{"url_path":"/sec/fsi/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 Financial Statements.**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1069394/0001493152-26-023701-index.html","accession_number":"0001493152-26-023701","cik":"0001069394","ticker":"FSI","issuer_name":"FLEXIBLE SOLUTIONS INTERNATIONAL INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/1069394/0001493152-26-023701-index.html","primary_entity_key":"0001069394","primary_entity_name":"FLEXIBLE SOLUTIONS INTERNATIONAL INC"},"word_count":6123,"has_tables":true,"body_markdown":"**Item\n1. Financial Statements.**\n\n \n\n**FLEXIBLE\nSOLUTIONS INTERNATIONAL, INC.**\n\n**CONDENSED\nINTERIM CONSOLIDATED BALANCE SHEETS**\n\n**(U.S.\nDollars - Unaudited)**\n\n \n\n  \nMarch\n31, 2026  \nDecember\n31, 2025 \n\nAssets \n    \n   \n\nCurrent \n    \n   \n\nCash \n$5,821,779  \n$6,625,748 \n\nTerm deposits (Note 2) \n 652,810  \n 1,386,150 \n\nAccounts receivable, net\n(Note 4) \n 13,390,388  \n 12,621,901 \n\nInventories (Note 5) \n 12,522,356  \n 10,541,637 \n\nPrepaid expenses and deposits \n 1,436,211  \n 1,326,637 \n\nProperty\nheld for sale \n 425,000  \n 425,000 \n\nTotal current assets \n 34,248,544  \n 32,927,073 \n\nProperty, equipment and leaseholds, net (Note 6) \n 17,906,361  \n 16,142,092 \n\nRight of use assets, net\n(Note 3) \n 3,678,552  \n 3,790,687 \n\nIntangible assets \n 1,920,000  \n 1,960,000 \n\nLong term deposits \n 1,643,595  \n 2,423,928 \n\nInvestments (Note 7) \n 2,000,236  \n 2,054,324 \n\nGoodwill \n 2,534,275  \n 2,534,275 \n\nTotal\nAssets \n$63,931,563  \n$61,832,379 \n\n  \n    \n   \n\nLiabilities \n    \n   \n\nCurrent \n    \n   \n\nAccounts payable \n$2,585,356  \n$2,221,411 \n\nAccrued liabilities \n 171,097  \n 501,175 \n\nDeferred revenue \n 132,881  \n 124,944 \n\nIncome taxes payable \n 4,803,244  \n 5,061,317 \n\nShort term lines of credit\n(Note 8) \n 4,796,444  \n 2,148,386 \n\nCurrent portion of lease\nliabilities (Note 3) \n 466,972  \n 299,445 \n\nCurrent\nportion of long-term debt (Note 9) \n 414,205  \n 396,961 \n\nTotal current liabilities \n 13,370,199  \n 10,753,639 \n\nRight of use liabilities,\nnet (Note 3) \n 3,730,815  \n 3,923,938 \n\nDeferred income tax liability \n 277,417  \n 277,417 \n\nLong\nterm debt (Note 9) \n 3,925,819  \n 4,044,699 \n\nTotal\nLiabilities \n 21,304,250  \n 18,999,693 \n\nCommitments\nand Contingencies (Notes 8 and 9) \n -   \n -  \n\n  \n    \n   \n\nStockholders’ Equity \n    \n   \n\nCapital stock (Note 11) \n    \n   \n\nAuthorized: 50,000,000 common shares with a\npar value of $0.001 each; 1,000,000 preferred shares with a par value of $0.01 each Issued and outstanding: 12,737,498 (December\n31, 2025: 12,722,498) common shares \n$12,738  \n$12,723 \n\nCapital in excess of par value \n 20,128,846  \n 19,895,935 \n\nAccumulated other comprehensive\nloss \n (434,170) \n (347,887)\n\nAccumulated\nearnings \n 19,107,248  \n 19,348,668 \n\nTotal stockholders’\nequity – Flexible Solutions International Inc. \n 38,814,662  \n 38,909,439 \n\nNon-controlling\ninterests (Note 12) \n 3,812,651  \n 3,923,247 \n\nTotal\nStockholders’ Equity \n 42,627,313  \n 42,832,686 \n\nTotal\nLiabilities and Stockholders’ Equity \n$63,931,563  \n$61,832,379 \n\n \n\n—\nSee Notes to Unaudited Condensed Interim Consolidated Financial Statements —\n\n \n\n3\n\n \n\n \n\n**FLEXIBLE\nSOLUTIONS INTERNATIONAL, INC.**\n\n**CONDENSED\nINTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)**\n\n**(U.S.\nDollars — Unaudited)**\n\n \n\n  \nThree Months Ended March 31, \n\n  \n2026  \n2025 \n\nSales \n    \n   \n\nProducts \n$8,296,997  \n$7,473,692 \n\nCost of sales \n 6,407,691  \n 5,522,128 \n\nGross profit \n 1,889,306  \n 1,951,564 \n\nOperating expenses \n    \n   \n\nProfessional fees \n 69,295  \n 262,633 \n\nResearch and development \n 116,533  \n 106,801 \n\nSelling, general, and administrative \n 762,357  \n 756,050 \n\nWages,\nadministrative salaries and benefits \n 1,027,086  \n 895,237 \n\nTotal\noperating expenses \n 1,975,271  \n 2,020,721 \n\nOperating loss \n (85,965) \n (69,157)\n\nNon-operating income (expense) \n    \n   \n\n(Loss) income from investments\n(Note 7) \n (54,088) \n 63,925 \n\nInterest expense \n (134,069) \n (198,019)\n\nInterest\nincome \n 37,446  \n 49,573 \n\nTotal\nnon-operating expense \n (150,711) \n (84,521)\n\nLoss before income tax \n (236,676) \n (153,678)\n\nIncome taxes \n    \n   \n\nCurrent\nincome tax expense \n (46,681) \n (110,363)\n\nNet\nloss \n (283,357) \n (264,041)\n\nNet\nloss (income) attributable to non-controlling interests \n 41,937  \n (13,693)\n\nNet\nloss attributable to Flexible Solutions International Inc. \n$(241,420) \n$(277,734)\n\n  \n    \n   \n\nLoss per share (basic) \n$(0.02) \n$(0.02)\n\nLoss per share (diluted) \n$(0.02) \n$(0.02)\n\nWeighted average number of common shares (basic) \n 12,735,609  \n 12,587,476 \n\nWeighted average number of common shares (diluted) \n 12,735,609  \n 12,587,476 \n\n  \n    \n   \n\nOther comprehensive income\n(loss): \n    \n   \n\nNet loss \n$(283,357) \n$(264,041)\n\nUnrealized\ngain (loss) on foreign currency translations \n (86,283) \n 188,840 \n\nTotal comprehensive loss \n (369,640) \n (75,201)\n\nComprehensive\nloss (income) – non-controlling interests \n 41,937  \n (13,693)\n\nComprehensive\nloss attributable to controlling interest \n$(327,703) \n$(88,894)\n\n \n\n—\nSee Notes to Unaudited Condensed Interim Consolidated Financial Statements —\n\n \n\n4\n\n \n\n \n\n**FLEXIBLE\nSOLUTIONS INTERNATIONAL, INC.**\n\n**CONDENSED\nINTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS**\n\n**(U.S.