Annual report pursuant to Section 13 and 15(d)

Long-Term Debt

v3.3.1.900
Long-Term Debt
12 Months Ended
Dec. 31, 2015
Long-Term Debt/ Subscription Agreements [Abstract]  
LONG-TERM DEBT
3. LONG-TERM DEBT

 

Long-term debt consists of the following:

 

      December 31, 2015     December 31, 2014  
  Secured debenture payable to Workhorse Custom Chassis, LLC, due March 2016 plus interest at 10%.  The debenture is secured by the real estate and related assets of the plant located in Union City, Indiana with a net book value of $3,628,354 at December 31, 2015     2,722,500       2,475,000  
                   
  Note payable, Bank due in monthly installments of $635 including interest at 5.04%.  The note was paid during 2015.     -       4,711  
                   
  Note payable, vendor due in monthly installments of $439 including interest at 8.00%. The note was paid during 2015     -       334  
                   
  Note payable to the City of Loveland, due in annual installments of $10,241 including interest with the final payment due October 2016.  Interest rate amended to 8.00%.  The note is unsecured and contains restrictions on the use of proceeds.     50,000       50,000  
                   
        2,772,500       2,530,045  
  Less current portion     2,772,500       35,904  
  Long term debt     -       2,494,141  

 

The note payable to the City of Loveland contains job creation incentives whereby each annual payment may be forgiven by the City upon the Company meeting minimum job creation benchmarks.  This loan agreement amended the incentives to 30 full time employees within the City of Loveland with payroll totaling $135,000 by October 31, 2013 and 40 employees with payroll totaling $175,000 by July 31, 2014, continuing with an average of 40 employees with payroll totaling $175,000 thereafter.  The proceeds from this loan were to be used for qualified disbursements only, and the Company has been notified it did not meet the requirements for qualified disbursements and for forgiveness of the 2012 principal and interest payment, which is past due.  In 2013 the Company made payments to an escrow account totaling $22,900.