9. LONG TERM DEBT

3 Months Ended

Mar. 31, 2013

Notes to Financial Statements

Note 9. LONG TERM DEBT

(a)           Flexible Solutions Ltd. has received a non-interest bearing, unsecured loan from the Department of Agriculture and Agri-Food Canada (“AAFC”). Eligible for up to $1,000,000 in Canadian funds,. the balance owing at March 31, 2013 was $546,481 in Canadian funds (US$537,901); (December 31, 2012 - $546,481CDN; US$549,268). The repayment schedule is as follows:

Amount Due (in CDN funds)	Payment Due Date
$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. 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, 2013 was $1,118,822 in Canadian funds (US$1,101,257). The borrowing balance as December 31, 2012 was $1,170,811 in Canadian funds (US$1,176,782). 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:

2013	$	140,220
2014	$	77,900

	March 31, 2013			December 31, 2012
Continuity
Balance, January 1	$	1,726,050			1,976,992
Less:  Payments on loan		51,567			310,384
Effect of exchange rate		(35,325	)		59,442
Balance	$	1,639,158		$	1,726,050

Outstanding balance at:
a)Long term debt – AAFC	$	537,901		$	549,268
b)Long term debt – AFSC		1,101,257			1,176,782
Long term debt	$	1,639,158		$	1,726,050
Less: current portion		(313,693	)		(318,644	)
Balance	$	1,325,465		$	1,407,406