\nDollars — Unaudited)**\n\n \n\n  \n   \n  \n\n  \nThree\nMonths Ended March 31, \n\n  \n2026  \n2025 \n\n  \n   \n  \n\nOperating activities \n    \n   \n\nNet loss for\nthe period \n$(283,357) \n$(264,041)\n\nAdjustments to reconcile\nnet income (loss) to net cash used in operating activities: \n    \n   \n\nStock based compensation \n 109,773  \n 97,920 \n\nDepreciation and amortization \n 509,495  \n 465,198 \n\nNon cash operating lease expense \n 86,539  \n - \n\nLoss (income) from investments \n 54,088  \n (63,925)\n\n  \n    \n   \n\nChanges in operating assets and liabilities: \n    \n   \n\nAccounts receivable \n (768,487) \n (280,391)\n\nInventories \n (1,980,719) \n (237,544)\n\nPrepaid expenses and deposits \n (109,574) \n 3,569 \n\nLong term deposits \n 780,333  \n (259,023)\n\nAccounts payable \n 363,946  \n 107,985 \n\nAccrued liabilities \n (330,078) \n (223,183)\n\nDeferred\nrevenue \n 7,937  \n (1,222)\n\nIncome taxes payable \n (258,073) \n 110,363 \n\n  \n    \n   \n\nCash\nused in operating activities \n (1,818,177) \n (544,294)\n\n  \n    \n   \n\nInvesting activities \n    \n   \n\nMaturities of term deposits, net \n 733,340  \n 1,019,760 \n\nPurchase\nof property, equipment and leaseholds \n (2,233,765) \n (354,121)\n\n  \n    \n   \n\nCash\nprovided by (used in) investing activities \n (1,500,425) \n 665,639\n\n  \n    \n   \n\nFinancing activities \n    \n   \n\nProceeds from short-term lines of credit, net \n 2,648,058  \n 1,938,670 \n\nRepayment of long-term\ndebt \n (101,636) \n (616,343)\n\nDistribution to non-controlling\ninterest \n (68,659) \n - \n\nDistribution received upon dissolution of subsidiary \n 72,953  \n - \n\nProceeds\nfrom shares issued upon exercise of stock options \n 50,200  \n 381,690 \n\n  \n    \n   \n\nCash\nprovided by financing activities \n 2,600,916  \n 1,704,017 \n\n  \n    \n   \n\nEffect of exchange rate\nchanges on cash \n (86,283) \n 188,840 \n\n  \n    \n   \n\nIncrease (decrease) in cash \n (803,969) \n 2,014,202 \n\nCash, beginning of year \n 6,625,748  \n 7,631,055 \n\n  \n    \n   \n\nCash, end of period \n$5,821,779  \n$9,645,257 \n\n \n\n—\nSee Notes to Unaudited Condensed Interim Consolidated Financial Statements —\n\n \n\n5\n\n \n\n \n\n**FLEXIBLE\nSOLUTIONS INTERNATIONAL, INC.**\n\n**CONDENSED\nINTERIM Consolidated Statements of Stockholders’ Equity**\n\n**(U.S.\nDollars – Unaudited)**\n\n \n\n  \n   \n   \n   \n   \n   \n   \n   \n  \n\n  \nShares  \nCapital\nStock  \n\n**Capital\nin**\n\n**Excess\nof**\n\n**Par\nValue**\n  \n\n**Accumulated**\n\n**Earnings**\n  \n\n**Accumulated\nOther**\n\n**Comprehensive**\n\n**Loss**\n  \nTotal  \n\n**Non-**\n\n**Controlling\nInterests**\n  \n\n**Total**\n\n**Stockholders’**\n\n**Equity**\n \n\n  \n   \n   \n   \n   \n   \n   \n   \n  \n\nBalance December 31, 2025 \n 12,722,498  \n$12,723  \n$19,895,935  \n$19,348,668  \n$(347,887) \n$38,909,439  \n$3,923,247  \n$   42,832,686 \n\nTranslation adjustment \n —  \n —  \n —  \n —  \n (86,283) \n (86,283) \n —  \n (86,283)\n\nNet income (loss) \n —  \n —  \n —  \n (241,420) \n —  \n (241,420) \n (41,937) \n (283,357)\n\nDistribution to noncontrolling interest \n —  \n —  \n —  \n —  \n —  \n —  \n (68,659) \n (68,659)\n\nDistribution received upon dissolution of subsidiary \n    \n    \n \n72,953\n  \n   \n    \n 72,953  \n    \n 72,953 \n\nCommon stock issued upon exercise of options \n 15,000  \n 15  \n 50,185  \n —  \n —  \n 50,200  \n —  \n 50,200 \n\nStock-based compensation \n —  \n —  \n 109,773  \n —  \n —  \n 109,773  \n —  \n 109,773 \n\n  \n    \n    \n    \n    \n    \n    \n    \n   \n\nBalance March 31, 2026 \n 12,737,498  \n$12,738  \n$20,128,846  \n$19,107,248  \n$(434,170) \n$38,814,662  \n$3,812,651  \n$42,627,313 \n\n \n\n—\nSee Notes to Unaudited Condensed Interim Consolidated Financial Statements —\n\n \n\n6\n\n \n\n \n\n**FLEXIBLE\nSOLUTIONS INTERNATIONAL, INC.**\n\n**CONDENSED\nINTERIM Consolidated Statements of Stockholders’ Equity**\n\n**(U.S.\nDollars – Unaudited)**\n\n \n\n  \nShares  \nCapital\nStock  \n\n**Capital\nin**\n\n**Excess\nof**\n\n**Par\nValue**\n  \n\n**Accumulated**\n\n**Earnings**\n  \n\n**Other**\n\n**Comprehensive**\n\n**Loss**\n  \nTotal  \n\n**Non-**\n\n**Controlling\nInterests**\n  \n\n**Total**\n\n**Stockholders’**\n\n**Equity**\n \n\n  \n   \n   \n   \n   \n   \n   \n   \n  \n\nBalance December 31, 2024  \n 12,515,532  \n$12,516  \n$18,789,915  \n$19,836,527  \n$(606,986) \n$38,031,972  \n$3,334,054  \n$   41,366,026 \n\nBalance \n 12,515,532  \n$12,516  \n$18,789,915  \n$19,836,527  \n$(606,986) \n$38,031,972  \n$3,334,054  \n$   41,366,026 \n\nTranslation adjustment  \n —  \n —  \n —  \n —  \n 188,840  \n 188,840  \n —  \n 188,840 \n\nNet income (loss)  \n —  \n —  \n —  \n (277,734) \n —  \n (277,734) \n 13,693  \n (264,041)\n\n  \n    \n    \n    \n    \n    \n    \n    \n   \n\nCommon stock issued upon exercise of options  \n 132,000  \n 132  \n 381,558  \n —  \n —  \n 381,690  \n —  \n 381,690 \n\nStock-based compensation  \n —  \n —  \n 97,920  \n —  \n —  \n 97,920  \n —  \n 97,920 \n\n  \n    \n    \n    \n    \n    \n    \n    \n   \n\nBalance March 31, 2025  \n 12,647,532  \n$12,648  \n$19,269,393  \n$19,558,793  \n$(418,146) \n$38,422,688  \n$3,347,747  \n$41,770,435 \n\nBalance \n 12,647,532  \n$12,648  \n$19,269,393  \n$19,558,793  \n$(418,146) \n$38,422,688  \n$3,347,747  \n$41,770,435 \n\n \n\n—\nSee Notes to Unaudited Condensed Interim Consolidated Financial Statements —\n\n \n\n7\n\n \n\n \n\n**NOTES\nTO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS**\n\n**For\nthe Three Months Ended March 31, 2026**\n\n**(U.S.\nDollars - Unaudited)**\n\n \n\n**1.\nBASIS OF PRESENTATION**\n\n \n\nThese\ncondensed interim consolidated financial statements include the accounts of Flexible Solutions International, Inc. (the\n“Company”), its wholly-owned subsidiaries Flexible Fermentation Ltd., NanoChem Solutions Inc. (“NanoChem”),\nFlexible Solutions Ltd., Flexible Biomass LP, FS Biomass Inc., NCS Deferred Corp., Natural Chem SEZC Ltd. (“Natural\nChem”), Pana Chem Solutions Inc. (“Pana Chem”), InnFlex Holdings Inc., ENP Peru Investments LLC (“ENP\nPeru”), its 65%\ncontrolling interest in ENP Investments, LLC (“ENP Investments”) and ENP Mendota, LLC (“ENP Mendota”) and\nits former 80%\ncontrolling interest in 317 Mendota LLC (“317 Mendota”) that was dissolved in March 2026 (see Note 12). All inter-company balances\nand transactions have been eliminated upon consolidation. The Company was incorporated on May 12, 1998 in the State of Nevada and in\n2019 the Company redomiciled into Alberta, Canada.