10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

OR

[  ] TRANSITION REPORT PURSUANT TO 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number: 001-31540

FLEXIBLE SOLUTIONS INTERNATIONAL INC.

(Exact Name of Issuer as Specified in Its Charter)

Alberta	71 163 0889
(State or other jurisdiction of	(Employer
incorporation or organization)	Identification No.)

6001 54 Ave.
Taber, Alberta, Canada	T1G 1X4
(Address of Issuer’s Principal Executive Offices)	(Zip Code)

Issuer’s telephone number: (403) 223-2995

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	FSI	NYSE American

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933.

Yes [  ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [  ]	Accelerated filer [  ]
Non-accelerated filer [X]	Smaller reporting company [X]
	Emerging growth company [  ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

[  ] Yes [X] No

Class of Stock	No. Shares Outstanding	Date
Common	12,315,746	May 14, 2021

FORM 10-Q

Index

PART I.	FINANCIAL INFORMATION		4
Item 1.	Financial Statements.		4
	(a)	Unaudited Interim Condensed Consolidated Balance Sheets at March 31, 2021 and December 31, 2020.	4
	(b)	Unaudited Interim Condensed Consolidated Statements of Income and Comprehensive Income for the Three Months Ended March 31, 2021 and 2020.	5
	(c)	Unaudited Interim Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020.	6
	(d)	Unaudited Interim Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2021 and 2020.	7
	(d)	Notes to Unaudited Interim Condensed Consolidated Financial Statements for the Three Months Ended March 31, 2021 and 2020.	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.		26
Item 4	Controls and Procedures.		29
PART II.	OTHER INFORMATION		30
Item 6.	Exhibits.		30
SIGNATURES			31

2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are “forward-looking statements” for the purposes of the federal and state securities laws, including, but not limited to: any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing obligation to disclose material information as required by the federal securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include but are not limited to:

● Increased competitive pressures from existing competitors and new entrants;

● Increases in interest rates or our cost of borrowing or a default under any material debt agreement;

● Deterioration in general or regional economic conditions;

● Adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;

● International tariff treatment of products, both inputs and outputs;

● Loss of customers or sales weakness;

● Inability to achieve future sales levels or other operating results;

● The unavailability of funds for capital expenditures;

● Operational inefficiencies in distribution or other systems.

● New tariffs relating to raw materials imported from China; and

● Impact of COVID-19 virus

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020.

3

PART I FINANCIAL INFORMATION

Item 1. Financial Statements.

FLEXIBLE SOLUTIONS INTERNATIONAL, INC.
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
(U.S. Dollars)

	March 31, 2021			December 31, 2020
	(Unaudited)
Assets
Current
Cash and cash equivalents	$	1,853,567		$	3,472,776
Term deposits		1,000,000			1,000,000
Accounts receivable (Note 4)		7,539,314			5,889,813
Inventories (Note 5)		9,989,338			8,372,476
Prepaid expenses		243,243			302,447
Total current assets		20,625,462			19,037,512
Property, equipment and leaseholds, net (Note 6)		5,053,321			5,142,041
Patents (Note 7)		26,028			30,137
Right of use assets (Note 3)		408,230			483,113
Intangible assets (Note 8)		2,732,000			2,776,000
Long term deposits (Note 9)		8,540			8,540
Investments (Note 10)		4,972,635			4,776,167
Goodwill (Note 8)		2,534,275			2,534,275
Deferred tax asset		299,603			299,603
Total Assets	$	36,660,094		$	35,087,388
Liabilities
Current
Accounts payable	$	515,518		$	558,105
Accrued liabilities		395,569			1,225,804
Deferred revenue		278,417			314,277
Income taxes payable		3,053,671			2,540,348
Short term line of credit (Note 11)		3,228,434			2,116,073
Current portion of lease liability (Note 3)		223,535			287,900
Current portion of long term debt (Note 12)		837,724			848,794
Total current liabilities		8,532,868			7,891,301
Lease liability (Note 3)		184,695			195,213
Deferred income tax liability		233,751			233,751
Long term debt (Note 12)		2,263,097			2,998,844
Total Liabilities		11,214,411			11,319,109
Stockholders’ Equity
Capital stock (Note 15)
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:
12,315,746 (December 31, 2020: 12,260,545) common shares		12,316			12,261
Capital in excess of par value		16,749,084			16,633,190
Other comprehensive loss		(789,769	)		(872,121	)
Accumulated earnings		6,883,769			5,433,198
Total stockholders’ equity – controlling interest		22,855,400			21,206,528
Non-controlling interests (Note 16)		2,590,283			2,561,751
Total Stockholders’ Equity		25,455,683			23,768,279
Total Liabilities and Stockholders’ Equity	$	36,660,094		$	35,087,388

— See Notes to Unaudited Interim Condensed Consolidated Financial Statements —

4

FLEXIBLE SOLUTIONS INTERNATIONAL INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(U.S. Dollars — Unaudited)

	Three Months Ended March 31,
	2021			2020
Sales	$	7,624,697		$	8,429,486
Cost of sales		4,916,776			5,479,947
Gross profit		2,707,921			2,949,539
Operating Expenses
Wages		579,355			535,433
Administrative salaries and benefits		222,490			204,543
Insurance		124,458			131,569
Consulting		72,961			67,311
Lease expense		66,028			118,468
Interest expense		62,274			101,425
Professional fees		53,689			51,053
Office and miscellaneous		42,119			39,392
Advertising and promotion		34,770			65,621
Investor relations and transfer agent fee		25,087			18,624
Research		18,275			28,578
Travel		10,994			55,362
Telecommunications		9,991			11,876
Currency exchange		8,300			(57,727	)
Commissions		4,768			2,358
Shipping		4,355			4,613
Utilities		2,722			4,305
Total operating expenses		1,342,636			1,382,804
Operating income		1,365,285			1,566,735
PPP loan forgiveness		537,960			-
Gain on investments		208,968			199,529
Interest income		10,298			414
Income before income tax		2,122,511			1,766,678
Income taxes
Deferred income tax recovery		-			-
Income tax expense		(485,456	)		(434,988	)
Net income for the period including non-controlling interests		1,637,055			1,331,690
Less: Net income attributable to non-controlling interests		(186,484	)		(67,015	)
Net income attributable to controlling interest	$	1,450,571		$	1,264,675
Income per share (basic and diluted)	$	0.12		$	0.10
Weighted average number of common shares (basic)		12,292,452			12,237,798
Weighted average number of common shares (diluted)		12,518,331			12,300,896
Other comprehensive income (loss):
Net income		1,637,055			1,331,690
Unrealized gain (loss) on foreign currency translations		82,352			(98,928	)
Total comprehensive income		1,719,407			1,232,762
Comprehensive income – non-controlling interest		(186,484	)		(67,015	)
Comprehensive income attributable to Flexible Solutions International Inc.	$	1,532,923		$	1,165,747

— See Notes to Unaudited Interim Condensed Consolidated Financial Statements —

5

FLEXIBLE SOLUTIONS INTERNATIONAL INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. Dollars — Unaudited)

	Three Months Ended March 31,
	2021			2020
Operating activities
Net income for the period including non-controlling interests	$	1,637,055		$	1,331,690
Adjustments to reconcile net income to net cash:
Stock based compensation		39,589			29,582
Depreciation and amortization		232,965			148,058
Lease right of use financing		8,187			17,532
Lease right of use amortization		74,884			83,547
Gain on investments		(208,968	)		(140,182	)
PPP loan forgiveness		(537,960	)		-
Changes in non-cash working capital items:
(Increase) Decrease in accounts receivable		(1,649,501	)		(3,192,845	)
(Increase) Decrease in inventories		(1,616,862	)		235,397
(Increase) Decrease in prepaid expenses		59.204			(85,116	)
Increase (Decrease) in accounts payable and accrued liabilities		(872,823	)		444,898
Increase (Decrease) in taxes payable		513,323			(29,038	)
Increase (Decrease) deferred revenue		(35,860	)		2,560
Cash used in operating activities		(2,356,767	)		(1,153,917	)
Investing activities
Long term deposit		-			22,084
Purchase of investments		-			(1,000,000	)
Proceeds of equity investment distributions		12,500			256,563
Net purchase of property, equipment and leaseholds		(96,136	)		(96,280	)
Cash used in investing activities		(83,636	)		(817,633	)
Financing activities
Draw from short term line of credit		1,112,361			1,165,850
Repayment of long term debt		(208,857	)		(201,027	)
Lease financing costs		(83,070	)		(101,079	)
Partnership distributions		(157,952	)		(143,002	)
Proceeds from issuance of common stock		76,360			24,750
Cash provided by financing activities		738,842			745,492
Effect of exchange rate changes on cash		82,352			3,653
Outflow of cash		(1,619,209	)		(1,222,405	)
Cash, cash equivalents and restricted cash, beginning		4,472,776			4,634,670
Cash, cash equivalents and restricted cash, ending	$	2,853,567		$	3,412,265
Cash, cash equivalents and restricted cash are comprised of:
Cash and cash equivalents	$	1,853,567		$	3,412,265
Term deposits		1,000,000			-
	$	2,853,567		$	3,412,265
Supplemental disclosure of cash flow information:
Income taxes paid	$	-		$	464,026
Interest paid	$	62,274		$	101,245

— See Notes to Unaudited Interim Condensed Consolidated Financial Statements —

6

FLEXIBLE SOLUTIONS INTERNATIONAL INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF Stockholders’ Equity

(U.S. Dollars — Unaudited)

	Shares		Capital Stock		Capital in Excess of Par Value		Accumulated Earnings (Deficiency)		Other Comprehensive Income (Loss)			Total		Non- Controlling Interests			Total Stockholders’ Equity
Balance December 31, 2020		12,260,545	$	12,261	$	16,633,190	$	5,433,198	$	(872,121	)	$	21,206,528	$	2,561,751		$	23,768,279
Translation adjustment		—		—		—		—		82,352			82,352		—			82,352
Net income		—		—		—		1,450,571		—			1,450,571		186,484			1,637,055
Common stock issued		55,201		55		76,305		—		—			76,360		—			76,360
Distributions to non-controlling interests		—		—		—		—		—			—		(157,952	)		(157.952	)
Stock-based compensation		—		—		39,589		—		—			39,589		—			39,589
Balance March 31, 2021		12,315,746	$	12,316	$	16,749,084	$	6,883,769	$	(789,769	)	$	22,855,400	$	2,590,283		$	25,445,683

	Shares		Capital Stock		Capital in Excess of Par Value		Accumulated Earnings (Deficiency)		Other Comprehensive Income (Loss)			Total			Non- Controlling Interests			Total Stockholders’ Equity
Balance December 31, 2019		12,215,545	$	12,216	$	16,437,473	$	2,456,148	$	(994,610	)	$	17,911,227		$	2,550,149		$	20,461,376
Translation adjustment		—		—		—		—		(98,928	)		(98,928	)		—			(98,928	)
Net income		—		—		—		1,264,675		—			1,264,675			67,015			1,331,690
Common stock issued		25,000		25		24,725		—		—			24,750			—			24,750
Distributions to non-controlling interests		—		—		—		—		—			—			(143,002	)		(143,002	)
Stock-based compensation		—		—		29,582		—		—			29,582			—			29,582
Balance March 31, 2020		12,240,545	$	12,241	$	16,491,780	$	3,720,823	$	(1,093,538	)	$	19,130,306		$	2,474,162		$	21,605,468

— See Notes to Unaudited Interim Condensed Consolidated Financial Statements —

7

FLEXIBLE SOLUTIONS INTERNATIONAL INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2021

(U.S. Dollars)

1. Basis of Presentation.

These consolidated financial statements include the accounts of Flexible Solutions International, Inc. (the “Company”), its wholly-owned subsidiaries Flexible Fermentation Ltd. , NanoChem Solutions Inc. (“NanoChem”), Flexible Solutions Ltd., Flexible Biomass LP, FS Biomass Inc., NCS Deferred Corp., Natural Chem SEZC Ltd., and InnFlex Holdings Inc. and its 65% interest in ENP Investments, LLC (“ENP Investments”) and ENP Realty, LLC (“ENP Realty”). All inter-company balances and transactions have been eliminated upon consolidation. The Company was incorporated on May 12, 1998 in the State of Nevada and had no operations until June 30, 1998. In 2019, the Company redomiciled into Alberta, Canada.

In 2018, NanoChem, a wholly-owned subsidiary of the Company, completed the purchase of a 65% interest in ENP Investments for an aggregate purchase price of $5,110,560. An unrelated party owns the remaining 35% interest in ENP Investments, and ENP Investments is consolidated into the financial statements. The outside investor’s ownership interest in ENP Investments is included in noncontrolling interests in these consolidated financial statements from the acquisition date onward. In 2020, ENP Investments increased its investment in ENP Realty from 24% to 100%, making ENP Realty a wholly-owned subsidiary of ENP Investments. ENP Realty is consolidated into the financial statements.

The Company 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. The TPA division also manufactures two nitrogen conservation products for agriculture that slows nitrogen loss from fields.

The outbreak of the novel strain of coronavirus, specifically identified as “COVID-19”, has resulted in a widespread health crisis that has affected economies and financial markets around the world resulting in an economic downturn. This outbreak may also cause staff shortages, reduced customer demand, increased government regulations or interventions, all of which may negatively impact the business, financial condition or results of options of the Company. The duration and impact of the COVID-19 outbreak is unknown at this time and it is not possible to reliably estimate the length and severity of these developments.

2. Significant Accounting Policies.

These consolidated financial statements have been prepared on a historical cost basis, except where otherwise noted, 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.

8

(b) Inventories and Cost of Sales

The Company has three major classes of inventory: completed goods, work in progress and raw materials and supplies. In all classes, inventories are stated at the lower of cost and net realizable value. The Company applies the first-in, first-out or weighted average cost formulae to inventories in different subsidiaries. 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. Shipping and handling charges billed to customers are included in revenue (2021 - $131,348; 2020 – $162,905). Shipping and handling costs incurred are included in cost of goods sold (2021 - $263,089; 2020 – $290,748).

(c) Allowance for Doubtful Accounts

The Company provides an allowance for doubtful accounts when management estimates collectability 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, Leaseholds and Intangible Assets.

The following assets are recorded at cost and depreciated using the methods and annual rates shown below:

Computer hardware	30% Declining balance
Furniture and fixtures	20% Declining balance
Manufacturing equipment	20% Declining balance
Office equipment	20% Declining balance
Boat	20% Declining balance
Building and improvements	10% Declining balance
Trailer	30% Declining balance
Automobile	Straight-line over 5 years
Patents	Straight-line over 17 years
Technology	Straight-line over 10 years
Right of Use Asset	Straight-line over lease term
Leasehold improvements	Straight-line over lease term
Customer Relationships – ENP Investments	Straight line over 15 years
Software – ENP Investments	Straight line over 3 years

(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, equipment and leaseholds, 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 are less than its carrying value, an impairment measurement is indicated. Long-lived assets are written down to net realizable value when management determines there has been a change in circumstances which indicates their carrying amounts may not be recoverable. 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 the Company is the U.S. dollar. 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 Company, 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 Company’s 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 in the consolidated statements of income and comprehensive income.

9

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.

The Company generates revenue primarily from energy and water conservation products and biodegradable polymer, as further discussed in Note 17.

The Company follows a five-step model for revenue recognition. The five steps are: (1) identification of the contract(s) with the customer, (2) identification of the performance obligation(s) in the contract(s), (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligation, and (5) recognition of revenue when (or as) the performance obligation is satisfied. The Company has fulfilled its performance obligations when control transfers to the customer, which is generally at the time the product is shipped since risk of loss is transferred to the purchaser upon delivery to the carrier. For shipments which are F.O.B. shipping point, the Company has elected to account for shipping and handling activities as a fulfillment cost rather than as an additional promised service and performance obligation.

The Company recognizes revenue when 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.

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 has 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 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) Other 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 comprised only of unrealized foreign exchange gains and losses.

10

(k) Income Per Share.

Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding in the period. Diluted earnings per share is 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 three months ended March 31, 2021 and 2020.

(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 valuation of goodwill and intangible assets, asset impairment analysis, share-based payments and warrants, valuation allowances for deferred income tax assets, determination of useful lives of property, equipment and leaseholds and intangible assets, recoverability of accounts receivable, recoverability of investments, discount rates for right of use assets and the valuation of inventory.

(m) Fair Value of Financial Instruments

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, accrued liabilities and the short term line of credit for all periods presented approximate their respective carrying amounts due to the short term nature of these financial instruments.

The fair value of the long term debt for all periods presented approximate their respective carrying amounts due to these financial instruments being at market rates.

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(n) Contingencies

Certain conditions may exist as of the date the consolidated 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 consolidated 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.

(o) 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 March 31, 2021, 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 in the consolidated statements of income and comprehensive income.

(p) Risk Management.

The Company’s credit risk is primarily attributable to its accounts receivable. 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-payment by customers. Credit exposure is minimized by dealing with only credit worthy counterparties. Revenue for the Company’s three primary customers totaled $3,120,819 (41%) for the three months ended March 31, 2021 (2020 - $3,744,455 or 44%). Accounts receivable for the Company’s three primary customers totaled $4,134,780 (55%) at March 31, 2021 (December 31, 2020 - $3,986,284 or 68%).

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 maintains cash balances at financial institutions which at times exceed federally insured amounts. The Company has not experienced any losses in such accounts.

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The Company is exposed to foreign exchange risk to the extent that market value rate fluctuations materially differ from financial assets and liabilities, subject to fixed long-term rates.

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 and accrued liabilities. The Company has not hedged its exposure to currency fluctuations.

The Company is exposed to interest rate risk to the extent that the fair value or future cash flows for financial liabilities will fluctuate as a result of changes in market interest rates. The Company is exposed to interest rate risk on its long-term debt.

In order to manage its exposure to interest rate risk, the Company is closely monitoring fluctuations in market interest risks and will refinance its long-term debt where possible to obtain more favourable rates.

