Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2016shares | |
Document and Entity Information: | |
Entity Registrant Name | Commonwealth Income & Growth Fund VII, LP |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2016 |
Trading Symbol | cigf7 |
Amendment Flag | false |
Entity Central Index Key | 1,450,335 |
Current Fiscal Year End Date | --12-31 |
Entity Common Stock, Shares Outstanding | 1,561,350 |
Entity Filer Category | Smaller Reporting Company |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Well-known Seasoned Issuer | No |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q2 |
Entity Incorporation, State Country Name | Commonwealth of Pennsylvania |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and cash equivalents | $ 1,394,133 | $ 2,027,414 |
Lease income receivable | 399,539 | 252,585 |
Accounts Receivable, Commonwealth Capital Corp, net | 1,516,740 | 1,491,424 |
Other receivables, net of reserve of approximately $137,371 and $105,000 at June 30, 2016 and December 31, 2015, respectively | 370,515 | 498,401 |
Receivable - COF 2 | 22,438 | 0 |
Prepaid expenses | 17,365 | 6,667 |
Current Assets | 3,720,730 | 4,276,491 |
Net Investment in Finance Leases | 345,437 | 414,926 |
Investment in COF2 | 1,344,384 | 1,484,587 |
Equipment, at cost | 19,726,699 | 20,203,394 |
Accumulated depreciation | (15,312,109) | (14,544,953) |
Technology equipment, net | 4,414,590 | 5,658,441 |
Equipment acquisition costs and deferred expenses, net of accumulated amortization of approximately $318,000 and $381,000 at June 30, 2016 and December 31, 2015, respectively | 120,948 | 159,304 |
Prepaid acquisition fees | 154,529 | 154,529 |
Total Acquisition Fees | 275,477 | 313,833 |
Total Assets | 10,100,618 | 12,148,278 |
LIABILITIES | ||
Accounts payable | 132,931 | 111,608 |
Accounts Payable - CIGF, Inc. | 92,548 | 114,688 |
Other accrued expenses | 400,000 | 23,592 |
Unearned lease income | 142,176 | 255,867 |
Notes payable | 1,738,930 | 2,060,546 |
Total Liabilities | 2,506,585 | 2,566,301 |
PARTNERS' CAPITAL | ||
General Partner | 1,050 | 1,050 |
Limited Partners | 7,592,983 | 9,580,927 |
Total Partners' Capital | 7,594,033 | 9,581,977 |
Total Liabilities and Partners' Capital | $ 10,100,618 | $ 12,148,278 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Other receivables reserve, net | $ 137,371 | $ 105,000 |
Land, Buildings, Equipment and Leasehold Improvements, accumulated depreciation and amortization | $ 318,000 | $ 381,000 |
Condensed Statements of Operati
Condensed Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenue | ||||
Lease | $ 904,990 | $ 2,112,672 | $ 1,871,646 | $ 3,466,845 |
Interest and other | 12,948 | 8,780 | 17,806 | 15,435 |
Gain on sale of equipment | 6,510 | 26,388 | 100,410 | 85,718 |
Total revenue and gain on sale of equipment | 924,448 | 2,147,840 | 1,989,862 | 3,567,998 |
Expenses | ||||
Operating, excluding depreciation and amortization | 276,665 | 332,061 | 666,711 | 707,198 |
Equipment management fee, General Partner | 46,018 | 106,399 | 95,120 | 174,852 |
Interest | 17,622 | 31,779 | 38,540 | 62,649 |
Depreciation | 834,955 | 1,172,238 | 1,810,718 | 2,463,308 |
Amortization of equipment acquisition costs and deferred expenses | 35,098 | 62,560 | 74,126 | 131,662 |
Bad debt expense | 0 | 105,000 | 32,371 | 105,000 |
Total expenses | 1,210,358 | 1,810,037 | 2,717,586 | 3,644,669 |
Other loss | ||||
Loss in investment from COF 2 | (53,258) | 0 | (60,921) | 0 |
Total other loss | (53,258) | 0 | (60,921) | 0 |
Net (loss) income | (339,168) | 337,803 | (788,645) | (76,671) |
Net (loss) income allocated to Limited Partners | $ (344,299) | $ 331,129 | $ (800,416) | $ (90,026) |
Net (loss) income per equivalent Limited Partnership unit | $ (0.22) | $ 0.21 | $ (0.51) | $ (0.06) |
Weighted average number of equivalent Limited Partnership units outstanding during the period | 1,561,350 | 1,569,488 | 1,561,776 | 1,570,454 |
Condensed Statement of Partners
Condensed Statement of Partners' Capital - 6 months ended Jun. 30, 2016 - USD ($) | General Partners | Limited Partners {1} | Total |
Partners' Capital at Dec. 31, 2015 | $ 1,050 | $ 9,580,927 | $ 9,581,977 |
Partners' Capital Account, Units at Dec. 31, 2015 | 50 | 1,563,850 | |
Net Income (Loss) | $ 11,771 | $ (800,416) | (788,645) |
Partners' Capital Account, Redemptions | $ (22,264) | (22,264) | |
Partners' Capital Account, Units, Redeemed | (2,500) | ||
Distributions to Partners | (11,771) | $ (1,165,264) | (1,177,035) |
