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| FSI > SEC Filings for FSI > Form 10-Q on 13-Aug-2009 | All Recent SEC Filings |
13-Aug-2009
Quarterly Report
Overview
The Company develops, manufactures and markets specialty chemicals that slow the evaporation of water. The Company also manufactures and markets biodegradable polymers which are used in the oil, gas and agriculture industries.
Results of Operations
The Company has two product lines:
Energy and Water Conservation products. The Company's HEAT$AVRŽ product is used in swimming pools and spas. The product forms a thin, transparent layer on the water's surface. The transparent layer slows the evaporation of water, allowing the water to retain a higher temperature for a longer period of time and thereby reducing the energy required to maintain the desired temperature of the water. WATER$AVRŽ, a modified version of HEAT$AVRŽ, can be used in reservoirs, potable water storage tanks, livestock watering ponds, canals, and irrigation ditches.
BCPA products. The second product TPA's (i.e. thermal polyaspartate biopolymers) are biodegradable polymers is 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.
Material changes in the Company's Statement of Operations for the periods presented are discussed below:
Six Months Ended June 30, 2009
Increase (I) or
Item Decrease (D) Reason
-------------- ------------------ -----------------------------------------
Sales
BCPA products D Reduced demand in the detergent sector
and lower oil extraction levels.
Gross Profit D Lower sales.
Wages I Increase of employees and annual wage
increases.
Investor D One time reversal of $80,000 as shares
relations and were cancelled by the Supreme Court of
transfer agent British Columbia as per Note 14 to the
fees Financials.
Office and D Reduced purchasing to retain cash.
Miscellaneous
Insurance D Credit allocated from overpayment in
three previous quarters.
Interest I Interest payments on the Agriculture
expense Financial Services Corp loan did not
start until the fall of 2008.
Professional I The yearend audit fee has been allocated
fees to each fiscal quarter rather than
expensing the audit expenses in the
fourth quarter.
Research D Decreased as one line of inquiry was
completed and new projects were
identified.
Commissions D Decreased sales.
Loss on sale D One time sale which occurred in the prior
of period. No equipment was sold during the
equipment current six- month period.
Utilities I Increased research and development energy
use at the Taber facility.
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Quarter Ended June 30, 2009
Increase (I) or
Item Decrease (D) Reason
-------------- ------------------ -----------------------------------------
Sales
BWCP products D Reduced demand in the detergent sector
and lower oil extraction levels.
Gross Profit D Lower sales.
Wages I Increase of employees and annual wage
increases.
Professional I The year-end audit fee has been allocated
fees to each fiscal quarter rather than
expensing the audit fee in the fourth
quarter.
Commissions D Decreased sales.
Utilities I Increased research and development energy
use at the Taber facility.
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Capital Resources and Liquidity
The sources and uses of funds are directly obtainable from the Consolidated Statement of Cash Flows included as part of the financial statements filed with this report.
The Company is committed to minimum rental payments for property and premises aggregating approximately $92,760 over the term of four leases, the last expiring on December 31, 2011.
Commitments in each of the next five years are approximately as follows:
2009 $ 63,840 2010 14,460 2011 14,460 2012 - 2013 - ---- - - ------- |
See Note 2 to the financial statements included as part of this report for a description of the Company's significant accounting policies and recent accounting pronouncements.
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