(q) Equity Method Investment

The Company accounts for investments using the equity method of accounting if the investment provides the Company the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if the Company’s ownership interest in the voting stock of the investee ranges between 20% and 50%, although other factors, such as representation on the investee’s board of directors, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the investment is recorded at cost in the consolidated balance sheets under other assets and adjusted for dividends received and the Company’s share of the investee’s earnings or losses together with other-than-temporary impairments which are recorded through other income (loss), net in the consolidated statements of income and comprehensive income.

(r) Goodwill and intangible assets

Goodwill represents the excess of the purchase price of an acquired entity over the amounts assigned to the assets acquired and liabilities assumed. Goodwill is not amortized, but is reviewed for impairment annually or more frequently if certain impairment conditions arise. The Company performs an annual goodwill impairment review in the fourth quarter of each year at the reporting unit level. The evaluation begins with a qualitative assessment of the factors that could impact the significant inputs used to estimate fair value. If after performing the qualitative assessment, it is determined that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, including goodwill, then no further analysis is necessary. However, if the results of the qualitative test are unclear, the Company performs a quantitative test, which involves comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses an income-based valuation method, determining the present value of future cash flows, to estimate the fair value of a reporting unit. If the fair value of a reporting unit exceeds its positive carrying amount, goodwill of the reporting unit is considered not impaired, and no further analysis is necessary. If the fair value of the reporting unit is less than its carrying amount, goodwill impairment would be recognized equal to the amount of the carrying value in excess of the reporting unit’s fair value, limited to the total amount of goodwill allocated to the reporting unit.

Intangible assets primarily include trademarks and trade secrets with indefinite lives and customer-relationships with finite lives. Intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis, or more frequently if indicators of impairment are present. Indefinite lived intangible assets are assessed using either a qualitative or a quantitative approach. The qualitative assessment evaluates factors including macro-economic conditions, industry and company-specific factors, legal and regulatory environments, and historical company performance in assessing fair value. If it is determined that it is more likely than not that the fair value of the intangible asset is less than its carrying value, a quantitative test is then performed. Otherwise, no further testing is required. When using a quantitative approach, the Company compares the fair value of the intangible asset to its carrying amount, including goodwill. If the estimated fair value of the intangible asset is less than the carrying amount of the intangible asset, impairment is indicated, requiring recognition of an impairment charge for the differential.

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Qualitative assessments of goodwill and indefinite-lived intangible assets were performed in 2020 and 2019. Based on the results of assessment, it was determined that it is more likely than not the reporting unit, customer lists and trademarks had a fair value in excess of their carrying value. Accordingly, no further impairment testing was completed and no impairment charges related to goodwill or indefinite-lived intangibles were recognized during the three months ended March 31, 2021.

Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. The Company reviews for impairment indicators of finite-lived intangibles and other long-lived assets as described in the “Impairment of Long Lived Assets” significant accounting policy.

(s) Recent Accounting Pronouncements

The Company has implemented all applicable new accounting pronouncements that are in effect. Those pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

3. Leases

Accounting and reporting guidance for leases requires that leases be evaluated and classified as either operating or finance leases by the lessee and as either operating, sales-type or direct financing leases by the lessor. For leases with terms greater than 12 months, the Company records the related right-of-use (“ROU”) asset and lease obligation at the present value of lease payments over the term. Leases may include fixed rental escalation clauses, renewal options and / or termination options that are factored into the determination of lease payments when appropriate. The Company’s operating leases are included in ROU assets, lease liabilities-current portion and lease liability-less current portion in the accompanying consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. The Company’s leases do not usually provide a readily determinable implicit rate; therefore, an estimate of the Company’s incremental borrowing rate is used to discount the lease payments based on information available at the lease commencement date. The discount rate used was 5.5%.

The table below summarizes the right-of-use asset and lease liability for the period ended March 31, 2021:

	March 31, 2021
Right of Use Assets
Balance at December 31, 2020	$	483,113
Depreciation		(74,883	)
Balance at March 31, 2021	$	408,230
Lease Liability
Balance at December 31, 2020	$	483,113
Lease interest expense		8,187
Payments		(83,070	)
Balance at March 31, 2021	$	408,230
Short-term portion	$	223,535
Long-term portion		184,695
Total	$	408,230

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Undiscounted rent payments for the next five years are as follows:

2021	$	204,830
2022		67,320
2023		66,180
2024		59,520
2025		61,020
Total	$	458,870
Impact of discounting		50,640
Lease liability, March 31, 2021	$	408,230

4. Accounts Receivable

	March 31, 2021			December 31, 2020
Accounts receivable	$	7,810,978		$	6,161,249
Allowances for doubtful accounts		(271,664	)		(271,436	)
	$	7,539,314		$	5,889,813

5. Inventories

	March 31, 2021		December 31, 2020
Completed goods	$	4,337,962	$	3,393,794
Work in progress		177,201		152,595
Raw materials and supplies		5,474,175		4,826,087
	$	9,989,338	$	8,372,476

6. Property, Plant & equipment

	March 31, 2021		Accumulated		March 31, 2021
	Cost		Depreciation		Net
Buildings and improvements	$	4,799,742	$	2,873,647	$	1,926,095
Automobiles		180,956		69,450		111,506
Computer hardware		43,609		42,090		1,519
Furniture and fixtures		111,167		102,043		9,124
Office equipment		1,875		1,022		853
Manufacturing equipment		6,252,435		3,715,223		2,537,212
Trailer		9,476		6,920		2,556
Boat		34,400		24,762		9,638
Leasehold improvements		88,872		87,705		1,167
Technology		107,909		107,909		—
Land		453,651		—		453,651
	$	12,084,092	$	7,030,771	$	5,053,321

	December 31, 2020		Accumulated		December 31, 2020
	Cost		Depreciation		Net
Buildings and improvements	$	4,798,370	$	2,836,142	$	1,962,228
Automobiles		180,956		61,266		119,690
Computer hardware		43,593		41,957		1,636
Furniture and fixtures		111,145		101,186		9,959
Office equipment		1,864		971		893
Manufacturing equipment		6,154,425		3,573,748		2,580,677
Trailer		9,422		6,675		2,747
Boat		34,400		24,255		10,145
Leasehold improvements		88,872		87,205		1,667
Technology		107,295		107,295		—
Land		452,399		—		452,399
	$	11,982,741	$	6,840,700	$	5,142,041

Amount of depreciation expense for the three months ended March 31, 2021: $184,855 (2020: $99,948) and is included in cost of sales in the unaudited interim condensed consolidated statements of income and comprehensive income.

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7. Patents

In fiscal 2005, the Company started the patent process for additional WATER$AVR® products. Patents associated with these costs were granted in 2006 and they have been amortized over their legal life of 17 years.

	March 31, 2021 Cost		Accumulated Amortization		March 31, 2021 Net
Patents	$	209,404	$	183,376	$	26,028

	December 31, 2020 Cost		Accumulated Amortization		December 31, 2020 Net
Patents	$	208,211	$	178,074	$	30,137

The increase in the carrying amount of patents is primarily due to foreign currency translation effects. The 2021 cost in Canadian dollars - $265,102 (December 31, 2020 - $265,102 in Canadian dollars).

Amount of amortization for 2021 - $4,110 (2020 - $4,110) and is included in cost of sales in the consolidated statements of income and comprehensive income.

Estimated amortization expense over the next two years is as follows:

2021	16,438
2022	13,699

8. Goodwill and Indefinite Lived Intangible Assets

Goodwill
Balance as of December 31, 2019	$	2,534,275
Additions		-
Impairment		-
Balance as of December 31, 2020 and March 31, 2021	$	2,534,275
Indefinite Lived Intangible Assets
Balance as of December 31, 2019	$	770,000
Additions		-
Impairment		-
Balance as of December 31, 2020 and March 31, 2021	$	770,000

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Goodwill relates to the acquisition of ENP Investments. Indefinite lived intangible assets consist of trade secrets and trademarks related to the acquisition of ENP Investments.

Definite Life Intangible Assets
Balance as of December 31, 2019	$	2,182,000
Amortization		(176,000	)
Balance as of December 31, 2020		2,006,000
Amortization		(44,000	)
Balance as of March 31, 2021	$	1,962,000

Definite life intangible assets consist of customer relationships and software related to the acquisition of ENP Investments. Customer relationships and software are amortized over their estimated useful life of 15 years and 3 years, respectively.

Estimated amortization expense over the next five years is as follows:

2021	$	176,000
2022		160,000
2023		160,000
2024		160,000
2025		160,000

9. 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.

		March 31, 2020		December 31, 2020
Long term deposits	$	8,540	$	8,540

10. Investments

(a) The Company has a 50% ownership interest in ENP Peru Investments LLC (“ENP Peru”), which was acquired in fiscal 2016. ENP Peru is located in Illinois and leases warehouse space. The Company accounts for this investment using the equity method of accounting. A summary of the Company’s investment follows:

Balance, December 31, 2019	$	11,387
Return of equity		(9,063	)
Gain in equity method investment		1,498
Balance, December 31, 2020		3,822
Return of equity		(3,822	)
Gain in equity method investment		-
Balance, March 31, 2021	$	-

Summarized profit and loss information related to the equity accounted investment is as follows for the full year:

	2020
Net sales	$	295,800
Net income	$	2,996

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During the three months ended March 31, 2021, the Company received $8,678 from ENP Peru. At the time of receipt of the payment, the investment balance was $nil and the payment was not recorded against the investment balance but was included in gains on investments.

(b) In fiscal 2018, ENP Investments acquired a 24% ownership interest in ENP Realty LLC (“ENP Realty”). ENP Realty is located in Illinois and leases warehouse space. During the year ended December 31, 2020, the other partners of ENP Realty withdrew from the partnership, resulting in ENP Realty becoming a wholly owned subsidiary of ENP Investments. As a result, ENP Realty is consolidated in the financial statements of the Company and a 35% non-controlling interest is recognized from the acquisition date onwards.

It was determined that ENP Realty did not meet the definition of a business in accordance with FASB Codification Topic 805, Business Combinations (ASC 805), and the acquisition was accounted for as an asset acquisition. The following table summarizes the final purchase price allocation of the consideration paid to the respective fair values of the assets acquired and liabilities assumed in ENP Realty as of the acquisition date.

Investment eliminated upon consolidation	$	63,165
Assets acquired:
Cash		13,419
Building		630,000
Land		85,000
Liabilities assumed:
Accounts payable		(15,797	)
Long term debt		(450,000	)
Deferred income tax liability		(66,116	)
Total identifiable net assets:		196,506
Gain on acquisition of ENP Realty	$	133,341

The income tax expense arising from the deferred income tax liability was net against gain on acquisition of ENP Realty in the consolidated statements of income and comprehensive income for the full year ended December 31, 2020.

A summary of the Company’s investment follows:

Balance, December 31, 2019	$	63,165
Investment eliminated upon consolidation		(63,165	)
Balance, December 31, 2020 and March 31, 2021	$	-

Summarized profit and loss information related to the equity accounted investment is as follows for the full year:

	2019
Net sales	$	75,870
Net income	$	34,200

(c) In December 2018 the Company invested $200,000 in Applied Holding Corp. (“Applied”). Applied is a captive insurance company and the Company received a promissory note for its investment which becomes due in 2021 but may be extended with notice for a maximum of two years. In accordance with FASB Codification Topic 323, Investments – Equity Method and Joint Ventures (ASC 323), the Company has elected to account for this investment at cost.

(d) In December 2018 the Company invested $500,000 in Trio Opportunity Corp. (“Trio”), a privately held entity. Trio is a real estate investment vehicle and the Company received 50,000 non-voting Class B shares at $10.00/share. In accordance with ASC 323, the Company has elected to account for this investment at cost.

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(e) In January 2019, the Company invested $1,001,000 in a Florida based LLC that is engaged in international sales of fertilizer additives. The Company accounts for this investment using the equity method of accounting. According to the operating agreement, the Company has a 50% interest in the profit and loss of the Florida based LLC but does not have control. A summary of the Company’s investment follows:

Balance, December 31, 2019	$	1,141,033
Additional payments		2,518,684
Gain in equity method investment		809,342
Return of equity		(896,714	)
Balance, December 31, 2020		3,572,345
Gain in equity method investment		200,290
Return of equity		-
Balance, March 31, 2021	$	3,772,635

Further to the original investment amount, the Company had placed $1,000,000 in trust, which was released upon the Florida based LLC reaching a milestone related to earnings before interest, taxes and depreciation (“EBITDA”) targets. This amount was accounted for as restricted cash on the balance sheet as at December 31, 2019. During the year ended December 31, 2020, this amount was released. The additional payments of $2,518,684 made during the year ended December 31, 2020 related to contingent consideration which was dependent on the Florida based LLC meeting certain performance millstones during the year. Summarized profit and loss information related to the equity accounted investment is as follows:

	Three months ended March 31, 2021		Three months ended March 31, 2020
Net sales	$	2,332,304	$	2,791,754
Gross profit		860,676		945,395
Net income		400,580		280,364

f) In December 2020, the Company invested $500,000 in Lygos Inc., a privately held entity. Both companies intend to work together in pursuit of sustainable aspartic acid through synthetic biology. The Company has elected to account for this investment at cost. A summary of the Company’s investment follows:

Balance, January 1, 2020	$	-
Acquisition		500,000
Balance, December 31, 2020 and March 31, 2021	$	500,000

11. Short-Term Line of Credit

(a) In September 2018, the Company signed a new agreement with Harris Bank (“Harris”) to renew the expiring credit line. The revolving line of credit is for an aggregate amount of up to the lesser of (i) $2,500,000, or (ii) 80% of eligible domestic accounts receivable and certain foreign accounts receivable plus 60% of inventory. The loan had an annual interest rate of 3.25% and a balance of $1,641,085 at December 31, 2019. The revolving line of credit at Harris was paid in October 2020, upon the opening of the revolving line of credit at Midland States Bank (“Midland”).

(b) In April, 2020, ENP Investments signed a new agreement with Midland to renew the expiring credit line. The revolving line of credit is for an aggregate amount up to $3,000,000. The interest rate of this loan is subject to change from time to time based on changes in an independent index which is the 1 month LIBOR as published in the Wall Street Journal (the “Index”). Interest on the unpaid principal balance of this loan will be calculated using a rate of 4.050 percentage points over the Index. Under no circumstances will the interest rate of this loan be less than 4.500% per annum or more than the maximum rate allowed by applicable law. The interest rate at March 31, 2021 is 4.5% (December 31, 2020 – 4.5%).

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The revolving line of credit contains customary affirmative and negative covenants, including the following: compliance with laws, provisions of financial statements and periodic reports, payment of taxes, maintenance of inventory and insurance, maintenance of operating accounts at Midland, Midland’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. NanoChem is a guarantor of 65% of all the principal and other loan costs not to exceed $1,625,000. March 31, 2021, ENP Investments was in compliance with all loan covenants.

To secure the repayment of any amounts borrowed under the revolving line of credit, ENP Investments granted Midland a security interest in all inventory, equipment and fixtures and acknowledges a separate commercial security agreement from guarantor to Midland dated February 15, 2011.

Short-term borrowings outstanding under the revolving line as of March 31, 2021 were $1,739,280 (December 31, 2020 - $541,456).

(c) In October 2020, the Company signed a new agreement with Midland to replace the expiring credit line at Harris. The revolving line of credit is for an aggregate amount of up to the lesser of (i) $2,500,000, or (ii) 80% of eligible domestic accounts receivable and certain foreign accounts receivable plus 50% of inventory with a rate of prime plus 0.5%. The loan has an annual interest rate of 3.75% at March 31, 2021 (December 31, 2020 – 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 Midland, Midland’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 March 31, 2021, 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 Midland a security interest in substantially all of the assets of NanoChem, exclusive of intellectual property assets.

Short-term borrowings outstanding under the revolving line as of March 31, 2021 were $1,489,154 (December 31, 2020 - $1,574,617).

12. Long Term Debt

(a) In October 2018, NanoChem signed a $4,100,000 term loan with Harris with a rate of prime (March 31, 2020 – 3.25%) to be repaid over 7 years with equal monthly installments plus interest along two payments consisting of 25% prior year cash flow recapture, capped at $300,000, due May 31, 2019 and 2020. The money was used to purchase a 65% interest in ENP Investments. Interest expense for the three months ended March 31, 2020 was $34,458. This loan was paid in October 2020 upon opening of credit facilities at Midland. The balance owing at March 31, 2020 was $2,970,238.

(b) In April 2019, NanoChem signed a loan for $1,100,000 with Harris with a rate of prime plus 0.5% (December 31, 2019 – 5.25%) for the purchase of new manufacturing equipment. The Company paid interest monthly until February 2020, when equal monthly installments of the principal and interest were due until January 2024. Interest expense for the year ended December 31, 2020 was $36,272 (2019 – $36,333). This loan was paid in October 2020 upon opening of credit facilities at Midland. The balance owing at December 31, 2019 was $1,100,000.

(c) In January 2018, ENP Investments signed a $200,000 promissory note with Midland with a rate of 5.250% to be repaid over 7 years with equal monthly installments plus interest. This money was used to purchase production equipment. Interest expense expense for the three months ended March 31, 2021 was $1,510 (2020 - 2,104). The principal balance owing at March 31, 2021 is $118,481 (December 31, 2020 - $125,543).

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The Company has committed to the following repayments:

2021	$	28,410
2022	$	29,900
2023	$	31,508
2024	$	33,202
2025	$	2,523

(d) In March 2016, ENP Investments signed a $45,941 promissory note with Ford Motor Credit Company with a rate of 0.00% interest to be repaid over 5 years with equal monthly installments. In August 2020, the loan was paid off in full

(e) In April 2020, NanoChem received a two year loan of $322,000 through the Paycheck Protection Program with a rate of 1%. In March, 2021, the loan was forgiven by the SBA and has been recorded as Other Income of the condensed interim consolidated statements of operations and comprehensive income for the three month period ended March 31, 2021.

