Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 15, 2014 | Jun. 30, 2013 | |
Document And Entity Information | ' | ' | ' |
Entity Registrant Name | 'FLEXIBLE SOLUTIONS INTERNATIONAL INC | ' | ' |
Entity Central Index Key | '0001069394 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' | ' |
Is Entity a Voluntary Filer? | 'No | ' | ' |
Is Entity's Reporting Status Current? | 'Yes | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Public Float | ' | ' | $5,714,892 |
Entity Common Stock, Shares Outstanding | ' | 13,169,991 | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Assets | ' | ' |
Cash and cash equivalents | $568,087 | $361,867 |
Accounts receivable (see Note 3) | 2,012,115 | 2,199,359 |
Inventories (see Note 4) | 3,061,536 | 3,361,760 |
Prepaid expenses | 126,952 | 127,009 |
Total current assets | 5,768,690 | 6,049,995 |
Property, equipment and leaseholds, net (see Note 5) | 5,831,123 | 7,185,730 |
Patents (see Note 6) | 168,868 | 200,512 |
Long term deposits (see Note 7) | 4,781 | 7,893 |
Deferred tax asset (see Note 10) | 2,700,506 | 292,111 |
Total Assets | 14,473,968 | 13,736,241 |
Liabilities | ' | ' |
Accounts payable and accrued liabilities | 570,476 | 677,969 |
Deferred revenue | 13,550 | 312,556 |
Income taxes payable | -281,202 | 45,998 |
Short term line of credit (Note 8) | 1,400,000 | 1,205,000 |
Current portion of long term debt (see Note 9) | 304,556 | 318,644 |
Total current liabilities | 2,007,380 | 2,560,167 |
Long term debt (see Note 9) | 993,274 | 1,407,406 |
Total liabilities | 3,000,654 | 3,967,573 |
Stockholders' Equity | ' | ' |
Capital stock (see Note 13) Authorized 50,000,000 common shares with a par value of $0.001 each 1,000,000 preferred shares with a par value of $0.01 each Issued and outstanding:13,169,991 (2012: 13,169,991) common shares | 13,170 | 13,170 |
Capital in excess of par value | 16,135,953 | 16,006,798 |
Other comprehensive income | 328,686 | 574,829 |
Accumulated Deficit | -5,004,495 | -6,826,129 |
Total Stockholders' Equity | 11,473,314 | 9,768,668 |
Total Liabilities and Stockholders' Equity | $14,473,968 | $13,736,241 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Stockholders' Equity | ' | ' |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, authorized shares | 1,000,000 | 1,000,000 |
Preferred stock, Issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, Authorized | 50,000,000 | 50,000,000 |
Common stock, Issued | 13,169,991 | 13,169,991 |
Common stock, Outstanding | 13,169,991 | 13,169,991 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Statement [Abstract] | ' | ' |
Sales | $15,801,596 | $16,400,107 |
Cost of sales | 11,271,200 | 11,127,742 |
Gross profit | 4,530,396 | 5,272,365 |
Operating expenses | ' | ' |
Wages | 1,795,564 | 1,729,768 |
Administrative salaries and benefits | 801,087 | 792,927 |
Advertising and promotion | 25,053 | 63,884 |
Investor relations and transfer agent fee | 221,407 | 224,873 |
Office and miscellaneous | 760,264 | 504,312 |
Insurance | 290,224 | 288,727 |
Interest expense | 109,199 | 128,407 |
Rent | 191,423 | 182,056 |
Consulting | 316,688 | 296,643 |
Professional fees | 330,515 | 523,057 |
Travel | 123,861 | 142,139 |
Telecommunications | 31,457 | 30,605 |
Shipping | 25,456 | 39,301 |
Research | 123,772 | 68,254 |
Commissions | 122,952 | 166,855 |
Bad debt expense | 37,659 | -319 |
Currency exchange | -4,460 | -9,694 |
Utilities | 122,639 | 134,637 |
Total operating expenses | 5,424,760 | 5,306,432 |
Operating income | -894,364 | -34,067 |
Exclusive distributor fee | 250,000 | ' |
Write down of inventory | -81,174 | ' |
Gain on sale of equipment | 2,057 | 2,217 |
Interest income | 2,000 | 759 |
Income before income tax | -721,481 | -31,091 |
Deferred income tax recovery | 2,408,395 | 73,111 |
Income tax recovery (expense) | 134,720 | -1,126,468 |
Net income (loss) for the year | 1,821,634 | -1,084,448 |
Other comprehensive income (loss) | -246,143 | 97,690 |
Comprehensive income (loss) | $1,575,491 | ($986,758) |
Income (loss) per share (basic and diluted) | $0.14 | ($0.08) |
Weighted average number of common shares (basic and diluted) | 13,169,991 | 13,169,991 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Common Stock | Capital in Excess of Par Value | Accumulated Earnings (Deficiency) | Other Comprehensive Income / Loss | Total |
Begining Balance, Amount at Dec. 31, 2011 | $13,170 | $15,864,348 | ($5,741,681) | $477,139 | $10,612,976 |
Begining Balance, Shares at Dec. 31, 2011 | 13,169,991 | ' | ' | ' | ' |
Translation adjustment | ' | ' | ' | 97,690 | 97,690 |
Comprehensive income | ' | ' | ' | ' | -986,758 |
Stock-based compensation | ' | 142,450 | ' | ' | 142,450 |
Net income (loss) | ' | ' | -1,084,448 | ' | -1,084,448 |
Ending Balance, Amount at Dec. 31, 2012 | 13,170 | 16,006,798 | -6,826,129 | 574,829 | 9,768,668 |
Ending Balance, Shares at Dec. 31, 2012 | 13,169,991 | ' | ' | ' | ' |
Translation adjustment | ' | ' | ' | -246,143 | -246,143 |
Comprehensive income | ' | ' | ' | ' | 1,575,491 |
Stock-based compensation | ' | 129,155 | ' | ' | 129,155 |
Net income (loss) | ' | ' | 1,821,634 | ' | 1,821,634 |
Ending Balance, Amount at Dec. 31, 2013 | $13,170 | $16,135,953 | ($5,004,495) | $328,686 | $11,473,314 |
Ending Balance, Shares at Dec. 31, 2013 | 13,169,991 | ' | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Operating activities | ' | ' |
Net income (loss) | $1,821,634 | ($1,084,448) |
Stock compensation expense | 129,155 | 142,450 |
Write down of inventory | 81,174 | ' |
Depreciation | 1,298,616 | 1,256,238 |
Deferred tax recovery | -2,408,395 | -73,111 |
Changes in non-cash working capital items: | ' | ' |
(Increase) Decrease in accounts receivable | 91,567 | 135,462 |
(Increase) Decrease in inventories | 187,448 | -459,250 |
(Increase) Decrease in prepaid expenses | -4,223 | 9,745 |
Increase (Decrease) in accounts payable | -91,512 | 157,668 |
Increase (Decrease) in taxes payable | -327,200 | -392,000 |
Increase (Decrease) in deferred revenue | -298,305 | ' |
Cash provided by (used in) operating activities | 479,959 | -307,246 |
Investing activities | ' | ' |
Proceeds from disposal of long term deposits | 2,721 | ' |
Acquisition of equipment | -235,565 | -96,721 |
Cash provided by (used in) investing activities | 232,844 | 96,721 |
Financing activities | ' | ' |
Proceeds from short term line of credit | 195,000 | 555,000 |
Proceeds from long term debt | -327,145 | -293,397 |
Cash provided by (used in) financing activities | -132,145 | 261,603 |
Effect of exchange rate changes on cash | 91,250 | -2,672 |
Inflow (outflow) of cash | 206,220 | -145,036 |
Cash and cash equivalents, beginning | 361,867 | 506,903 |
Cash and cash equivalents, ending | 568,087 | 361,867 |
Supplemental disclosure of cash flow information: | ' | ' |
Income taxes paid | 204,480 | 1,523,567 |
Interest paid | $110,194 | $128,407 |
1_BASIS_OF_PRESENTATION
1. BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
Note 1. BASIS OF PRESENTATION | ' |
These consolidated financial statements include the accounts of Flexible Solutions International, Inc. (the “Company”), and its wholly-owned subsidiaries Flexible Fermentation Ltd. (“Flexible Ltd.”), NanoChem Solutions Inc. (“NanoChem”), Flexible Solutions Ltd., Flexible Biomass LP, and FS Biomass Inc. All inter-company balances and transactions have been eliminated. The company was incorporated May 12, 1998 in the State of Nevada and had no operations until June 30, 1998. | |
Flexible Solutions International, Inc. and its subsidiaries develop, manufacture and market specialty chemicals which slow the evaporation of water. One product, HEATSAVR®, is marketed for use in swimming pools and spas where its use, by slowing the evaporation of water, allows the water to retain a higher temperature for a longer period of time and thereby reduces the energy required to maintain the desired temperature of the water in the pool. Another product, WATERSAVR®, is marketed for water conservation in irrigation canals, aquaculture, and reservoirs where its use slows water loss due to evaporation. In addition to the water conservation products, the Company also manufactures and markets water-soluble chemicals utilizing thermal polyaspartate biopolymers (hereinafter referred to as “TPAs”), which are beta-proteins manufactured from the common biological amino acid, L-aspartic. TPAs can be formulated to prevent corrosion and scaling in water piping within the petroleum, chemical, utility and mining industries. TPAs are also used as proteins to enhance fertilizers in improving crop yields and can be used as additives for household laundry detergents, consumer care products and pesticides. |
2_SIGNIFICANT_ACCOUNTING_POLIC
2. SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |
Dec. 31, 2013 | ||
Notes to Financial Statements | ' | |
Note 2. SIGNIFICANT ACCOUNTING POLICIES | ' | |
These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States applicable to a going concern and reflect the policies outlined below. | ||
(a) Cash and Cash Equivalents. | ||
The Company considers all highly liquid investments purchased with an original or remaining maturity of less than three months at the date of purchase to be cash equivalents. Cash and cash equivalents are maintained with several financial institutions. | ||
(b) Inventories and Cost of Sales | ||
The Company has four major classes of inventory: finished goods, work in progress, raw materials and supplies. In all classes, inventory is valued at the lower of cost or market. Cost is determined on a first-in, first-out basis. Cost of sales includes all expenditures incurred in bringing the goods to the point of sale. Inventory costs and costs of sales include direct costs of the raw material, inbound freight charges, warehousing costs, handling costs (receiving and purchasing) and utilities and overhead expenses related to the Company’s manufacturing and processing facilities. | ||
(c) Allowance for Doubtful Accounts | ||
The Company provides an allowance for doubtful accounts when management estimates collectibility to be uncertain. Accounts receivable are continually reviewed to determine which, if any, accounts are doubtful of collection. In making the determination of the appropriate allowance amount, the Company considers current economic and industry conditions, relationships with each significant customer, overall customer credit-worthiness and historical experience. | ||
(d) Property, Equipment and Leaseholds. | ||
The following assets are recorded at cost and depreciated using the methods and annual rates shown below: | ||
Computer hardware | 30% Declining balance | |
Automobile | 30% Declining balance | |
Furniture and fixtures | 20% Declining balance | |
Manufacturing equipment | 20% Declining balance | |
Office equipment | 20% Declining balance | |
Building and improvements | 10% Declining balance | |
Leasehold improvements | Straight-line over lease term | |
Property and equipment are written down to net realizable value when management determines there has been a change in circumstances which indicates its carrying amount may not be recoverable. No write-downs have been necessary to date. | ||
Costs capitalized on self-constructed assets, classified as plant under construction, include contracted costs and supplies, but not capitalized interest costs. The Company has commenced depreciating its plant as construction has been completed and the plant is in use. | ||
(e) Impairment of Long-Lived Assets. | ||