\n\n \n\nIn\n2023, the Company purchased an 80%\ninterest in 317 Mendota, a newly incorporated company established to purchase a large manufacturing building. The remaining 20%\nnon-controlling interest was held by unrelated parties. The manufacturing building was sold in October 2025 and ENP Investments\nleases space in building from the new owner (see Note 3).\n\n \n\nThe\nCompany and its subsidiaries develop, manufacture and market specialty chemicals which slow the evaporation of water. One product, HEATSAVR®,\nis marketed for use in swimming pools and spas where its use, by slowing the evaporation of water, allows the water to retain a higher\ntemperature for a longer period of time and thereby reduces the energy required to maintain the desired temperature of the water in the\npool. Another product, WATERSAVR®, is marketed for water conservation in irrigation canals, aquaculture, and reservoirs where its\nuse slows water loss due to evaporation. In addition to the water conservation products, the Company also manufactures and markets water-soluble\nchemicals utilizing thermal polyaspartate biopolymers (hereinafter referred to as “TPAs”), which are beta-proteins manufactured\nfrom the common biological amino acid, L-aspartic. TPAs can be formulated to prevent corrosion and scaling in water piping within the\npetroleum, chemical, utility and mining industries. TPAs are also used as proteins to enhance fertilizers in improving crop yields and\ncan be used as additives for household laundry detergents, consumer care products and pesticides. The TPA division also manufactures\ntwo nitrogen conservation products for agriculture that slows nitrogen loss from fields and has installed custom equipment for production\nof food and nutritional materials. All the ingredients the Company produces are custom products for specific clients and are confidential.\nThe Company anticipates that this market vertical will grow over time. The Company also manufactures food grade products that are made\nand sold by the TPA division. The TPA division recognizes research and development income from time to time.\n\n \n\n**2.\nSIGNIFICANT ACCOUNTING POLICIES**\n\n \n\nThese\ncondensed interim consolidated financial statements have been prepared on a historical cost basis, except where otherwise noted, in accordance\nwith accounting principles generally accepted in the United States applicable to a going concern and reflect the policies outlined below.\n\n \n\nIn\nthe opinion of management, the accompanying unaudited condensed interim consolidated financial statements contain all adjustments (all\nof which are of a normal recurring nature) and disclosures necessary for a fair statement of the Company’s financial position as\nof March 31, 2026 and the results of its operations and cash flows for the three months then ended. The consolidated balance sheet as\nof December 31, 2025 is derived from the December 31, 2025 audited financial statements. The unaudited condensed interim consolidated\nfinancial statements do not include all disclosures required of annual consolidated financial statements and, accordingly, should be\nread in conjunction with our annual financial statements for the year ended December 31, 2025. Operating results for the three months\nended March 31, 2026 may not be indicative of results expected for the full year ending December 31, 2026.\n\n \n\n8\n\n \n\n \n\nThe Company recorded income tax expense for the three months ended March 31, 2026 despite reporting a pre-tax loss.\nThe estimated effective tax rate for the period differs from the U.S. federal statutory rate primarily due to the accrual of interest\nand penalties on unfiled federal and state tax returns. The uncertain tax position underlying these returns was resolved during the year\nended December 31, 2025, but interest and penalties continue to accrue until the returns are filed. These amounts are recognized as a\ncomponent of income tax expense.\n\n \n\n(a)\n*Term Deposits.*\n\n \n\nTerm\ndeposits with original maturities greater than three months but less than one year are classified as current assets and carried at amortized\ncost, which approximates fair value. Interest income is recognized on the accrual basis.\n\n \n\nAt\nMarch 31, 2026, the Company had two term deposits that are maintained by commercial banks. The first term deposit is for $322,752 and\nmatures in February 2027. This deposit pays 3% interest and, if withdrawn before maturity, a penalty may be applied. The second term deposit\nis for $330,058, matures in August 2026 and pays interest at a rate of 3%. If withdrawn before maturity, a penalty may be applied. A\nthird term deposit for $761,074, matured in March 2026 and was not renewed.\n\n \n\n(b)\n*Inventories and Cost of Sales.*\n\n \n\nThe\nCompany has three major classes of inventory: completed goods, work in progress and raw materials and supplies. In all classes, inventories\nare stated at the lower of cost or net realizable value with cost determined using either weighted average cost or the first-in, first-out\n(FIFO) method, depending on the entity. Cost of sales includes all expenditures incurred in bringing the goods to the point of sale.\nInventory costs and costs of sales include direct costs of the raw material, inbound freight charges, warehousing costs, handling costs\n(receiving and purchasing) and utilities and overhead expenses related to the Company’s manufacturing and processing facilities.\nThe Company periodically reviews its inventory for slow-moving or obsolete items and writes down the inventory carrying value to its\nestimated net realizable value based on assumptions about future demand and market conditions.