9. LONG TERM DEBT

12 Months Ended

Dec. 31, 2013

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$856,335) as of December 31, 2013 on an unsecured basis (2012 - CDN$910,801; US$915,446). The balance owing at December 31, 2013 was $364,320 in Canadian funds (US$342,534). The repayment schedule is as follows:

Amount Due (in CDN funds)	Payment Due Date
$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 dollars. The Company was required to make interest payments until May 1, 2010 and then started to pay down the principal in equal payments until April 1, 2015. The borrowing balance as December 31, 2013 was $1,016,056 in Canadian funds ($955,296US). The borrowing balance as December 31, 2012 was $1,170,811 in Canadian funds ($1,176,782US). The Company has pledged the assets of the Taber, AB building, including equipment, inventory and accounts receivable (see Notes 3, 4 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:

2014	$	180,996
2015	$	75,415

As of December 31, 2013, Company was in compliance with all loan covenants.

Continuity	2013			2012
Balance, January 1	$	1,726,050			1,976,992
Less: Payments on loan		307,833			310,384
Effect of exchange rate		(120,387	)		59,512
Balance, December 31	$	1,297,830		$	1,726,050
Outstanding balance at December 31,		2013			2012
a) Long term debt - AAFC	$	342,534		$	549,268
b) Long term debt - AFSC		955,296			1,176,782
Long-term Debt	$	1,297,830		$	1,726,050
Less: current portion		(304,556	)		(318,644	)
	$	993,274		$	1,407,406