In accordance with FASB Codification Topic 360, “Property, Plant and Equipment (ASC 360), the Company reviews long-lived assets, including, but not limited to, property and equipment, patents and other assets, for impairment annually or whenever events or changes in circumstances indicate the carrying amounts of assets may not be recoverable. The carrying value of long-lived assets is assessed for impairment by evaluating operating performance and future undiscounted cash flows of the underlying assets. If the expected future cash flows of an asset is less than its carrying value, an impairment measurement is indicated. Impairment charges are recorded to the extent that an asset’s carrying value exceeds its fair value. Accordingly, actual results could vary significantly from such estimates. There were no impairment charges during the periods presented. | ||
(f) Foreign Currency. | ||
The functional currency of three of the Company’s subsidiaries is the Canadian Dollar. The translation of the Canadian Dollar to the reporting currency of the U.S. Dollar is performed for assets and liabilities using exchange rates in effect at the balance sheet date. Revenue and expense transactions are translated using average exchange rates prevailing during the year. Translation adjustments arising on conversion of the financial statements from the subsidiary’s functional currency, Canadian Dollars, into the reporting currency, U.S. Dollars, are excluded from the determination of income (loss) and are disclosed as other comprehensive income (loss) in the Statement of Comprehensive Income. | ||
Foreign exchange gains and losses relating to transactions not denominated in the applicable local currency are included in operating income (loss) if realized during the year and in comprehensive income (loss) if they remain unrealized at the end of the year. | ||
(g) Revenue Recognition. | ||
Revenue from product sales is recognized at the time the product is shipped since title and risk of loss is transferred to the purchaser upon delivery to the carrier. Shipments are made F.O.B. shipping point. The Company recognizes revenue when there is persuasive evidence of an arrangement, delivery to the carrier has occurred, the fee is fixed or determinable, collectability is reasonably assured and there are no significant remaining performance obligations. When significant post-delivery obligations exist, revenue is deferred until such obligations are fulfilled. To date there have been no such significant post-delivery obligations. | ||
Provisions are made at the time the related revenue is recognized for estimated product returns. Since the Company’s inception, product returns have been insignificant; therefore no provision has been established for estimated product returns. | ||
Deferred revenues consist of products sold to distributors with payment terms greater than the Company’s customary business terms due to lack of credit history or operating in a new market in which the Company has no prior experience. The Company defers the recognition of revenue until the criteria for revenue recognition have been met, and payments become due or cash is received from these distributors. | ||
(h) Stock Issued in Exchange for Services. | ||
The Company’s common stock issued in exchange for services is valued at estimated fair market value based upon trading prices of the Company’s common stock on the dates of the stock transactions. The corresponding expense of the services rendered is recognized over the period that the services are performed. | ||
(i) Stock based Compensation. | ||
The Company recognizes compensation expense for all share-based payments, in accordance with FASB Codification Topic 718, Compensation — Stock Compensation, (ASC 718). Under the fair value recognition provisions of ASC 718, the Company recognizes share-based compensation expense, net of an estimated forfeiture rate, over the requisite service period of the award. | ||
The fair value at grant date of stock options is estimated using the Black-Scholes-Merton option-pricing model. Compensation expense is recognized on a straight-line basis over the stock option vesting period based on the estimated number of stock options that are expected to vest. Shares are issued from treasury upon exercise of stock options. | ||
(j) Comprehensive Income. | ||
Other comprehensive income refers to revenues, expenses, gains and losses that under generally accepted accounting principles are included in comprehensive income, but are excluded from net income as these amounts are recorded directly as an adjustment to stockholders’ equity. The Company’s other comprehensive income is primarily comprised of unrealized foreign exchange gains and losses. | ||
(k) Income (loss) Per Share. | ||
Basic earnings (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding in the period. Diluted earnings (loss) per share are calculated giving effect to the potential dilution of the exercise of options and warrants. Common equivalent shares, composed of incremental common shares issuable upon the exercise of stock options and warrants are included in diluted net income per share to the extent that these shares are dilutive. Common equivalent shares that have an anti-dilutive effect on net income per share have been excluded from the calculation of diluted weighted average shares outstanding for the years ended December 31, 2013 and 2012. | ||
(l) Use of Estimates. | ||
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and would impact the results of operations and cash flows. | ||
Estimates and underlying assumptions are reviewed at each period end. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. | ||
Significant areas requiring the use of management estimates include assumptions and estimates relating to the asset impairment analysis, share-based payments and warrants, valuation allowances for deferred income tax assets, determination of useful lives of property, plant and equipment, and the valuation of inventory. | ||
(m) Financial Instruments. | ||
The fair market value of the Company’s financial instruments comprising cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities, and short term line of credit were estimated to approximate their carrying values due to immediate or short-term maturity of these financial instruments. The Company maintains cash balances at financial institutions which at times, exceed federally insured amounts. The Company has not experienced any material losses in such accounts. | ||
The Company is exposed to foreign exchange and interest rate risk to the extent that market value rate fluctuations materially differ from financial assets and liabilities, subject to fixed long-term rates. | ||
(n) Fair Value of Financial Instruments. | ||
In August 2009, an update was made to Fair Value Measurements and Disclosures — “Measuring Liabilities at Fair Value.” This update permits entities to measure the fair value of liabilities, in circumstances in which a quoted price in an active market for an identical liability is not available, using a valuation technique that uses a quoted price of an identical liability when traded as an asset, quoted prices for similar liabilities or similar liabilities when traded as assets or the income or market approach that is consistent with the principles of Fair Value Measurements and Disclosures. Effective upon issuance, the Company has adopted this guidance with no material impact to the Company’s consolidated financial statements. | ||
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs described below, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. | ||
● | Level 1 – Quoted prices in active markets for identical assets or liabilities | |
● | Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
● | Level 3 – Unobservable inputs that are supported by little or no market activity which is significant to the fair value of the assets or liabilities. | |
The fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities and short term line of credit for all periods presented approximate their respective carrying amounts due to the short term nature of these financial instruments. Long term debt relates to borrowings from governmental entities and as such no interest has been imputed on the non-interest bearing loan. | ||
(o) Contingencies | ||
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company's management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company's legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. | ||
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the Company's financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. | ||
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Legal fees associated with loss contingencies are expensed as incurred. | ||
(p) Income Taxes | ||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance so that the assets are recognized only to the extent that when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized. | ||
Per FASB ASC 740 “Income taxes” under the liability method, it is the Company’s policy to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. At December 31, 2013, the Company believes it has appropriately accounted for any unrecognized tax benefits. To the extent the Company prevails in matters for which a liability for an unrecognized benefit is established or is required to pay amounts in excess of the liability, the Company’s effective tax rate in a given financial statement period may be affected. Interest and penalties associated with the Company’s tax positions are recorded as Interest Expense. | ||
(q) Risk Management | ||
The Company’s credit risk is primarily attributable to its account receivables. The amounts presented in the accompanying consolidated balance sheets are net of allowances for doubtful accounts, estimated by the Company’s management based on prior experience and the current economic environment. The Company is exposed to credit-related losses in the event of non-performance by counterparties to the financial instruments. Credit exposure is minimized by dealing with only credit worthy counterparties. Accounts receivable for the Company’s three primary customers totaled $1,473,682 (73%) at December 31, 2013 (2012 - $1,648,428 or 75%). | ||
The credit risk on cash and cash equivalents is limited because the Company limits its exposure to credit loss by placing its cash and cash equivalents with major financial institutions. | ||
The Company is not exposed to significant interest rate risk to the extent that the long term debt maintained from the foreign government agencies is subject to a fixed rate of interest. | ||
In order to manage its exposure to foreign exchange risks, the Company is closely monitoring the fluctuations in the foreign currency exchange rates and the impact on the value of cash and cash equivalents, accounts receivable, and accounts payable. | ||
(r) Recent Accounting Pronouncements | ||
In January 2013, the FASB issued ASU 2013-01, Balance Sheet (Topic 210) - Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. This amendment requires companies to disclose information about financial instruments that have been offset and related arrangements to enable users of the company's financial statements to understand the effect of those arrangements on the company's financial position. Companies will be required to provide both net (offset amounts) and gross information in the notes to the financial statements for relevant assets and liabilities that are offset. The guidance is effective prospectively for the Company's interim and annual periods beginning after January 1, 2013. Adoption of this amendment had no impact on the on the Company’s balance sheet or results of operations. |