\n\n \n\nThe\nCompany accounts for shipping and handling activities as fulfillment costs and shipping and handling charges included in the consolidated\nstatements of income and comprehensive income are as follows:\n\n SCHEDULE\nOF SHIPPING AND HANDLING CHARGES\n\n  \n2026  \n2025 \n\n  \nThree\nMonths Ended March 31, \n\n  \n2026  \n2025 \n\n  \n   \n  \n\nShipping income in product sales \n$108,799  \n$76,066 \n\nProduct sales \n$108,799  \n$76,066 \n\nShipping costs in cost of sales \n$163,462  \n$158,768 \n\nCost of sales \n$163,462  \n$158,768 \n\n \n\n(c)\n*Risk Management and Concentrations.*\n\n \n\nThe\nCompany’s credit risk is primarily attributable to its accounts receivable. The amounts presented in the consolidated balance sheets\nare net of allowances for doubtful accounts, estimated by the Company’s management based on prior experience and the current economic\nenvironment. The Company is exposed to credit-related losses in the event of non-payment by customers. Credit exposure is minimized by\ndealing with only credit worthy counterparties.\n\n \n\nTotal revenue for the Company’s three primary customers in each period is as follows:\n\n \n\n SCHEDULE\nOF RESEARCH AND DEVELOPMENT SERVICES REVENUE\n\n  \nThree\nmonths ended\nMarch 31, \n\n  \n2026  \n2025 \n\n  \n   \n  \n\nTotal revenue for three primary\ncustomers \n$4,639,124  \n$3,665,235 \n\nTotal revenue for three primary customers as\na percentage of sales \n 56% \n 49%\n\n \n\n9\n\n \n\n \n\nTotal\naccounts receivable for the Company’s three primary product sales customers for the three months ended March 31, 2026 and the full\nyear December 31, 2025 is as follows:\n\n \n\n  \nMarch\n31, 2026  \nDecember\n31, 2025 \n\n  \n    \n   \n\nAccounts receivable of three primary\ncustomers \n$9,057,268\n(68)% \n$7,826,250\n(62)%\n\n \n\nThe\ncredit risk on cash is limited because the Company limits its exposure to credit loss by placing its cash with major financial institutions.\nThe Company maintains cash balances at financial institutions which at times exceed federally insured amounts. The Company has not experienced\nany losses in such accounts.\n\n* *\n\n(d)\n*Reclassification.*\n\n \n\nCertain\nprior year amounts have been reclassified to conform to the 2026 financial statements presentation. Reclassifications had no effect on\nnet income (loss), cash flows, or stockholders’ equity as previously reported.\n\n \n\n(e)\n*Recent Accounting Pronouncements.*\n\n \n\nIn\nNovember 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures\n(Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure about the types of costs and expenses included\nin certain expense captions presented on the income statement. The new disclosure requirements are effective for the Company’s\nannual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted,\nand may be applied either prospectively or retrospectively. The Company is currently evaluating the ASU to determine its impact on its\ncondensed interim consolidated financial statements and disclosures.\n\n \n\nManagement\ndoes not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material\neffect on the accompanying financial statements.\n\n \n\n10\n\n \n\n \n\n**3.\nLEASES**\n\n \n\n*Panama\nOperating Lease*\n\n \n\nIn\n2024, the Company executed a contract to lease 37,500 sq. ft for manufacturing space with a lease term of 122 months with the option\nto renew the lease for a further 36 months at the end and total payments during the term, starting at $31,324 per month with a 3% increase\neach year, or $3,461,568 in total. The Company recorded the present value of the lease payments over the term as a lease liability and\nan ROU asset. The Company’s incremental borrowing rate of 7% was used as the discount rate since the rate implicit in the lease\nwas not readily determinable.\n\n \n\nThe\nlease liability related to this operating lease, which represents the present value of the lease payments, and the corresponding ROU\nasset were both $2,341,339 at inception of the lease. As of March 31, 2026, the ROU asset was $2,067,018 (December 31, 2025 - $2,111,027)\nand the lease liability was $2,586,253 (December 31, 2025 - $2,543,723). During the three months ended March 31, 2026, the Company recognized\n$86,539 (2025 – nil) of lease expense related to this lease in “Selling, general and administrative” in the consolidated statements\nof income and comprehensive income. There were no payments made or expense recorded for this lease in 2024. The Company is waiting for\nfinal requirements to be met by the lessor before starting to pay rent. At December 31, 2025 and March 31, 2026, the difference between\nthe ROU asset and lease liability is attributable to the timing of the commencement of rent payments.\n\n \n\n*Mendota,\nIllinois Operating Leases*\n\n \n\nIn\nOctober 2025, in connection with the sale of a building previously occupied by the Company’s subsidiary ENP Investments (see Note\n6), ENP Investments entered into operating leases with the new owner for a total of 125,500 square feet of manufacturing and office space,\ncomprised of two lease sections. The Company’s incremental borrowing rate of 7% was used as the discount rate for both leases as\nthe implicit rate was not readily determinable.\n\n \n\nSection\nA (110,000 sq. ft.): Initial term of 60 months with an option to renew. Monthly base rent begins at $27,492 and escalates at approximately\n3.6% annually, for total undiscounted payments of $1,771,552. At inception, both the ROU asset and lease liability were recorded at $1,483,227.\nThe option to renew was not considered in calculating the initial carrying values. As of March 31, 2026, both the ROU asset and lease\nliability were $1,368,664 (December 31, 2025 - $1,426,447). For the three months ended March 31, 2026, operating lease expense of $82,475\n(2025 – $nil) was recognized in “Cost of sales” in the condensed interim consolidated statements\nof loss and comprehensive income (loss).\n\n \n\nSection\nB (15,500 sq. ft.): Initial term of 60 months with an option to renew. Monthly base rent begins at $4,856 and escalates at approximately\n3.6% annually, for total undiscounted payments of $312,625. At inception, both the ROU asset and lease liability were recorded at $263,383.