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LONG TERM DEBT

3 Months Ended

Mar. 31, 2012

(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$895,576) as of December 31, 2011 on an unsecured basis. The balance owing at March 31, 2012 was $728,641 in Canadian funds (US$730,462); (December 31, 2011 - $728,641CDN; US$716,461). The repayment schedule is as follows:

Amount Due (in CDN funds)		Payment Due Date

$182,160		December 31, 2012
$182,160		December 31, 2013
$182,160		December 31, 2014
$182,161		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 March 31, 2012 was $1,250,123 in Canadian funds ($1,253,249US). 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	$	142,813
2013	$	190,417
2014	$	79,341

Continuity	March 31, 2012		December 31, 2011
Balance, January 1	$	1,976,992		2,328,801
Less: Payments on loan		47,433		309,055
Effect of exchange rate		54,152		(42,754	)
Balance,	$	1,983,711	$	1,976,992

Outstanding balance at:	2012			2011
a) Long term debt – AAFC	$	730,462		$	716,461

b) Long term debt – AFSC		1,253,249			1,260,531

Long term debt	$	1,983,711		$	1,976,992
Less: current portion		(330,067	)		(329,389	)
Balance	$	1,653,644		$	1,647,603