3_ACCOUNTS_RECEIVABLE
3. ACCOUNTS RECEIVABLE | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Note 3. ACCOUNTS RECEIVABLE | ' | ||||||||
2013 | 2012 | ||||||||
Accounts receivable | $ | 2,056,964 | $ | 2,212,448 | |||||
Allowances for doubtful accounts | (44,849 | ) | (13,089 | ) | |||||
$ | 2,012,115 | $ | 2,199,359 | ||||||
The Company has pledged $156,066 (2012 - $69,410) of the above listed accounts receivable as collateral for the Flexible Solutions Ltd. loan from AFSC (see Note 9b). | |||||||||
4_INVENTORIES
4. INVENTORIES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Note 4. INVENTORIES | ' | ||||||||
2013 | 2012 | ||||||||
Completed goods | $ | 1,527,563 | $ | 1,740,186 | |||||
Work in progress | 34,702 | 31,593 | |||||||
Raw materials | 1,499,271 | 1,589,981 | |||||||
$ | 3,061,536 | $ | 3,361,760 | ||||||
The Company has pledged $459,339 (2012 - $487,903) of the above listed inventories as collateral for the Flexible Solutions Ltd. loan from AFSC (see Note 9b) | |||||||||
5_PROPERTY_EQUIPMENT_AND_LEASE
5. PROPERTY, EQUIPMENT AND LEASEHOLDS | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Notes to Financial Statements | ' | ||||||||||||
Note 5. PROPERTY, EQUIPMENT AND LEASEHOLDS | ' | ||||||||||||
2013 | Accumulated | 2013 | |||||||||||
Cost | Depreciation | Net | |||||||||||
Buildings | $ | 5,233,147 | $ | 2,419,217 | $ | 2,813,930 | |||||||
Computer hardware | 102,225 | 90,265 | 11,960 | ||||||||||
Furniture and fixtures | 27,098 | 22,310 | 4,788 | ||||||||||
Office equipment | 22,400 | 20,042 | 2,358 | ||||||||||
Manufacturing equipment | 6,014,006 | 3,555,731 | 2,458,275 | ||||||||||
Trailer | 16,233 | 13,992 | 2,241 | ||||||||||
Technology | 128,442 | 51,377 | 77,065 | ||||||||||
Land | 460,506 | — | 460,506 | ||||||||||
$ | 12,004,057 | $ | 6,172,934 | $ | 5,831,123 | ||||||||
2012 | Accumulated | 2012 | |||||||||||
Cost | Depreciation | Net | |||||||||||
Buildings | $ | 5,372,327 | $ | 2,122,396 | $ | 3,249,931 | |||||||
Computer hardware | 106,457 | 88,811 | 17,646 | ||||||||||
Furniture and fixtures | 28,385 | 22,155 | 6,230 | ||||||||||
Office equipment | 23,946 | 20,795 | 3,151 | ||||||||||
Manufacturing equipment | 6,039,836 | 2,725,324 | 3,314,512 | ||||||||||
Trailer | 17,353 | 13,930 | 3,423 | ||||||||||
Technology | 137,308 | 27,461 | 109,847 | ||||||||||
Truck | 11,951 | 9,512 | 2,439 | ||||||||||
Land | 478,551 | — | 478,551 | ||||||||||
$ | 12,216,114 | $ | 5,030,384 | $ | 7,185,730 | ||||||||
Amount of depreciation expense for 2013: $1,279,255 (2012: $1,245,114) | |||||||||||||
The following carrying amount of property, equipment and leaseholds held by Flexible Solutions Ltd. serves as collateral for the AFSC loan (see Note 9b): | |||||||||||||
Land | $ | 261,413 | |||||||||||
Building | 780,527 | ||||||||||||
Building improvements | 827,645 | ||||||||||||
Manufacturing equipment | 2,129,434 | ||||||||||||
Trailer | 2,241 | ||||||||||||
Technology | 77,065 | ||||||||||||
6_PATENTS
6. PATENTS | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Notes to Financial Statements | ' | ||||||||||||
Note 6. PATENTS | ' | ||||||||||||
2013 | Accumulated | 2013 | |||||||||||
Cost | Amortization | Net | |||||||||||
Patents | $ | 249,284 | $ | 80,416 | $ | 168,868 | |||||||
2012 | Accumulated | 2012 | |||||||||||
Cost | Amortization | Net | |||||||||||
Patents | $ | 266,451 | $ | 65,939 | $ | 200,512 | |||||||
Decrease in 2013 cost was due to currency conversion. 2013 cost in Canadian dollars - $265,102 (2012 - $265,102 in Canadian dollars). | |||||||||||||
Amount of depreciation for 2013: $19,361 (2012: $11,124). | |||||||||||||
Estimated depreciation expense over the next five years is as follows: | |||||||||||||
2014 | $ | 19,051 | |||||||||||
2015 | 19,051 | ||||||||||||
2016 | 19,051 | ||||||||||||
2017 | 19,051 | ||||||||||||
2018 | 19,051 | ||||||||||||
7_LONG_TERM_DEPOSITS
7. LONG TERM DEPOSITS | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Note 7. LONG TERM DEPOSITS | ' | ||||||||
The Company has reclassified certain security deposits to better reflect their long term nature. Long term deposits consist of damage deposits held by landlords and security deposits held by various vendors. | |||||||||
2013 | 2012 | ||||||||
Long term deposits | $ | 4,781 | $ | 7,893 | |||||
8_SHORTTERM_LINE_OF_CREDIT
8. SHORT-TERM LINE OF CREDIT | 12 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
Note 8. SHORT-TERM LINE OF CREDIT | ' |
In March 2012, the Company signed a new agreement with Harris Bank to replace the expiring credit line. The revolving line of credit was increased to an aggregate amount of up to the lesser of (i) $5,000,000, or (ii) 75% of eligible domestic accounts receivable and certain foreign accounts receivable plus 40% of inventory. The Company can borrow an additional $1,400,000 using other assets as collateral. Both loans are at an annual interest rate of 3.75%. | |
The Revolving Line of Credit contains customary affirmative and negative covenants, including the following: compliance with laws, provision of financial statements and periodic reports, payment of taxes, maintenance of inventory and insurance, maintenance of operating accounts at the Bank, the Bank’s access to collateral, formation or acquisition of subsidiaries, incurrence of indebtedness, dispositions of assets, granting liens, changes in business, ownership or business locations, engaging in mergers and acquisitions, making investments or distributions and affiliate transactions. The covenants also require that the Company maintain a minimum ratio of qualifying financial assets to the sum of qualifying financial obligations. As of December 31, 2013, Company was in compliance with all loan covenants. | |
To secure the repayment of any amounts borrowed under the Revolving Line of Credit, the Company granted to the Bank a security interest in substantially all of the assets of NanoChem Solutions Inc., exclusive of intellectual property assets. | |
Short-term borrowings outstanding under the Revolving Line as of December 31, 2013 were $1,400,000 (December 31, 2012 - $1,205,000) and there were no amounts outstanding on the secured loan. | |
9_LONG_TERM_DEBT
9. LONG TERM DEBT | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Note 9. LONG TERM DEBT | ' | ||||||||
(a) Flexible Solutions Ltd. has received a non-interest bearing loan from the Department of Agriculture and Agri-Food Canada (“AAFC”). Eligible for up to $1,000,000 in Canadian funds, the Company had borrowed $910,801 in Canadian funds (US$856,335) as of December 31, 2013 on an unsecured basis (2012 - CDN$910,801; US$915,446). The balance owing at December 31, 2013 was $364,320 in Canadian funds (US$342,534). The repayment schedule is as follows: | |||||||||
Amount Due (in CDN funds) | Payment Due Date | ||||||||
$182,160 | 31-Dec-14 | ||||||||
$182,160 | 31-Dec-15 | ||||||||
(b) Flexible Solutions Ltd. has also received a 5% simple interest loan from Agriculture Financial Services Corp. (“AFSC”). Eligible for up to $2,000,000 in Canadian funds, the Company had originally borrowed $1,491,000 in Canadian dollars. The Company was required to make interest payments until May 1, 2010 and then started to pay down the principal in equal payments until April 1, 2015. The borrowing balance as December 31, 2013 was $1,016,056 in Canadian funds ($955,296US). The borrowing balance as December 31, 2012 was $1,170,811 in Canadian funds ($1,176,782US). The Company has pledged the assets of the Taber, AB building, including equipment, inventory and accounts receivable (see Notes 3, 4 and 5) as collateral, as well as signed a promissory note guaranteeing the amount of the loan. | |||||||||
The Company has committed to the following repayments: | |||||||||
2014 | $ | 180,996 | |||||||
2015 | $ | 75,415 | |||||||
As of December 31, 2013, Company was in compliance with all loan covenants. | |||||||||
Continuity | 2013 | 2012 | |||||||
Balance, January 1 | $ | 1,726,050 | 1,976,992 | ||||||
Less: Payments on loan | 307,833 | 310,384 | |||||||
Effect of exchange rate | (120,387 | ) | 59,512 | ||||||
Balance, December 31 | $ | 1,297,830 | $ | 1,726,050 | |||||
Outstanding balance at December 31, | 2013 | 2012 | |||||||
a) Long term debt - AAFC | $ | 342,534 | $ | 549,268 | |||||
b) Long term debt - AFSC | 955,296 | 1,176,782 | |||||||
Long-term Debt | $ | 1,297,830 | $ | 1,726,050 | |||||
Less: current portion | (304,556 | ) | (318,644 | ) | |||||
$ | 993,274 | $ | 1,407,406 | ||||||
10_INCOME_TAX
10. INCOME TAX | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Note 10. INCOME TAX | ' | ||||||||
The provision for income tax expense (benefit) is compromised of the following: | |||||||||
2013 | 2012 | ||||||||
Current tax, federal | $ | (110,302 | ) | $ | 921,247 | ||||
Current tax, state | (24,418 | ) | 205,221 | ||||||
Current tax, foreign | - | - | |||||||
Current tax, total | (134,720 | ) | 1,126,468 | ||||||
Deferred income tax, federal | (79,178 | ) | (73,111 | ) | |||||
Deferred income tax, state | - | - | |||||||
Deferred income tax, foreign | (2,329,217 | ) | - | ||||||
Deferred income tax, total | (2,408,395 | ) | (73,111 | ) | |||||
Total | $ | (2,543,115 | ) | $ | 1,053,357 | ||||
The following table reconciles the income tax benefit at the U.S. Federal statutory rate to income tax benefit at the Company's effective tax rates. | |||||||||
2013 | 2012 | ||||||||
Loss before taxes | (721,481 | ) | (31,090 | ) | |||||
US statutory tax rate | 38.62 | % | 34 | % | |||||
Expected income tax (recovery) | (278,635 | ) | (10,571 | ) | |||||
Non-deductible items | (396,793 | ) | (71,650 | ) | |||||
Change in estimates | (163,928 | ) | 758 | ||||||
Change in enacted tax rate | 91,711 | - | |||||||
Option expired during the year | 20,878 | - | |||||||
Functional currency adjustments | 164,890 | (40,925 | ) | ||||||
Foreign tax rate difference | 365,377 | 217,576 | |||||||
Change in valuation allowance | (2,346,616 | ) | 752,948 | ||||||
Total income taxes (recovery) | (2,543,115 | ) | 848,136 | ||||||
Current income tax expenses (recovery) | (134,720 | ) | 1,126,468 | ||||||
Deferred tax expenses (recovery) | (2,408,395 | ) | (73,111 | ) | |||||
Total income taxes (recovery) | (2,543,115 | ) | 1,053,357 | ||||||
Deferred taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes. Deferred tax assets (liabilities) at December 31, 2013 and 2012 are comprised of the following: | |||||||||
Canada | 2013 | 2012 | |||||||
Non capital loss carryforwards | 1,596,755 | 2,119,669 | |||||||
Patents | 33,936 | (118 | ) | ||||||
Fixed Assets | 698,526 | 199,983 | |||||||
2,329,217 | 2,319,534 | ||||||||
Valuation Allowance | - | 2,319,534 | |||||||
Net Deferred tax asset (liability) | 2,329,217 | - | |||||||
USA | |||||||||
2013 | 2012 | ||||||||
Net operating loss carryforwards | - | 108,969 | |||||||
Fixed Assets | 348,517 | 272,062 | |||||||
Stock-Based Compensation | 213,662 | 147,051 | |||||||
580,178 | 528,082 | ||||||||
Deferred tax asset not recognized | 208,889 | 235,971 | |||||||
Net Deferred tax asset | 371,289 | 292,111 | |||||||
The Company has non operating loss carryforwards of approximately $6,387,020 (2012 - $6,378,112) which may be carried forward to apply against future year income tax for Canadian income tax purposes, subject to the final determination by taxation authorities, expiring in the following years: | |||||||||
Expiry | Loss | ||||||||
2014 | - | ||||||||
2015 | 75,153 | ||||||||
2026 | 878,698 | ||||||||
2027 | 789,096 | ||||||||
2028 | 707,062 | ||||||||
2029 | 973,931 | ||||||||
2030 | 1,017,150 | ||||||||
2031 | 1,171,186 | ||||||||
2032 | 765,836 | ||||||||