\nThe option to renew was not considered in calculating the initial carrying values. As of March 31, 2026, both the ROU asset and lease\nliability were $242,870 (December 31, 2025 - $253,213). For the three months ended March 31, 2026, operating lease expense of $14,567\n(2025 – $nil) was recognized in “Cost of sales” in the condensed interim consolidated statements\nof loss and comprehensive income (loss).\n\n \n\nThe\nfollowing table summarizes expense and cash payments for operating leases during the periods noted:\n\n \n\nSCHEDULE OF CASH\nPAYMENTS FOR OPERATING LEASE\n\n  \nThree months ended March 31, \n\n  \n2026  \n2025 \n\nOperating lease expense \n$183,581  \n$- \n\nCash paid for rents with terms less than 1\nyear \n$16,850  \n$22,160 \n\nCash paid for operating lease liability \n$97,041  \n$- \n\n \n\nThe\nfollowing table contains the weighted average remaining lease term and discount rate for operating leases as of the end of the period:\n\n \n\nSCHEDULE OF WEIGHTED\nAVERAGE REMAINING LEASE TERM AND DISCOUNT RATE\n\n  \n\nAs of\n\nMarch 31, 2026\n \n\nRemaining lease term – Panama operating\nlease \n 8.5\nyears \n\nRemaining lease term – Mendota, IL operating\nleases \n 4.5\nyears \n\nDiscount rate - operating leases \n 7.0%\n\n \n\n11\n\n \n\n \n\nThe\ntable below presents a maturity analysis of the future minimum lease payments for operating leases as of March 31, 2026:\n\n SUMMARY OF RIGHT-OF-USE ASSET AND LEASE LIABILITY \n\nTwelve months\nending December 31, \nTotal \n\nRemainder of 2026 \n$482,597 \n\n2027 \n 787,376 \n\n2028 \n 813,094 \n\n2029 \n 753,349 \n\n2030 \n 672,417 \n\nThereafter \n 1,677,458 \n\nTotal operating lease payments \n 5,186,291 \n\nLess: discount on lease\nliability \n (988,504)\n\nTotal operating lease liability \n 4,197,787 \n\nLess: current portion\nof operating lease liability \n (466,972)\n\nNon-current operating\nlease liability \n$3,730,815 \n\n** **\n\n**4.\nACCOUNTS RECEIVABLE**\n\n** **SCHEDULE OF ACCOUNTS RECEIVABLE \n\n  \nMarch\n31,\n2026  \n\nDecember\n31,\n\n2025\n \n\n  \n   \n  \n\nAccounts receivable \n$13,679,635  \n$12,910,754 \n\nAllowances for doubtful\naccounts \n (289,247) \n (288,853)\n\nTotal accounts receivable \n$13,390,388  \n$12,621,901 \n\n \n\n**5.\nINVENTORIES**\n\n \n\n SCHEDULE OF INVENTORY\n\n  \nMarch\n31,\n2026  \nDecember\n31,\n\n2025 \n\n  \n   \n  \n\nCompleted goods \n$2,358,839  \n$2,090,720 \n\nWorks in progress \n 194,792  \n 231,407 \n\nRaw materials and supplies \n 9,968,725  \n 8,219,510 \n\nTotal inventory \n$12,522,356  \n$10,541,637 \n\n \n\n**6.\nPROPERTY, EQUIPMENT AND LEASEHOLDS**\n\n SCHEDULE\nOF PROPERTY AND EQUIPMENT\n\n  \nMarch 31, 2026  \nAccumulated  \nMarch 31, 2026 \n\n  \nCost  \nDepreciation  \nNet \n\nBuildings and improvements \n$11,219,850  \n$5,039,730  \n$6,180,120 \n\nAutomobiles \n 173,659  \n 97,956  \n 75,703 \n\nOffice equipment \n 148,702  \n 121,732  \n 26,970 \n\nManufacturing equipment \n 19,719,651  \n 8,395,110  \n 11,324,541 \n\nLand \n 299,027  \n —  \n 299,027 \n\nTechnology \n 98,005  \n 98,005  \n — \n\n  \n$31,658,894  \n$13,752,533  \n$17,906,361 \n\n \n\n  \nDecember 31, 2025  \nAccumulated  \nDecember 31, 2025 \n\n  \nCost  \nDepreciation  \nNet \n\nBuildings and improvements \n$11,087,175  \n$4,904,582  \n$6,182,593 \n\nAutomobiles \n 190,933  \n 108,304  \n 82,629 \n\nOffice equipment \n 133,990  \n 121,386  \n 12,604 \n\nManufacturing equipment \n 17,636,508  \n 8,071,269  \n 9,565,239 \n\nLand \n 299,027  \n —  \n 299,027 \n\nTechnology \n 99,671  \n 99,671  \n — \n\n  \n$29,447,304  \n$13,305,212  \n$16,142,092 \n\n \n\nAmount\nof depreciation expense for three months ended March 31, 2026 was: $469,495 (2025 - $425,198) and is included in cost of sales in the\ncondensed interim consolidated statements of operations and comprehensive income (loss).\n\n \n\nIn\nlate 2025, management committed to a plan to sell the 14,000\nsq. ft. former manufacturing facility located in Mendota, IL. As of March 31, 2026 and December 31, 2025, the carrying value of the\nproperty has been reclassified to Property Held for Sale on the consolidated balance sheet at its estimated net realizable value of\n$425,000.\n\n \n\n12\n\n \n\n \n\n**7.\nINVESTMENTS**\n\n \n\nThe\nCompany’s investments at March 31, 2026 and December 31, 2025 consisted of the following:\n\n \n\nSCHEDULE\nOF COMPANY’S INVESTMENTS \n\n  \nMarch\n31, 2026  \nDecember\n31, 2025 \n\n  \n   \n  \n\nInvestments, at cost: \n    \n   \n\nTrio Opportunity\nCorp., 47,000 non-voting Class B shares \n$470,000  \n$470,000 \n\nInvestments, at cost  \n 470,000  \n 470,000 \n\nInvestment, equity method: \n    \n   \n\nFlorida-based\nLLC \n 1,530,236  \n 1,584,324 \n\nInvestment, equity method \n 1,530,236  \n 1,584,324 \n\nTotal \n$2,000,236  \n$2,054,324 \n\n \n\nIn\nJanuary 2019, the Company invested in a Florida based LLC that is engaged in international sales of fertilizer additives. According to\nthe operating agreement, the Company had a 50% interest in the profit and loss of the Florida based LLC but did not have control. In\nAugust 2024, the Company sold a 30.1% interest in the Florida based LLC to a third party for consideration of $2,000,000. In addition,\nthe Company entered into a subsequent agreement for the sale of its remaining 19.9% interest over the next five years for an additional\n$4,000,000. Starting in 2025, the Company will sell a further 3.98% per year upon receipt of that year’s $800,000 payment. In December\n2025, the purchaser advised that there would be a delay in funding the 2025 tranche and that they would pay the $100,000 penalty in January\n2026. This payment was made by the Florida based LLC, and not the third party, and was applied to the outstanding Accounts Receivable\ndue from the Florida based LLC. At March 31, 2026, the Company continues to account for this investment using the equity investment as it exercises\nsignificant influence.