9. LONG TERM DEBT

12 Months Ended

Dec. 31, 2014

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$785,106) as of December 31, 2014 on an unsecured basis (2013 - CDN$910,801; US$856,335).  The balance owing at December 31, 2014 was $182,160 in Canadian funds (US$157,021).  The repayment schedule is as follows:

Amount Due (in CDN funds)	Payment Due Date
$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.  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 (US$955,296).  The Company had pledged the assets of the Taber, AB building, including equipment, inventory and accounts receivable as collateral, as well as signed a promissory note guaranteeing the amount of the loan.  The Company repaid this loan in full in September 2014.

(c)           In September 2014, NanoChem Solutions Inc. signed a US$1,005,967 promissory note with Harris Bank with a rate of prime plus 0.5% to be repaid over 5 years with equal monthly installments plus interest.  This money was used to retire the AFSC debt and make the December 2014 payment on the AAFC loan. The balance owing at December 31, 2014 was US$955,668.

The Company has committed to the following repayments:

2015	$	201,193
2016	$	201,193
2017	$	201,193
2018	$	201,193
2019	$	150,895

As of December 31, 2014, Company was in compliance with all loan covenants.

Continuity	2014			2013
Balance, January 1	$	1,297,830			1,726,050
Plus:  Proceeds from loans		1,005,967			-
Less:  Payments on loan		982,973			307,833
Effect of exchange rate		(208,135	)		(120,387	)
Balance, December 31	$	1,112,689		$	1,297,830
Outstanding balance at December 31,		2014			2013
a)  Long term debt - AAFC	$	157,021		$	342,534
b)  Long term debt - AFSC		-			955,296
c)  Long term debt - Harris		955,668			-
Long-term Debt	$	1,112,689		$	1,297,830
Less: current portion		(358,214	)		(304,556	)
	$	754,475		$	993,274