(f) In April 2020, ENP Investments received a two year loan of $215,960 through the Paycheck Protection Program with a rate of 1%. In March, 2021, the loan was forgiven by the SBA and has been recorded as Other Income of the condensed interim consolidated statements of operations and comprehensive income for the three month period ended March 31, 2021.

(g) In October 2020, NanoChem signed a $1,980,947 term loan with Midland with a rate of 3.85% to be repaid over 5 years with equal monthly payments including interest. The money was used to retire the debt at Harris related to the loan to purchase a 65% interest in ENP Investments. Interest expense for the three months ended March 31, 2021 was $18,606 (2020 - $nil). The balance owing at March 31, 2021 is $1,830,392 (December 31, 2020 - $1,920,976).

The Company has committed to the following repayments:

2021	$	368,332
2022	$	382,705
2023	$	397,414
2024	$	413,516
2025	$	359,009

(h) In October 2020, NanoChem signed a loan for $894,253 with Midland with an interest rate 3.85% to be repaid over two years with equal monthly payments including interest. The funds were used to replace the loan at Harris for the purchase of new manufacturing equipment. Interest expense for the three months ended March 31, 2021 was $7,739 (2020 - $nil). The balance owing at March 31, 2021 is $713,735 (December 31, 2020 - $822,380).

2021	$	441,260
2022	$	381,120

(i) In January 2020, ENP Realty refinanced its mortgage and signed a loan for $450,000 with Stock Yards Bank & Trust to be repaid over 10 years with monthly installments plus interest. Interest for the first five years is at 4.35% and it will be adjusted for the last five years to the Cincinnati Federal Home Bank Loan 5 year fixed index plus 2.5%. Interest expense for the three months ended March 31, 2021 was $4,766 (2020 - $3,260). The balance owing at March 31, 2021 is $438,213 (December 31, 2020 - $440,779).

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As of March 31, 2021, Company was in compliance with all loan covenants.

Continuity	March 31, 2021			December 31, 2020
Balance, January 1	$	3,847,638		$	4,380,393
Plus: Proceeds from loans		-			3,413,160
Plus: Loan acquired with acquisition of ENP Realty		-			450,000
Less: Forgiveness on PPP loans		(537,960	)		-
Less: Payments on loan		(208,857	)		(4,395,915	)
Balance, end of period	$	3,100,821		$	3,847,638

Outstanding balance at December 31,	March 31, 2021			December 31, 2020
a) Long term debt – Harris Bank	$	-		$	-
b) Long term debt – Harris Bank		-			-
c) Long term debt – Midland States Bank		118,481			125,543
d) Long term debt – Ford Credit		-			-
e) Long term debt – PPP		-			322,000
f) Long term debt - PPP		-			215,960
g) Long term debt – Midland States Bank		1,830,392			1,920,976
h) Long term debt – Midland States Bank		713,735			822,380
i) Long term debt – Stock Yards Bank & Trust		438,213			440,779
Long-term Debt		3,100,821			3,847,638
Less: current portion		(837,724	)		(848,794	)
	$	2,263,097		$	2,998,844

13. Convertible Note Payable

In October 2018, the Company issued a convertible note payable in the amount of $1,000,000 in connection with the acquisition of EnP Investments LLC. The convertible note is due on or before September 30, 2023 with 5% interest due per year. At the option of the holder, the Note may be converted into 400,000 shares in the Company’s common stock.

In June 2019, the holder opted to convert $500,000 of the convertible note payable into 200,000 shares of the Company’s common stock.

In April 2020, the Company repaid the remaining principal balance of $500,000 and accrued interest of $13,046.

14. Stock Options

The Company has 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 and the exercise price for all options are issued for not less than fair market value at the date of the grant.

22

The following table summarizes the Company’s stock option activities for the year ended December 31, 2020 and the three-month period ended March 31, 2021:

	Number of shares			Exercise price per share		Weighted average exercise price
Balance, December 31, 2019		635,000		$	0.75 – 1.75	$	1.35
Granted		172,000		$	2.44	$	2.44
Cancelled or expired		(13,000	)	$	2.44 – 3.46	$	2.75
Exercised		(45,000	)	$	0.75 – 1.05	$	0.88
Balance, December 31, 2020		749,000		$	0.75 – 4.13	$	2.42
Cancelled or expired		(27,799	)	$	1.42 – 3.46	$	2.45
Exercised		(55,201	)	$	0.75 – 3.46	$	1.55
Balance, March 31, 2021		666,000		$	1.42 – 4.13	$	2.66
Exercisable, March 31, 2021		423,000		$	1.42 – 4.13	$	2.44

The weighted average remaining contractual life of options outstanding is 3.6 years.

The fair value of each option grant is calculated using the following weighted average assumptions:

	2020
Expected life – years		3.0
Interest rate		0.37	%
Volatility		70.14	%
Weighted average fair value of options granted	$	1.12

The Company did not grant any options during the three months ended March 31, 2021 or 2020. Options granted in previous quarters resulted in expenses in the amount of $13,065 for consultants (2020 - $11,272) and $26,524 for employees (2020 - $18,310) during the quarter ended March 31, 2021. There were 32,000 employee and 23,201 consultant stock options exercised during the three months ended March 31, 2021 (2020 – 15,000 employee and 10,000 consultant stock options).

As of March 31, 2021, there was approximately $129,991 of compensation expense related to non-vested awards. This expense is expected to be recognized over a weighted average period of 1 year.

The aggregate intrinsic value of vested options outstanding at March 31, 2021 is $578,660 (2020 – $nil).

15. Capital Stock.

During the three months ended March 31, 2021, 32,000 shares were issued upon the exercise of employee stock options (2020 – 15,000) and 23,201 shares were issued upon the exercise of consultant stock options (2020 – 10,000).

On March 19, 2020, the Company suspended the annual dividend until further notice due to the uncertainty surrounding the COVID-19 virus.

16. Non-Controlling Interests

ENP Investments is a limited liability corporation (LLC) that manufactures and distributes golf, turf and ornamental agriculture products in Mendota, Illinois. The Company owns a 65% interest in ENP Investments through its wholly-owned subsidiary NanoChem. An unrelated party owns the remaining 35% interest in ENP Investments. As of December 31, 2020, ENP Realty is a wholly owned subsidiary of ENP Investments. ENP Realty leases warehouse space. For financial reporting purposes, the assets, liabilities and earnings of both of the LLC’s are consolidated into these financial statements. The unrelated third party’s ownership interest in the LLC is recorded in non-controlling interests in these consolidated financial statements. The non-controlling interest represents the non-controlling unitholder’s interest in the earnings and equity of ENP Investments. ENP Investments is allocated to the BCPA segment.

23

ENP Investments makes cash distributions to its equity owners based on formulas defined within its Ownership Interest Purchase Agreement dated October 1, 2018. Distributions are defined in the Ownership Interest Purchase Agreement as cash on hand to the extent it exceeds current and anticipated long-term and short-term needs, including, without limitation, needs for operating expenses, debt service, acquisitions, reserves, and mandatory distributions, if any.

From the effective date of acquisition onward, the minimum distributions requirements under the Ownership Interest Purchase Agreement were satisfied. The total distribution from the effective date of acquisition onward was $1,278,944.

Balance, December 31, 2019	$	2,550,149
Distribution		(594,882	)
Non-controlling interest share of income		606,484
Balance, December 31, 2020		2,561,751
Distribution		(157,952	)
Non-controlling interest share of income		186,484
Balance, March 31, 2021	$	2,590,283

17. Segmented, Significant Customer Information and Economic Dependency.

The Company operates in two segments:

(a) Energy and water conservation products (as shown under the column heading “EWCP” below), which consists of a (i) liquid swimming pool blankets 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 blankets and which are designed to be used in still or slow moving drinking water sources.

(b) Biodegradable polymers (“BCPA’s”), also known as TPA’s, used by the petroleum, chemical, utility and mining industries to prevent corrosion and scaling in water piping. This product can also be used in detergents to increase biodegradability and in agriculture to increase crop yields by enhancing fertilizer uptake.

The accounting policies of the segments are the same as those described in Note 2, Significant Accounting Policies. The Company evaluates performance based on profit or loss from operations before income taxes, not including nonrecurring gains and losses and foreign exchange gains and losses.

The 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.

Three months ended March 31, 2021:
	EWCP			TPA			Total
Revenue	$	71,351		$	7,553,346		$	7,624,697
Interest expense		-			62,274			62,274
Depreciation and amortization		9,977			222,988			232,965
Segment profit (loss)		(219,256	)		1,669,827			1,450,571
Segment assets		2,360,199			34,299,895			36,660,094
Expenditures for segment assets		-			(96,136	)		(96,136	)

24

Three months ended March 31, 2020:
	EWCP			TPA			Total
Revenue	$	89,928		$	8,339,558		$	8,429,486
Interest expense		-			101,425			101,425
Depreciation and amortization		10,476			137,582			148,058
Segment profit (loss)		(60,255	)		1,324,930			1,264,675
Segment assets		1,963,075			32,856,519			34,819,594
Expenditures for segment assets		-			(96,280	)		(96,280	)

The sales generated in the United States and Canada are as follows:

	Three months ended March 31, 2021		Three months ended March 31, 2020
Canada	$	107,253	$	146,000
United States and abroad		7,517,444		8,283,486
Total	$	7,624,697	$	8,429,486

The Company’s long-lived assets (property, equipment, intangibles, goodwill, leaseholds, patents and right of use assets) are located in Canada and the United States as follows:

	March 31, 2021		December 31, 2020
Canada	$	438,107	$	445,663
United States		10,315,747		10,519,903
Total	$	10,753,854	$	10,965,566

Three primary customers accounted for $3,120,819 (41%) of sales during the three-month period ended March 31, 2021 (2020 - $3,744,456 or 44%).

18. Comparative Figures.

Certain of the comparative figures have been reclassified to conform with the current period’s presentation.

19. Subsequent Events

None

25

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

The Company manufactures and markets biodegradable polymers which are used in the oil, gas and agriculture industries. The Company also develops, manufactures and markets specialty chemicals that slow the evaporation of water.

Results of Operations

The Company has two product lines:

The first is a chemical (“EWCP”) used in swimming pools and spas. The product forms a thin, transparent layer on the water’s surface. The transparent layer slows the evaporation of water, allowing the water to retain a higher temperature for a longer period of time thereby reducing the energy required to maintain the desired temperature of the water. A modified version of EWCP can also be used in reservoirs, potable water storage tanks, livestock watering pods, canals, and irrigation ditches for the purpose of reducing evaporation.

The second product, biodegradable polymers (“TPAs”), is used by the petroleum, chemical, utility and mining industries to prevent corrosion and scaling in water piping. TPAs can also be used to increase biodegradability in detergents and in the agriculture industry to increase crop yields by enhancing fertilizer uptake.

The third product line is nitrogen conservation products used for the agriculture industry. These products decrease the loss of nitrogen fertilizer after initial application and allows less fertilizer to be used. These products are made and sold by our TPA division.

Material changes in the Company’s Statement of Operations for the three months ended March 31, 2021 compared to the same period in the prior year are discussed below:

Item	Increase (I) or Decrease (D)	Reason
Sales
EWCP products	D	Decreased customer orders.
TPA products	D	Decreased customer orders.
Advertising and promotion	D	The COVID virus prevented trade shows from occurring.
Interest expense	D	Decreased debt resulted in decreased interest expense.
Lease expense	D	The purchase of ENP Realty by ENP Investments reduced lease expense.
Travel	D	Travel decreased due to COVID-19.
Currency exchange	I	Currency exchange increased as a result of movements in the US / Canadian dollar exchange rate and its effects on US dollar cash balances and US dollar payables held by the Company’s Canadian subsidiaries.

26

Three primary customers accounted for 41% of the Company’s sales during the three months ended March 31, 2021 (2020 - 44%). The amount of revenue (all from the sale of TPA products) attributable to each customer is shown below.

	Three Months Ended March 31,
	2021			2020
Company A	$	358,528	*	$	985,942
Company B	$	998,336		$	915,820
Company C	$	1,434,684		$	1,842,694
Company D	$	687,800		$	670,163	*

*not a primary customer in that period

Customers with balances greater than 10% of our receivables as of March 31, 2021 and 2020 are shown below:

	March 31,
	2021			2020
Company A	$	127,205	*	$	603,655
Company B	$	2,577,497		$	2,037,071
Company C	$	1,138,276		$	1,010,104

*less than 10%

The factors that will most significantly affect future operating results will be:

● the sale price of crude oil which is used in the manufacture of aspartic acid we import from China. Aspartic acid is a key ingredient in our TPA product;

● activity in the oil and gas industry, as we sell our TPA product to oil and gas companies;

● drought conditions, since we also sell our TPA product to farmers, and

● the impact of the COVID-19 virus.

Other than the foregoing we do not know of any trends, events or uncertainties that have had, or are reasonably expected to have, a material impact on our revenues or expenses.

Capital Resources and Liquidity

The Company’s sources and (uses) of cash for the three months ended March 31, 2021 and 2020 are shown below:

	2021			2020
Cash provided (used) by operations		(2,356,767	)		(1,153,917	)
Long term deposits		-			22,084
Purchase of investments		-			(1,000,000	)
Proceeds of equity investment distributions		12,500			256,563
Acquisition of equipment		(96,136	)		(96,280	)
Borrowings from line of credit		1,112,361			1,165,850
Repayment of loans		(208,857	)		(201,027	)
Lease financing costs		(83,070	)		(101,079	)
Partnership distributions		(157,952	)		(143,001	)
Proceeds from sale of common stock		76,360			24,750
Changes in exchange rates		82,352			3,653

27

The Company has sufficient cash resources to meets its future commitments and cash flow requirements for the coming year. As of March 31, 2021, working capital was $12,092,594 (December 31, 2020 - $11,146,211).

We are committed to minimum rental payments for property and premises aggregating approximately $632,340 over the term of four leases, the last expiring on December 31, 2025.

Commitments for rent in the next five years are as follows:

2021	$	334,620
2022	$	78,240
2023	$	77,100
2024	$	70,440
2025	$	71,940

Other than as disclosed above, we do not anticipate any material capital requirements for the twelve months ending December 31, 2021.

Other than as disclosed above, we do not know of any trends, demands, commitments, events or uncertainties that will result in, or that are reasonable likely to result in, our liquidity increasing or decreasing in any material way.

Other than as disclosed above, we do not know of any significant changes in our expected sources and uses of cash.

We do not have any commitments or arrangements from any person to provide us with any equity capital.

See Note 2 to the consolidated financial statements included as part of this report for a description of our significant accounting policies.

28

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the direction and with the participation of our management, including our Principal Executive and Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2021. We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic reports with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations, and that such information is accumulated and communicated to our management, including our principal executive and financial officer, as appropriate, to allow timely decisions regarding required disclosure. Our disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching desired disclosure control objectives. Based on the evaluation, our Principal Executive and Financial Officer concluded that these disclosure controls and procedures are effective as of March 31, 2021.

Changes in Internal Control over Financial Reporting

Our management, with the participation of our Principal Executive and Financial Officer, evaluated whether any change in our internal control over financial reporting occurred during the three months ended March 31, 2021. Based on that evaluation, it was concluded that there has been no change in our internal control over financial reporting during the three months ended March 31, 2021 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

29

PART II

Item 6. Exhibits.

Number	Description
3.1	Amended and Restated Articles of Incorporation. (1)
3.2	Bylaws (1)
31.1	Certification of Principal Executive Officer Pursuant to §302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of Principal Financial Officer Pursuant to §302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of Principal Executive and Financial Officer Pursuant to 18 U.S.C. §1350 and §906 of the Sarbanes-Oxley Act of 2002.*

* Filed with this report.

(1) Incorporated by reference to the registrant’s Registration Statement on Form 10-SB (SEC File. No. 000-29649) filed February 22, 2000.

30

SIGNATURES

In accordance with the requirements the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

May 14, 2021

Flexible Solutions International, Inc.
By:	/s/ Daniel B. O’Brien
Name:	Daniel B. O’Brien
Title:	President and Principal Executive Officer
By:	/s/ Daniel B. O’Brien
Name:	Daniel B. O’Brien
Title:	Principal Financial and Accounting Officer

31

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Daniel O’Brien, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Flexible Solutions International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the unaudited consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or cause such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of unaudited consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have significant role in the registrant’s internal control over financial reporting.

May 14, 2021	/s/ Daniel B. O’Brien
	Daniel O’Brien
	Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Daniel O’Brien, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Flexible Solutions International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the unaudited consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or cause such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of unaudited consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have significant role in the registrant’s internal control over financial reporting.