\n\n \n\nA\nsummary of the activity associated with the Company’s investment in the Florida based LLC during the three months ended March 31,\n2026 and the year ended December 31, 2025 is follows:\n\n SCHEDULE OF EQUITY METHOD INVESTMENT\n\nBalance, December 31, 2024 – 19.9%\ninterest \n$1,454,381 \n\nCompany’s proportionate\nshare of earnings \n 129,943 \n\nBalance, December 31, 2025 – 19.9%\ninterest \n$1,584,324 \n\nCompany’s proportionate\nshare of loss \n (54,088)\n\nBalance, March 31,\n2026 – 19.9% interest \n$1,530,236 \n\n \n\nSummarized\nprofit and loss information related to the Florida based LLC is as follows:\n\n SUMMARY OF PROFIT AND LOSS INFORMATION RELATED TO EQUITY ACCOUNTED INVESTMENT\n\n  \nThree\nmonths ended\nMarch 31, 2026  \nThree\nmonths ended\nMarch 31, 2025 \n\n  \n   \n  \n\nNet sales \n$1,620,695  \n$3,443,030 \n\nGross profit \n$323,949  \n$1,094,892 \n\nNet income (loss) \n$(271,797) \n$321,229 \n\n \n\nDuring\nthe three months ended March 31, 2026, the Company had sales of $498,418 (2025 - $1,856,395) to the Florida based LLC. At March 31, 2026, the Florida based LLC had a balance of $592,188\nincluded within Accounts Receivable (December 31, 2025 - $980,638).\n\n \n\n13\n\n \n\n \n\n**8.\nSHORT TERM LINES OF CREDIT**\n\n \n\n**(****a)**In\nJune 2025, ENP Investments renewed the line of credit with Stock Yards Bank and Trust (“Stock Yards”). The revolving line\nof credit is for an aggregate amount of up to the lesser of (i) $5,000,000, or (ii) 50-80% of eligible domestic accounts receivable plus\n50% of inventory, capped at $2,500,000. Interest on the unpaid principal balance of this loan will be calculated using the greater of\nprime or 4.0%. The interest rate at March 31, 2026 is 6.75% (December 31, 2025 – 6.75%).\n\n \n\nThe\nrevolving line of credit contains customary affirmative and negative covenants, including the following: compliance with laws, provisions\nof financial statements and periodic reports, payment of taxes, maintenance of inventory and insurance, maintenance of operating accounts\nat Stock Yards, Stock Yard’s access to collateral, formation or acquisition of subsidiaries, incurrence of indebtedness, dispositions\nof assets, granting liens, changes in business, ownership or business locations, engaging in mergers and acquisitions, making investments\nor distributions and affiliate transactions. NanoChem is a guarantor of 65% of all the principal and other loan costs not to exceed $3,250,000.\nThe non-controlling interest is the guarantor of the remaining 35% of all the principal and other loan costs not to exceed $1,750,000.\n\n \n\nTo\nsecure the repayment of any amounts borrowed under the revolving line of credit, the Company granted Stock Yards a security interest\nin substantially all of the assets of ENP Investments, exclusive of intellectual property assets.\n\n \n\nThe\nbalance outstanding under this revolving line as of March 31, 2026 was $3,812,187 (December 31, 2025 - $2,092,097).\n\n \n\n**(b)**In August 2025, the Company renewed the line of credit with Stock Yards Bank and Trust (“Stock Yards”). The revolving\nline of credit is for an aggregate amount of up to the lesser of (i) $2,000,000, or (ii) 80% of eligible domestic accounts receivable\nplus 50% of inventory, capped at $1,000,000. Interest on the unpaid principal balance of this loan will be calculated using the greater\nof prime or 4.0%. The interest rate at March 31, 2026 is 6.75% (December 31, 2025 – 6.75%).\n\n \n\nThe\nrevolving line of credit contains customary affirmative and negative covenants, including the following: compliance with laws, provision\nof financial statements and periodic reports, payment of taxes, maintenance of inventory and insurance, maintenance of operating accounts\nat Stock Yards, Stock Yards access to collateral, formation or acquisition of subsidiaries, incurrence of indebtedness, dispositions\nof assets, granting liens, changes in business, ownership or business locations, engaging in mergers and acquisitions, making investments\nor distributions and affiliate transactions. The covenants also require that the Company maintain a minimum ratio of qualifying financial\nassets to the sum of qualifying financial obligations.\n\n \n\nTo\nsecure repayment of any amounts borrowed under the revolving line of credit, the Company granted Stock Yards a security interest in substantially\nall of the assets of NanoChem, exclusive of intellectual property assets.\n\n \n\nThe\nbalance outstanding under this revolving line as of March 31, 2026 was $984,257 (December 31, 2025 - $56,289).\n\n \n\n14\n\n \n\n \n\n**9.\nLONG TERM DEBT**\n\n** **\n\nLong\nterm debt, all of which is with StockYards Bank and Trust, at March 31, 2026 and December 31, 2025 consisted of the following:\n\n SCHEDULE OF LONG TERM DEBT\n\n  \nMarch\n31, 2026  \nDecember\n31, 2025 \n\nENP Mendota, 10-year mortgage,\n5 year fixed index plus 4.50% interest (7.18%) monthly payments through to January 2030, collateralized by real property and all\nrents on said property \n$343,714  \n$351,377 \n\nENP Peru, 10-year\nmortgage, 7.18%\ninterest, monthly principal and interest payments through January 2030, collateralized by real property (1st mortgage) \n 2,579,168  \n 2,595,681 \n\nENP Peru, 10-year mortgage, 5.4% interest,\nmonthly principal payments plus interest through June 2032, collateralized by real property (2nd mortgage) \n 235,556  \n 237,317 \n\nNanoChem, 5-year note\npayable, 7.0% interest, monthly principal payments plus interest through August 2029, collateralized by manufacturing equipment \n 1,181,586  \n 1,257,285 \n\nLong-term debt \n 4,340,024  \n 4,441,660 \n\nLess: current portion \n (414,205) \n (396,961)\n\nLong-term debt non current \n$3,925,819  \n$4,044,699 \n\n** **\n\nThe\nfollowing table summarizes the scheduled annual future principal payments as of March 31, 2026:\n\n \n\nSCHEDULE\nOF ANNUAL FUTURE PRINCIPAL PAYMENTS \n\nYear Ended\nDecember 31, \nPrincipal\n\nAmount Due \n\nRemainder of 2026 \n$313,972 \n\n2027 \n 443,446 \n\n2028 \n 472,599 \n\n2029 \n 375,772 \n\n2030 \n 2,254,887 \n\nThereafter \n 479,348 \n\nTotal \n$4,340,024 \n\n \n\n**10.