Sales at Flame Seal Products, inc., a leading provider of Specialty Chemicals for the Passive Fire Protection Market, for the first nine months of 2013 were $1,535,957 versus sales of $1,001,937 for the same period in 2012.

The represents a year over year increase of 53%. Sales for the 3rd quarter were $403,452 versus sales of $372,831 for the 3rd quarter in 2012. This represents a year over year increase of 8%. Sales continue to be on pace with our internal projections.

On that note, sales for the Leather Segment continue to be strong. The company has developed and is testing a new promising resin-based product.

The Company continues to focus on the Thermal Barrier market as these segments continue to expand. Additional test certifications have been achieved with a new SPF manufacturer. Certification testing is also underway in other markets.

Efforts continue to establish new business in overseas markets. We have achieved new product certifications for wood, textile in Canada and for wood, textile and FX-100 coating in India.

The company is also working on establishing sales in the Wildfire Protection Industry. Currently, several organizations are experimenting with our Intumescent Technology for application and viability testing.

Technology

As previously reported the company has secured all Intellectual Property Rights, the Technology and all Testing Certifications. It is working on several modifications and adaptations of its technology.  Research efforts are focused on improving existing technology and identifying and/or developing applications for the technology. Testing is currently underway with an improved version of the core Intumescent technology.

Flame Seal Products remains a technology company competing in the Fire Safety arena. The application of its science will determine its success. The ability to find solutions to fire retardant related problems will define the nature of our growth. The company is working diligently to improve existing products, develop new products, and define markets where the technology is applicable.

The technical team is constantly looking for ways to make the products and technology more effective, easier to apply and less expensive for our market partners.

Financing Alternatives

The company would like to accelerate our R&D and Certification efforts for the reasons stated above but its current financial condition constrains that activity. The Board continues to evaluate financing options. If we seek additional financing some the funds will be used to make additional repairs to our balance sheet which will reduce our breakeven point.

The balance of the funds obtained will be used to increase our R&D efforts and secure certifications in new markets and for new products. Some of the resulting increased cash flow will be used to enhance its marketing efforts.

The Board continues to review the possibility of issuing Preferred Stock and/or making a Rights Offering. If the Board proceeds, the issue(s) will be first offered to existing shareholders and then to outside investors only if existing shareholders do not fully subscribe to the offering.