2033 | 8,908 | ||||||||
Total | 6,387,020 | ||||||||
As at December 31, 2013, the Company's deferred tax asset attributable to its net operating loss carry forward is nil (2012 – $nil). | |||||||||
Accounting for uncertainty for Income Tax | |||||||||
Effective January 1, 2009, the Company adopted the interpretation for accounting for uncertainty in income taxes which was an interpretation of the accounting standard accounting for income taxes. This interpretation created a single model to address accounting for uncertainty in tax positions. This interpretation clarifies the accounting for income taxes, by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. | |||||||||
As at December 31, 2013 and 2012, the Company’s consolidated balance sheets did not reflect a liability for uncertain tax positions, nor any accrued penalties or interest associated with income tax uncertainties. The Company is subject to income taxation at the federal and state levels. The Company is subject to US federal tax examinations for the tax years 2008 through 2011. Loss carryforwards generated or utilized in years earlier than 2008 are also subject to examination and adjustment. The Company has no income tax examinations in process. | |||||||||
The operating income shown in the income statement is on a consolidated basis. As shown in the income tax reconciliation in this Note 10, net income and net loss has been segregated so that the financial statement reader can see that the Company has a significant net income before tax in the United States, and a significant loss before tax in 'foreign' jurisdictions. On a consolidated basis, the net income earned in the United States is being offset by the losses in Canada. |
11_INCOME_LOSS_PER_SHARE
11. INCOME (LOSS) PER SHARE | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Note 11. INCOME (LOSS) PER SHARE | ' | ||||||||
We present both basic and diluted loss per share (“LPS”) on the face of our consolidated statements of operations. Basic and diluted LPS are calculated as follows: | |||||||||
2013 | 2012 | ||||||||
Net loss | $ | 1,821,634 | $ | (1,084,448 | ) | ||||
Weighted average common shares outstanding: | |||||||||
Basic and diluted | 13,169,991 | 13,169,991 | |||||||
Net loss per common share: | |||||||||
Basic and Diluted | $ | 0.14 | $ | (0.08 | ) | ||||
Certain stock options whose terms and conditions are described in Note 12, “Stock Options” could potentially dilute basic LPS in the future, but were not included in the computation of diluted LPS because to do so would have been anti-dilutive. Those anti-dilutive options are as follows. | |||||||||
2013 | 2012 | ||||||||
Anti-dilutive options | 1,164,000 | 990,000 | |||||||
There were no preferred shares issued and outstanding during the years ended December 31, 2013 or 2012. |
12_STOCK_OPTIONS
12. STOCK OPTIONS | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Notes to Financial Statements | ' | ||||||||||||
Note 12. Stock Options | ' | ||||||||||||
The Company adopted a stock option plan ("Plan"). The purpose of this Plan is to provide additional incentives to key employees, officers, directors and consultants of the Company and its subsidiaries in order to help attract and retain the best available personnel for positions of responsibility and otherwise promote the success of the Company’s business. It is intended that options issued under this Plan constitute non-qualified stock options. The general terms of awards under the option plan are that 100% of the options granted will vest the year following the grant. The maximum term of options granted is 5 years. | |||||||||||||
The Company may issue stock options and stock bonuses for shares of its common stock to provide incentives to directors, key employees and other persons who contribute to the success of the Company. The exercise price of all incentive options are issued for not less than fair market value at the date of grant. | |||||||||||||
The following table summarizes the Company’s stock option activity for the years ended December 31, 2013 and 2012: | |||||||||||||
Number | Exercise price | Weighted average exercise price | |||||||||||
of shares | per share | ||||||||||||
Balance, December 31, 2011 | 1,193,700 | $ | 1.50 - $3.60 | $ | 2.04 | ||||||||
Granted | 94,000 | $ | 2.00 - 2.22 | $ | 2.14 | ||||||||
Cancelled or expired | (288,700 | ) | $ | 1.50 - $3.60 | $ | 2.35 | |||||||
Balance, December 31, 2012 | 999,000 | $ | 1.50 - $2.45 | $ | 1.96 | ||||||||
Granted | 233,000 | $ | 1.21 - 1.50 | $ | 1.27 | ||||||||
Cancelled or expired | (68,000 | ) | $ | 3.6 | $ | 3.6 | |||||||
Balance, December 31, 2013 | 1,164,000 | $ | 1.21 – 2.45 | $ | 1.73 | ||||||||
Exercisable, December 31, 2013 | 1,034,000 | $ | 1.21 – 2.45 | $ | 1.75 | ||||||||
The weighted-average remaining contractual life of outstanding options is 2.1 years. The aggregate intrinsic value of options outstanding at December 31, 2013 is nil. The weighted-average remaining contractual life of outstanding options exercisable is 2.1 years. The aggregate intrinsic value of exercisable options outstanding at December 31, 2013 is nil. | |||||||||||||
The fair value of each option grant is calculated using the following weighted average assumptions: | |||||||||||||
2013 | 2012 | ||||||||||||
Expected life – years | 5 | 5 | |||||||||||
Interest rate | 0.36 – 0.63 | % | 0.36 – 0.38 | % | |||||||||
Volatility | 51 - 63 | % | 51 - 58 | % | |||||||||
Dividend yield | -- | % | -- | % | |||||||||
Weighted average fair value of options granted | $ | 0.36 – 0.38 | $ | 0.38 | |||||||||
During the year ended December 31, 2013, the Company granted 55,000 (2012 – 33,000) stock options to consultants and has applied ASC 718 using the Black-Scholes option-pricing model, which resulted in additional expenses of $16,628 (2012 - $21,939). Options granted in other years resulted in additional expenses of $20,597 (2012 – $27,159). During the year ended December 31, 2013, employees were granted 178,000 (2012 – 61,000) stock options, which resulted in additional expenses of $56,975 (2012 – $39,586). Options granted in other years resulted in additional expenses in the amount of $34,955 for employees during the year ended December 31, 2013 (2012 - $53,766). No stock options were exercised during the year ended December 31, 2013. | |||||||||||||
As of December 31, 2013, there was approximately $29,247 of compensation expense related to non-vested awards. This expense is expected to be recognized over a weighted average period of 2 years. | |||||||||||||
13_CAPITAL_STOCK
13. CAPITAL STOCK | 12 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
Note 13. Capital Stock | ' |
During the years ended December 31, 2012 and 2013, the Company did not issue any stock. | |
As of December 31, 2013, the Company holds 792,576 shares in treasury with the intention of cancelling them. |
14_SEGMENTED_SIGNIFICANT_CUSTO
14. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Notes to Financial Statements | ' | ||||||||||||
Note 14. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY | ' | ||||||||||||
The Company operates in two segments: | |||||||||||||
(a) Development and marketing of two lines of energy and water conservation products (as shown under the column heading “EWCP” below), which consists of a (i) liquid swimming pool blanket which saves energy and water by inhibiting evaporation from the pool surface, and (ii) food-safe powdered form of the active ingredient within the liquid blanket and which is designed to be used in still or slow moving drinking water sources. | |||||||||||||
(b) Manufacture of biodegradable polymers and chemical additives used within the petroleum, chemical, utility and mining industries to prevent corrosion and scaling in water piping (as shown under the column heading “TPA” below). These chemical additives are also manufactured for use in laundry and dish detergents, as well as in products to reduce levels of insecticides, herbicides and fungicides. | |||||||||||||
The accounting policies of the segments are the same as those described in Note 2, Significant Accounting Policies. The Company evaluates performance based on profit or loss from operations before income taxes, not including nonrecurring gains and losses and foreign exchange gains and losses. | |||||||||||||
The Company’s reportable segments are strategic business units that offer different, but synergistic products and services. They are managed separately because each business requires different technology and marketing strategies. | |||||||||||||
Year ended December 31, 2013: | |||||||||||||
EWCP | TPA | Consolidated | |||||||||||
Revenue | $ | 769,818 | $ | 15,031,778 | $ | 15,801,596 | |||||||
Interest expense | 49,539 | 59,660 | 109,199 | ||||||||||
Depreciation | 1,079,256 | 219,360 | 1,298,616 | ||||||||||
Extraordinary items | - | 250,000 | 250,000 | ||||||||||
Income tax expense (recovery) | - | -134,720 | -134,720 | ||||||||||
Segment profit (loss) | (713,633 | ) | 2,535,267 | 1,821,634 | |||||||||
Segment assets | 4,258,075 | 1,741,916 | 5,999,991 | ||||||||||
Expenditures for segment assets | 235,565 | - | 235,565 | ||||||||||
Year ended December 31, 2012: | |||||||||||||
EWCP | TPA | Consolidated | |||||||||||
Revenue | $ | 828,135 | $ | 15,571,972 | $ | 16,400,107 | |||||||
Interest expense | 78,467 | 49,940 | 128,407 | ||||||||||
Depreciation | 1,002,228 | 254,010 | 1,256,238 | ||||||||||
Income tax expense | - | 1,126,468 | 1,126,468 | ||||||||||
Segment profit (loss) | (2,745,801 | ) | 1,661,353 | (1,084,448 | ) | ||||||||
Segment assets | 5,424,966 | 1,961,276 | 7,386,242 | ||||||||||
Expenditures for segment assets | 80,217 | 16,504 | 96,721 | ||||||||||
Sales by territory are shown below: | |||||||||||||
2013 | 2012 | ||||||||||||
Canada | $ | 563,221 | $ | 718,128 | |||||||||
United States and abroad | 15,238,375 | 15,681,979 | |||||||||||
Total | $ | 15,801,596 | $ | 16,400,107 | |||||||||
The Company’s long-lived assets (property, equipment, leaseholds and patents) are located in Canada and the United States as follows: | |||||||||||||
2013 | 2012 | ||||||||||||
Canada | $ | 4,258,075 | $ | 5,424,966 | |||||||||
United States | 1,741,916 | 1,961,276 | |||||||||||
Total | $ | 5,999,991 | $ | 7,386,242 | |||||||||
Three customers accounted for $9,884,601 (63%) of sales made in 2013 (2012 - $9,712,657 or 59%). |
15_COMMITMENTS
15. COMMITMENTS | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Notes to Financial Statements | ' | ||||
Note 15. COMMITMENTS | ' | ||||
The Company is committed to minimum rental payments for property and premises aggregating approximately $149,944 over the term of three leases, the last expiring on September 30, 2014. | |||||
Commitments in each of the next five years are as follows: | |||||
2013 | $ | 138,944 | |||
2014 | $ | 11,000 | |||
16_CONTINGENCIES
16. CONTINGENCIES | 12 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
Note 16. CONTINGENCIES | ' |
None. |
17_SUBSEQUENT_EVENTS
17. SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Notr 17. SUBSEQUENT EVENTS | ' |
On January 1, 2014, the Company issued 127,000 stock options to employees and 85,000 stock options to consultants. The strike price is $1.00, with a vesting date of December 31, 2014 and all expire December 31, 2018. |
18_COMPARATIVE_FIGURES
18. COMPARATIVE FIGURES | 12 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
Note 18. COMPARATIVE FIGURES | ' |
Certain of the comparative figures have been reclassified to conform with the current year’s presentation. |
2_SIGNIFICANT_ACCOUNTING_POLIC1
2. SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |
Dec. 31, 2013 | ||
Significant Accounting Policies Policies | ' | |
Basis of Presentation | ' | |
These consolidated financial statements include the accounts of Flexible Solutions International, Inc. (the “Company”), and its wholly-owned subsidiaries Flexible Fermentation Ltd. (“Flexible Ltd.”), NanoChem Solutions Inc. (“NanoChem”), Flexible Solutions Ltd., Flexible Biomass LP, and FS Biomass Inc. All inter-company balances and transactions have been eliminated. The company was incorporated May 12, 1998 in the State of Nevada and had no operations until June 30, 1998. | ||
Flexible Solutions International, Inc. and its subsidiaries develop, manufacture and market specialty chemicals which slow the evaporation of water. One product, HEATSAVR®, is marketed for use in swimming pools and spas where its use, by slowing the evaporation of water, allows the water to retain a higher temperature for a longer period of time and thereby reduces the energy required to maintain the desired temperature of the water in the pool. Another product, WATERSAVR®, is marketed for water conservation in irrigation canals, aquaculture, and reservoirs where its use slows water loss due to evaporation. In addition to the water conservation products, the Company also manufactures and markets water-soluble chemicals utilizing thermal polyaspartate biopolymers (hereinafter referred to as “TPAs”), which are beta-proteins manufactured from the common biological amino acid, L-aspartic. TPAs can be formulated to prevent corrosion and scaling in water piping within the petroleum, chemical, utility and mining industries. TPAs are also used as proteins to enhance fertilizers in improving crop yields and can be used as additives for household laundry detergents, consumer care products and pesticides. | ||
Cash and Cash Equivalents | ' | |
The Company considers all highly liquid investments purchased with an original or remaining maturity of less than three months at the date of purchase to be cash equivalents. Cash and cash equivalents are maintained with several financial institutions. | ||
Inventories and Cost of Sales | ' | |
The Company has four major classes of inventory: finished goods, work in progress, raw materials and supplies. In all classes, inventory is valued at the lower of cost or market. Cost is determined on a first-in, first-out basis. Cost of sales includes all expenditures incurred in bringing the goods to the point of sale. Inventory costs and costs of sales include direct costs of the raw material, inbound freight charges, warehousing costs, handling costs (receiving and purchasing) and utilities and overhead expenses related to the Company’s manufacturing and processing facilities. | ||
Allowance for Doubtful Accounts | ' | |
The Company provides an allowance for doubtful accounts when management estimates collectibility to be uncertain. Accounts receivable are continually reviewed to determine which, if any, accounts are doubtful of collection. In making the determination of the appropriate allowance amount, the Company considers current economic and industry conditions, relationships with each significant customer, overall customer credit-worthiness and historical experience. | ||
Property, Equipment and Leaseholds | ' | |
The following assets are recorded at cost and depreciated using the methods and annual rates shown below: | ||
Computer hardware | 30% Declining balance | |
Automobile | 30% Declining balance | |
Furniture and fixtures | 20% Declining balance | |
Manufacturing equipment | 20% Declining balance | |
Office equipment | 20% Declining balance | |
Building and improvements | 10% Declining balance | |
Leasehold improvements | Straight-line over lease term | |
Property and equipment are written down to net realizable value when management determines there has been a change in circumstances which indicates its carrying amount may not be recoverable. No write-downs have been necessary to date. | ||
Costs capitalized on self-constructed assets, classified as plant under construction, include contracted costs and supplies, but not capitalized interest costs. The Company has commenced depreciating its plant as construction has been completed and the plant is in use. | ||
Impairment of Long-Lived Assets | ' | |
In accordance with FASB Codification Topic 360, “Property, Plant and Equipment (ASC 360), the Company reviews long-lived assets, including, but not limited to, property and equipment, patents and other assets, for impairment annually or whenever events or changes in circumstances indicate the carrying amounts of assets may not be recoverable. The carrying value of long-lived assets is assessed for impairment by evaluating operating performance and future undiscounted cash flows of the underlying assets. If the expected future cash flows of an asset is less than its carrying value, an impairment measurement is indicated. Impairment charges are recorded to the extent that an asset’s carrying value exceeds its fair value. Accordingly, actual results could vary significantly from such estimates. There were no impairment charges during the periods presented. | ||
Foreign Currency | ' | |
The functional currency of three of the Company’s subsidiaries is the Canadian Dollar. The translation of the Canadian Dollar to the reporting currency of the U.S. Dollar is performed for assets and liabilities using exchange rates in effect at the balance sheet date. Revenue and expense transactions are translated using average exchange rates prevailing during the year. Translation adjustments arising on conversion of the financial statements from the subsidiary’s functional currency, Canadian Dollars, into the reporting currency, U.S. Dollars, are excluded from the determination of income (loss) and are disclosed as other comprehensive income (loss) in the Statement of Comprehensive Income. | ||
Foreign exchange gains and losses relating to transactions not denominated in the applicable local currency are included in operating income (loss) if realized during the year and in comprehensive income (loss) if they remain unrealized at the end of the year. | ||
Revenue Recognition | ' | |
Revenue from product sales is recognized at the time the product is shipped since title and risk of loss is transferred to the purchaser upon delivery to the carrier. Shipments are made F.O.B. shipping point. The Company recognizes revenue when there is persuasive evidence of an arrangement, delivery to the carrier has occurred, the fee is fixed or determinable, collectability is reasonably assured and there are no significant remaining performance obligations. When significant post-delivery obligations exist, revenue is deferred until such obligations are fulfilled. To date there have been no such significant post-delivery obligations. | ||
Provisions are made at the time the related revenue is recognized for estimated product returns. Since the Company’s inception, product returns have been insignificant; therefore no provision has been established for estimated product returns. | ||
Deferred revenues consist of products sold to distributors with payment terms greater than the Company’s customary business terms due to lack of credit history or operating in a new market in which the Company has no prior experience. The Company defers the recognition of revenue until the criteria for revenue recognition have been met, and payments become due or cash is received from these distributors. | ||
Stock Issued in Exchange for Services | ' | |
The Company’s common stock issued in exchange for services is valued at estimated fair market value based upon trading prices of the Company’s common stock on the dates of the stock transactions. The corresponding expense of the services rendered is recognized over the period that the services are performed. | ||
Stock-based Compensation | ' | |
The Company recognizes compensation expense for all share-based payments, in accordance with FASB Codification Topic 718, Compensation — Stock Compensation, (ASC 718). Under the fair value recognition provisions of ASC 718, the Company recognizes share-based compensation expense, net of an estimated forfeiture rate, over the requisite service period of the award. | ||
The fair value at grant date of stock options is estimated using the Black-Scholes-Merton option-pricing model. Compensation expense is recognized on a straight-line basis over the stock option vesting period based on the estimated number of stock options that are expected to vest. Shares are issued from treasury upon exercise of stock options. | ||
Comprehensive Income | ' | |
Other comprehensive income refers to revenues, expenses, gains and losses that under generally accepted accounting principles are included in comprehensive income, but are excluded from net income as these amounts are recorded directly as an adjustment to stockholders’ equity. The Company’s other comprehensive income is primarily comprised of unrealized foreign exchange gains and losses. | ||
Income (loss) Per Share | ' | |
Basic earnings (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding in the period. Diluted earnings (loss) per share are calculated giving effect to the potential dilution of the exercise of options and warrants. Common equivalent shares, composed of incremental common shares issuable upon the exercise of stock options and warrants are included in diluted net income per share to the extent that these shares are dilutive. Common equivalent shares that have an anti-dilutive effect on net income per share have been excluded from the calculation of diluted weighted average shares outstanding for the years ended December 31, 2013 and 2012. | ||
Use of Estimates | ' | |
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and would impact the results of operations and cash flows. | ||
Estimates and underlying assumptions are reviewed at each period end. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. | ||
Significant areas requiring the use of management estimates include assumptions and estimates relating to the asset impairment analysis, share-based payments and warrants, valuation allowances for deferred income tax assets, determination of useful lives of property, plant and equipment, and the valuation of inventory. | ||
Financial Instruments | ' | |
The fair market value of the Company’s financial instruments comprising cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities, and short term line of credit were estimated to approximate their carrying values due to immediate or short-term maturity of these financial instruments. The Company maintains cash balances at financial institutions which at times, exceed federally insured amounts. The Company has not experienced any material losses in such accounts. | ||
The Company is exposed to foreign exchange and interest rate risk to the extent that market value rate fluctuations materially differ from financial assets and liabilities, subject to fixed long-term rates. | ||
Fair Value of Financial Instruments | ' | |
In August 2009, an update was made to Fair Value Measurements and Disclosures — “Measuring Liabilities at Fair Value.” This update permits entities to measure the fair value of liabilities, in circumstances in which a quoted price in an active market for an identical liability is not available, using a valuation technique that uses a quoted price of an identical liability when traded as an asset, quoted prices for similar liabilities or similar liabilities when traded as assets or the income or market approach that is consistent with the principles of Fair Value Measurements and Disclosures. Effective upon issuance, the Company has adopted this guidance with no material impact to the Company’s consolidated financial statements. | ||