Partners' Capital at Jun. 30, 2016 | $ 1,050 | $ 7,592,983 | $ 7,594,033 |
Partners' Capital Account, Units at Jun. 30, 2016 | 50 | 1,561,350 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flow - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities | ||
Net cash provided by operating activities | $ 36,325 | $ 1,419,974 |
Cash flows from investing activities | ||
Capital Expenditures | (188,689) | (114,733) |
Purchase of finance leases | 0 | (33,402) |
Payments received from finance leases | 76,876 | 75,532 |
Equipment acquisition fees, General Partner | (30,127) | (4,134) |
Net proceeds from the sale of equipment | 286,719 | 1,073,354 |
Net cash provided by investing activities | 144,779 | 996,617 |
Cash flows from financing activities | ||
Distributions to Partners | (786,476) | (1,335,524) |
Redemptions | (22,264) | (21,175) |
Debt placement fees paid to General Partner | (5,645) | (724) |
Net cash used in financing activities | (814,385) | (1,357,423) |
Net (decrease) increase in cash and cash equivalents | (633,281) | 1,059,168 |
Cash and cash equivalents beginning of period | 2,027,414 | 3,177,323 |
Cash and cash equivalents end of period | $ 1,394,133 | $ 4,236,491 |
Business
Business | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure Text Block [Abstract] | |
Business | Commonwealth Income & Growth Fund VII, LP (the Partnership) is a limited partnership organized in the Commonwealth of Pennsylvania on November 14, 2008. The Partnership offered for sale up to 2,500,000 units of limited partnership interest at the purchase price of $20 per unit (the offering). The Partnership reached the minimum amount in escrow and commenced operations on March 31, 2010. The offering terminated on November 22, 2011 with 1,572,900 units sold for a total of approximately $31,432,000 in limited partner contributions. The Partnership uses the proceeds of the offering to acquire, own and lease various types of computer information technology equipment and other similar capital equipment, which is leased primarily to U.S. corporations and institutions. Commonwealth Capital Corp. (CCC), on behalf of the Partnership and other affiliated partnerships, acquires computer equipment subject to associated debt obligations and lease agreements and allocates a participation in the cost, debt and lease revenue to the various partnerships based on certain risk factors. The Partnerships general partner is Commonwealth Income & Growth Fund, Inc. (the General Partner), a Pennsylvania corporation which is an indirect wholly-owned subsidiary of CCC. CCC is a member of the Investment Program Association (IPA), REISA, Financial Planning Association (FPA), and the Equipment Leasing and Finance Association (ELFA). Approximately ten years after the commencement of operations, the Partnership intends to sell or otherwise dispose of all of its equipment, make final distributions to partners, and to dissolve. Unless sooner terminated or extended pursuant to the terms of its Limited Partnership Agreement (the Agreement), the Partnership will continue until December 31, 2021. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure Text Block [Abstract] | |
Summary of Significant Accounting Policies | Basis of Presentation The financial information presented as of any date other than December 31, 2015 has been prepared from the books and records without audit. The following unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Financial information as of December 31, 2015 has been derived from the audited financial statements of the Partnership, but does not include all disclosures required by generally accepted accounting principles to be included in audited financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial information for the periods indicated, have been included. Operating results for the six months ended June 30, 2016 are not necessarily indicative of financial results that may be expected for the full year ended December 31, 2016. Recently Adopted Accounting Pronouncements In June 2015, the FASB issued Accounting Standards Update No. 2015-10, Technical Corrections and Improvements- In January 2015, the FASB issued Accounting Standards Update No. 2015-01, Income StatementExtraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. Equity Method Investment The Partnership accounts for its 34% investment in COF2 under the equity method in accordance with Accounting Standards Codification (ASC) 323. Under