Quarterly report pursuant to Section 13 or 15(d)

Long-Term Debt

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Long-Term Debt
9 Months Ended
Sep. 30, 2016
Long-Term Debt [Abstract]  
LONG-TERM DEBT
4. LONG-TERM DEBT

 

Long-term debt consists of the following:

 

      September 30, 2016     December 31, 
2015
 
      (Unaudited)        
  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. Note was paid on February 2016.   $ -     $ 2,722,500  
                   
  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  
                   
        50,000       2,772,500  
  Less current portion     50,000       2,772,500  
  Long term debt   $ -     $ -  

 

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.