Long Term Debt

6 Months Ended

Jun. 30, 2011

Notes to Financial Statements

Long Term Debt

9. Long Term Debt

(a) The Company has received a non-interest bearing loan from the Department of Agriculture and Agri-Food Canada (“AAFC”). Eligible for up to $1,000,000 Canadian funds, the Company had an outstanding balance of $910,801 in Canadian funds ($944,319 US) as of June 30, 2011, on an unsecured basis. If the full amount is borrowed, the repayment schedule is as follows:

Amount Due (in CDN funds)	Payment Due Date
$200,000		January 1, 2012
$200,000		January 1, 2013
$200,000		January 1, 2014
$200,000		January 1, 2015
$200,000		January 1, 2016

(b) The Company has also received a 5% simple interest loan from Agriculture Financial Services Corp. (“AFSC”). Eligible for up to $2,000,000 Canadian funds, the Company had an outstanding balance of $1,344,479 in Canadian funds ($1,393,956 US) as of June 30, 2011. The Company was required to make interest payments until May 1, 2010 and then effective May 1, 2010 equal monthly payments of principal and interest of $15,829 in Canadian funds ($16,412 US) until May 1, 2014. The Company has pledged its building in Taber, Alberta, as well as equipment, inventory and accounts receivable (see Notes 3 and 5) as collateral, as well as signed a promissory note guaranteeing the amount of the loan.

Continuity:
Balance at December 31, 2009	$	2,285,314
Less: loan repayment		(75,642	)
Effect of exchange rate		119,129
Balance at December 31, 2010	$	2,328,801
Less: loan repayment		(62,465	)
Effect of exchange rate		71,939
Balance at June 30, 2011	$	2,338,275

Outstanding balance at:		2011			2010
a)      Long term debt – AAFC	$	944,319		$	915,719
b)      Long term debt – AFSC		1,393,956			1,413,082
Long term debt	$	2,338,275		$	2,328,801
Less current portion		(336,924	)		(122,726	)
	$	2,001,351		$	2,206,075