the equity method, the Partnership records its proportionate share of the Funds net income (loss). Capital contributions, distributions and net income (loss) of such entities are recorded in accordance with the terms of the governing documents. An allocation of net income (loss) may differ from the stated ownership percentage interest in such entity as a result of distributions and allocation formulas, if any, as described in such governing documents. Disclosure of Fair Value of Financial Instruments Estimated fair value was determined by management using available market information and appropriate valuation methodologies. However, judgment was necessary to interpret market data and develop estimated fair value. Cash and cash equivalents, receivables, accounts payable and accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values as of June 30, 2016 and December 31, 2015 due to the short term nature of these financial instruments. The Partnerships long-term debt consists of notes payable, which are secured by specific equipment and are nonrecourse liabilities of the Partnership. The estimated fair value of this debt at June 30, 2016 and December 31, 2015 approximates the carrying value of these instruments, due to the interest rates on the debt approximating current market interest rates. The Partnership classifies the fair value of its notes payable within Level 2 of the valuation hierarchy based on the observable inputs used to estimate fair value. Cash and cash equivalents We consider cash equivalents to be highly liquid investments with the original maturity dates of 90 days or less. At June 30, 2016, cash and cash equivalents was held in two bank accounts maintained at one financial institution with an aggregate balance of approximately $1,399,000. Bank accounts are federally insured up to $250,000 by the FDIC. At June 30, 2016, the total cash bank balance was as follows: At June 30, 2016 Balance Total bank balance $ 1,399,000 FDIC insured (250,000 ) Uninsured amount $ 1,149,000 The Partnership believes it mitigates the risk of holding uninsured deposits by only depositing funds with major financial institutions. The Partnership has not experienced any losses in our accounts, and believes it is not exposed to any significant credit risk. The amounts in such accounts will fluctuate throughout 2016 due to many factors, including cash receipts, equipment acquisitions, interest rates and distributions to limited partners. Recent Accounting Pronouncements In May 2016, the FASB issued Accounting Standards Update No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients- Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In April 2016, the FASB issued Accounting Standards Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing- Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)- Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In March 2016, the FASB issued Accounting Standards Update No. 2016-07, InvestmentsEquity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting- In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) Section ALeases: Amendments to the FASB Accounting Standards Codification® Section BConforming Amendments Related to Leases: Amendments to the FASB Accounting Standards Codification® Section CBackground Information and Basis for Conclusions In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Financial InstrumentsOverall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In August 2015, the FASB issued Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In August 2014, the FASB issued Accounting Standards Update No. 2014 -15, Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers |
Information Technology, Medical
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment ('Equipment') | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure Text Block [Abstract] | |
