LONG TERM DEBT

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Note 9. LONG TERM DEBT

(a) Flexible Solutions Ltd. has received a non-interest bearing loan from the Department of Agriculture and
Agri-Food Canada (“AAFC”). Eligible for up to $1,000,000 in Canadian funds, the Company had borrowed $910,801 in Canadian funds (US$915,719) as of December 31, 2011 on an unsecured basis (2010 - $910,801CDN; US$915,719). The balance owing at December 31, 2011 was $728,641 in Canadian funds (US$716,461). The repayment schedule is as follows:

Amount Due (in CDN funds)	Payment Due Date
$182,160	December 31, 2011
$182,160	December 31, 2012
$182,160	December 31, 2013
$182,160	December 31, 2014
$182,160	December 31, 2015

(b) Flexible Solutions Ltd. has also received a 5% simple interest loan from Agriculture Financial Services Corp. (“AFSC”). Eligible for up to $2,000,000 in Canadian funds, the Company had originally borrowed $1,491,000 in Canadian funds and the balance as of December 31, 2010 was $1,405,492 in Canadian funds ($1,413,082US). The Company was required to make interest payments until May 1, 2010 and then started to pay down the principal in equal payments until May 1, 2014. The borrowing balance as December 31, 2011 was $1,281,960 in Canadian funds ($1,260,531US). The Company has pledged the assets of the Taber, AB building, including 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.

The Company has committed to the following repayments:

2012	$	193,172
2013	$	193,172
2014	$	80,488

Continuity	2011			2010
Balance, January 1	$	2,328,801			2,285,314
Less: Payments on loan		309,055			75,642
Effect of exchange rate		(42,754	)		(32,155	)
Balance, December 31	$	1,976,992		$	2,328,801
Outstanding balance at December 31,		2011			2010
a) Long term debt - AAFC	$	716,461		$	915,719
b) Long term debt - AFSC		1,260,531			1,413,082
Long-term Debt	$	1,976,992		$	2,328,801
Less: current portion		(329,389	)		(122,726	)
	$	1,647,603		$	2,206,075