\nSTOCK BASED COMPENSATION**\n\n \n\nDuring\nthe three months ended March 31, 2026 and 2025, the Company recognized stock based compensation associated with stock options as follows:\n\n SCHEDULE OF RECOGNIZED STOCK BASED COMPENSATION\n\n  \nMarch\n31, 2026  \nMarch\n31, 2025 \n\nLine item on the statement of operations and\ncomprehensive income (loss): \n    \n   \n\nWages,\nadministrative salaries and benefits \n$87,443  \n$79,740 \n\nProfessional fees \n 22,330  \n 18,180 \n\nStock based compensation \n$109,773  \n$97,920 \n\n \n\nThe\nfollowing table summarizes the Company’s stock option activities for the three months ended March 31, 2026 and the full year ended\nDecember 31, 2025:\n\n* *SCHEDULE OF STOCK OPTION ACTIVITIES\n\n  \nNumber\nof\nshares  \nExercise\nprice\nper share  \nWeighted\naverage\nexercise price \n\n  \n   \n   \n  \n\nBalance, December 31, 2024 \n 1,850,000  \n$2.00\n– 4.05  \n$2.68 \n\nGranted \n 66,000  \n$7.00  \n$7.00 \n\nCancelled or expired \n (5,000) \n$2.00\n– 3.61  \n$2.84 \n\nExercised \n (212,000) \n$2.00\n– 3.61  \n$2.80 \n\nBalance, December 31, 2025 \n 1,699,000  \n$2.00\n– 7.00  \n$2.83 \n\nExercised \n (15,000) \n$2.44\n– 4.05  \n$3.35 \n\nBalance, March 31, 2026 \n 1,684,000  \n$2.00\n– 7.00  \n$2.84 \n\nExercisable, March 31, 2026 \n 1,068,000  \n$2.00\n– 7.00  \n$2.75 \n\n \n\n15\n\n \n\n \n\nDuring\nthe three months ended March 31, 2026 and 2025, the Company did not grant any stock based compensation to employees or consultants.\n\n \n\nAs\nof March 31, 2026, the weighted-average remaining contractual life of outstanding and exercisable options is 2.5\nyears and 2.3\nyears, respectively. As of March 31, 2026, there was approximately\n$302,111\nof compensation expense related to non-vested options that\nis expected to be recognized over a weighted average period of 1.2\nyears.\n\n \n\nThe\naggregate intrinsic value of options outstanding and exercisable at March 31, 2026 is $4,317,960\nand $2,832,560,\nrespectively. During the three months ended March 31, 2026, the intrinsic value of stock options exercised was $49,000\n(2025 - $419,350).\n\n \n\nDuring\nthe year ended December 31, 2025, the Company granted 50,000\nshares as a stock award. The total fair value of the stock award was $350,000\nwith 10,000\nshares vested upon issuance and 10,000\nshares vest on each anniversary date through 2029. As of March 31, 2026, there was approximately $217,440\nof compensation related to the 40,000 non-vested shares of the stock award that is expected to be recognized through\n2029.\n\n \n\n**11.\nCAPITAL STOCK**\n\n \n\nDuring\nthe three months ended March 31, 2026, 15,000 shares were issued upon the exercise of stock options (2025 – 132,000).\n\n \n\n**12.\nNON-CONTROLLING INTERESTS**\n\n \n\n**(****a)**ENP\nInvestments is a limited liability corporation (“LLC”) that manufactures and distributes golf, turf and ornamental\nagriculture products in Mendota, Illinois. The Company owns a 65%\ninterest in ENP Investments through its wholly-owned subsidiary NanoChem. An unrelated party (“NCI”) owns the remaining 35%\ninterest in ENP Investments. ENP Mendota is a wholly owned subsidiary of ENP Investments. ENP Mendota is a LLC that leases warehouse\nspace. For financial reporting purposes, the assets, liabilities and earnings of both of the LLC’s are consolidated into these\nfinancial statements. The NCI’s ownership interest in ENP Investments is recorded in non-controlling interests in these\ncondensed interim consolidated financial statements. The non-controlling interest represents NCI’s interest in the earnings\nand equity of ENP Investments. ENP Investments is allocated to the TPA segment. See Note 13.\n\n* *\n\nENP\nInvestments makes cash distributions to its equity owners based on formulas defined within its Ownership Interest Purchase Agreement\ndated October 1, 2018. Distributions are defined in the Ownership Interest Purchase Agreement as cash on hand to the extent it exceeds\ncurrent and anticipated long-term and short-term needs, including, without limitation, needs for operating expenses, debt service, acquisitions,\nreserves, and mandatory distributions, if any.\n\n \n\nFrom\nthe effective date of acquisition onward, the minimum distributions requirements under the Ownership Interest Purchase Agreement were\nsatisfied. The total distribution from the effective date of acquisition onward was $4,862,387.\n\n* * SCHEDULE OF DISTRIBUTIONS\n\nBalance, December 31, 2024 \n$3,270,514 \n\nDistribution \n (841,708)\n\nNon-controlling interest share of income \n 1,425,782 \n\nBalance, December 31, 2025 \n 3,854,588 \n\nNon-controlling interest share of loss \n (41,937)\n\nBalance, March 31, 2026 \n$3,812,651 \n\n \n\nDuring\nthe three months ended March 31, 2026, the Company had sales of $895,953 (2025 - $830,483) to NCI. At March 31, 2026, the NCI had a balance of $7,554,641 included within\nAccounts Receivable (December 31, 2025 – $6,652,611).\n\n \n\n16\n\n \n\n \n\n**b)**317\nMendota was a LLC that owned real estate that the Company occupied part of while the excess was rented out. In October 2025, the\nCompany sold the building but continues to rent from the new owner (see Note 3). 317 Mendota was dissolved in March 2026. In\nconnection with the dissolution, the Company received $72,953 in\ncash. The transaction was accounted for as an equity transaction, with the Company’s share recorded as capital in excess of\npar value; no gain or loss was recognized in the consolidated statements of operations. The Company owned an 80%\ninterest in 317 Mendota and an unrelated party (“317 NCI”) owned the remaining 20%\ninterest in 317 Mendota. For financial reporting purposes, the assets, liabilities and earnings of 317 Mendota were consolidated\ninto these financial statements. The 317 NCI’s ownership interest in 317 Mendota was recorded in non-controlling interests in\nthese condensed interim consolidated financial statements. The non-controlling interest represented 317 NCI’s interest in the\nearnings and equity of 317 Mendota.