May 14, 2021	/s/ Daniel B. O’Brien
	Daniel O’Brien
	Principal Financial Officer

EX-32.1

Exhibit 32.1

CertificatION of Principal Executive Officer
Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

Solely for the purposes of complying with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, the undersigned Principal Executive and Financial Officer of Flexible Solutions International, Inc. (the “Company”), hereby certify that, to the best of my knowledge, the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2021 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 14, 2021	/s/ Daniel B. O’Brien
	Daniel B. O’Brien Principal Executive and Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2021	May 14, 2021
Cover [Abstract]
Entity Registrant Name	FLEXIBLE SOLUTIONS INTERNATIONAL INC
Entity Central Index Key	0001069394
Document Type	10-Q
Document Period End Date	Mar. 31, 2021
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		12,315,746
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2021

XML

Condensed Interim Consolidated Balance Sheets - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Current
Cash and cash equivalents	$ 1,853,567	$ 3,472,776
Term deposits	1,000,000	1,000,000
Accounts receivable (Note 4)	7,539,314	5,889,813
Inventories (Note 5)	9,989,338	8,372,476
Prepaid expenses	243,243	302,447
Total current assets	20,625,462	19,037,512
Property, equipment and leaseholds, net (Note 6)	5,053,321	5,142,041
Patents (Note 7)	26,028	30,137
Right of use assets (Note 3)	408,230	483,113
Intangible assets (Note 8)	2,732,000	2,776,000
Long term deposits (Note 9)	8,540	8,540
Investments (Note 10)	4,972,635	4,776,167
Goodwill (Note 8)	2,534,275	2,534,275
Deferred tax asset	299,603	299,603
Total Assets	36,660,094	35,087,388
Current
Accounts payable	515,518	558,105
Accrued liabilities	395,569	1,225,804
Deferred revenue	278,417	314,277
Income taxes payable	3,053,671	2,540,348
Short term line of credit (Note 11)	3,228,434	2,116,073
Current portion of lease liability (Note 3)	223,535	287,900
Current portion of long term debt (Note 12)	837,724	848,794
Total current liabilities	8,532,868	7,891,301
Lease liability (Note 3)	184,695	195,213
Deferred income tax liability	233,751	233,751
Long term debt (Note 12)	2,263,097	2,998,844
Total Liabilities	11,214,411	11,319,109
Stockholders' Equity
Capital stock (Note 15) 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: 12,315,746 (December 31, 2020: 12,260,545) common shares	12,316	12,261
Capital in excess of par value	16,749,084	16,633,190
Other comprehensive loss	(789,769)	(872,121)
Accumulated earnings	6,883,769	5,433,198
Total stockholders' equity - controlling interest	22,855,400	21,206,528
Non-controlling interests (Note 16)	2,590,283	2,561,751
Total Stockholders' Equity	25,455,683	23,768,279
Total Liabilities and Stockholders' Equity	$ 36,660,094	$ 35,087,388

XML

Condensed Interim Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Common stock, shares authorized	50,000,000	50,000,000
Common stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	12,315,746	12,260,545
Common stock, shares outstanding	12,315,746	12,260,545

XML

Condensed Interim Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Statement [Abstract]
Sales	$ 7,624,697	$ 8,429,486
Cost of sales	4,916,776	5,479,947
Gross profit	2,707,921	2,949,539
Operating Expenses
Wages	579,355	535,433
Administrative salaries and benefits	222,490	204,543
Insurance	124,458	131,569
Consulting	72,961	67,311
Lease expense	66,028	118,468
Interest expense	62,274	101,425
Professional fees	53,689	51,053
Office and miscellaneous	42,119	39,392
Advertising and promotion	34,770	65,621
Investor relations and transfer agent fee	25,087	18,624
Research	18,275	28,578
Travel	10,994	55,362
Telecommunications	9,991	11,876
Currency exchange	8,300	(57,727)
Commissions	4,768	2,358
Shipping	4,355	4,613
Utilities	2,722	4,305
Total operating expenses	1,342,636	1,382,804
Operating income	1,365,285	1,566,735
PPP loan forgiveness	537,960
Gain on investments	208,968	199,529
Interest income	10,298	414
Income before income tax	2,122,511	1,766,678
Income taxes
Deferred income tax recovery
Income tax expense	(485,456)	(434,988)
Net income for the period including non-controlling interests	1,637,055	1,331,690
Less: Net income attributable to non-controlling interests	(186,484)	(67,015)
Net income attributable to controlling interest	$ 1,450,571	$ 1,264,675
Income per share (basic and diluted)	$ .12	$ .10
Weighted average number of common shares (basic)	12,292,452	12,237,798
Weighted average number of common shares (diluted)	12,518,331	12,300,896
Other comprehensive income (loss):
Net income	$ 1,637,055	$ 1,331,690
Unrealized gain (loss) on foreign currency translations	82,352	(98,928)
Total comprehensive income	1,719,407	1,232,762
Comprehensive income - non-controlling interest	(186,484)	(67,015)
Comprehensive income attributable to Flexible Solutions International Inc.	$ 1,532,923	$ 1,165,747

XML

Condensed Interim Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Operating activities
Net income for the period including non-controlling interests	$ 1,637,055	$ 1,331,690
Adjustments to reconcile net income to net cash:
Stock based compensation	39,589	29,582
Depreciation and amortization	232,965	148,058
Lease right of use financing	8,187	17,532
Lease right of use amortization	74,884	83,547
Gain on investments	(208,968)	(199,529)
PPP loan forgiveness	(537,960)
Changes in non-cash working capital items:
(Increase) Decrease in accounts receivable	(1,649,501)	(3,192,845)
(Increase) Decrease in inventories	(1,616,862)	235,397
(Increase) Decrease in prepaid expenses	59,204	(85,116)
Increase (Decrease) in accounts payable and accrued liabilities	(872,823)	444,898
Increase (Decrease) in taxes payable	513,323	(29,038)
Increase (Decrease) deferred revenue	(35,860)	2,560
Cash used in operating activities	(2,356,767)	(1,153,917)
Investing activities
Long term deposit		22,084
Purchase of investments		(1,000,000)
Proceeds of equity investment distributions	12,500	256,563
Net purchase of property, equipment and leaseholds	(96,136)	(96,280)
Cash used in investing activities	(83,636)	(817,633)
Financing activities
Draw from short term line of credit	1,112,361	1,165,850
Repayment of long term debt	(208,857)	(201,027)
Lease financing costs	(83,070)	(101,079)
Partnership distributions	(157,952)	(143,002)
Proceeds from issuance of common stock	76,360	24,750
Cash provided by financing activities	738,842	745,492
Effect of exchange rate changes on cash	82,352	3,653
Outflow of cash	(1,619,209)	(1,222,405)
Cash, cash equivalents and restricted cash, beginning	4,472,776	4,634,670
Cash, cash equivalents and restricted cash, ending	2,853,567	3,412,265
Cash, cash equivalents and restricted cash are comprised of:
Cash and cash equivalents	1,853,567	3,412,265
Term deposits	1,000,000
Cash, cash equivalents and restricted cash, ending	2,853,567	3,412,265
Supplemental disclosure of cash flow information:
Income taxes paid		464,026
Interest paid	$ 62,274	$ 101,245

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Condensed Interim Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Capital in Excess of Par Value [Member]	Accumulated Earnings (Deficiency) [Member]	Other Comprehensive Income (Loss) [Member]	Total	Non-Controlling Interests [Member]	Total Stockholders' Equity [Member]
Beginning balance at Dec. 31, 2019	$ 12,216	$ 16,437,473	$ 2,456,148	$ (994,610)	$ 17,911,227	$ 2,550,149	$ 20,461,376
Beginning balance, Shares at Dec. 31, 2019	12,215,545
Translation adjustment				(98,928)	(98,928)		(98,928)
Net income			1,264,675		1,264,675	67,015	1,331,690
Common stock issued	$ 25	24,725			24,750		24,750
Common stock issued, Shares	25,000
Distributions to noncontrolling interests						(143,002)	(143,002)
Stock-based compensation		29,582			29,582		29,582
Ending balance at Mar. 31, 2020	$ 12,241	16,491,780	3,720,823	(1,093,538)	19,130,306	2,474,162	21,605,468
Ending balance, Shares at Mar. 31, 2020	12,240,545
Beginning balance at Dec. 31, 2019	$ 12,216	16,437,473	2,456,148	(994,610)	17,911,227	2,550,149	20,461,376
Beginning balance, Shares at Dec. 31, 2019	12,215,545
Ending balance at Dec. 31, 2020	$ 12,261	16,633,190	5,433,198	(872,121)	21,206,528	2,561,751	23,768,279
Ending balance, Shares at Dec. 31, 2020	12,260,545
Translation adjustment				82,352	82,352		82,352
Net income			1,450,571		1,450,571	186,484	1,637,055
Common stock issued	$ 55	76,305			76,360		76,360
Common stock issued, Shares	55,201
Distributions to noncontrolling interests						(157,952)	(157,952)
Stock-based compensation		39,589			39,589		39,589
Ending balance at Mar. 31, 2021	$ 12,316	$ 16,749,084	$ 6,883,769	$ (789,769)	$ 22,855,400	$ 2,590,238	$ 25,445,683
Ending balance, Shares at Mar. 31, 2021	12,315,746

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Basis of Presentation

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

1. Basis of Presentation.

These consolidated financial statements include the accounts of Flexible Solutions International, Inc. (the “Company”), its wholly-owned subsidiaries Flexible Fermentation Ltd. , NanoChem Solutions Inc. (“NanoChem”), Flexible Solutions Ltd., Flexible Biomass LP, FS Biomass Inc., NCS Deferred Corp., Natural Chem SEZC Ltd., and InnFlex Holdings Inc. and its 65% interest in ENP Investments, LLC (“ENP Investments”) and ENP Realty, LLC (“ENP Realty”). All inter-company balances and transactions have been eliminated upon consolidation. The Company was incorporated on May 12, 1998 in the State of Nevada and had no operations until June 30, 1998. In 2019, the Company redomiciled into Alberta, Canada.

In 2018, NanoChem, a wholly-owned subsidiary of the Company, completed the purchase of a 65% interest in ENP Investments for an aggregate purchase price of $5,110,560. An unrelated party owns the remaining 35% interest in ENP Investments, and ENP Investments is consolidated into the financial statements. The outside investor’s ownership interest in ENP Investments is included in noncontrolling interests in these consolidated financial statements from the acquisition date onward. In 2020, ENP Investments increased its investment in ENP Realty from 24% to 100%, making ENP Realty a wholly-owned subsidiary of ENP Investments. ENP Realty is consolidated into the financial statements.

The Company 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. The TPA division also manufactures two nitrogen conservation products for agriculture that slows nitrogen loss from fields.

The outbreak of the novel strain of coronavirus, specifically identified as “COVID-19”, has resulted in a widespread health crisis that has affected economies and financial markets around the world resulting in an economic downturn. This outbreak may also cause staff shortages, reduced customer demand, increased government regulations or interventions, all of which may negatively impact the business, financial condition or results of options of the Company. The duration and impact of the COVID-19 outbreak is unknown at this time and it is not possible to reliably estimate the length and severity of these developments.

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Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Significant Accounting Policies

2. Significant Accounting Policies.

These consolidated financial statements have been prepared on a historical cost basis, except where otherwise noted, 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 three major classes of inventory: completed goods, work in progress and raw materials and supplies. In all classes, inventories are stated at the lower of cost and net realizable value. The Company applies the first-in, first-out or weighted average cost formulae to inventories in different subsidiaries. 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. Shipping and handling charges billed to customers are included in revenue (2021 - $131,348; 2020 – $162,905). Shipping and handling costs incurred are included in cost of goods sold (2021 - $263,089; 2020 – $290,748).

(c) Allowance for Doubtful Accounts

The Company provides an allowance for doubtful accounts when management estimates collectability 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, Leaseholds and Intangible Assets.

The following assets are recorded at cost and depreciated using the methods and annual rates shown below:

Computer hardware	30% Declining balance
Furniture and fixtures	20% Declining balance
Manufacturing equipment	20% Declining balance
Office equipment	20% Declining balance
Boat	20% Declining balance
Building and improvements	10% Declining balance
Trailer	30% Declining balance
Automobile	Straight-line over 5 years
Patents	Straight-line over 17 years
Technology	Straight-line over 10 years
Right of Use Asset	Straight-line over lease term
Leasehold improvements	Straight-line over lease term
Customer Relationships – ENP Investments	Straight line over 15 years
Software – ENP Investments	Straight line over 3 years

(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, equipment and leaseholds, 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 are less than its carrying value, an impairment measurement is indicated. Long-lived assets are written down to net realizable value when management determines there has been a change in circumstances which indicates their carrying amounts may not be recoverable. 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 the Company is the U.S. dollar. 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 Company, 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 Company’s 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 in the consolidated statements of income and 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.

The Company generates revenue primarily from energy and water conservation products and biodegradable polymer, as further discussed in Note 17.

The Company follows a five-step model for revenue recognition. The five steps are: (1) identification of the contract(s) with the customer, (2) identification of the performance obligation(s) in the contract(s), (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligation, and (5) recognition of revenue when (or as) the performance obligation is satisfied. The Company has fulfilled its performance obligations when control transfers to the customer, which is generally at the time the product is shipped since risk of loss is transferred to the purchaser upon delivery to the carrier. For shipments which are F.O.B. shipping point, the Company has elected to account for shipping and handling activities as a fulfillment cost rather than as an additional promised service and performance obligation.

The Company recognizes revenue when 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.

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 has 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 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) Other 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 comprised only of unrealized foreign exchange gains and losses.

(k) Income Per Share.

Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding in the period. Diluted earnings per share is 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 three months ended March 31, 2021 and 2020.

(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 valuation of goodwill and intangible assets, asset impairment analysis, share-based payments and warrants, valuation allowances for deferred income tax assets, determination of useful lives of property, equipment and leaseholds and intangible assets, recoverability of accounts receivable, recoverability of investments, discount rates for right of use assets and the valuation of inventory.

(m) Fair Value of Financial Instruments

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, accrued liabilities and the short term line of credit for all periods presented approximate their respective carrying amounts due to the short term nature of these financial instruments.

The fair value of the long term debt for all periods presented approximate their respective carrying amounts due to these financial instruments being at market rates.

(n) Contingencies

Certain conditions may exist as of the date the consolidated 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 consolidated 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.

(o) 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 March 31, 2021, 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 in the consolidated statements of income and comprehensive income.

(p) Risk Management.

The Company’s credit risk is primarily attributable to its accounts receivable. 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-payment by customers. Credit exposure is minimized by dealing with only credit worthy counterparties. Revenue for the Company’s three primary customers totaled $3,120,819 (41%) for the three months ended March 31, 2021 (2020 - $3,744,455 or 44%). Accounts receivable for the Company’s three primary customers totaled $4,134,780 (55%) at March 31, 2021 (December 31, 2020 - $3,986,284 or 68%).

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 maintains cash balances at financial institutions which at times exceed federally insured amounts. The Company has not experienced any losses in such accounts.

The Company is exposed to foreign exchange risk to the extent that market value rate fluctuations materially differ from financial assets and liabilities, subject to fixed long-term rates.

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 and accrued liabilities. The Company has not hedged its exposure to currency fluctuations.

The Company is exposed to interest rate risk to the extent that the fair value or future cash flows for financial liabilities will fluctuate as a result of changes in market interest rates. The Company is exposed to interest rate risk on its long-term debt.

In order to manage its exposure to interest rate risk, the Company is closely monitoring fluctuations in market interest risks and will refinance its long-term debt where possible to obtain more favourable rates.

(q) Equity Method Investment

The Company accounts for investments using the equity method of accounting if the investment provides the Company the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if the Company’s ownership interest in the voting stock of the investee ranges between 20% and 50%, although other factors, such as representation on the investee’s board of directors, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the investment is recorded at cost in the consolidated balance sheets under other assets and adjusted for dividends received and the Company’s share of the investee’s earnings or losses together with other-than-temporary impairments which are recorded through other income (loss), net in the consolidated statements of income and comprehensive income.

(r) Goodwill and intangible assets

Goodwill represents the excess of the purchase price of an acquired entity over the amounts assigned to the assets acquired and liabilities assumed. Goodwill is not amortized, but is reviewed for impairment annually or more frequently if certain impairment conditions arise. The Company performs an annual goodwill impairment review in the fourth quarter of each year at the reporting unit level. The evaluation begins with a qualitative assessment of the factors that could impact the significant inputs used to estimate fair value. If after performing the qualitative assessment, it is determined that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, including goodwill, then no further analysis is necessary. However, if the results of the qualitative test are unclear, the Company performs a quantitative test, which involves comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses an income-based valuation method, determining the present value of future cash flows, to estimate the fair value of a reporting unit. If the fair value of a reporting unit exceeds its positive carrying amount, goodwill of the reporting unit is considered not impaired, and no further analysis is necessary. If the fair value of the reporting unit is less than its carrying amount, goodwill impairment would be recognized equal to the amount of the carrying value in excess of the reporting unit’s fair value, limited to the total amount of goodwill allocated to the reporting unit.

Intangible assets primarily include trademarks and trade secrets with indefinite lives and customer-relationships with finite lives. Intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis, or more frequently if indicators of impairment are present. Indefinite lived intangible assets are assessed using either a qualitative or a quantitative approach. The qualitative assessment evaluates factors including macro-economic conditions, industry and company-specific factors, legal and regulatory environments, and historical company performance in assessing fair value. If it is determined that it is more likely than not that the fair value of the intangible asset is less than its carrying value, a quantitative test is then performed. Otherwise, no further testing is required. When using a quantitative approach, the Company compares the fair value of the intangible asset to its carrying amount, including goodwill. If the estimated fair value of the intangible asset is less than the carrying amount of the intangible asset, impairment is indicated, requiring recognition of an impairment charge for the differential.

Qualitative assessments of goodwill and indefinite-lived intangible assets were performed in 2020 and 2019. Based on the results of assessment, it was determined that it is more likely than not the reporting unit, customer lists and trademarks had a fair value in excess of their carrying value. Accordingly, no further impairment testing was completed and no impairment charges related to goodwill or indefinite-lived intangibles were recognized during the three months ended March 31, 2021.

Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. The Company reviews for impairment indicators of finite-lived intangibles and other long-lived assets as described in the “Impairment of Long Lived Assets” significant accounting policy.

(s) Recent Accounting Pronouncements

The Company has implemented all applicable new accounting pronouncements that are in effect. Those pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

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Leases

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Leases

3. Leases

Accounting and reporting guidance for leases requires that leases be evaluated and classified as either operating or finance leases by the lessee and as either operating, sales-type or direct financing leases by the lessor. For leases with terms greater than 12 months, the Company records the related right-of-use (“ROU”) asset and lease obligation at the present value of lease payments over the term. Leases may include fixed rental escalation clauses, renewal options and / or termination options that are factored into the determination of lease payments when appropriate. The Company’s operating leases are included in ROU assets, lease liabilities-current portion and lease liability-less current portion in the accompanying consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. The Company’s leases do not usually provide a readily determinable implicit rate; therefore, an estimate of the Company’s incremental borrowing rate is used to discount the lease payments based on information available at the lease commencement date. The discount rate used was 5.5%.

