trials and beginning sales over the next six to eight quarters. Q3, Q4 2014 we’re optimistic. Our products are best in the class and they’re due to less volatility in world economic conditions compared to last year. We are not able to meet specific growth predictions because even with loyal growing customers of new sales opportunities in multiple markets, our sales, our purchase order by purchase order rather than long-term uptake contracts, it’s unrealistic to give numerical guidance under these conditions. We are comfortable predicting that full-year 2013 will be higher than 2012. Our best estimate is that Q3 will resemble the year earlier period with some growth and that in Q4 we may say, it’s faster year-over-year growth due to pre-ordering of agricultural TPA for the 2014 season. In 2014, we expect additional growth in revenue, with the usual lumpy quarter – because of customer behavior, weather, crop pricing and the other variables of our business. So the highlights of the financial results; sales for the quarter increased 30% to $4.88 million compared with $3.76 million for Q2 2012. The result is a gain of $70,000 or $0.01 per share in the 2013 period compared to a loss of $466,000 or $0.04 in the year earlier. Now that the Alberta factory is operating, biomass expense is no longer given in the news release. Instead, due to the generation of revenue from that facility expenses are included in operations. In addition, depreciation of the factory has begun and is being applied against income from all divisions. Our working capital is very adequate. Our sales tend to be larger during the first half of the year resulting in higher accounts receivable, lower cash and lower inventory that reverts the other one to the second half. The company’s growth is supported by its mostly unused $6.4 million line of credit with the Chicago base bank. Because of the outside effects of depreciation, stock option expenses and one-time items on the financials of the small companies, FSI provides a non-GAAP measure useful for judging year-over-year success. Operating cash flow is arrived at by removing depreciation, option expenses and one-time items from the statement of operations. For the first half of 2013, the operating cash flow was $905,000 and $0.07 a share compared to $1.17 million and $0.09 a share in 2012. Detailed information on how to reconcile GAAP with non-GAAP numbers is included in our news release of yesterday August 14. Net income and income tax as a result of our January 1, 2013 change in accounting for Taber, Alberta operations and its historical losses, our taxable income is greatly reduced until all the historical losses for Taber are applied against income. We suggest that reviewing the quarterly and annual changes in current assets, current liabilities and long-term debt will help some of the forward momentum of the company. And last our other product lines, Watersaver and Swimming pool divisions are being emphasized less than the NanoChem division, while maintaining the long-term opportunities and limiting cash and management costs. Swimming pool sales are steady and we think that a new distributor in Western Europe will have a significant upward effect on pool division revenue over the next year. Watersaver sales are little more difficult to predict. More continuing efforts in Turkey, Morocco, Chile, Senegal, parts of East Asia, Australia, United States, small sales are expected at intervals through the year. The drought last summer has continued in the Colorado River Basin resulting in several small sales this spring and dozens of increase some with quite large potential, the successful trial in 2012 on Lake Sahara, in Las Vegas has provided concrete evidence that Watersaver works safely in the U.S. Southwest, pays water at low costs to the water owner. The text of this speech will be available on our website by Friday the 16. And e-mail copies can be requested immediately from Jason Bloom at Jason@flexiblesolutions.com or by telephone at 1800-661-3560. Thank you, Charissa, the floor is now open for questions. : Our sugar to aspartic acid plant in Alberta is now in operation. Our corporate policy is not to provide volume information or details of production. Our revenue is ongoing. We’re depreciating the factory and the Taber production team is focused on continuous increases in quantity, efficiency and quality. Aspartic acid from the Taber plant is shipped to our Peru, Illinois plant, where it is converted to polyaspartic acid for onward sale through our customers. TPA is used in agriculture to increase crop yield, the method of action is through limiting crystal embryo growth between fertilizer ions in the soil, when embryonic crystals are preventing from transforming into fully crystalline form by TPA, the fertilizer remains available to plants further into the growing season. The firm but light attraction between the TPA and the fertilizer ions also prevents fertilizer run off, keeping fertilizer easily available to crops results and better yield with the same level of fertilization. In North America alone the wholesale market for this is estimated at over $2 billion a year and most crops are able to use TPA profitably. Sales into agriculture grew quickly in 2011 and that strength has carried forward into 2013 but with the dip in the growth rate we attribute to the weather conditions in 2012 and early 2013. Our internal sales team is focused on supporting the best distributors, helping the others improve their performance and identifying additional distribution opportunities. TPA in agriculture is a unique economic situation for all links availed to end user chain. With many products the economic value was good for all but one party most commonly the farmer who has asked to accept the soft values instead of the cash profit accruing to the other parties, not so for TPA. FSI earns a fair profit on manufacturing, distribution earns strong but selling to dealers. Dealers make good profit selling to growers, if the grower still