9. Long Term Debt

9 Months Ended

Sep. 30, 2012

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$895,576) as of December 31, 2011 on an unsecured basis.  The present value of the loan at September 30, 2012 was $728,641 in Canadian funds (US$741,101); (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, 2011 was $1,281,960 in Canadian funds ($1,260,531US).  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 present value of the loan as September 30, 2012 was $1,185,273 in Canadian funds ($1,205,542US).  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	$	48,298
2013	$	193,191
2014	$	80,496

Continuity	September 30, 2012		December 31, 2011
	$	1,976,992		2,328,801
Less:  Payments on loan		142,129		309,055
Effect of exchange rate		111,779		(42,754	)
Balance	$	1,946,642	$	1,976,992

Outstanding balance at:	September 30, 2012			December 31, 2011
a)Long term debt – AAFC	$	741,100		$	716,461
b)Long term debt – AFSC		1,205,542			1,260,531
Long term debt	$	1,946,642		$	1,976,992
Less: current portion		(320,752	)		(329,389	)
Balance	$	1,625,890		$	1,647,603