The table below summarizes the right-of-use asset and lease liability for the period ended March 31, 2021:

	March 31, 2021
Right of Use Assets
Balance at December 31, 2020	$	483,113
Depreciation		(74,883	)
Balance at March 31, 2021	$	408,230
Lease Liability
Balance at December 31, 2020	$	483,113
Lease interest expense		8,187
Payments		(83,070	)
Balance at March 31, 2021	$	408,230
Short-term portion	$	223,535
Long-term portion		184,695
Total	$	408,230

Undiscounted rent payments for the next five years are as follows:

2021	$	204,830
2022		67,320
2023		66,180
2024		59,520
2025		61,020
Total	$	458,870
Impact of discounting		50,640
Lease liability, March 31, 2021	$	408,230

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Accounts Receivable

3 Months Ended

Mar. 31, 2021

Receivables [Abstract]

Accounts Receivable

4. Accounts Receivable

	March 31, 2021			December 31, 2020
Accounts receivable	$	7,810,978		$	6,161,249
Allowances for doubtful accounts		(271,664	)		(271,436	)
	$	7,539,314		$	5,889,813

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Inventories

3 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

Inventories

5. Inventories

	March 31, 2021		December 31, 2020
Completed goods	$	4,337,962	$	3,393,794
Work in progress		177,201		152,595
Raw materials and supplies		5,474,175		4,826,087

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Property, Plant & Equipment

3 Months Ended

Mar. 31, 2021

Property, Plant and Equipment [Abstract]

Property, Plant & Equipment

6. Property, Plant & equipment

	March 31, 2021		Accumulated		March 31, 2021
	Cost		Depreciation		Net
Buildings and improvements	$	4,799,742	$	2,873,647	$	1,926,095
Automobiles		180,956		69,450		111,506
Computer hardware		43,609		42,090		1,519
Furniture and fixtures		111,167		102,043		9,124
Office equipment		1,875		1,022		853
Manufacturing equipment		6,252,435		3,715,223		2,537,212
Trailer		9,476		6,920		2,556
Boat		34,400		24,762		9,638
Leasehold improvements		88,872		87,705		1,167
Technology		107,909		107,909		—
Land		453,651		—		453,651
	$	12,084,092	$	7,030,771	$	5,053,321

	December 31, 2020		Accumulated		December 31, 2020
	Cost		Depreciation		Net
Buildings and improvements	$	4,798,370	$	2,836,142	$	1,962,228
Automobiles		180,956		61,266		119,690
Computer hardware		43,593		41,957		1,636
Furniture and fixtures		111,145		101,186		9,959
Office equipment		1,864		971		893
Manufacturing equipment		6,154,425		3,573,748		2,580,677
Trailer		9,422		6,675		2,747
Boat		34,400		24,255		10,145
Leasehold improvements		88,872		87,205		1,667
Technology		107,295		107,295		—
Land		452,399		—		452,399
	$	11,982,741	$	6,840,700	$	5,142,041

Amount of depreciation expense for the three months ended March 31, 2021: $184,855 (2020: $99,948) and is included in cost of sales in the unaudited interim condensed consolidated statements of income and comprehensive income.

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Patents

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Patents

7. Patents

In fiscal 2005, the Company started the patent process for additional WATER$AVR® products. Patents associated with these costs were granted in 2006 and they have been amortized over their legal life of 17 years.

	March 31, 2021 Cost		Accumulated Amortization		March 31, 2021 Net
Patents	$	209,404	$	183,376	$	26,028

	December 31, 2020 Cost		Accumulated Amortization		December 31, 2020 Net
Patents	$	208,211	$	178,074	$	30,137

The increase in the carrying amount of patents is primarily due to foreign currency translation effects. The 2021 cost in Canadian dollars - $265,102 (December 31, 2020 - $265,102 in Canadian dollars).

Amount of amortization for 2021 - $4,110 (2020 - $4,110) and is included in cost of sales in the consolidated statements of income and comprehensive income.

Estimated amortization expense over the next two years is as follows:

2021	16,438
2022	13,699

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Goodwill and Indefinite Lived Intangible Assets

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Indefinite Lived Intangible Assets

8. Goodwill and Indefinite Lived Intangible Assets

Goodwill
Balance as of December 31, 2019	$	2,534,275
Additions		-
Impairment		-
Balance as of December 31, 2020 and March 31, 2021	$	2,534,275
Indefinite Lived Intangible Assets
Balance as of December 31, 2019	$	770,000
Additions		-
Impairment		-
Balance as of December 31, 2020 and March 31, 2021	$	770,000

Goodwill relates to the acquisition of ENP Investments. Indefinite lived intangible assets consist of trade secrets and trademarks related to the acquisition of ENP Investments.

Definite Life Intangible Assets
Balance as of December 31, 2019	$	2,182,000
Amortization		(176,000	)
Balance as of December 31, 2020		2,006,000
Amortization		(44,000	)
Balance as of March 31, 2021	$	1,962,000

Definite life intangible assets consist of customer relationships and software related to the acquisition of ENP Investments. Customer relationships and software are amortized over their estimated useful life of 15 years and 3 years, respectively.

Estimated amortization expense over the next five years is as follows:

2021	$	176,000
2022		160,000
2023		160,000
2024		160,000
2025		160,000

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Long Term Deposits

3 Months Ended

Mar. 31, 2021

Long Term Deposits

Long Term Deposits

9. 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.

		March 31, 2020		December 31, 2020
Long term deposits	$	8,540	$	8,540

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Investments

3 Months Ended

Mar. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Investments

10. Investments

(a) The Company has a 50% ownership interest in ENP Peru Investments LLC (“ENP Peru”), which was acquired in fiscal 2016. ENP Peru is located in Illinois and leases warehouse space. The Company accounts for this investment using the equity method of accounting. A summary of the Company’s investment follows:

Balance, December 31, 2019	$	11,387
Return of equity		(9,063	)
Gain in equity method investment		1,498
Balance, December 31, 2020		3,822
Return of equity		(3,822	)
Gain in equity method investment		-
Balance, March 31, 2021	$	-

Summarized profit and loss information related to the equity accounted investment is as follows for the full year:

	2020
Net sales	$	295,800
Net income	$	2,996

During the three months ended March 31, 2021, the Company received $8,678 from ENP Peru. At the time of receipt of the payment, the investment balance was $nil and the payment was not recorded against the investment balance but was included in gains on investments.

(b) In fiscal 2018, ENP Investments acquired a 24% ownership interest in ENP Realty LLC (“ENP Realty”). ENP Realty is located in Illinois and leases warehouse space. During the year ended December 31, 2020, the other partners of ENP Realty withdrew from the partnership, resulting in ENP Realty becoming a wholly owned subsidiary of ENP Investments. As a result, ENP Realty is consolidated in the financial statements of the Company and a 35% non-controlling interest is recognized from the acquisition date onwards.

It was determined that ENP Realty did not meet the definition of a business in accordance with FASB Codification Topic 805, Business Combinations (ASC 805), and the acquisition was accounted for as an asset acquisition. The following table summarizes the final purchase price allocation of the consideration paid to the respective fair values of the assets acquired and liabilities assumed in ENP Realty as of the acquisition date.

Investment eliminated upon consolidation	$	63,165
Assets acquired:
Cash		13,419
Building		630,000
Land		85,000
Liabilities assumed:
Accounts payable		(15,797	)
Long term debt		(450,000	)
Deferred income tax liability		(66,116	)
Total identifiable net assets:		196,506
Gain on acquisition of ENP Realty	$	133,341

The income tax expense arising from the deferred income tax liability was net against gain on acquisition of ENP Realty in the consolidated statements of income and comprehensive income for the full year ended December 31, 2020.

A summary of the Company’s investment follows:

Balance, December 31, 2019	$	63,165
Investment eliminated upon consolidation		(63,165	)
Balance, December 31, 2020 and March 31, 2021	$	-

Summarized profit and loss information related to the equity accounted investment is as follows for the full year:

	2019
Net sales	$	75,870
Net income	$	34,200

(c) In December 2018 the Company invested $200,000 in Applied Holding Corp. (“Applied”). Applied is a captive insurance company and the Company received a promissory note for its investment which becomes due in 2021 but may be extended with notice for a maximum of two years. In accordance with FASB Codification Topic 323, Investments – Equity Method and Joint Ventures (ASC 323), the Company has elected to account for this investment at cost.

(d) In December 2018 the Company invested $500,000 in Trio Opportunity Corp. (“Trio”), a privately held entity. Trio is a real estate investment vehicle and the Company received 50,000 non-voting Class B shares at $10.00/share. In accordance with ASC 323, the Company has elected to account for this investment at cost.

(e) In January 2019, the Company invested $1,001,000 in a Florida based LLC that is engaged in international sales of fertilizer additives. The Company accounts for this investment using the equity method of accounting. According to the operating agreement, the Company has a 50% interest in the profit and loss of the Florida based LLC but does not have control. A summary of the Company’s investment follows:

Balance, December 31, 2019	$	1,141,033
Additional payments		2,518,684
Gain in equity method investment		809,342
Return of equity		(896,714	)
Balance, December 31, 2020		3,572,345
Gain in equity method investment		200,290
Return of equity		-
Balance, March 31, 2021	$	3,772,635

Further to the original investment amount, the Company had placed $1,000,000 in trust, which was released upon the Florida based LLC reaching a milestone related to earnings before interest, taxes and depreciation (“EBITDA”) targets. This amount was accounted for as restricted cash on the balance sheet as at December 31, 2019. During the year ended December 31, 2020, this amount was released. The additional payments of $2,518,684 made during the year ended December 31, 2020 related to contingent consideration which was dependent on the Florida based LLC meeting certain performance millstones during the year. Summarized profit and loss information related to the equity accounted investment is as follows:

	Three months ended March 31, 2021		Three months ended March 31, 2020
Net sales	$	2,332,304	$	2,791,754
Gross profit		860,676		945,395
Net income		400,580		280,364

f) In December 2020, the Company invested $500,000 in Lygos Inc., a privately held entity. Both companies intend to work together in pursuit of sustainable aspartic acid through synthetic biology. The Company has elected to account for this investment at cost. A summary of the Company’s investment follows:

Balance, January 1, 2020	$	-
Acquisition		500,000
Balance, December 31, 2020 and March 31, 2021	$	500,000

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Short-Term Line of Credit

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Short-Term Line of Credit

11. Short-Term Line of Credit

(a) In September 2018, the Company signed a new agreement with Harris Bank (“Harris”) to renew the expiring credit line. The revolving line of credit is for an aggregate amount of up to the lesser of (i) $2,500,000, or (ii) 80% of eligible domestic accounts receivable and certain foreign accounts receivable plus 60% of inventory. The loan had an annual interest rate of 3.25% and a balance of $1,641,085 at December 31, 2019. The revolving line of credit at Harris was paid in October 2020, upon the opening of the revolving line of credit at Midland States Bank (“Midland”).

(b) In April, 2020, ENP Investments signed a new agreement with Midland to renew the expiring credit line. The revolving line of credit is for an aggregate amount up to $3,000,000. The interest rate of this loan is subject to change from time to time based on changes in an independent index which is the 1 month LIBOR as published in the Wall Street Journal (the “Index”). Interest on the unpaid principal balance of this loan will be calculated using a rate of 4.050 percentage points over the Index. Under no circumstances will the interest rate of this loan be less than 4.500% per annum or more than the maximum rate allowed by applicable law. The interest rate at March 31, 2021 is 4.5% (December 31, 2020 – 4.5%).

The revolving line of credit contains customary affirmative and negative covenants, including the following: compliance with laws, provisions of financial statements and periodic reports, payment of taxes, maintenance of inventory and insurance, maintenance of operating accounts at Midland, Midland’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. NanoChem is a guarantor of 65% of all the principal and other loan costs not to exceed $1,625,000. March 31, 2021, ENP Investments was in compliance with all loan covenants.

To secure the repayment of any amounts borrowed under the revolving line of credit, ENP Investments granted Midland a security interest in all inventory, equipment and fixtures and acknowledges a separate commercial security agreement from guarantor to Midland dated February 15, 2011.

Short-term borrowings outstanding under the revolving line as of March 31, 2021 were $1,739,280 (December 31, 2020 - $541,456).

(c) In October 2020, the Company signed a new agreement with Midland to replace the expiring credit line at Harris. The revolving line of credit is for an aggregate amount of up to the lesser of (i) $2,500,000, or (ii) 80% of eligible domestic accounts receivable and certain foreign accounts receivable plus 50% of inventory with a rate of prime plus 0.5%. The loan has an annual interest rate of 3.75% at March 31, 2021 (December 31, 2020 – 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 Midland, Midland’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 March 31, 2021, 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 Midland a security interest in substantially all of the assets of NanoChem, exclusive of intellectual property assets.

Short-term borrowings outstanding under the revolving line as of March 31, 2021 were $1,489,154 (December 31, 2020 - $1,574,617).

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Long Term Debt

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Long Term Debt

12. Long Term Debt

(a) In October 2018, NanoChem signed a $4,100,000 term loan with Harris with a rate of prime (March 31, 2020 – 3.25%) to be repaid over 7 years with equal monthly installments plus interest along two payments consisting of 25% prior year cash flow recapture, capped at $300,000, due May 31, 2019 and 2020. The money was used to purchase a 65% interest in ENP Investments. Interest expense for the three months ended March 31, 2020 was $34,458. This loan was paid in October 2020 upon opening of credit facilities at Midland. The balance owing at March 31, 2020 was $2,970,238.

(b) In April 2019, NanoChem signed a loan for $1,100,000 with Harris with a rate of prime plus 0.5% (December 31, 2019 – 5.25%) for the purchase of new manufacturing equipment. The Company paid interest monthly until February 2020, when equal monthly installments of the principal and interest were due until January 2024. Interest expense for the year ended December 31, 2020 was $36,272 (2019 – $36,333). This loan was paid in October 2020 upon opening of credit facilities at Midland. The balance owing at December 31, 2019 was $1,100,000.

(c) In January 2018, ENP Investments signed a $200,000 promissory note with Midland with a rate of 5.250% to be repaid over 7 years with equal monthly installments plus interest. This money was used to purchase production equipment. Interest expense expense for the three months ended March 31, 2021 was $1,510 (2020 - 2,104). The principal balance owing at March 31, 2021 is $118,481 (December 31, 2020 - $125,543).

The Company has committed to the following repayments:

2021	$	28,410
2022	$	29,900
2023	$	31,508
2024	$	33,202
2025	$	2,523

(d) In March 2016, ENP Investments signed a $45,941 promissory note with Ford Motor Credit Company with a rate of 0.00% interest to be repaid over 5 years with equal monthly installments. In August 2020, the loan was paid off in full

(e) In April 2020, NanoChem received a two year loan of $322,000 through the Paycheck Protection Program with a rate of 1%. In March, 2021, the loan was forgiven by the SBA and has been recorded as Other Income of the condensed interim consolidated statements of operations and comprehensive income for the three month period ended March 31, 2021.

(f) In April 2020, ENP Investments received a two year loan of $215,960 through the Paycheck Protection Program with a rate of 1%. In March, 2021, the loan was forgiven by the SBA and has been recorded as Other Income of the condensed interim consolidated statements of operations and comprehensive income for the three month period ended March 31, 2021.

(g) In October 2020, NanoChem signed a $1,980,947 term loan with Midland with a rate of 3.85% to be repaid over 5 years with equal monthly payments including interest. The money was used to retire the debt at Harris related to the loan to purchase a 65% interest in ENP Investments. Interest expense for the three months ended March 31, 2021 was $18,606 (2020 - $nil). The balance owing at March 31, 2021 is $1,830,392 (December 31, 2020 - $1,920,976).

The Company has committed to the following repayments:

2021	$	368,332
2022	$	382,705
2023	$	397,414
2024	$	413,516
2025	$	359,009

(h) In October 2020, NanoChem signed a loan for $894,253 with Midland with an interest rate 3.85% to be repaid over two years with equal monthly payments including interest. The funds were used to replace the loan at Harris for the purchase of new manufacturing equipment. Interest expense for the three months ended March 31, 2021 was $7,739 (2020 - $nil). The balance owing at March 31, 2021 is $713,735 (December 31, 2020 - $822,380).

2021	$	441,260
2022	$	381,120

(i) In January 2020, ENP Realty refinanced its mortgage and signed a loan for $450,000 with Stock Yards Bank & Trust to be repaid over 10 years with monthly installments plus interest. Interest for the first five years is at 4.35% and it will be adjusted for the last five years to the Cincinnati Federal Home Bank Loan 5 year fixed index plus 2.5%. Interest expense for the three months ended March 31, 2021 was $4,766 (2020 - $3,260). The balance owing at March 31, 2021 is $438,213 (December 31, 2020 - $440,779).

As of March 31, 2021, Company was in compliance with all loan covenants.

Continuity	March 31, 2021			December 31, 2020
Balance, January 1	$	3,847,638		$	4,380,393
Plus: Proceeds from loans		-			3,413,160
Plus: Loan acquired with acquisition of ENP Realty		-			450,000
Less: Forgiveness on PPP loans		(537,960	)		-
Less: Payments on loan		(208,857	)		(4,395,915	)
Balance, end of period	$	3,100,821		$	3,847,638

Outstanding balance at December 31,	March 31, 2021			December 31, 2020
a) Long term debt – Harris Bank	$	-		$	-
b) Long term debt – Harris Bank		-			-
c) Long term debt – Midland States Bank		118,481			125,543
d) Long term debt – Ford Credit		-			-
e) Long term debt – PPP		-			322,000
f) Long term debt - PPP		-			215,960
g) Long term debt – Midland States Bank		1,830,392			1,920,976
h) Long term debt – Midland States Bank		713,735			822,380
i) Long term debt – Stock Yards Bank & Trust		438,213			440,779
Long-term Debt		3,100,821			3,847,638
Less: current portion		(837,724	)		(848,794	)
	$	2,263,097		$	2,998,844

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Convertible Note Payable

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Convertible Note Payable

13. Convertible Note Payable

In October 2018, the Company issued a convertible note payable in the amount of $1,000,000 in connection with the acquisition of EnP Investments LLC. The convertible note is due on or before September 30, 2023 with 5% interest due per year. At the option of the holder, the Note may be converted into 400,000 shares in the Company’s common stock.