earns a great profit from the extra crops he produces with the same land and fertilizer program more than 300 trials over the last 15 years have demonstrated that investing $20 an acre in TPA can payback 60 to 100 or more. We believe this is an excellent basis for long-term growth in sales. TPA is also a biodegradable way of treating oil filled water for net pipes from plugging with mineral scale. Our sales into this market are well-established and growing steadily, they can be subject to temporary reductions when production is cutback or when platforms are shut down for reconditioning. Industrially, TPA is used in high-quality dish and laundry detergents that wish to be as biodegradable as possible. TPA is also an excellent choice for water treatment processes like customers who need to accept the small cost premium compared to polyacrylates, we have recently identified two additional industrial users with significant volume potential and will be conducting trials and beginning sales over the next six to eight quarters. Q3, Q4 2014 we’re optimistic. Our products are best in the class and they’re due to less volatility in world economic conditions compared to last year. We are not able to meet specific growth predictions because even with loyal growing customers of new sales opportunities in multiple markets, our sales, our purchase order by purchase order rather than long-term uptake contracts, it’s unrealistic to give numerical guidance under these conditions. We are comfortable predicting that full-year 2013 will be higher than 2012. Our best estimate is that Q3 will resemble the year earlier period with some growth and that in Q4 we may say, it’s faster year-over-year growth due to pre-ordering of agricultural TPA for the 2014 season. In 2014, we expect additional growth in revenue, with the usual lumpy quarter – because of customer behavior, weather, crop pricing and the other variables of our business. So the highlights of the financial results; sales for the quarter increased 30% to $4.88 million compared with $3.76 million for Q2 2012. The result is a gain of $70,000 or $0.01 per share in the 2013 period compared to a loss of $466,000 or $0.04 in the year earlier. Now that the Alberta factory is operating, biomass expense is no longer given in the news release. Instead, due to the generation of revenue from that facility expenses are included in operations. In addition, depreciation of the factory has begun and is being applied against income from all divisions. Our working capital is very adequate. Our sales tend to be larger during the first half of the year resulting in higher accounts receivable, lower cash and lower inventory that reverts the other one to the second half. The company’s growth is supported by its mostly unused $6.4 million line of credit with the Chicago base bank. Because of the outside effects of depreciation, stock option expenses and one-time items on the financials of the small companies, FSI provides a non-GAAP measure useful for judging year-over-year success. Operating cash flow is arrived at by removing depreciation, option expenses and one-time items from the statement of operations. For the first half of 2013, the operating cash flow was $905,000 and $0.07 a share compared to $1.17 million and $0.09 a share in 2012. Detailed information on how to reconcile GAAP with non-GAAP numbers is included in our news release of yesterday August 14. Net income and income tax as a result of our January 1, 2013 change in accounting for Taber, Alberta operations and its historical losses, our taxable income is greatly reduced until all the historical losses for Taber are applied against income. We suggest that reviewing the quarterly and annual changes in current assets, current liabilities and long-term debt will help some of the forward momentum of the company. And last our other product lines, Watersaver and Swimming pool divisions are being emphasized less than the NanoChem division, while maintaining the long-term opportunities and limiting cash and management costs. Swimming pool sales are steady and we think that a new distributor in Western Europe will have a significant upward effect on pool division revenue over the next year. Watersaver sales are little more difficult to predict. More continuing efforts in Turkey, Morocco, Chile, Senegal, parts of East Asia, Australia, United States, small sales are expected at intervals through the year. The drought last summer has continued in the Colorado River Basin resulting in several small sales this spring and dozens of increase some with quite large potential, the successful trial in 2012 on Lake Sahara, in Las Vegas has provided concrete evidence that Watersaver works safely in the U.S. Southwest, pays water at low costs to the water owner. The text of this speech will be available on our website by Friday the 16. And e-mail copies can be requested immediately from Jason Bloom at Jason@flexiblesolutions.com or by telephone at 1800-661-3560. Thank you, Charissa, the floor is now open for questions. : Our sugar to aspartic acid plant in Alberta is now in operation. Our corporate policy is not to provide volume information or details of production. Our revenue is ongoing. We’re depreciating the factory and the Taber production team is focused on continuous increases in quantity, efficiency and quality. Aspartic acid from the Taber plant is shipped to our Peru, Illinois plant, where it is converted to polyaspartic acid for onward sale through our customers. TPA is used in agriculture to increase crop yield, the method of action is through limiting crystal embryo growth between fertilizer ions in the soil, when embryonic crystals are preventing from transforming into fully crystalline form by TPA, the fertilizer remains available to plants further into the growing season. The firm but light attraction between the TPA and the fertilizer ions also prevents fertilizer run off, keeping fertilizer easily available to crops results and better yield with the same level