Annual report pursuant to Section 13 and 15(d)

Long-Term Debt

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Long-Term Debt
 12 Months Ended
Dec. 31, 2016
Long-Term Debt [Abstract]  
LONG-TERM DEBT
4. LONG-TERM DEBT

 

As of December 31, 2016 and 2015 the long-term debt consists of the following:

 

      2016     2015  
               
  Secured mortgage payable to Bank for the purchase of the 100 Commerce Drive Building due in monthly installments of $11,900.     1,767,950       -  
  Note payable, former building owner with only payments due in monthly installments of $1,604 at 5.5%.  A balloon payment of $350 thousand plus unpaid interests due August 2018.     350,000       -  
  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.  Paid in February 2016     -       2,722,500  
  Note payable to the City of Loveland with interest of 8%. The note is unsecured and contains restrictions on the use of proceeds.     50,000       50,000  
                   
        2,167,950       2,772,500  
  Less current portion     79,521       2,772,500  
  Long term debt     2,088,429       -  

 

Aggregate maturities of long-term debt are as follows:

 

  2018     381,498  
  2019     33,607  
  2020     35,858  
  2021     38,260  
  2022     44,345  
  Thereafter     1,554,861  
        2,088,429  

  

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.