In June 2019, the holder opted to convert $500,000 of the convertible note payable into 200,000 shares of the Company’s common stock.

In April 2020, the Company repaid the remaining principal balance of $500,000 and accrued interest of $13,046.

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Stock Options

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Stock Options

14. Stock Options

The Company has 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 and the exercise price for all options are issued for not less than fair market value at the date of the grant.

The following table summarizes the Company’s stock option activities for the year ended December 31, 2020 and the three-month period ended March 31, 2021:

	Number of shares			Exercise price per share		Weighted average exercise price
Balance, December 31, 2019		635,000		$	0.75 – 1.75	$	1.35
Granted		172,000		$	2.44	$	2.44
Cancelled or expired		(13,000	)	$	2.44 – 3.46	$	2.75
Exercised		(45,000	)	$	0.75 – 1.05	$	0.88
Balance, December 31, 2020		749,000		$	0.75 – 4.13	$	2.42
Cancelled or expired		(27,799	)	$	1.42 – 3.46	$	2.45
Exercised		(55,201	)	$	0.75 – 3.46	$	1.55
Balance, March 31, 2021		666,000		$	1.42 – 4.13	$	2.66
Exercisable, March 31, 2021		423,000		$	1.42 – 4.13	$	2.44

The weighted average remaining contractual life of options outstanding is 3.6 years.

The fair value of each option grant is calculated using the following weighted average assumptions:

	2020
Expected life – years		3.0
Interest rate		0.37	%
Volatility		70.14	%
Weighted average fair value of options granted	$	1.12

The Company did not grant any options during the three months ended March 31, 2021 or 2020. Options granted in previous quarters resulted in expenses in the amount of $13,065 for consultants (2020 - $11,272) and $26,524 for employees (2020 - $18,310) during the quarter ended March 31, 2021. There were 32,000 employee and 23,201 consultant stock options exercised during the three months ended March 31, 2021 (2020 – 15,000 employee and 10,000 consultant stock options).

As of March 31, 2021, there was approximately $129,991 of compensation expense related to non-vested awards. This expense is expected to be recognized over a weighted average period of 1 year.

The aggregate intrinsic value of vested options outstanding at March 31, 2021 is $578,660 (2020 – $nil).

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Capital Stock

3 Months Ended

Mar. 31, 2021

Equity [Abstract]

Capital Stock

15. Capital Stock.

During the three months ended March 31, 2021, 32,000 shares were issued upon the exercise of employee stock options (2020 – 15,000) and 23,201 shares were issued upon the exercise of consultant stock options (2020 – 10,000).

On March 19, 2020, the Company suspended the annual dividend until further notice due to the uncertainty surrounding the COVID-19 virus.

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Non-Controlling Interests

3 Months Ended

Mar. 31, 2021

Noncontrolling Interest [Abstract]

Non-Controlling Interests

16. Non-Controlling Interests

ENP Investments is a limited liability corporation (LLC) that manufactures and distributes golf, turf and ornamental agriculture products in Mendota, Illinois. The Company owns a 65% interest in ENP Investments through its wholly-owned subsidiary NanoChem. An unrelated party owns the remaining 35% interest in ENP Investments. As of December 31, 2020, ENP Realty is a wholly owned subsidiary of ENP Investments. ENP Realty leases warehouse space. For financial reporting purposes, the assets, liabilities and earnings of both of the LLC’s are consolidated into these financial statements. The unrelated third party’s ownership interest in the LLC is recorded in non-controlling interests in these consolidated financial statements. The non-controlling interest represents the non-controlling unitholder’s interest in the earnings and equity of ENP Investments. ENP Investments is allocated to the BCPA segment.

ENP Investments makes cash distributions to its equity owners based on formulas defined within its Ownership Interest Purchase Agreement dated October 1, 2018. Distributions are defined in the Ownership Interest Purchase Agreement as cash on hand to the extent it exceeds current and anticipated long-term and short-term needs, including, without limitation, needs for operating expenses, debt service, acquisitions, reserves, and mandatory distributions, if any.

From the effective date of acquisition onward, the minimum distributions requirements under the Ownership Interest Purchase Agreement were satisfied. The total distribution from the effective date of acquisition onward was $1,278,944.

Balance, December 31, 2019	$	2,550,149
Distribution		(594,882	)
Non-controlling interest share of income		606,484
Balance, December 31, 2020		2,561,751
Distribution		(157,952	)
Non-controlling interest share of income		186,484
Balance, March 31, 2021	$	2,590,283

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Segmented, Significant Customer Information and Economic Dependency

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Segmented, Significant Customer Information and Economic Dependency

17. Segmented, Significant Customer Information and Economic Dependency.

The Company operates in two segments:

(a) Energy and water conservation products (as shown under the column heading “EWCP” below), which consists of a (i) liquid swimming pool blankets 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 blankets and which are designed to be used in still or slow moving drinking water sources.

(b) Biodegradable polymers (“BCPA’s”), also known as TPA’s, used by the petroleum, chemical, utility and mining industries to prevent corrosion and scaling in water piping. This product can also be used in detergents to increase biodegradability and in agriculture to increase crop yields by enhancing fertilizer uptake.

The accounting policies of the segments are the same as those described in Note 2, Significant Accounting Policies. The Company evaluates performance based on profit or loss from operations before income taxes, not including nonrecurring gains and losses and foreign exchange gains and losses.

The 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.

Three months ended March 31, 2021:
	EWCP			TPA			Total
Revenue	$	71,351		$	7,553,346		$	7,624,697
Interest expense		-			62,274			62,274
Depreciation and amortization		9,977			222,988			232,965
Segment profit (loss)		(219,256	)		1,669,827			1,450,571
Segment assets		2,360,199			34,299,895			36,660,094
Expenditures for segment assets		-			(96,136	)		(96,136	)

Three months ended March 31, 2020:
	EWCP			TPA			Total
Revenue	$	89,928		$	8,339,558		$	8,429,486
Interest expense		-			101,425			101,425
Depreciation and amortization		10,476			137,582			148,058
Segment profit (loss)		(60,255	)		1,324,930			1,264,675
Segment assets		1,963,075			32,856,519			34,819,594
Expenditures for segment assets		-			(96,280	)		(96,280	)

The sales generated in the United States and Canada are as follows:

	Three months ended March 31, 2021		Three months ended March 31, 2020
Canada	$	107,253	$	146,000
United States and abroad		7,517,444		8,283,486
Total	$	7,624,697	$	8,429,486

The Company’s long-lived assets (property, equipment, intangibles, goodwill, leaseholds, patents and right of use assets) are located in Canada and the United States as follows:

	March 31, 2021		December 31, 2020
Canada	$	438,107	$	445,663
United States		10,315,747		10,519,903
Total	$	10,753,854	$	10,965,566

Three primary customers accounted for $3,120,819 (41%) of sales during the three-month period ended March 31, 2021 (2020 - $3,744,456 or 44%).

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Comparative Figures

3 Months Ended

Mar. 31, 2020

Comparative Figures

Comparative Figures

18. Comparative Figures.

Certain of the comparative figures have been reclassified to conform with the current period’s presentation.

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Subsequent Events

3 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

19. Subsequent Events

None

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Cash and Cash Equivalents

(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.

Inventories and Cost of Sales

(b) Inventories and Cost of Sales

The Company has three major classes of inventory: completed goods, work in progress and raw materials and supplies. In all classes, inventories are stated at the lower of cost and net realizable value. The Company applies the first-in, first-out or weighted average cost formulae to inventories in different subsidiaries. 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. Shipping and handling charges billed to customers are included in revenue (2021 - $131,348; 2020 – $162,905). Shipping and handling costs incurred are included in cost of goods sold (2021 - $263,089; 2020 – $290,748).

Allowance for Doubtful Accounts

(c) Allowance for Doubtful Accounts

The Company provides an allowance for doubtful accounts when management estimates collectability 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, Leaseholds and Intangible Assets

(d) Property, Equipment, Leaseholds and Intangible Assets.

The following assets are recorded at cost and depreciated using the methods and annual rates shown below:

Computer hardware	30% Declining balance
Furniture and fixtures	20% Declining balance
Manufacturing equipment	20% Declining balance
Office equipment	20% Declining balance
Boat	20% Declining balance
Building and improvements	10% Declining balance
Trailer	30% Declining balance
Automobile	Straight-line over 5 years
Patents	Straight-line over 17 years
Technology	Straight-line over 10 years
Right of Use Asset	Straight-line over lease term
Leasehold improvements	Straight-line over lease term
Customer Relationships – ENP Investments	Straight line over 15 years
Software – ENP Investments	Straight line over 3 years

Impairment of Long-Lived Assets

(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, equipment and leaseholds, 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 are less than its carrying value, an impairment measurement is indicated. Long-lived assets are written down to net realizable value when management determines there has been a change in circumstances which indicates their carrying amounts may not be recoverable. 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

(f) Foreign Currency.

The functional currency of the Company is the U.S. dollar. 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 Company, 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 Company’s 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 in the consolidated statements of income and 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

(g) Revenue Recognition.

The Company generates revenue primarily from energy and water conservation products and biodegradable polymer, as further discussed in Note 17.

The Company follows a five-step model for revenue recognition. The five steps are: (1) identification of the contract(s) with the customer, (2) identification of the performance obligation(s) in the contract(s), (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligation, and (5) recognition of revenue when (or as) the performance obligation is satisfied. The Company has fulfilled its performance obligations when control transfers to the customer, which is generally at the time the product is shipped since risk of loss is transferred to the purchaser upon delivery to the carrier. For shipments which are F.O.B. shipping point, the Company has elected to account for shipping and handling activities as a fulfillment cost rather than as an additional promised service and performance obligation.

The Company recognizes revenue when 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.

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 has been met, and payments become due or cash is received from these distributors.

Stock Issued in Exchange for Services

(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.

Stock-based Compensation

(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 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.

Other Comprehensive Income

(j) Other 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 comprised only of unrealized foreign exchange gains and losses.

Income Per Share

(k) Income Per Share.

Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding in the period. Diluted earnings per share is 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 three months ended March 31, 2021 and 2020.

Use of Estimates

(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 valuation of goodwill and intangible assets, asset impairment analysis, share-based payments and warrants, valuation allowances for deferred income tax assets, determination of useful lives of property, equipment and leaseholds and intangible assets, recoverability of accounts receivable, recoverability of investments, discount rates for right of use assets and the valuation of inventory.

Fair Value of Financial Instruments

(m) Fair Value of Financial Instruments

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, accrued liabilities and the short term line of credit for all periods presented approximate their respective carrying amounts due to the short term nature of these financial instruments.

The fair value of the long term debt for all periods presented approximate their respective carrying amounts due to these financial instruments being at market rates.

Contingencies

(n) Contingencies

Certain conditions may exist as of the date the consolidated 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 consolidated 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

(o) 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 March 31, 2021, 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 in the consolidated statements of income and comprehensive income.

Risk Management

(p) Risk Management.

The Company’s credit risk is primarily attributable to its accounts receivable. 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-payment by customers. Credit exposure is minimized by dealing with only credit worthy counterparties. Revenue for the Company’s three primary customers totaled $3,120,819 (41%) for the three months ended March 31, 2021 (2020 - $3,744,455 or 44%). Accounts receivable for the Company’s three primary customers totaled $4,134,780 (55%) at March 31, 2021 (December 31, 2020 - $3,986,284 or 68%).

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 maintains cash balances at financial institutions which at times exceed federally insured amounts. The Company has not experienced any losses in such accounts.

The Company is exposed to foreign exchange risk to the extent that market value rate fluctuations materially differ from financial assets and liabilities, subject to fixed long-term rates.

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 and accrued liabilities. The Company has not hedged its exposure to currency fluctuations.

The Company is exposed to interest rate risk to the extent that the fair value or future cash flows for financial liabilities will fluctuate as a result of changes in market interest rates. The Company is exposed to interest rate risk on its long-term debt.

In order to manage its exposure to interest rate risk, the Company is closely monitoring fluctuations in market interest risks and will refinance its long-term debt where possible to obtain more favourable rates.

Equity Method Investment

(q) Equity Method Investment

The Company accounts for investments using the equity method of accounting if the investment provides the Company the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if the Company’s ownership interest in the voting stock of the investee ranges between 20% and 50%, although other factors, such as representation on the investee’s board of directors, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the investment is recorded at cost in the consolidated balance sheets under other assets and adjusted for dividends received and the Company’s share of the investee’s earnings or losses together with other-than-temporary impairments which are recorded through other income (loss), net in the consolidated statements of income and comprehensive income.

Goodwill and Intangible Assets

(r) Goodwill and intangible assets

Goodwill represents the excess of the purchase price of an acquired entity over the amounts assigned to the assets acquired and liabilities assumed. Goodwill is not amortized, but is reviewed for impairment annually or more frequently if certain impairment conditions arise. The Company performs an annual goodwill impairment review in the fourth quarter of each year at the reporting unit level. The evaluation begins with a qualitative assessment of the factors that could impact the significant inputs used to estimate fair value. If after performing the qualitative assessment, it is determined that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, including goodwill, then no further analysis is necessary. However, if the results of the qualitative test are unclear, the Company performs a quantitative test, which involves comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses an income-based valuation method, determining the present value of future cash flows, to estimate the fair value of a reporting unit. If the fair value of a reporting unit exceeds its positive carrying amount, goodwill of the reporting unit is considered not impaired, and no further analysis is necessary. If the fair value of the reporting unit is less than its carrying amount, goodwill impairment would be recognized equal to the amount of the carrying value in excess of the reporting unit’s fair value, limited to the total amount of goodwill allocated to the reporting unit.

Intangible assets primarily include trademarks and trade secrets with indefinite lives and customer-relationships with finite lives. Intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis, or more frequently if indicators of impairment are present. Indefinite lived intangible assets are assessed using either a qualitative or a quantitative approach. The qualitative assessment evaluates factors including macro-economic conditions, industry and company-specific factors, legal and regulatory environments, and historical company performance in assessing fair value. If it is determined that it is more likely than not that the fair value of the intangible asset is less than its carrying value, a quantitative test is then performed. Otherwise, no further testing is required. When using a quantitative approach, the Company compares the fair value of the intangible asset to its carrying amount, including goodwill. If the estimated fair value of the intangible asset is less than the carrying amount of the intangible asset, impairment is indicated, requiring recognition of an impairment charge for the differential.

Qualitative assessments of goodwill and indefinite-lived intangible assets were performed in 2020 and 2019. Based on the results of assessment, it was determined that it is more likely than not the reporting unit, customer lists and trademarks had a fair value in excess of their carrying value. Accordingly, no further impairment testing was completed and no impairment charges related to goodwill or indefinite-lived intangibles were recognized during the three months ended March 31, 2021.

Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. The Company reviews for impairment indicators of finite-lived intangibles and other long-lived assets as described in the “Impairment of Long Lived Assets” significant accounting policy.

Recent Accounting Pronouncements

(s) Recent Accounting Pronouncements

The Company has implemented all applicable new accounting pronouncements that are in effect. Those pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

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Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Schedule of 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
Furniture and fixtures	20% Declining balance
Manufacturing equipment	20% Declining balance
Office equipment	20% Declining balance
Boat	20% Declining balance
Building and improvements	10% Declining balance
Trailer	30% Declining balance
Automobile	Straight-line over 5 years
Patents	Straight-line over 17 years
Technology	Straight-line over 10 years
Right of Use Asset	Straight-line over lease term
Leasehold improvements	Straight-line over lease term
Customer Relationships – ENP Investments	Straight line over 15 years
Software – ENP Investments	Straight line over 3 years

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Leases (Tables)

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Summary of Right-of-use Asset and Lease Liability

The table below summarizes the right-of-use asset and lease liability for the period ended March 31, 2021:

	March 31, 2021
Right of Use Assets
Balance at December 31, 2020	$	483,113
Depreciation		(74,883	)
Balance at March 31, 2021	$	408,230
Lease Liability
Balance at December 31, 2020	$	483,113
Lease interest expense		8,187
Payments		(83,070	)
Balance at March 31, 2021	$	408,230
Short-term portion	$	223,535
Long-term portion		184,695
Total	$	408,230

Schedule of Undiscounted Rent Payments

Undiscounted rent payments for the next five years are as follows:

2021	$	204,830
2022		67,320
2023		66,180
2024		59,520
2025		61,020
Total	$	458,870
Impact of discounting		50,640
Lease liability, March 31, 2021	$	408,230

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Accounts Receivable (Tables)

3 Months Ended

Mar. 31, 2021

Receivables [Abstract]

Schedule of Accounts Receivable

	March 31, 2021			December 31, 2020
Accounts receivable	$	7,810,978		$	6,161,249
Allowances for doubtful accounts		(271,664	)		(271,436	)
	$	7,539,314		$	5,889,813

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Inventories (Tables)

3 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

Schedule of Inventories

	March 31, 2021		December 31, 2020
Completed goods	$	4,337,962	$	3,393,794
Work in progress		177,201		152,595
Raw materials and supplies		5,474,175		4,826,087
	$	9,989,338	$	8,372,476

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Property, Plant & Equipment (Tables)

3 Months Ended

Mar. 31, 2021

Property, Plant and Equipment [Abstract]

Schedule of Property, Equipment and Leaseholds

	March 31, 2021		Accumulated		March 31, 2021
	Cost		Depreciation		Net
Buildings and improvements	$	4,799,742	$	2,873,647	$	1,926,095
Automobiles		180,956		69,450		111,506
Computer hardware		43,609		42,090		1,519
Furniture and fixtures		111,167		102,043		9,124
Office equipment		1,875		1,022		853
Manufacturing equipment		6,252,435		3,715,223		2,537,212
Trailer		9,476		6,920		2,556
Boat		34,400		24,762		9,638
Leasehold improvements		88,872		87,705		1,167
Technology		107,909		107,909		—
Land		453,651		—		453,651
	$	12,084,092	$	7,030,771	$	5,053,321

	December 31, 2020		Accumulated		December 31, 2020
	Cost		Depreciation		Net
Buildings and improvements	$	4,798,370	$	2,836,142	$	1,962,228
Automobiles		180,956		61,266		119,690
Computer hardware		43,593		41,957		1,636
Furniture and fixtures		111,145		101,186		9,959
Office equipment		1,864		971		893
Manufacturing equipment		6,154,425		3,573,748		2,580,677
Trailer		9,422		6,675		2,747
Boat		34,400		24,255		10,145
Leasehold improvements		88,872		87,205		1,667
Technology		107,295		107,295		—
Land		452,399		—		452,399
	$	11,982,741	$	6,840,700	$	5,142,041

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Patents (Tables)

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Patents

Patents associated with these costs were granted in 2006 and they have been amortized over their legal life of 17 years.