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs described below, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. | ||
● | Level 1 – Quoted prices in active markets for identical assets or liabilities | |
● | Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
● | Level 3 – Unobservable inputs that are supported by little or no market activity which is significant to the fair value of the assets or liabilities. | |
The fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities and short term line of credit for all periods presented approximate their respective carrying amounts due to the short term nature of these financial instruments. Long term debt relates to borrowings from governmental entities and as such no interest has been imputed on the non-interest bearing loan. | ||
Contingencies | ' | |
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company's management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company's legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. | ||
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the Company's financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. | ||
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Legal fees associated with loss contingencies are expensed as incurred. | ||
Income Taxes | ' | |
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance so that the assets are recognized only to the extent that when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized. | ||
Per FASB ASC 740 “Income taxes” under the liability method, it is the Company’s policy to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. At December 31, 2013, the Company believes it has appropriately accounted for any unrecognized tax benefits. To the extent the Company prevails in matters for which a liability for an unrecognized benefit is established or is required to pay amounts in excess of the liability, the Company’s effective tax rate in a given financial statement period may be affected. Interest and penalties associated with the Company’s tax positions are recorded as Interest Expense. | ||
Risk Management | ' | |
The Company’s credit risk is primarily attributable to its account receivables. The amounts presented in the accompanying consolidated balance sheets are net of allowances for doubtful accounts, estimated by the Company’s management based on prior experience and the current economic environment. The Company is exposed to credit-related losses in the event of non-performance by counterparties to the financial instruments. Credit exposure is minimized by dealing with only credit worthy counterparties. Accounts receivable for the Company’s three primary customers totaled $1,473,682 (73%) at December 31, 2013 (2012 - $1,648,428 or 75%). | ||
The credit risk on cash and cash equivalents is limited because the Company limits its exposure to credit loss by placing its cash and cash equivalents with major financial institutions. | ||
The Company is not exposed to significant interest rate risk to the extent that the long term debt maintained from the foreign government agencies is subject to a fixed rate of interest. | ||
In order to manage its exposure to foreign exchange risks, the Company is closely monitoring the fluctuations in the foreign currency exchange rates and the impact on the value of cash and cash equivalents, accounts receivable, and accounts payable. | ||
Recent Accounting Pronouncements | ' | |
In January 2013, the FASB issued ASU 2013-01, Balance Sheet (Topic 210) - Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. This amendment requires companies to disclose information about financial instruments that have been offset and related arrangements to enable users of the company's financial statements to understand the effect of those arrangements on the company's financial position. Companies will be required to provide both net (offset amounts) and gross information in the notes to the financial statements for relevant assets and liabilities that are offset. The guidance is effective prospectively for the Company's interim and annual periods beginning after January 1, 2013. Adoption of this amendment had no impact on the on the Company’s balance sheet or results of operations. |
2_SIFNIFICANT_ACCOUNTING_POLIC
2. SIFNIFICANT ACCOUNTING POLICIES (Table) | 12 Months Ended | |
Dec. 31, 2013 | ||
Sifnificant Accounting Policies Table | ' | |
Method of Depreciation | ' | |
The following assets are recorded at cost and depreciated using the methods and annual rates shown below: | ||
Computer hardware | 30% Declining balance | |
Automobile | 30% Declining balance | |
Furniture and fixtures | 20% Declining balance | |
Manufacturing equipment | 20% Declining balance | |
Office equipment | 20% Declining balance | |
Building and improvements | 10% Declining balance | |
Leasehold improvements | Straight-line over lease term | |
3_ACCOUNTS_RECEIVABLE_Tables
3. ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accounts Receivable Tables | ' | ||||||||
Accounts Receivable | ' | ||||||||
2013 | 2012 | ||||||||
Accounts receivable | $ | 2,056,964 | $ | 2,212,448 | |||||
Allowances for doubtful accounts | (44,849 | ) | (13,089 | ) | |||||
$ | 2,012,115 | $ | 2,199,359 |
4_INVENTORIES_Tables
4. INVENTORIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Inventories Tables | ' | ||||||||
Inventories | ' | ||||||||
2013 | 2012 | ||||||||
Completed goods | $ | 1,527,563 | $ | 1,740,186 | |||||
Work in progress | 34,702 | 31,593 | |||||||
Raw materials | 1,499,271 | 1,589,981 | |||||||
$ | 3,061,536 | $ | 3,361,760 |
5_PROPERTY_PLANT_EQUIPMENT_Tab
5. PROPERTY, PLANT & EQUIPMENT (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Property Plant Equipment Tables | ' | ||||||||||||
Property, Plant & equipment | ' | ||||||||||||
2013 | Accumulated | 2013 | |||||||||||
Cost | Depreciation | Net | |||||||||||
Buildings | $ | 5,233,147 | $ | 2,419,217 | $ | 2,813,930 | |||||||
Computer hardware | 102,225 | 90,265 | 11,960 | ||||||||||
Furniture and fixtures | 27,098 | 22,310 | 4,788 | ||||||||||
Office equipment | 22,400 | 20,042 | 2,358 | ||||||||||
Manufacturing equipment | 6,014,006 | 3,555,731 | 2,458,275 | ||||||||||
Trailer | 16,233 | 13,992 | 2,241 | ||||||||||
Technology | 128,442 | 51,377 | 77,065 | ||||||||||
Land | 460,506 | — | 460,506 | ||||||||||
$ | 12,004,057 | $ | 6,172,934 | $ | 5,831,123 | ||||||||
2012 | Accumulated | 2012 | |||||||||||
Cost | Depreciation | Net | |||||||||||
Buildings | $ | 5,372,327 | $ | 2,122,396 | $ | 3,249,931 | |||||||
Computer hardware | 106,457 | 88,811 | 17,646 | ||||||||||
Furniture and fixtures | 28,385 | 22,155 | 6,230 | ||||||||||
Office equipment | 23,946 | 20,795 | 3,151 | ||||||||||
Manufacturing equipment | 6,039,836 | 2,725,324 | 3,314,512 | ||||||||||
Trailer | 17,353 | 13,930 | 3,423 | ||||||||||
Technology | 137,308 | 27,461 | 109,847 | ||||||||||
Truck | 11,951 | 9,512 | 2,439 | ||||||||||
Land | 478,551 | — | 478,551 | ||||||||||
$ | 12,216,114 | $ | 5,030,384 | $ | 7,185,730 | ||||||||
Capital assets | ' | ||||||||||||
The following carrying amount of property, equipment and leaseholds held by Flexible Solutions Ltd. serves as collateral for the AFSC loan (see Note 9b): | |||||||||||||
Land | $ | 261,413 | |||||||||||
Building | 780,527 | ||||||||||||
Building improvements | 827,645 | ||||||||||||
Manufacturing equipment | 2,129,434 | ||||||||||||
Trailer | 2,241 | ||||||||||||
Technology | 77,065 | ||||||||||||
6_PATENTS_Tables
6. PATENTS (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Patents Tables | ' | ||||||||||||
Patents | ' | ||||||||||||
2013 | Accumulated | 2013 | |||||||||||
Cost | Amortization | Net | |||||||||||
Patents | $ | 249,284 | $ | 80,416 | $ | 168,868 | |||||||
2012 | Accumulated | 2012 | |||||||||||
Cost | Amortization | Net | |||||||||||
Patents | $ | 266,451 | $ | 65,939 | $ | 200,512 | |||||||
Estimated depreciation expense | ' | ||||||||||||
Estimated depreciation expense over the next five years is as follows: | |||||||||||||
2014 | $ | 19,051 | |||||||||||
2015 | 19,051 | ||||||||||||
2016 | 19,051 | ||||||||||||
2017 | 19,051 | ||||||||||||
2018 | 19,051 | ||||||||||||
7_LONG_TERM_DEPOSITS_Tables
7. LONG TERM DEPOSITS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Long Term Deposits Tables | ' | ||||||||
Long Term Deposits | ' | ||||||||
The Company has reclassified certain security deposits to better reflect their long term nature. Long term deposits consist of damage deposits held by landlords and security deposits held by various vendors. | |||||||||
2013 | 2012 | ||||||||
Long term deposits | $ | 4,781 | $ | 7,893 | |||||
9_LONG_TERM_DEBT_Tables
9. LONG TERM DEBT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Long Term Debt Tables | ' | ||||||||
Non-interest bearing loan repayment | ' | ||||||||
The repayment schedule is as follows: | |||||||||
Amount Due (in CDN funds) | Payment Due Date | ||||||||
$182,160 | 31-Dec-14 | ||||||||
$182,160 | 31-Dec-15 | ||||||||
Interest loan Repayment | ' | ||||||||
The Company has committed to the following repayments: | |||||||||
2014 | $ | 180,996 | |||||||
2015 | $ | 75,415 | |||||||
Outstanding balance loan | ' | ||||||||
As of December 31, 2013, Company was in compliance with all loan covenants. | |||||||||
Continuity | 2013 | 2012 | |||||||
Balance, January 1 | $ | 1,726,050 | 1,976,992 | ||||||
Less: Payments on loan | 307,833 | 310,384 | |||||||
Effect of exchange rate | (120,387 | ) | 59,512 | ||||||
Balance, December 31 | $ | 1,297,830 | $ | 1,726,050 | |||||
Outstanding balance at December 31, | 2013 | 2012 | |||||||
a) Long term debt - AAFC | $ | 342,534 | $ | 549,268 | |||||
b) Long term debt - AFSC | 955,296 | 1,176,782 | |||||||
Long-term Debt | $ | 1,297,830 | $ | 1,726,050 | |||||
Less: current portion | (304,556 | ) | (318,644 | ) | |||||
$ | 993,274 | $ | 1,407,406 | ||||||
10_INCOME_TAX_Tables
10. INCOME TAX (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Components of Income Tax Expense (Benefit) | ' | ||||||||
2013 | 2012 | ||||||||
Current tax, federal | $ | (110,302 | ) | $ | 921,247 | ||||
Current tax, state | (24,418 | ) | 205,221 | ||||||
Current tax, foreign | - | - | |||||||
Current tax, total | (134,720 | ) | 1,126,468 | ||||||
Deferred income tax, federal | (79,178 | ) | (73,111 | ) | |||||
Deferred income tax, state | - | - | |||||||
Deferred income tax, foreign | (2,329,217 | ) | - | ||||||
Deferred income tax, total | (2,408,395 | ) | (73,111 | ) | |||||
Total | $ | (2,543,115 | ) | $ | 1,053,357 | ||||
Schedule of Reconcilation of Income Taxes | ' | ||||||||
The following table reconciles the income tax benefit at the U.S. Federal statutory rate to income tax benefit at the Company's effective tax rates. | |||||||||
2013 | 2012 | ||||||||
Loss before taxes | (721,481 | ) | (31,090 | ) | |||||
US statutory tax rate | 38.62 | % | 34 | % | |||||
Expected income tax (recovery) | (278,635 | ) | (10,571 | ) | |||||
Non-deductible items | (396,793 | ) | (71,650 | ) | |||||
Change in estimates | (163,928 | ) | 758 | ||||||
Change in enacted tax rate | 91,711 | - | |||||||
Option expired during the year | 20,878 | - | |||||||
Functional currency adjustments | 164,890 | (40,925 | ) | ||||||
Foreign tax rate difference | 365,377 | 217,576 | |||||||
Change in valuation allowance | (2,346,616 | ) | 752,948 | ||||||
Total income taxes (recovery) | (2,543,115 | ) | 848,136 | ||||||
Current income tax expenses (recovery) | (134,720 | ) | 1,126,468 | ||||||
