Flexible Solutions International, Inc. (AMEX:FSI) Q4 2022 Earnings Call Transcript

William Gregozeski: Okay. You mentioned the one-time benefit on taxes in the fourth quarter. Is there anything that’s going to be replicated or will taxes on an annual basis, look roughly the same as they have been in the past going forward.

Daniel O’Brien: Well, there’s another rub. It’s a great question. This is our — are relatively new auditors looking back over time at the allowances for tax and saying, the allowances were too high. We’re going to bring them back into line according to our opinions. It’s going to happen now all at once. And I believe that they have a much better handle on what tax we should be paying and that there won’t be any more of these huge one-time situations. So I think that we’ve moved to a better auditor, better acts understanding, and I’m truly hoping that we don’t have this again.

William Gregozeski: Okay. On Lygos, have you guys ever received any product samples from them?

Daniel O’Brien: Yes. We have very small samples quite some time ago. They’re still working hard and they are properly financed now. They did close the financing with European investor and they’ve got the three to five year runway. So I hope they can do it. They have the money to do it.

William Gregozeski: Okay. But time line for when you guys might be able to get something else, commercial quantity.

Daniel O’Brien: Done whatsoever and that is sort of how developmental companies in the bio base have been operating recently.

William Gregozeski: Okay. Last question is, in terms of Peru, how are you guys looking and in terms of utilization and if there is any need to expand space or equipment?

Daniel O’Brien: Well, I think you probably saw from the notes to the financials that we have been expanding equipment, and we’re going to continue to do so. We’re not in need of duplicating anything yet, but it’s coming, maybe a year, maybe two years out, depending on how fast we grow our food division. As for space, we’d like to have more space, where we are looking at alternatives. We definitely don’t want to pay too much. And one of the places where inflation has been highest is in the new construction. So we’re not in an emergency situation. So we’re really just taking a look see planning position on that. And if we see something unique and valuable, we will do.

William Gregozeski: Okay. All right. Great. Thank you, Dan.

A €“ Daniel O’Brien: Thank you, Bill.

Operator: And our next question comes from Greg Hillman, who is a private investor. Your line is open.

Unidentified Participant: Hi, Dan. Good morning. Hey. First of all, I wanted to go to detergents for a minute, in what percentage of detergents is acrylic acid used currently and what kind of market size is that potentially to be replaced with the polyaspartic acid?

Daniel O’Brien: Okay. Thanks. I appreciate it, Greg. I would say that at this point in time virtually all laundry detergent and almost all closed washing detergent and virtually all hard surface cleaners use some variation of polyacrylic acid or polyacrylates. It’s a little bit hard to predict what the marketplace is because everyone is keeping their formulations fairly secret and they can range from 2% to as much as 12% of polyacrylic builders. So what we’ve used as a marker in this is 250,000 metric tons…

Unidentified Participant: 250, what?

Daniel O’Brien: Thousand metric tons ahead of the potential. That’s pretty significant amount given that although, I’m not going to tell you what we make, our factory has a nameplate of 10,000 metric.

Unidentified Participant: What would be the value of that or what’s the value of the acrylic acid that’s going in there right now?