	March 31, 2021 Cost		Accumulated Amortization		March 31, 2021 Net
Patents	$	209,404	$	183,376	$	26,028

	December 31, 2020 Cost		Accumulated Amortization		December 31, 2020 Net
Patents	$	208,211	$	178,074	$	30,137

Schedule of Estimated Amortization Expense

Estimated amortization expense over the next two years is as follows:

2021	16,438
2022	13,699

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Goodwill and Indefinite Lived Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill and Indefinite Lived Intangible Assets

Goodwill
Balance as of December 31, 2019	$	2,534,275
Additions		-
Impairment		-
Balance as of December 31, 2020 and March 31, 2021	$	2,534,275
Indefinite Lived Intangible Assets
Balance as of December 31, 2019	$	770,000
Additions		-
Impairment		-
Balance as of December 31, 2020 and March 31, 2021	$	770,000

Goodwill relates to the acquisition of ENP Investments. Indefinite lived intangible assets consist of trade secrets and trademarks related to the acquisition of ENP Investments.

Definite Life Intangible Assets
Balance as of December 31, 2019	$	2,182,000
Amortization		(176,000	)
Balance as of December 31, 2020		2,006,000
Amortization		(44,000	)
Balance as of March 31, 2021	$	1,962,000

Schedule of Estimated Future Amortization Expense

Estimated amortization expense over the next five years is as follows:

2021	$	176,000
2022		160,000
2023		160,000
2024		160,000
2025		160,000

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Long Term Deposits (Tables)

3 Months Ended

Mar. 31, 2021

Long Term Deposits

Schedule of Long Term Deposits

Long term deposits consist of damage deposits held by landlords and security deposits held by various vendors.

		March 31, 2020		December 31, 2020
Long term deposits	$	8,540	$	8,540

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Investments (Tables)

3 Months Ended

Mar. 31, 2021

ENP Peru Investments LLC [Member]

Schedule of Equity Method Investment

A summary of the Company’s investment follows:

Balance, December 31, 2019	$	11,387
Return of equity		(9,063	)
Gain in equity method investment		1,498
Balance, December 31, 2020		3,822
Return of equity		(3,822	)
Gain in equity method investment		-
Balance, March 31, 2021	$	0

Summary of Profit and Loss Information Related to Equity Accounted Investment

Summarized profit and loss information related to the equity accounted investment is as follows for the full year:

	2020
Net sales	$	295,800
Net income	$	2,996

ENP Realty LLC [Member]

Schedule of Equity Method Investment

A summary of the Company’s investment follows:

Balance, December 31, 2019	$	63,165
Investment eliminated upon consolidation		(63,165	)
Balance, December 31, 2020 and March 31, 2021	$	-

Summary of Profit and Loss Information Related to Equity Accounted Investment

Summarized profit and loss information related to the equity accounted investment is as follows for the full year:

	2019
Net sales	$	75,870
Net income	$	34,200

Schedule of Fair Values of Assets Acquired and Liabilities Assumption

The following table summarizes the final purchase price allocation of the consideration paid to the respective fair values of the assets acquired and liabilities assumed in ENP Realty as of the acquisition date.

Investment eliminated upon consolidation	$	63,165
Assets acquired:
Cash		13,419
Building		630,000
Land		85,000
Liabilities assumed:
Accounts payable		(15,797	)
Long term debt		(450,000	)
Deferred income tax liability		(66,116	)
Total identifiable net assets:		196,506
Gain on acquisition of ENP Realty	$	133,341

Florida based LLC [Member]

Schedule of Equity Method Investment

Summarized profit and loss information related to the equity accounted investment is as follows:

	Three months ended March 31, 2021		Three months ended March 31, 2020
Net sales	$	2,332,304	$	2,791,754
Gross profit		860,676		945,395
Net income		400,580		280,364

Summary of Profit and Loss Information Related to Equity Accounted Investment

Summarized profit and loss information related to the equity accounted investment is as follows:

	Three months ended March 31, 2021		Three months ended March 31, 2020
Net sales	$	2,332,304	$	2,791,754
Gross profit		860,676		945,395
Net income		400,580		280,364

Lygos Inc [Member]

Schedule of Equity Method Investment

A summary of the Company’s investment follows:

Balance, January 1, 2020	$	-
Acquisition		500,000
Balance, December 31, 2020 and March 31, 2021	$	500,000

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Long Term Debt (Tables)

3 Months Ended

Mar. 31, 2021

Schedule of Loan Covenants

As of March 31, 2021, Company was in compliance with all loan covenants.

Continuity	March 31, 2021			December 31, 2020
Balance, January 1	$	3,847,638		$	4,380,393
Plus: Proceeds from loans		-			3,413,160
Plus: Loan acquired with acquisition of ENP Realty		-			450,000
Less: Forgiveness on PPP loans		(537,960	)		-
Less: Payments on loan		(208,857	)		(4,395,915	)
Balance, end of period	$	3,100,821		$	3,847,638

Schedule of Outstanding Balance Loan

Outstanding balance at December 31,	March 31, 2021			December 31, 2020
a) Long term debt – Harris Bank	$	-		$	-
b) Long term debt – Harris Bank		-			-
c) Long term debt – Midland States Bank		118,481			125,543
d) Long term debt – Ford Credit		-			-
e) Long term debt – PPP		-			322,000
f) Long term debt - PPP		-			215,960
g) Long term debt – Midland States Bank		1,830,392			1,920,976
h) Long term debt – Midland States Bank		713,735			822,380
i) Long term debt – Stock Yards Bank & Trust		438,213			440,779
Long-term Debt		3,100,821			3,847,638
Less: current portion		(837,724	)		(848,794	)
	$	2,263,097		$	2,998,844

Promissory Note With Midland Bank [Member]

Schedule of Interest Loan Repayment

The Company has committed to the following repayments:

2021	$	28,410
2022	$	29,900
2023	$	31,508
2024	$	33,202
2025	$	2,523

Promissory Note One With Midland Bank [Member]

Schedule of Interest Loan Repayment

The Company has committed to the following repayments:

2021	$	368,332
2022	$	382,705
2023	$	397,414
2024	$	413,516
2025	$	359,009

Promissory Note Two With Midland Bank [Member]

Schedule of Interest Loan Repayment

2021	$	441,260
2022	$	381,120

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Stock Options (Tables)

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Schedule of Stock Option Activities

The following table summarizes the Company’s stock option activities for the year ended December 31, 2020 and the three-month period ended March 31, 2021:

	Number of shares			Exercise price per share		Weighted average exercise price
Balance, December 31, 2019		635,000		$	0.75 – 1.75	$	1.35
Granted		172,000		$	2.44	$	2.44
Cancelled or expired		(13,000	)	$	2.44 – 3.46	$	2.75
Exercised		(45,000	)	$	0.75 – 1.05	$	0.88
Balance, December 31, 2020		749,000		$	0.75 – 4.13	$	2.42
Cancelled or expired		(27,799	)	$	1.42 – 3.46	$	2.45
Exercised		(55,201	)	$	0.75 – 3.46	$	1.55
Balance, March 31, 2021		666,000		$	1.42 – 4.13	$	2.66
Exercisable, March 31, 2021		423,000		$	1.42 – 4.13	$	2.44

Schedule of Stock Option Fair Value Assumptions

The fair value of each option grant is calculated using the following weighted average assumptions:

	2020
Expected life – years		3.0
Interest rate		0.37	%
Volatility		70.14	%
Weighted average fair value of options granted	$	1.12

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Non-Controlling Interests (Tables)

3 Months Ended

Mar. 31, 2021

Noncontrolling Interest [Abstract]

Schedule of Distributions

The total distribution from the effective date of acquisition onward was $1,278,944.

Balance, December 31, 2019		2,550,149
Distribution		(594,882	)
Non-controlling interest share of income		606,484
Balance, December 31, 2020	$	2,561,751
Distribution		(157,952	)
Non-controlling interest share of income		186,484
Balance, March 31, 2021	$	2,590,283

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Segmented, Significant Customer Information and Economic Dependency (Tables)

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Schedule of Reportable Segments

They are managed separately because each business requires different technology and marketing strategies.

Three months ended March 31, 2021:
	EWCP			TPA			Total
Revenue	$	71,351		$	7,553,346		$	7,624,697
Interest expense		-			62,274			62,274
Depreciation and amortization		9,977			222,988			232,965
Segment profit (loss)		(219,256	)		1,669,827			1,450,571
Segment assets		2,360,199			34,299,895			36,660,094
Expenditures for segment assets		-			(96,136	)		(96,136	)

Three months ended March 31, 2020:
	EWCP			TPA			Total
Revenue	$	89,928		$	8,339,558		$	8,429,486
Interest expense		-			101,425			101,425
Depreciation and amortization		10,476			137,582			148,058
Segment profit (loss)		(60,255	)		1,324,930			1,264,675
Segment assets		1,963,075			32,856,519			34,819,594
Expenditures for segment assets		-			(96,280	)		(96,280	)

Schedule of Revenue Generated in United States and Canada

The sales generated in the United States and Canada are as follows:

	Three months ended March 31, 2021		Three months ended March 31, 2020
Canada	$	107,253	$	146,000
United States and abroad		7,517,444		8,283,486
Total	$	7,624,697	$	8,429,486

Schedule of Long-lived Assets are Located in Canada and United States

The Company’s long-lived assets (property, equipment, intangibles, goodwill, leaseholds, patents and right of use assets) are located in Canada and the United States as follows:

	March 31, 2021		December 31, 2020
Canada	$	438,107	$	445,663
United States		10,315,747		10,519,903
Total	$	10,753,854	$	10,965,566

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Basis of Presentation (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended	12 Months Ended
	Dec. 31, 2018	Mar. 31, 2021	Dec. 31, 2020	Dec. 31, 2018
ENP Peru Investments LLC [Member]
Purchase price				$ 5,110,560
ENP Investments LLC and ENP Realty, LLC [Member]
Subsidiary company ownership interest rate		65.00%
ENP Investments LLC [Member]
Subsidiary company ownership interest rate	65.00%	65.00%
ENP Investments, LLC [Member] | Unrelated Party [Member]
Subsidiary company ownership interest rate				35.00%
ENP Realty LLC [Member] | Minimum [Member]
Subsidiary company ownership interest rate			24.00%
ENP Realty LLC [Member] | Maximum [Member]
Subsidiary company ownership interest rate			100.00%

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Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenue	$ 7,624,697	$ 8,429,486
Cost of goods sold	$ 4,916,776	5,479,947
Equity method investment, description	Significant influence is generally deemed to exist if the Company's ownership interest in the voting stock of the investee ranges between 20% and 50%, although other factors, such as representation on the investee's board of directors, are considered in determining whether the equity method of accounting is appropriate.
Three Primary Customers [Member]
Revenue	$ 3,120,819	3,744,455
Accounts receivable	$ 4,134,780	$ 3,986,284
Three Primary Customers [Member] | Revenue [Member]
Concentration risk, percentage	41.00%	44.00%
Three Primary Customers [Member] | Accounts Receivable [Member]
Concentration risk, percentage	55.00%	68.00%
Shipping and Handling [Member]
Revenue	$ 131,348	$ 162,905
Cost of goods sold	$ 263,089	$ 290,748

XML

Significant Accounting Policies - Schedule of Method of Depreciation (Details)	3 Months Ended
	Mar. 31, 2021
Computer Hardware [Member]
Depreciation method used and annual rate	30% Declining balance
Furniture and Fixtures [Member]
Depreciation method used and annual rate	20% Declining balance
Manufacturing Equipment [Member]
Depreciation method used and annual rate	20% Declining balance
Office Equipment [Member]
Depreciation method used and annual rate	20% Declining balance
Boat [Member]
Depreciation method used and annual rate	20% Declining balance
Building and Improvements [Member]
Depreciation method used and annual rate	10% Declining balance
Trailer [Member]
Depreciation method used and annual rate	30% Declining balance
Automobiles [Member]
Depreciation method used and annual rate	Straight-line over 5 years
Patents [Member]
Depreciation method used and annual rate	Straight-line over 17 years
Technology [Member]
Depreciation method used and annual rate	Straight-line over 10 years
Right of Use Asset [Member]
Depreciation method used and annual rate	Straight-line over lease term
Leasehold Improvements [Member]
Depreciation method used and annual rate	Straight-line over lease term
Customer Relationships - ENP Investments [Member]
Depreciation method used and annual rate	Straight line over 15 years
Software - ENP Investments [Member]
Depreciation method used and annual rate	Straight line over 3 years

XML

Leases (Detail Narrative)	Mar. 31, 2021
Leases [Abstract]
Operating leases discount rate	5.50%

XML

Leases - Summary of Right-of-use Asset and Lease Liability (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Leases [Abstract]
Right of Use Assets Beginning Balance	$ 483,113
Depreciation	(74,883)
Right of Use Assets Ending Balance	408,230
Lease Liability Beginning Balance	483,113
Lease interest expense	8,187
Payments	(83,070)
Lease Liability Ending Balance	408,230
Short-term portion		$ 223,535	$ 287,900
Long-term portion		184,695	195,213
Total	$ 408,230	$ 408,230	$ 483,113

XML

Leases - Schedule of Undiscounted Rent Payments (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Leases [Abstract]
2021	$ 204,830
2022	67,320
2023	66,180
2024	59,520
2025	61,020
Total	458,870
Impact of discounting	50,640
Lease liability, March 31, 2021	$ 408,230	$ 483,113

XML

Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Receivables [Abstract]
Accounts receivable	$ 7,810,978	$ 6,161,249
Allowances for doubtful accounts	(271,664)	(271,436)
Accounts receivable net	$ 7,539,314	$ 5,889,813

XML

Inventories - Schedule of Inventories (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Inventory Disclosure [Abstract]
Completed goods	$ 4,337,962	$ 3,393,794
Work in progress	177,201	152,595
Raw materials and supplies	5,474,175	4,826,087
Total inventory	$ 9,989,338	$ 8,372,476

XML

Property, Plant & Equipment (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 184,855	$ 99,948

XML

Property, Plant & Equipment - Schedule of Property, Equipment and Leaseholds (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Cost	$ 12,084,092	$ 11,982,741
Accumulated Depreciation	7,030,771	6,840,700
Net	5,053,321	5,142,041
Building and Improvements [Member]
Cost	4,799,742	4,798,370
Accumulated Depreciation	2,873,647	2,836,142
Net	1,926,095	1,962,228
Automobiles [Member]
Cost	180,956	180,956
Accumulated Depreciation	69,450	61,266
Net	111,506	119,690
Computer Hardware [Member]
Cost	43,609	43,593
Accumulated Depreciation	42,090	41,957
Net	1,519	1,636
Furniture and Fixtures [Member]
Cost	111,167	111,145
Accumulated Depreciation	102,043	101,186
Net	9,124	9,959
Office Equipment [Member]
Cost	1,875	1,864
Accumulated Depreciation	1,022	971
Net	853	893
Manufacturing Equipment [Member]
Cost	6,252,435	6,154,425
Accumulated Depreciation	3,715,223	3,573,748
Net	2,537,212	2,580,677
Trailer [Member]
Cost	9,476	9,422
Accumulated Depreciation	6,920	6,675
Net	2,556	2,747
Boat [Member]
Cost	34,400	34,400
Accumulated Depreciation	24,762	24,255
Net	9,638	10,145
Leasehold Improvements [Member]
Cost	88,872	88,872
Accumulated Depreciation	87,705	87,205
Net	1,167	1,667
Technology [Member]
Cost	107,909	107,295
Accumulated Depreciation	107,909	107,295
Net
Land [Member]
Cost	453,651	452,399
Accumulated Depreciation
Net	$ 453,651	$ 452,399

XML

Patents (Details Narrative)	3 Months Ended
	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2020 CAD ($)
Amortization	$ 4,110	$ 4,110
CAD [Member]
Increase in currency conversion	$ 265,102		$ 265,102

XML

Patents - Schedule of Patents (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Patents, Cost	$ 209,404	$ 208,211
Accumulated Amortization	183,376	178,074
Patents, Net	$ 26,028	$ 30,137

XML

Patents - Schedule of Estimated Amortization Expense (Details)	Mar. 31, 2021 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2021	$ 16,438
2022	$ 13,699

XML

Goodwill and Indefinite Lived Intangible Assets (Details Narrative) - ENP Investments LLC [Member]	3 Months Ended
	Mar. 31, 2021
Customer Relationships [Member]
Estimated useful life	15 years
Software [Member]
Estimated useful life	3 years

XML

Goodwill and Indefinite Lived Intangible Assets - Schedule of Goodwill and Indefinite Lived Intangible Assets (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Goodwill, Beginning balance	$ 2,534,275
Goodwill, Ending balance	2,534,275		$ 2,534,275
Beginning balance	30,137
Amortization	4,110	$ 4,110
Ending balance	26,028		30,137
EnP Investments Limited Liability Corporation (LLC) [Member]
Goodwill, Beginning balance	2,534,275	2,534,275	2,534,275
Additions
Impairment
Goodwill, Ending balance	2,534,275		2,534,275
Indefinite Lived Intangible Assets, Beginning balance	770,000	770,000	770,000
Additions
Impairment
Indefinite Lived Intangible Assets, Ending balance	770,000		770,000
Beginning balance	2,006,000	$ 2,182,000	2,182,000
Amortization	(44,000)		(176,000)
Ending balance	$ 1,962,000		$ 2,006,000