\n\n  SCHEDULE\nOF NON CONTROLLING INTEREST RELATED TO ACQUISITION\n\nBalance, December 31, 2024 \n$63,540 \n\nDistribution \n (150,000)\n\nNon-controlling interest share of income \n 155,119 \n\nBalance, December 31, 2025 \n 68,659 \n\nDistribution \n (68,659)\n\nBalance, March 31, 2026 \n$- \n\n \n\n**13.\nSEGMENTED DISCLOSURE, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY**\n\n \n\nThe\nCompany operates in two segments:\n\n \n\n**(a)**Energy and water conservation products (as shown under the column heading “EWCP” below), which consists of a (i) liquid\nswimming pool blankets which save energy and water by inhibiting evaporation from the pool surface, and (ii) food-safe powdered form\nof the active ingredient within the liquid blankets and which are designed to be used in still or slow moving drinking water sources.\n\n \n\n**(b)**Biodegradable polymers, also known as TPA’s (as shown under the column heading “BCPA” below), used by the petroleum,\nchemical, utility and mining industries to prevent corrosion and scaling in water piping. This product can also be used in detergents\nto increase biodegradability and in agriculture to increase crop yields by enhancing fertilizer uptake.\n\n* *\n\nThe\nthird product line is nitrogen conservation products used for the agriculture industry. These products decrease the loss of nitrogen\nfertilizer after initial application and allows less fertilizer to be used. These products are made and sold by the Company’s TPA\ndivision.\n\n \n\nThe\nCompany also manufactures food grade products that are made and sold by the TPA division.\n\n \n\nThe\nCompany’s reportable segments are strategic business units that offer different, but synergistic products and services. They are\nmanaged separately because each business requires different technology and marketing strategies. The economic factors that impact the\nnature, amount, timing, and uncertainty of revenue and cash flows vary among the Company’s operating segments and the geographical\nregions in which they operate. This operating segment structure is used by the Chief Operating Decision Maker (“CODM”), who\nhas been determined to be the Chief Executive Officer, to make key operating decisions and assess performance of the Company. The CODM\nevaluates segment operating performance, and makes resource allocation and performance evaluation decisions, based on gross profit and\nnet operating income.\n\n \n\nThree\nmonths ended March 31, 2026:\n\n SCHEDULE OF REPORTABLE SEGMENTS\n\n  \nEWCP  \nBCPA  \nOther\n(1)  \nConsolidated \n\nProduct Sales \n$104,573  \n$8,192,424  \n$-  \n$8,296,997 \n\nCost of sales \n 66,478  \n 6,341,213  \n -  \n 6,407,691 \n\nGross profit \n 38,095  \n 1,851,211  \n -  \n 1,889,306 \n\nWages, administrative salaries and benefits \n 32,968  \n 994,118  \n -  \n 1,027,086 \n\nSelling, general, and administrative \n 18,147  \n 679,676  \n 64,534  \n 762,357 \n\nOther segment items (2) \n 0  \n 213,947  \n (28,119) \n 185,828 \n\nOperating loss \n (13,020) \n (36,530) \n (36,415) \n (85,965)\n\nInterest expense \n -  \n 134,069  \n -  \n 134,069 \n\nDepreciation and amortization (included in\nCOGS) \n 2,928  \n 506,567  \n -  \n 509,495 \n\nCapital expenditures \n -  \n 2,233,765  \n -  \n 2,233,765 \n\nAssets at March 31, 2026 (3) \n 1,570,655  \n 61,075,433  \n 1,285,475  \n 63,931,563 \n\n \n\n17\n\n \n\n \n\nThree\nmonths ended March 31, 2025:\n\n \n\n  \nEWCP  \nBCPA  \nOther\n(1)  \nConsolidated \n\nSales \n$40,185  \n$7,433,507  \n$-  \n$7,473,692 \n\nCost of sales \n 49,797  \n 5,472,331  \n -  \n 5,522,128 \n\nGross profit (loss) \n (9,612) \n 1,961,176  \n -  \n 1,951,564 \n\nWages, administrative salaries and benefits \n 17,593  \n 877,644  \n -  \n 895,237 \n\nSelling, general, and administrative \n 27,265  \n 685,859  \n 42,926  \n 756,050 \n\nOther segment items (2) \n 6,000  \n 235,033  \n 128,401  \n 369,434 \n\nOperating income (loss) \n (60,470) \n 162,640  \n (171,327) \n (69,157)\n\nInterest expense \n -  \n 198,019  \n -  \n 198,019 \n\nDepreciation and amortization (included in\nCOGS) \n 3,206  \n 461,992  \n -  \n 465,198 \n\nCapital expenditures \n -  \n 354,121  \n -  \n 354,121 \n\nAssets at December 31, 2025 (3) \n 2,097,454  \n 58,533,323  \n 1,201,602  \n 61,832,379 \n\n \n\n(1)\n \nOther\nis not considered an operating segment and includes expenses and income not identifiable to an operating segment and is not included\nin operating segment results\n\n \n \n \n\n(2)\n \nOther\nsegment items for each reportable segment includes items such as professional fees and research and development.\n\n \n \n \n\n(3)\n \nSegment\nassets include cash, term deposits, accounts receivable, inventory, prepaid expenses, property held for sale, property, equipment and leaseholds, right of use assets,\nintangible assets, long-term deposits, investments and goodwill.\n\n \n\nSales\nby territory are shown below:\n\n   SCHEDULE\nOF REVENUE GENERATED IN UNITED STATES AND CANADA \n\n  \nThree\nmonths ended\nMarch 31, 2026  \nThree\nmonths ended\nMarch 31, 2025 \n\n  \n   \n  \n\nCanada \n$88,292  \n$288,094 \n\nUnited States and abroad \n 8,208,705  \n 7,185,598 \n\nTotal \n$8,296,997  \n$7,473,692 \n\n \n\nThe\nCompany’s long-lived assets (property, equipment and leaseholds, right of use assets, intangibles, and goodwill) by territory as follows:\n\n   SCHEDULE\nOF LONG-LIVED ASSETS ARE LOCATED IN CANADA AND UNITED STATE \n\n  \n\nMarch\n31, 2026\n  \n\nDecember 31, 2025\n \n\n  \n   \n  \n\nCanada \n$103,729  \n$108,423 \n\nUnited States and abroad \n 25,935,459  \n 24,318,631 \n\nTotal \n$26,039,188  \n$24,427,054 \n\n \n\nThree\nprimary customers accounted for $4,639,124 (56%) of sales during the three-month period ended March 31, 2026 (2025 - $3,665,235 or 49%).\n\n \n\n**14.\nSUBSEQUENT EVENTS**\n\n \n\nNone.\n\n \n\n18"}