Long-Term Debt

12 Months Ended

Dec. 31, 2021

12. Long-Term Debt

			2021			2020
(a)	PACE Credit Facility-Due September 2, 2022	$	750,465		$	765,137
(b)	PACE Credit Facility-Due September 2, 2022		419,661			427,869
(c)	PACE Corporate Term Loan-Due September 13, 2022		2,546,536			2,592,947
(d)i.)	Mortgage Payable-Due September 1, 2022		4,010,966			2,541,567
(d)ii.)	Mortgage Payable-Due August 17, 2023		1,577,600			-
(e)	Canada Emergency Business Account-Due December 31, 2023		78,880			78,540
(f)	Corporate Term Loan-Due April 7, 2025		133,584			-
			9,517,692			6,406,060
Current portion			(7,765,421	)		(6,327,520	)
Long-Term portion		$	1,752,271		$	78,540

On February 18, 2021, PACE and the Company reached a new agreement to repay all amounts owing to PACE on or before July 30, 2021. Management was not able to meet the July 30, 2021 deadline. On August 13, 2021, PACE agreed to allow the Company to bring the arrears current by August 31, 2021 and continue to September 2022. Management was not able to meet this new deadline. On November 15, 2021, the Company paid all arrears to PACE and PACE agreed to allow the Company to continue payments to the end of the terms of each obligation, September 2022. Management continues discussions with equity investors to re-finance its remaining obligations to PACE and repay other creditors. In addition, the letter of credit the Company has with PACE in favor of the Ministry of the Environment, Conservation and Parks (the "MECP"), was renewed to the termination of the obligations to PACE, September 2022. On April 3, 2020, the shares previously pledged as security to PACE, were released and are currently held as security for the personal guarantee from the CEO and charge against the Haute leased premises.

Refer also to going concern, note 2.

The PACE long-term debt is payable as noted below:

(a)	The credit facility bears interest at the PACE base rate of 7.00% plus 1.25% per annum, currently 8.25%, is payable in monthly blended installments of principal and interest of $6,913 (C$8,764) and matures on September 2, 2022. The first and only advance on the credit facility on February 2, 2017, in the amount of $1,262,080 (C$1,600,000), is secured by a business loan general security agreement, a $1,262,080 (C$1,600,000) personal guarantee from the CEO and a charge against the Haute leased premises. Also pledged as security are the shares of the wholly-owned subsidiaries, and a limited recourse guarantee against each of these parties. As noted above, the pledged shares were delivered by PACE and are currently held as security for the personal guarantee from the CEO and charge against the Haute leased premises. The credit facility is fully open for prepayment at any time without notice or bonus.

(b)	The credit facility advanced on June 15, 2017, in the amount of $473,280 (C$600,000), bears interest at the PACE base of 7.00% plus 1.25% per annum, currently 8.25%, is payable in monthly blended installments of principal and interest of $3,866 (C$4,901), and matures on September 2, 2022. The credit facility is secured by a variable rate business loan agreement on the same terms, conditions and security as noted above.

(c)	The corporate term loan advanced on September 13, 2017, in the amount of $2,937,607 (C$3,724,147), bears interest at PACE base rate of 7.00% plus 1.25% per annum, currently 8.25%, is payable in monthly blended installments of principal and interest of $23,436 (C$29,711), and matures on September 13, 2022. The corporate term loan is secured by a business loan general security agreement representing a floating charge over the assets and undertakings of the Company, a first priority charge under a registered debenture and a lien registered under the Personal Property Security Act in the amount of $3,155,971 (C$4,000,978) against the assets including inventory, accounts receivable and equipment. The corporate term loan also included an assignment of existing contracts included in the asset purchase agreement.

For the year ended December 31, 2021, $318,714 (C$399,391) (2020-$302,758; C$405,788), in interest was incurred on the PACE long-term debt. As at December 31, 2021, $43,233 (C$54,808) (2020-$18,319; C$23,325) in accrued interest is included in accrued liabilities in the consolidated balance sheets.

(d)	i.)	The Company obtained a 1st mortgage provided by private lenders to finance the acquisition of the shares of 1684567 and to provide funds for additional financing needs, including additional lands, received in four tranches totaling $4,101,760 (C$5,200,000) (December 31, 2020-$2,591,820; C$3,300,000). The fourth tranche was received on August 13, 2021 in the amount of $1,498,720 (C$1,900,000) and a portion of this fourth tranche, $1,462,382 (C$1,853,933), was used to fund a portion of the purchase of the Hamilton Property, described under long-lived assets, net note 9. The 1st mortgage is repayable interest only on a monthly basis at an annual rate of the higher of the Royal Bank of Canada's prime rate plus 6.05% per annum (currently 8.50%) and 10% per annum with a maturity date of September 1, 2022. The 1st mortgage payable is secured by the shares held of 1684567, a 1st mortgage on the premises located at 704 Phillipston Road, Roslin, Ontario, Canada and a general assignment of rents. Financing fees on the 1st mortgage totaled $318,217 (C$403,419). As at December 31, 2021 $33,713 (C$42,740) (December 31, 2020-$36,215; C$46,110) of accrued interest is included in accrued liabilities in the consolidated balance sheets. In addition, as at December 31, 2021 there is $90,794 (C$115,104) (December 31, 2020-$50,253; C$63,984) of unamortized financing fees included in long-term debt in the consolidated balance sheets.

	ii.)	On August 17, 2021, the Company obtained a vendor take-back 1st mortgage in the amount of $1,577,600 (C$2,000,000), on the purchase of the Hamilton Property, described under long-lived assets, net note 9. The 1st mortgage bears interest at an annual rate of 2% per annum, repayable monthly interest only with a maturity date of August 17, 2023, secured by the assets on the Hamilton Property. In addition, as at December 31, 2021 there is $nil (C$nil) of accrued interest is included in accrued liabilities in the consolidated balance sheets.

For the year ended December 31, 2021, $308,101 (C$385,978) (2020-$214,853; C$287,968) in interest was incurred on the 1st mortgages payable.

(e)	As a result of the COVID-19 virus, the Government of Canada launched the Canada Emergency Business Account (the "CEBA"), a program to ensure that small businesses have access to the capital they need to see them through the current challenges and better position them to quickly return to providing services to their communities and creating employment. The program is administered by Canadian chartered banks and credit unions.

	The Company has received a total of $78,490 (C$100,000) under this program, from its Canadian chartered bank.

	Under the initial term date of the loans, which is detailed in the CEBA term loan agreements, the amount is due on December 31, 2022 and is interest-free. If the loans are not repaid by December 31, 2022, the Company can make payments, interest only, on a monthly basis at an annual rate of 5%, under the extended term date, beginning January 1, 2023, maturing December 31, 2025. The CEBA term loan agreements were amended by extending the interest free repayment date by one year to December 31, 2023. If paid by December 31, 2023, 33.33% ($26,293; C$33,333), previously 25%, of the loans would be forgiven. Repayment terms on the extended period are unchanged.

	The CEBA term loan agreements contain a number of positive and negative covenants, for which the Company is not in full compliance.

(f)	On April 8, 2021, the Company took delivery of a truck and hauling trailer for a total purchase price of $172,225 (C$218,338) plus applicable harmonized sales taxes. The purchase was financed by a bank term loan of $157,760 (C$200,000), over a forty-eight-month term, bearing interest at 4.95% per annum with monthly blended instalments of principal and interest payments of $3,866 (C$4,901) due April 7, 2025.

	For the year ended December 31, 2021, $5,355 (C$6,711) in interest was incurred.