Deferred tax expenses (recovery) | (2,408,395 | ) | (73,111 | ) | |||||
Total income taxes (recovery) | (2,543,115 | ) | 1,053,357 | ||||||
Deferred tax assets (liabilities) | ' | ||||||||
Deferred tax assets (liabilities) at December 31, 2013 and 2012 are comprised of the following: | |||||||||
Canada | 2013 | 2012 | |||||||
Non capital loss carryforwards | 1,596,755 | 2,119,669 | |||||||
Patents | 33,936 | (118 | ) | ||||||
Fixed Assets | 698,526 | 199,983 | |||||||
2,329,217 | 2,319,534 | ||||||||
Valuation Allowance | - | 2,319,534 | |||||||
Net Deferred tax asset (liability) | 2,329,217 | - | |||||||
USA | |||||||||
2013 | 2012 | ||||||||
Net operating loss carryforwards | - | 108,969 | |||||||
Fixed Assets | 348,517 | 272,062 | |||||||
Stock-Based Compensation | 213,662 | 147,051 | |||||||
580,178 | 528,082 | ||||||||
Deferred tax asset not recognized | 208,889 | 235,971 | |||||||
Net Deferred tax asset | 371,289 | 292,111 | |||||||
Non operating loss carryforwards | ' | ||||||||
Expiry | Loss | ||||||||
2014 | - | ||||||||
2015 | 75,153 | ||||||||
2026 | 878,698 | ||||||||
2027 | 789,096 | ||||||||
2028 | 707,062 | ||||||||
2029 | 973,931 | ||||||||
2030 | 1,017,150 | ||||||||
2031 | 1,171,186 | ||||||||
2032 | 765,836 | ||||||||
2033 | 8,908 | ||||||||
Total | 6,387,020 |
11_INCOME_LOSS_PER_SHARE_Table
11. INCOME (LOSS) PER SHARE (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Basic and diluted loss per share | ' | ||||||||
Basic and diluted LPS are calculated as follows: | |||||||||
2013 | 2012 | ||||||||
Net loss | $ | 1,821,634 | $ | (1,084,448 | ) | ||||
Weighted average common shares outstanding: | |||||||||
Basic and diluted | 13,169,991 | 13,169,991 | |||||||
Net loss per common share: | |||||||||
Basic and Diluted | $ | 0.14 | $ | (0.08 | ) | ||||
Anti-dilutive options | ' | ||||||||
2013 | 2012 | ||||||||
Anti-dilutive options | 1,164,000 | 990,000 |
12_STOCK_OPTIONS_Tables
12. STOCK OPTIONS (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Stock Options Tables | ' | ||||||||||||
Stock option activity | ' | ||||||||||||
The following table summarizes the Company’s stock option activity for the years ended December 31, 2013 and 2012: | |||||||||||||
Number | Exercise price | Weighted average exercise price | |||||||||||
of shares | per share | ||||||||||||
Balance, December 31, 2011 | 1,193,700 | $ | 1.50 - $3.60 | $ | 2.04 | ||||||||
Granted | 94,000 | $ | 2.00 - 2.22 | $ | 2.14 | ||||||||
Cancelled or expired | (288,700 | ) | $ | 1.50 - $3.60 | $ | 2.35 | |||||||
Balance, December 31, 2012 | 999,000 | $ | 1.50 - $2.45 | $ | 1.96 | ||||||||
Granted | 233,000 | $ | 1.21 - 1.50 | $ | 1.27 | ||||||||
Cancelled or expired | (68,000 | ) | $ | 3.6 | $ | 3.6 | |||||||
Balance, December 31, 2013 | 1,164,000 | $ | 1.21 – 2.45 | $ | 1.73 | ||||||||
Exercisable, December 31, 2013 | 1,034,000 | $ | 1.21 – 2.45 | $ | 1.75 | ||||||||
Fair value of each option grant | ' | ||||||||||||
The fair value of each option grant is calculated using the following weighted average assumptions: | |||||||||||||
2013 | 2012 | ||||||||||||
Expected life – years | 5 | 5 | |||||||||||
Interest rate | 0.36 – 0.63 | % | 0.36 – 0.38 | % | |||||||||
Volatility | 51 - 63 | % | 51 - 58 | % | |||||||||
Dividend yield | -- | % | -- | % | |||||||||
Weighted average fair value of options granted | $ | 0.36 – 0.38 | $ | 0.38 | |||||||||
14_SEGMENTED_SIGNIFICANT_CUSTO1
14. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Segmented Significant Customer Information And Economic Dependency Tables | ' | ||||||||||||
Reportable segments | ' | ||||||||||||
The Company’s reportable segments are strategic business units that offer different, but synergistic products and services. They are managed separately because each business requires different technology and marketing strategies. | |||||||||||||
Year ended December 31, 2013: | |||||||||||||
EWCP | TPA | Consolidated | |||||||||||
Revenue | $ | 769,818 | $ | 15,031,778 | $ | 15,801,596 | |||||||
Interest expense | 49,539 | 59,660 | 109,199 | ||||||||||
Depreciation | 1,079,256 | 219,360 | 1,298,616 | ||||||||||
Extraordinary items | - | 250,000 | 250,000 | ||||||||||
Income tax expense (recovery) | - | -134,720 | -134,720 | ||||||||||
Segment profit (loss) | (713,633 | ) | 2,535,267 | 1,821,634 | |||||||||
Segment assets | 4,258,075 | 1,741,916 | 5,999,991 | ||||||||||
Expenditures for segment assets | 235,565 | - | 235,565 | ||||||||||
Year ended December 31, 2012: | |||||||||||||
EWCP | TPA | Consolidated | |||||||||||
Revenue | $ | 828,135 | $ | 15,571,972 | $ | 16,400,107 | |||||||
Interest expense | 78,467 | 49,940 | 128,407 | ||||||||||
Depreciation | 1,002,228 | 254,010 | 1,256,238 | ||||||||||
Income tax expense | - | 1,126,468 | 1,126,468 | ||||||||||
Segment profit (loss) | (2,745,801 | ) | 1,661,353 | (1,084,448 | ) | ||||||||
Segment assets | 5,424,966 | 1,961,276 | 7,386,242 | ||||||||||
Expenditures for segment assets | 80,217 | 16,504 | 96,721 | ||||||||||
Sales generated in the United States and Canada | ' | ||||||||||||
Sales by territory are shown below: | |||||||||||||
2013 | 2012 | ||||||||||||
Canada | $ | 563,221 | $ | 718,128 | |||||||||
United States and abroad | 15,238,375 | 15,681,979 | |||||||||||
Total | $ | 15,801,596 | $ | 16,400,107 | |||||||||
Property, equipment, leasehold and patents are located in Canada and the United States | ' | ||||||||||||
The Company’s long-lived assets (property, equipment, leaseholds and patents) are located in Canada and the United States as follows: | |||||||||||||
2013 | 2012 | ||||||||||||
Canada | $ | 4,258,075 | $ | 5,424,966 | |||||||||
United States | 1,741,916 | 1,961,276 | |||||||||||
Total | $ | 5,999,991 | $ | 7,386,242 |
15_COMMITMENTS_Tables
15. COMMITMENTS (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments Tables | ' | ||||
Commitments | ' | ||||
Commitments in each of the next five years are as follows: | |||||
2013 | $ | 138,944 | |||
2014 | $ | 11,000 | |||
2_SIGNIFICANT_ACCOUNTING_POLIC2
2. SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Computer hardware [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Depreciation method used and annual rate | '30% Declining balance |
Automobiles [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Depreciation method used and annual rate | '30% Declining balance |
Furniture and fixtures [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Depreciation method used and annual rate | '20% Declining balance |
Manufacturing equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Depreciation method used and annual rate | '20% Declining balance |
Office equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Depreciation method used and annual rate | '20% Declining balance |
Building And Improvements [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Depreciation method used and annual rate | '10% Declining balance |
Leasehold Improvements [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Depreciation method used and annual rate | 'Straight-line over lease term |
2_SIGNIFICANT_ACCOUNTING_POLIC3
2. SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Significant Accounting Policies Details Narrative | ' | ' |
Representation in Accounts receivable by primary customers | $1,473,682 | $1,648,428 |
Percentage Representation in Accounts receivable by primary customers | 73.00% | 75.00% |
3_ACCOUNTS_RECEIVABLE_Details
3. ACCOUNTS RECEIVABLE (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Accounts Receivable Details | ' | ' |
Accounts receivable | $2,056,964 | $2,212,448 |
Allowances for doubtful accounts | -44,849 | -13,089 |
Total | $2,012,115 | $2,199,359 |
3_ACCOUNTS_RECEIVABLE_Details_
3. ACCOUNTS RECEIVABLE (Details Narrative) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Accounts Receivable Details Narrative | ' | ' |
Accounts receivable as collateral | $156,066 | $69,410 |
4_INVENTORIES_Details
4. INVENTORIES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Inventories Details | ' | ' |
Completed goods | $1,527,563 | $1,740,186 |
Works in progress | 34,702 | 31,593 |
Raw materials | 1,499,271 | 1,589,981 |
Inventories | $3,061,536 | $3,361,760 |
5_PROPERTY_PLANT_EQUIPMENT_Det
5. PROPERTY, PLANT & EQUIPMENT (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant & equipment, Cost | $12,004,057 | $12,216,114 |
Accumulated Depreciation | 6,172,934 | 5,030,384 |
Property, Plant & equipment, Net | 5,831,123 | 7,185,730 |
Buildings [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant & equipment, Cost | 5,233,147 | 5,372,327 |
Accumulated Depreciation | 2,419,217 | 2,122,396 |
Property, Plant & equipment, Net | 2,813,930 | 3,249,931 |
Computer hardware [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant & equipment, Cost | 102,225 | 106,457 |
Accumulated Depreciation | 90,265 | 88,811 |
Property, Plant & equipment, Net | 11,960 | 17,646 |
Furniture and fixtures [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant & equipment, Cost | 27,098 | 28,385 |
Accumulated Depreciation | 22,310 | 22,155 |
Property, Plant & equipment, Net | 4,788 | 6,230 |
Office equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant & equipment, Cost | 22,400 | 23,946 |
Accumulated Depreciation | 20,042 | 20,795 |
Property, Plant & equipment, Net | 2,358 | 3,151 |
Manufacturing equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant & equipment, Cost | 6,014,006 | 6,039,836 |
Accumulated Depreciation | 3,555,731 | 2,725,324 |
Property, Plant & equipment, Net | 2,458,275 | 3,314,512 |
Trailer [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant & equipment, Cost | 16,233 | 17,353 |
Accumulated Depreciation | 13,992 | 13,930 |
Property, Plant & equipment, Net | 2,241 | 3,423 |
Technology [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant & equipment, Cost | 128,442 | 137,308 |
Accumulated Depreciation | 51,377 | 27,461 |
Property, Plant & equipment, Net | 77,065 | 109,847 |
Land [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant & equipment, Cost | 460,506 | 478,551 |
Accumulated Depreciation | ' | ' |
Property, Plant & equipment, Net | 460,506 | 478,551 |
Trucks [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, Plant & equipment, Cost | ' | 11,951 |
Accumulated Depreciation | ' | 9,512 |
Property, Plant & equipment, Net | ' | $2,439 |
5_PROPERTY_PLANT_EQUIPMENT_Det1
5. PROPERTY, PLANT & EQUIPMENT (Details 1) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Land [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Carrying amount of capital assets held as collateral | $261,413 |
Buildings [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Carrying amount of capital assets held as collateral | 780,527 |
Building Improvements [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Carrying amount of capital assets held as collateral | 827,645 |
Manufacturing equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Carrying amount of capital assets held as collateral | 2,129,434 |
Trailer [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Carrying amount of capital assets held as collateral | 2,241 |
Technology [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Carrying amount of capital assets held as collateral | $77,065 |
5_PROPERTY_PLANT_EQUIPMENT_Det2
5. PROPERTY, PLANT & EQUIPMENT (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Property Plant Equipment Details Narrative | ' | ' |
Depreciation expense | $1,279,255 | $1,245,114 |
6_PATENTS_Details
6. PATENTS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Patents Details | ' | ' |
Patents, Gross | $249,284 | $266,451 |
