9. LONG TERM DEBT

3 Months Ended

Mar. 31, 2015

Notes to Financial Statements

9. LONG TERM DEBT

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 Company had borrowed $910,801in Canadian funds (US$719,077) as of March 31, 2015 on an unsecured basis (December 31, 2014 – CDN$910,801; US$785,106).  The balance owing at March 31, 2015 was $182,160 in Canadian funds (US$143,816); (December 31, 2014 - $182,160CDN; 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 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 March 31, 2015 was $905,370 (December 31, 2014 - US$955,668).

The Company has committed to the following repayments:

2015	$	150,896
2016	$	201,193
2017	$	201,193
2018	$	201,193
2019	$	150,895

As of March 31, 2015, Company was in compliance with all loan covenants.

Continuity	March 31, 2015			December 31, 2014
Balance, beginning of period	$	1,112,689			1,297,830
Plus:  Proceeds from loans		-			1,005,967
Less:  Payments on loan		50,298			982,973
Effect of exchange rate		(13,205	)		(208,135	)
Balance, end of period	$	1,049,186		$	1,112,689

Outstanding balance at:
a)Long term debt – AAFC	$	143,816		$	157,021
b)Long term debt – AFSC		-			-
c)Long term debt – Harris		905,370			955,668
Long term debt	$	1,049,186		$	1,112,689
Less: current portion		(345,009	)		(358,214	)
Balance	$	704,177		$	754,475