XML

Goodwill and Indefinite Lived Intangible Assets - Schedule of Estimated Future Amortization Expense (Details)	Mar. 31, 2021 USD ($)
2021	$ 16,438
2022	13,699
Finite-Lived Intangible Assets [Member]
2021	176,000
2022	160,000
2023	160,000
2024	160,000
2025	$ 160,000

XML

Long Term Deposits - Schedule of Long Term Deposits (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Long Term Deposits
Long term deposits	$ 8,540	$ 8,540

XML

Investments (Details Narrative) - USD ($)	1 Months Ended			3 Months Ended
	Dec. 31, 2020	Jan. 31, 2019	Dec. 31, 2018	Mar. 31, 2021	Dec. 31, 2016
ENP Realty LLC [Member]
Non-controlling interests			35.00%
ENP Peru Investments LLC [Member]
Ownership interest					50.00%
Proceeds from investment				$ 8,678
ENP Realty LLC [Member]
Ownership interest			24.00%
Applied Holding Corp [Member]
Investment			$ 200,000
Debt conversion due date			2021
Applied Holding Corp [Member] | Maximum [Member]
Debt term			2 years
Trio Opportunity Corp [Member]
Investment			$ 500,000
Trio Opportunity Corp [Member] | Common Class B [Member]
Non-voting shares			50,000
Share price			$ 10.00
Florida based LLC [Member]
Ownership interest		50.00%
Investment		$ 1,001,000
Restricted cash, released upon reaching milestone	$ 2,518,684	$ 1,000,000
Lygos Inc [Member]
Investment	$ 500,000

XML

Investments - Schedule of Equity Method Investment (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Balance, Beginning	$ 4,776,167
Investment eliminated upon consolidation	63,165
Balance, Ending	4,972,635	$ 4,776,167
ENP Peru Investments LLC [Member]
Balance, Beginning	3,822	11,387
Return of equity	(3,822)	(9,063)
Gain (loss) in equity method investment		1,498
Balance, Ending	0	3,822
ENP Realty LLC [Member]
Balance, Beginning		63,165
Investment eliminated upon consolidation		(63,165)
Balance, Ending
Florida based LLC [Member]
Balance, Beginning	3,572,345	1,141,033
Return of equity		(896,714)
Gain (loss) in equity method investment	200,290	809,342
Additional payment		2,518,684
Balance, Ending	3,772,635	3,572,345
Lygos Inc [Member]
Balance, Beginning	500,000
Acquisition		500,000
Balance, Ending	$ 500,000	$ 500,000

XML

Investments - Summary of Profit and Loss Information Related to Equity Accounted Investment (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2019
ENP Peru Investments LLC [Member]
Net sales			$ 295,800
Net income			$ 2,996
ENP Realty LLC [Member]
Net sales				$ 75,870
Net income				$ 34,200
Florida based LLC [Member]
Net sales	$ 2,332,304	$ 2,791,754
Gross profit	860,676	945,395
Net income	$ 400,580	$ 280,364

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Investments - Schedule of Fair Values of Assets Acquired and Liabilities Assumption (Details)	3 Months Ended
	Mar. 31, 2021 USD ($)
Equity Method Investments and Joint Ventures [Abstract]
Investment eliminated upon consolidation	$ 63,165
Assets acquired: Cash	13,419
Assets acquired:Building	630,000
Assets acquired: Land	85,000
Liabilities assumed: Accounts payable	(15,797)
Liabilities assumed: Long term debt	(450,000)
Liabilities assumed: Deferred income tax liability	(66,116)
Total identifiable net assets:	196,506
Gain on acquisition of ENP Realty	$ 133,341

XML

Short-Term Line of Credit (Details Narrative) - USD ($)	1 Months Ended
	Oct. 31, 2020	Apr. 30, 2020	Sep. 30, 2018	Mar. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Line of credit				$ 3,228,434	$ 2,116,073
New Agreement [Member] | Midland States Bank [Member]
Aggregate amount of revolving line of credit		$ 3,000,000
Annual interest rate of loan				4.50%	4.50%
Debt effective rate		4.05%
Short-term borrowings				$ 1,739,280	$ 541,456
New Agreement [Member] | Midland States Bank [Member] | Maximum [Member]
Annual interest rate of loan		4.50%
New Agreement [Member] | Harris Bank [Member]
Annual interest rate of loan						3.25%
Line of credit						$ 1,641,085
New Agreement [Member] | NanoChem Solutions Inc. [Member]
Line of credit				$ 1,625,000
Loan guaranteed rate				65.00%
New Agreement [Member] | Harris Bank [Member]
Aggregate amount of revolving line of credit			$ 2,500,000
Eligible percentage of domestic accounts receivable			80.00%
Percentage of foreign accounts receivable of inventory			60.00%
New Agreement [Member] | Harris Bank [Member] | Midland States Bank [Member]
Aggregate amount of revolving line of credit	$ 2,500,000
Eligible percentage of domestic accounts receivable	80.00%
Percentage of foreign accounts receivable of inventory	50.00%
Annual interest rate of loan				3.75%	3.75%
Loan guaranteed rate				148915400.00%	157461700.00%
New Agreement [Member] | Harris Bank [Member] | Midland States Bank [Member] | Prime Rate [Member]
Percentage of foreign accounts receivable of inventory	0.50%

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Long Term Debt (Details Narrative) - USD ($)	1 Months Ended						3 Months Ended		12 Months Ended
	Oct. 31, 2020	Apr. 30, 2020	Jan. 31, 2020	Oct. 31, 2018	Jan. 31, 2018	Mar. 31, 2016	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	Apr. 30, 2019	Dec. 31, 2018	Dec. 31, 2016
Long term debt							$ 3,100,821		$ 3,847,638	$ 4,380,393
Harris Bank [Member]
Long term debt
Ford Motor Credit Company [Member]
Long term debt
Paycheck Protection Program [Member]
Long term debt									322,000
Stock Yards Bank & Trust [Member]
Long term debt							438,213		440,779
NanoChem Solutions Inc. [Member] | Harris Bank [Member]
Promissory note		$ 322,000
NanoChem Solutions Inc. [Member] | Harris Bank [Member] | Prime Rate [Member]
Debt instrument, interest rate, stated percentage		1.00%
NanoChem Solutions Inc. [Member] | Harris Bank [Member] | Term Loan [Member]
Promissory note				$ 4,100,000
Debt instrument, term				7 years
Payment of monthly installments interest rate				25.00%
Payment of monthly installment				$ 300,000
Debt maturity description				Due May 31, 2019 and 2020
NanoChem Solutions Inc. [Member] | Midland Bank [Member]
Promissory note	$ 894,253
Debt instrument, term	2 years
Interest expense							7,739
Debt balance owing							713,735		822,380
NanoChem Solutions Inc. [Member] | Midland Bank [Member] | Prime Rate [Member]
Debt instrument, interest rate, stated percentage	3.85%
NanoChem Solutions Inc. [Member] | Midland Bank [Member] | Term Loan [Member]
Promissory note	$ 1,980,947
Debt instrument, term	5 years
Interest expense							18,606
Debt balance owing							$ 1,830,392		$ 1,920,976
NanoChem Solutions Inc. [Member] | Midland Bank [Member] | Term Loan [Member] | Prime Rate [Member]
Debt instrument, interest rate, stated percentage	3.85%
NanoChem Solutions Inc. [Member] | Paycheck Protection Program [Member]
Debt instrument, term		2 years
NanoChem Solutions Inc. [Member] | Harris Bank [Member]
Promissory note											$ 1,100,000
Debt maturity description									The Company paid interest monthly until February 2020, when equal monthly installments of the principal and interest were due until January 2024.
Interest expense									$ 36,272	36,333
Long term debt										$ 1,100,000
NanoChem Solutions Inc. [Member] | Harris Bank [Member] | Prime Rate [Member]
Debt instrument, interest rate, stated percentage										5.25%	0.50%
NanoChem Solutions Inc. [Member] | Harris Bank [Member] | Term Loan [Member]
Debt instrument, interest rate, stated percentage							3.25%
Interest expense							$ 34,458
Debt balance owing							2,970,238
ENP Investments, LLC [Member] | Term Loan [Member]
Ownership interest percentage	65.00%			65.00%
ENP Investments, LLC [Member] | Harris Bank [Member] | Prime Rate [Member]
Debt instrument, interest rate, stated percentage		1.00%
ENP Peru Investments LLC [Member]
Ownership interest percentage													50.00%
ENP Peru Investments LLC [Member] | Midland Bank [Member]
Promissory note					$ 200,000
Debt instrument, interest rate, stated percentage					5.25%
Debt instrument, term					7 years
Interest expense							1,510	2,104
Debt balance owing							118,481		125,543
ENP Peru Investments LLC [Member] | Ford Motor Credit Company [Member]
Promissory note		$ 215,960				$ 45,941
Debt instrument, interest rate, stated percentage						0.00%
Debt instrument, term		2 years				5 years
ENP Realty LLC [Member]
Ownership interest percentage												24.00%
ENP Realty LLC [Member] | Stock Yards Bank & Trust [Member]
Promissory note			$ 450,000
Debt instrument, term			10 years
Interest expense							4,766	$ 3,260
Debt balance owing							$ 438,213		$ 440,779
ENP Realty LLC [Member] | Stock Yards Bank & Trust [Member] | Cincinnati Federal Home Bank Loan [Member]
Debt instrument, term			5 years
ENP Realty LLC [Member] | Stock Yards Bank & Trust [Member] | Prime Rate [Member]
Debt instrument, interest rate, stated percentage			4.35%
ENP Realty LLC [Member] | Stock Yards Bank & Trust [Member] | Prime Rate [Member] | Cincinnati Federal Home Bank Loan [Member]
Debt instrument, interest rate, stated percentage			2.50%

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Long Term Debt - Schedule of Interest Loan Repayment (Details) - USD ($)	Oct. 31, 2020	Jan. 31, 2018
Promissory Note With Midland States Bank [Member]
2021		$ 28,410
2022		29,900
2023		31,508
2024		33,202
2025		$ 2,523
Promissory Note One With Midland Bank [Member]
2021	$ 368,332
2022	382,705
2023	397,414
2024	413,516
2025	359,009
Promissory Note Two With Midland Bank [Member]
2021	441,260
2022	$ 381,120

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Long Term Debt - Schedule of Loan Covenants (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Debt Disclosure [Abstract]
Balance, beginning	$ 3,847,638	$ 4,380,393
Plus: Proceeds from loans		3,413,160
Plus: Loan acquired with acquisition of ENP Realty		450,000
Less: Forgiveness on PPP loans	(537,960)
Less: Payments on loan	(208,857)	(4,395,915)
Balance, end of period	$ 3,100,821	$ 3,847,638

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Long Term Debt - Schedule of Outstanding Balance Loan (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Long-term Debt	$ 3,100,821	$ 3,847,638	$ 4,380,393
Less: current portion	(837,724)	(848,794)
Long term balance	2,263,097	2,998,844
Harris Bank [Member]
Long-term Debt
Harris Bank One [Member]
Long-term Debt
Midland States Bank [Member]
Long-term Debt	118,481	125,543
Ford Motor Credit Company [Member]
Long-term Debt
Paycheck Protection Program [Member]
Long-term Debt		322,000
Paycheck Protection Program One [Member]
Long-term Debt		215,960
Midland States Bank One [Member]
Long-term Debt	1,830,392	1,920,976
Midland States Bank Two [Member]
Long-term Debt	713,735	822,380
Stock Yards Bank & Trust [Member]
Long-term Debt	$ 438,213	$ 440,779

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Convertible Note Payable (Details Narrative) - USD ($)	1 Months Ended
	Apr. 30, 2020	Jun. 30, 2019	Oct. 31, 2018	Oct. 31, 2018
Parent Company [Member]
Debt converted to shares		200,000	400,000
Debt converted to shares, amount	$ 500,000	$ 500,000
Accrued interest	$ 13,046
ENP Investments LLC [Member]
Convertible note payable			$ 1,000,000	$ 1,000,000
Debt convertible due date				Sep. 30, 2023
Debt conversion ratio				5.00%

XML

Stock Options (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Options granted percentage	100.00%
Options maximum granted term	5 years
Weighted-average remaining contractual life	3 years 7 months 6 days
Stock options granted			172,000
Stock options exercised	55,201		45,000
Compensation expense related to non-vested awards	$ 129,991
Compensation expense related to non-vested awards, weighted average period	1 year
Aggregate intrinsic value of vested options	$ 578,660
Consultants [Member]
Stock option expense	$ 13,065	$ 11,272
Stock options exercised	23,201	10,000
Employees [Member]
Stock option expense	$ 26,254	$ 18,310
Stock options exercised	32,000	15,000

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Stock Options - Schedule of Stock Option Activities (Details) - $ / shares	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Number of shares, Beginning Balance	749,000	635,000	635,000
Number of shares, Granted			172,000
Number of shares, Cancelled or expired	(27,799)		(13,000)
Number of shares, Exercised	(55,201)		(45,000)
Number of shares, Ending Balance	666,000		749,000
Number of shares Exercisable, Ending Balance	423,000
Exercise price per share, Granted			$ 2.44
Weighted average exercise price, Beginning Balance	$ 2.42	$ 1.35	1.35
Weighted average exercise price, Granted			2.44
Weighted average exercise price, Cancelled or expired	2.45		2.75
Weighted average exercise price, Exercised	1.55		0.88
Weighted average exercise price, Ending Balance	2.66		2.42
Weighted average exercise price Exercisable, Ending Balance	2.44
Minimum [Member]
Exercise price per share, Beginning Balance	0.75	0.75	0.75
Exercise price per share, Cancelled or expired	1.42		2.44
Exercise price per share, Exercised	0.75		0.75
Exercise price per share, Ending Balance	1.42		0.75
Exercise price per share Exercisable, Ending Balance	1.42
Maximum [Member]
Exercise price per share, Beginning Balance	4.13	$ 1.75	1.75
Exercise price per share, Cancelled or expired	3.46		3.46
Exercise price per share, Exercised	3.46		1.05
Exercise price per share, Ending Balance	4.13		$ 4.13
Exercise price per share Exercisable, Ending Balance	$ 4.13

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Stock Options - Schedule of Stock Option Fair Value Assumptions (Details)	3 Months Ended
	Mar. 31, 2021 $ / shares
Share-based Payment Arrangement [Abstract]
Expected life - years	3 years
Interest rate	0.37%
Volatility	70.14%
Weighted average fair value of options granted	$ 1.12

XML

Capital Stock (Details Narrative) - shares	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Stock options exercised	55,201		45,000
Employees Stock Option [Member]
Stock options exercised	32,000	15,000
Consultants Stock Options [Member]
Stock options exercised	23,201	10,000

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Non-Controlling Interests (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended
	Dec. 31, 2018	Mar. 31, 2021	Mar. 31, 2020
Partnership distribution to non-controlling interest		$ 157,952	$ 143,002
ENP Investments LLC [Member]
Subsidiary company ownership interest rate	65.00%	65.00%
Related party owner ship percentage		35.00%
Partnership distribution to non-controlling interest		$ 1,278,944

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Non-Controlling Interests - Schedule of Distributions (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Distribution to noncontrolling interests	$ 2,561,751
Distribution
Non-controlling interest share of income (loss)	186,484	67,015
Distribution to noncontrolling interests	2,590,283		$ 2,561,751
ENP Investments LLC [Member] | Ownership Interest Purchase Agreement [Member]
Distribution to noncontrolling interests	2,561,751	$ 2,550,149	2,550,149
Distribution	(157,952)		(594,882)
Non-controlling interest share of income (loss)	186,484		606,484
Distribution to noncontrolling interests	$ 2,590,283		$ 2,561,751

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Segmented, Significant Customer Information and Economic Dependency (Details Narrative)	3 Months Ended
	Mar. 31, 2021 USD ($) Segments	Mar. 31, 2020 USD ($)
Number of operating segment | Segments	2
Revenue	$ 7,624,697	$ 8,429,486
Three Primary Customers [Member]
Revenue	$ 3,120,819	$ 3,744,455
Three Primary Customers [Member] | Revenue [Member]
Concentration risk percentage	41.00%	44.00%

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Segmented, Significant Customer Information and Economic Dependency - Schedule of Reportable Segments (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenue	$ 7,624,697	$ 8,429,486
Depreciation and amortization	232,965	148,058
Segment profit (loss)	1,637,055	1,331,690
Expenditures for segment assets	(96,136)	(96,280)
Segments [Member]
Revenue	7,624,697	8,429,486
Interest expense	62,274	101,425
Depreciation and amortization	232,965	148,058
Segment profit (loss)	1,450,571	1,264,675
Segment assets	36,660,094	34,819,594
Expenditures for segment assets	(96,136)	(96,280)
EWCP [Member] | Segments [Member]
Revenue	71,351	89,928
Interest expense
Depreciation and amortization	9,977	10,476
Segment profit (loss)	(219,256)	(60,255)
Segment assets	2,360,199	1,963,075
Expenditures for segment assets
BCPA [Member] | Segments [Member]
Revenue	7,553,346	8,339,558
Interest expense	62,274	101,425
Depreciation and amortization	222,988	137,582
Segment profit (loss)	1,669,827	1,324,930
Segment assets	34,299,895	32,856,519
Expenditures for segment assets	$ (96,136)	$ (96,280)

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Segmented, Significant Customer Information and Economic Dependency - Schedule of Revenue Generated in United States and Canada (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Sales	$ 7,624,697	$ 8,429,486
Canada [Member]
Sales	107,253	146,000
United States and Abroad [Member]
Sales	$ 7,517,444	$ 8,283,486

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Segmented, Significant Customer Information and Economic Dependency - Schedule of Long-lived Assets are Located in Canada and United States (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
Long-lived assets	$ 10,753,854	$ 10,965,566
Canada [Member]
Long-lived assets	438,107	445,663
United States [Member]
Long-lived assets	$ 10,315,747	$ 10,519,903