of fertilization. In North America alone the wholesale market for this is estimated at over $2 billion a year and most crops are able to use TPA profitably. Sales into agriculture grew quickly in 2011 and that strength has carried forward into 2013 but with the dip in the growth rate we attribute to the weather conditions in 2012 and early 2013. Our internal sales team is focused on supporting the best distributors, helping the others improve their performance and identifying additional distribution opportunities. TPA in agriculture is a unique economic situation for all links availed to end user chain. With many products the economic value was good for all but one party most commonly the farmer who has asked to accept the soft values instead of the cash profit accruing to the other parties, not so for TPA. FSI earns a fair profit on manufacturing, distribution earns strong but selling to dealers. Dealers make good profit selling to growers, if the grower still earns a great profit from the extra crops he produces with the same land and fertilizer program more than 300 trials over the last 15 years have demonstrated that investing $20 an acre in TPA can payback 60 to 100 or more. We believe this is an excellent basis for long-term growth in sales. TPA is also a biodegradable way of treating oil filled water for net pipes from plugging with mineral scale. Our sales into this market are well-established and growing steadily, they can be subject to temporary reductions when production is cutback or when platforms are shut down for reconditioning. Industrially, TPA is used in high-quality dish and laundry detergents that wish to be as biodegradable as possible. TPA is also an excellent choice for water treatment processes like customers who need to accept the small cost premium compared to polyacrylates, we have recently identified two additional industrial users with significant volume potential and will be conducting trials and beginning sales over the next six to eight quarters. Q3, Q4 2014 we’re optimistic. Our products are best in the class and they’re due to less volatility in world economic conditions compared to last year. We are not able to meet specific growth predictions because even with loyal growing customers of new sales opportunities in multiple markets, our sales, our purchase order by purchase order rather than long-term uptake contracts, it’s unrealistic to give numerical guidance under these conditions. We are comfortable predicting that full-year 2013 will be higher than 2012. Our best estimate is that Q3 will resemble the year earlier period with some growth and that in Q4 we may say, it’s faster year-over-year growth due to pre-ordering of agricultural TPA for the 2014 season. In 2014, we expect additional growth in revenue, with the usual lumpy quarter – because of customer behavior, weather, crop pricing and the other variables of our business. So the highlights of the financial results; sales for the quarter increased 30% to $4.88 million compared with $3.76 million for Q2 2012. The result is a gain of $70,000 or $0.01 per share in the 2013 period compared to a loss of $466,000 or $0.04 in the year earlier. Now that the Alberta factory is operating, biomass expense is no longer given in the news release. Instead, due to the generation of revenue from that facility expenses are included in operations. In addition, depreciation of the factory has begun and is being applied against income from all divisions. Our working capital is very adequate. Our sales tend to be larger during the first half of the year resulting in higher accounts receivable, lower cash and lower inventory that reverts the other one to the second half. The company’s growth is supported by its mostly unused $6.4 million line of credit with the Chicago base bank. Because of the outside effects of depreciation, stock option expenses and one-time items on the financials of the small companies, FSI provides a non-GAAP measure useful for judging year-over-year success. Operating cash flow is arrived at by removing depreciation, option expenses and one-time items from the statement of operations. For the first half of 2013, the operating cash flow was $905,000 and $0.07 a share compared to $1.17 million and $0.09 a share in 2012. Detailed information on how to reconcile GAAP with non-GAAP numbers is included in our news release of yesterday August 14. Net income and income tax as a result of our January 1, 2013 change in accounting for Taber, Alberta operations and its historical losses, our taxable income is greatly reduced until all the historical losses for Taber are applied against income. We suggest that reviewing the quarterly and annual changes in current assets, current liabilities and long-term debt will help some of the forward momentum of the company. And last our other product lines, Watersaver and Swimming pool divisions are being emphasized less than the NanoChem division, while maintaining the long-term opportunities and limiting cash and management costs. Swimming pool sales are steady and we think that a new distributor in Western Europe will have a significant upward effect on pool division revenue over the next year. Watersaver sales are little more difficult to predict. More continuing efforts in Turkey, Morocco, Chile, Senegal, parts of East Asia, Australia, United States, small sales are expected at intervals through the year. The drought last summer has continued in the Colorado River Basin resulting in several small sales this spring and dozens of increase some with quite large potential, the successful trial in 2012 on Lake Sahara, in Las Vegas has provided concrete evidence that Watersaver works safely in the U.S. Southwest, pays water at low costs to the water owner. The text of this speech will be available on our website by Friday the 16. And e-mail copies can be requested immediately from Jason Bloom at Jason@flexiblesolutions.com or by telephone at 1800-661-3560. Thank you, Charissa, the floor is now open for questions.