Accumulated Amortization | 80,416 | 65,939 |
Patents, net | $168,868 | $200,512 |
6_PATENTS_Details_1
6. PATENTS (Details 1) (USD $) | Dec. 31, 2013 |
Patents Details 1 | ' |
Estimated depreciation expense, 2014 | $19,051 |
Estimated depreciation expense, 2015 | 19,051 |
Estimated depreciation expense, 2016 | 19,051 |
Estimated depreciation expense, 2017 | 19,051 |
Estimated depreciation expense, 2018 | $19,051 |
6_PATENTS_Details_Narrative
6. PATENTS (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Patents Details Narrative | ' | ' |
Currency conversion in canadian dollars | $265,102 | $265,102 |
Depreciation | $19,361 | $11,124 |
7_LONG_TERM_DEPOSITS_Details
7. LONG TERM DEPOSITS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Long Term Deposits Details | ' | ' |
Long term deposits | $4,781 | $7,893 |
8_SHORTTERM_LINE_OF_CREDIT_Det
8. SHORT-TERM LINE OF CREDIT (Details Narrative) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2012 |
Short-Term Line Of Credit Details Narrative | ' | ' | ' |
Revolving line of credit increased | ' | ' | $5,000,000 |
Percentage of domestic and foreign accounts receivable | ' | ' | 75.00% |
Percentage of inventory | ' | ' | 40.00% |
Interest rate on amounts advanced | ' | ' | 3.75% |
Secured loan | 0 | 0 | ' |
Short-term borrowings outstanding | $1,400,000 | $1,205,000 | ' |
9_LONG_TERM_DEBT_Details
9. LONG TERM DEBT (Details) (Aafc, expressed in CDN$ [Member], USD $) | Dec. 31, 2013 |
Aafc, expressed in CDN$ [Member] | ' |
Debt Instrument [Line Items] | ' |
31-Dec-14 | $182,160 |
31-Dec-15 | $182,160 |
9_LONG_TERM_DEBT_Details_1
9. LONG TERM DEBT (Details 1) (USD $) | Dec. 31, 2013 |
Long Term Debt Details 1 | ' |
2014 | $180,996 |
2015 | $75,415 |
9_LONG_TERM_DEBT_Details_2
9. LONG TERM DEBT (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Long Term Debt Details 2 | ' | ' |
Balance, January 1 | $1,726,050 | $1,976,992 |
Less: Payments on loan | 307,833 | 310,384 |
Effect of exchange rate | -120,387 | 59,512 |
Balance, December 31 | $1,297,830 | $1,726,050 |
9_LONG_TERM_DEBT_Details_3
9. LONG TERM DEBT (Details 3) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Long Term Debt Details 3 | ' | ' | ' |
Long term debt - AAFC | $342,534 | $549,268 | ' |
Long term debt - AFSC | 955,296 | 1,176,782 | ' |
Long term debt | 1,297,830 | 1,726,050 | 1,976,992 |
Less: current portion | -304,556 | -318,644 | ' |
Long term debt outstanding Balance | $993,274 | $1,407,406 | ' |
9_LONG_TERM_DEBT_Details_Narra
9. LONG TERM DEBT (Details Narrative) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Aafc, expressed in CDN$ [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Eligible loan amount | $1,000,000 | ' |
Amount borrowed | 910,801 | 910,801 |
Borrowing balance | 364,320 | ' |
Afsc, expressed in CDN$ [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Eligible loan amount | 2,000,000 | ' |
Amount borrowed | 1,491,000 | ' |
Interest on loan | 5.00% | ' |
Borrowing balance | $1,016,056 | $1,170,811 |
10_INCOME_TAX_Details
10. INCOME TAX (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' |
Current tax, federal | ($110,302) | $921,247 |
Current tax, state | -24,418 | 205,221 |
Current tax, foreign | ' | ' |
Current tax, total | -134,720 | 1,126,468 |
Deferred income tax, federal | -79,178 | -73,111 |
Deferred income tax, state | ' | ' |
Deferred income tax, foreign | -2,329,217 | ' |
Deferred income tax, total | -2,408,395 | -73,111 |
Total | ($2,543,115) | $1,053,357 |
10_INCOME_TAX_Details_1
10. INCOME TAX (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' |
Loss before taxes | ($721,481) | ($31,090) |
US statutory tax rate | 38.62% | 34.00% |
Expected income tax (recovery) | -278,635 | -10,571 |
Non-deductible items | -396,793 | -71,650 |
Change in estimates | -163,928 | 758 |
Change in enacted tax rate | 91,711 | ' |
Option expired during the year | 20,878 | ' |
Functional currency adjustments | 164,890 | -40,925 |
Foreign tax rate difference | 365,377 | 217,576 |
Change in valuation allowance | -2,346,616 | 752,948 |
Total income taxes (recovery) | -2,543,115 | 848,136 |
Current income tax expenses (recovery) | -134,720 | 1,126,468 |
Deferred tax expenses (recovery) | -2,408,395 | -73,111 |
Total income taxes (recovery) | ($2,543,115) | $1,053,357 |
10_INCOME_TAX_Details_2
10. INCOME TAX (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Canada | ' | ' |
Non capital loss carryforwards | $1,596,755 | $2,119,669 |
Patents | 33,936 | -118 |
Fixed Assets | 698,526 | 199,983 |
Deferred tax asset (liability) | 2,329,217 | 2,319,534 |
Valuation Allowance | ' | 2,319,534 |
Net Deferred tax asset (liability) | 2,329,217 | ' |
USA | ' | ' |
Net operating loss carryforwards | ' | 108,969 |
Fixed Assets | 348,517 | 272,062 |
Stock-Based Compensation | 231,662 | 147,051 |
Deferred tax asset | 580,178 | 528,082 |
Deferred tax asset not recognized | 208,889 | 235,971 |
Net Deferred tax asset | $371,289 | $292,111 |
10_INCOME_TAX_Details_3
10. INCOME TAX (Details 3) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | ' | ' |
2014 | ' | ' |
2015 | 75,153 | ' |
2026 | 878,698 | ' |
2027 | 789,096 | ' |
2028 | 707,062 | ' |
2029 | 973,931 | ' |
2030 | 1,017,150 | ' |
2031 | 1,171,186 | ' |
2032 | 765,836 | ' |
2033 | 8,908 | ' |
Total | $6,387,020 | $6,378,112 |
10_INCOME_TAX_Details_Narrativ
10. INCOME TAX (Details Narrative) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | ' | ' |
Operating loss carryforwards | $6,387,020 | $6,378,112 |
Deferred tax asset operating loss carry forward | $0 | $0 |
11_INCOME_LOSS_PER_SHARE_Detai
11. INCOME (LOSS) PER SHARE (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Earnings Per Share [Abstract] | ' | ' |
Net loss | $1,821,634 | ($1,084,448) |
Weighted average common shares outstanding: Basic and diluted | 13,169,991 | 13,169,991 |
Net loss per common share: Basic and Diluted | $0.14 | ($0.08) |
11_INCOME_LOSS_PER_SHARE_Detai1
11. INCOME (LOSS) PER SHARE (Details 1) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Earnings Per Share [Abstract] | ' | ' |
Anti-dilutive options | 1,164,000 | 990,000 |
12_STOCK_OPTIONS_Details
12. STOCK OPTIONS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Beginning Balance, Shares | 999,000 | 1,193,700 |
Granted, Shares | 233,000 | 94,000 |
Cancelled or expired, Shares | -68,000 | -288,700 |
Ending Balance, Shares | 1,164,000 | 999,000 |
Exercisable shares | 1,034,000 | ' |
Cancelled or expired, Exercise price per share | $3.60 | ' |
Beginning Balance, Weighted average exercise price | $1.96 | $2.04 |
Granted, Weighted average exercise price | $1.27 | $2.14 |
Cancelled or expired, Weighted average exercise price | $3.60 | $2.35 |
Ending Balance, Weighted average exercise price | $1.73 | $1.96 |
Exercisable Weighted average exercise price | $1.75 | ' |
Minimum [Member] | ' | ' |
Beginning Balance, Exercise price per share | $1.50 | $1.50 |
Granted, Exercise price per share | $1.21 | $2 |
Cancelled or expired, Exercise price per share | ' | $1.50 |
EndingBalance, Exercise price per share | $1.21 | $1.50 |
Exercisable Exercise price per share | $1.21 | ' |
Maximum [Member] | ' | ' |
Beginning Balance, Exercise price per share | $2.45 | $3.60 |
Granted, Exercise price per share | $1.50 | $2.22 |
Cancelled or expired, Exercise price per share | ' | $3.60 |
EndingBalance, Exercise price per share | $2.45 | $2.45 |
Exercisable Exercise price per share | $2.45 | ' |
12_STOCK_OPTIONS_Details_1
12. STOCK OPTIONS (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Expected life - years | '5 years | '5 years |
Interest rate | ' | 1.08% |
Dividend yield | 0.00% | 0.00% |
Weighted average fair value of options granted | ' | $0.38 |
Minimum [Member] | ' | ' |
Interest rate | 0.36% | 0.36% |
Volatility | 51.00% | 51.00% |
Weighted average fair value of options granted | 0.36 | ' |
Maximum [Member] | ' | ' |
Interest rate | 0.63% | 0.38% |
Volatility | 63.00% | 58.00% |
Weighted average fair value of options granted | 0.38 | ' |
12_STOCK_OPTIONS_Details_Narra
12. STOCK OPTIONS (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Stock Options Details Narrative | ' | ' |
Options granted to consultants | 55,000 | 33,000 |
Expenses due to Options granted to consultants | 16,628 | 21,939 |
Options granted to employees | 178,000 | 61,000 |
Expenses due to Options granted to employees | $56,975 | $39,586 |
Additional Expenses due to Options granted to consultants | 20,597 | 27,159 |
Additional Expenses due to Options granted to employees | 34,955 | 53,766 |
Weighted-average remaining contractual life of outstanding options | '2 years 1 month 6 days | ' |
Aggregate intrinsic value of options outstanding | 0 | ' |
Weighted-average remaining contractual life of outstanding options exercisable | '2 years 1 month 6 days | ' |
Aggregate intrinsic value of exercisable options outstanding | 0 | ' |
Compensation expense related to non-vested awards | $29,247 | ' |
weighted average period of expenses | '2 years | ' |
14_SEGMENTED_SIGNIFICANT_CUSTO2
14. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Revenue | $15,801,596 | $16,400,107 |
Interest expense | 109,199 | 128,407 |
Depreciation | 1,298,616 | 1,256,238 |
Extraordinary items | 250,000 | ' |
Income tax expense (recovery) | -134,720 | 1,126,468 |
Segment profit (loss) | 1,821,634 | -1,084,448 |
Segment assets | 5,999,991 | 7,386,242 |
Expenditures for segment assets | 235,565 | 96,721 |
TPA [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Revenue | 15,031,778 | 15,571,972 |
Interest expense | 59,660 | 49,940 |
Depreciation | 219,360 | 254,010 |
Extraordinary items | 250,000 | ' |
Income tax expense (recovery) | -134,720 | 1,126,468 |
Segment profit (loss) | 2,535,267 | 1,661,353 |
Segment assets | 1,741,916 | 1,961,276 |
Expenditures for segment assets | ' | 16,504 |
Ewcp [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Revenue | 769,818 | 828,135 |
Interest expense | 49,539 | 78,467 |
Depreciation | 1,079,256 | 1,002,228 |
Extraordinary items | ' | ' |
Income tax expense (recovery) | ' | ' |
Segment profit (loss) | -713,633 | -2,745,801 |
Segment assets | 4,258,075 | 5,424,966 |
Expenditures for segment assets | $235,565 | $80,217 |
14_SEGMENTED_SIGNIFICANT_CUSTO3
14. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Sales generated | $15,801,596 | $16,400,107 |
Canada [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Sales generated | 563,221 | 718,128 |
United States and abroad [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Sales generated | $15,238,375 | $15,681,979 |
14_SEGMENTED_SIGNIFICANT_CUSTO4
14. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Property, equipment, leasehold and patents | $5,999,991 | $7,386,242 |
Canada [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Property, equipment, leasehold and patents | 4,258,075 | 5,424,966 |
United States and abroad [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Property, equipment, leasehold and patents | $1,741,916 | $1,961,276 |
14_SEGMENTED_SIGNIFICANT_CUSTO5
14. SEGMENTED, SIGNIFICANT CUSTOMER INFORMATION AND ECONOMIC DEPENDENCY (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Segmented Significant Customer Information And Economic Dependency Details Narrative | ' | ' |
Customers accounted sales | $9,884,601 | $9,712,657 |
Percentage representation in sales | 63.00% | 59.00% |
15_COMMITMENTS_Details
15. COMMITMENTS (Details) (USD $) | Dec. 31, 2013 |
Commitments Details | ' |
2013 | $138,944 |
2014 | $11,000 |
15_COMMITMENTS_Details_Narrati
15. COMMITMENTS (Details Narrative) (USD $) | Dec. 31, 2013 |
Commitments Details Narrative | ' |
Minimum rental payments for property and premises | $149,944 |