NYSE: FSI

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

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

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

2

In
June 2023, 317 Mendota LLC (“317 Mendota”) was created to purchase real estate and the Company has 80% ownership with an
unrelated party (NCI) owning the remaining 20%. The Company occupied part of the building owned by 317 Mendota and rented out the remaining
portion of the building. In October 2025, the Company sold the building and will continue to rent from the new owners (see Note 6). For
financial reporting purposes, the assets, liabilities and earnings of 317 Mendota are consolidated into these financial statements. The
NCI’s ownership interest in 317 Mendota is recorded in non-controlling interests in these consolidated financial statements.

In 2025, Pana Chem Solutions Inc.
(“Pana Chem”) set up a manufacturing facility in Panama for production of NanoChem Legacy products. Shipments started in January
2026.

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

Our
website is www.flexiblesolutions.com

Our
Products

Thermal
Polyaspartates (“TPAs”)

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

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

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

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

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

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

3

Food
and Nutritional Materials

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

HEATSAVR®

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

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

WATERSAVR®

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

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

Tests
have indicated that WATERSAVR®:

●
Reduces
daily water evaporation as much as 54%;

●
Reduces
monthly water evaporation as much as 37%;

●
Is
odorless;

●
Has
no effect on invertebrates or vertebrates;

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

●
Is
biodegradable.

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

4

Principal
Customers

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

Year Ended December 31,

2025
2024

Company A
$ 8,817,331
$ 8,050,462

Company B
$ 6,169,277
$ 8,235,394

Company C
$ 3,068,991
$ 4,493,455

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

Year Ended December 31,

2025
2024

Company A
$ 6,652,611
$ 5,377,088

Company B
$ 980,638 *
$ 1,866,645

Company D
$ 170,148 *
$ 1,189,157

Company E
$ 1,866,972
$ -

*Less
than 10% in that period

Competition

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

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

●
Biodegradability
compared to competing oil field chemicals;

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

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

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

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

Manufacturing

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

5

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

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

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

In 2025, Pana Chem Solutions
Inc. started building out a manufacturing facility in Panama for the production of NanoChem Legacy products, such as agricultural and
polymer products, increasing capacity for food and nutritional materials in Peru, IL. Shipments started leaving the Panama facility in
January 2026.

In
2025, ENP Investments, LLC signed a lease for manufacturing space with the new owners of the building formerly held by 317 Mendota, LLC.
See Notes 3 and 6.

Government
Regulations

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

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

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

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

Proprietary
Rights

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

Research
and Development

We
spent $615,292 during the year ended December 31, 2025 and $329,952 during year ended December 31, 2024 on research and development.

6

Employees

As
of December 31, 2025, we had 78 employees, including one officer, 20 sales and customer support personnel, and 57 manufacturing personnel.
None of our employees are represented by a labor union and we have not experienced any work stoppages to date.