Thank you, sir. We will now begin the question-and-answer session. (Operator Instructions) Our first question comes from Bill Gregozeski with Mont Blanc Capital. Please go ahead sir. William R. Gregozeski – Mont Blanc Capital Management AG: Hey, Dan; could you talk a little about the new distributor in Australia or expand on that a little bit? Daniel O’Brien: Well, sorry Bill, it’s a new distributor in Western Europe. William R. Gregozeski – Mont Blanc Capital Management AG: Sorry. Daniel O’Brien: And as a result of previous distributor being purchased by the current one and the new group is much larger, and it is able to cover more countries better. It’s not my right to give out their name but we are quite satisfied with who they are? William R. Gregozeski – Mont Blanc Capital Management AG: Okay, all right. And then to spend I know you don’t like talking much about Taber, but it’s been about two years since you’ve started commercial production there. Is there anything you can provide us to, I mean what kind of timeline we’re looking at for this being to get ramped up? I mean is it something that is just a matter of it will take a year or I mean are we looking at years of slow incremental increases? Daniel B. O’Brien: Well, that was asked very, very nicely. But still there wasn’t in the speech about Taber and I’m just not going to go further into it. Thank you.

(Operator Instructions) And our next question comes from Steve Neri with Gilford Securities. Please go ahead. Steve Neri – Gilford Securities: Hi, good morning. Dan, I was curious in terms of what your plans are to essentially get more attention to the stock? We’ve seen very light trading volume on this for quite some time and it seems like quarter-after-quarter, we see that and I haven’t really seen any comments in terms of what type of promotional marketing effort that we will see to have more investment banking firms take a look at this, any types of road shows? I know I haven’t seen anything in terms of IPOs, which is fine, which is great. But I was just curious in terms of what we’re going to doing to get more attention on this stock? Daniel O’Brien: Well, Steve it’s an interesting question. We maintain an internal Investor Relations team Mr. Bloom and myself. We do travel expensively each year. We do not mount promotional tours for the simple reason that temporary promotion without the numbers of profits and growth back them up or usually not good for anybody involved. We are quite happy with the recent numbers and the better our numbers are, they more often we go to healthy – about them for a round answer. Steve Neri – Gilford Securities: That’s pretty good. I appreciate the numbers as well and I think you guys are doing a pretty good job quarter-over-quarter growing. I just would like to see some prospects of that in the future, so that I can bring more customers into this myself. Daniel O’Brien: I appreciate it. Perhaps you and I, and Jason could take this one to private line at sometime to put stock. Steve Neri – Gilford Securities: It sounds good. I’ll reach out to them. Daniel O’Brien: Thank you.

And our next question is from [CJ Philip], Private Investor. Please go ahead.

At least you could try to make last confusion with these – Canadian so called water companies. If you could do a little bit of that, it will really, really help? Daniel O’Brien: Thanks for the suggestion, little bit difficult of course because everybody puts their best foot forward and sometime the foot has got a lot of makeup on it. We don’t do that of course.

I understand. Daniel O’Brien: Yeah, I guess the other point is, we’re not Canadian.

Well, I know, which you have a Canadian address? Daniel O’Brien: Yeah. All right, maybe you could – if you’ve got a chance…

I’m doing everything I can. I don’t know. Daniel O’Brien: Okay. Jason and I will have a quick look and see what we can find as people supposedly competing with us and we’ll see if we can differentiate a little bit.

Well, that competition only in the stance that these guys, where it was swindle. They were popping these water companies that were called water companies and you guys appear to be sort of a water company and they were doing it without any basis for the stock whatsoever. And I know there was some confusion beginning about two and half years ago. Daniel O’Brien: Well, I’m really sorry about that. I actually wasn’t even aware of it, but we will do what we can do to keep coming forward as the Company with large – for a small company and grow that actually result in profits and products that you can buy from us and rub between your fitness.

Thank you, sir. Daniel O’Brien: I appreciate it.

Our next question is from (inaudible). Please go ahead.

Good morning, Dan. I wondered if you could add a little color to the sales of the Watersaver line, and at the trial in Nevada, I read about that very successful our most of the customers, the current customer base, private individuals that are treating private reservoirs or is it kind of mix between private individuals and entities that are protecting a municipal water supply, how is that now and how is it looking going forward? Daniel B. O’Brien: Well that’s a quite few questions how about that for just expand a little bit on Watersaver for the only customer that I’m able to mention by name is Lake Sahara where we did the trial, they are now happy customers with automated solar power spreading mechanisms, sales this year have been all to private entities enquiries have been mixed about 50/50 between private and public or quasi public companies. Private of course as you know private people can make decisions without committees and long-term studies, but they are smaller dollar values in most cases. The public intuitions that we are going after control very large quantities of water, take very long times to make their decisions but on the flip side they rarely fail to pay their bills and they are very sticky because once they have decided to do something they tend to continue.

Right I’m a long-term shareholder and have recommended this to the clients and we appreciate your continued attention that TPA has been nice not the reason we initially bought into the company we are enjoying the nano-cam divisions profit I appreciate your time. Thank you. Daniel O’Brien: Thank you.

(Operator Instruction) And there are no further questions, please continue with any closing remarks. Daniel O’Brien: Thank you all for joining me this morning. I look forward to talking again in three months and to doing as much I can for you the shareholders to improve the quality and price of our company. Thank you very much and good bye.

Ladies and gentlemen this concludes the second quarter 2013 financials conference call. This conference will be available for replay after 9:40 pacific time today through 9:15 at midnight pacific time. You may access the replay system at any time by dialing 1800-406-7325 and entering the access code of 463-4021. Thank you for your participation, you may now disconnect.