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment ('Equipment') | The Partnership is the lessor of equipment under operating leases with periods that generally will range from 12 to 48 months. In general, associated costs such as repairs and maintenance, insurance and property taxes are paid by the lessee. Remarketing fees will be paid to the leasing companies from which the Partnership purchases leases. These are fees that are earned by the leasing companies when the initial terms of the lease have been met. The General Partner believes that this strategy adds value since it entices the leasing company to remain actively involved with lessee and encourages potential extensions, remarketing or sale of equipment. This strategy is designed to minimize any conflicts the leasing company may have with a new lessee and may assist in maximizing overall portfolio performance. The remarketing fee is tied into lease performance thresholds and is a factor in the negotiation of the fee. For the six months ended June 30, 2016 and 2015, the partnership incurred remarketing fees of $0 and $300, respectively. For the six months ended June 30, 2016 and 2015, there were no remarketing fees paid with cash or netted against receivables due from such parties. In December 2014, a significant lessee, ALSC, breached its Master Lease Agreement (MLA) scheduled to terminate in December 2015 and defaulted on its lease payments for equipment shared by the Partnership and other affiliated Funds. On December 4, 2014, ALSC filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. On April 2, 2015, CCC, on behalf of the Funds, entered into a settlement agreement with the parent company of ALSC for $3,500,000. The Partnerships share of this settlement was approximately $1,051,000 of which $860,000 was recorded as a gain on termination of leases in the second quarter of 2015. In addition, the Bankruptcy Court ordered the release of all equipment leased to ALSC under the MLA to the Partnerships. In January 2015, CCC, on behalf of the Funds, entered into a Purchase Agreement for the sale of the equipment to Medshare Technologies (see note 8 - Medshare). CCC, on behalf of the Partnership and on behalf of other affiliated companies and partnerships (partnerships), acquires equipment subject to associated debt obligations and lease agreements and allocates a participation in the cost, debt and lease revenue to the various companies based on certain risk factors.. The Partnerships share of the cost of the equipment in which it participates with other partnerships at June 30, 2016 was approximately $8,708,000 and is included in the Partnerships equipment on its balance sheet. The Partnerships share of the outstanding debt associated with this equipment at June 30, 2016 was approximately $512,000 and is included in the Partnerships notes payable on its balance sheet. The total cost of the equipment shared by the Partnership with other partnerships at June 30, 2016 was approximately $20,830,000. The total outstanding debt related to the equipment shared by the Partnership at June 30, 2016 was approximately $1,074,000. The Partnerships share of the cost of the equipment in which it participates with other partnerships at December 31, 2015 was approximately $8,708,000 and is included in the Partnerships equipment on its balance sheet. The Partnerships share of the outstanding debt associated with this equipment at December 31, 2015 was approximately $939,000 and is included in the Partnerships notes payable on its balance sheet. The total cost of the equipment shared by the Partnership with other partnerships at December 31, 2015 was approximately $20,830,000. The total outstanding debt related to the equipment shared by the Partnership at December 31, 2015 was approximately $2,023,000. As the Partnership and the other programs managed by the General Partner increase their overall portfolio size, opportunities for shared participation are expected to continue. Sharing in the acquisition of a lease portfolio gives the fund an opportunity to acquire additional assets and revenue streams, while allowing the fund to remain diversified and reducing its overall risk with respect to one portfolio. Thus, the Partnership expects total shared equipment and related debt to continue to trend higher for the remainder of 2016 as the Partnership builds its portfolio. The following is a schedule of future minimum rentals on non-cancellable operating leases at June 30, 2016: Periods Ended December 31, Amount Six months ended December 31, 2016 $ 1,214,000 Year Ended December 31, 2017 901,000 Year Ended December 31, 2018 221,000 Year Ended December 31, 2019 70,000 Year Ended December 31, 2020 7,000 $ 2,413,000 Finance Leases: The following lists the components of the net investment in direct financing leases: At June 30, June 30, 2016 December 31, 2015 Total minimum lease payments to be received $ 295,000 $ 372,000 Estimated residual value of leased equipment (unguaranteed) 66,000 66,000 Initial direct costs finance leases 6,000 10,000 Less: unearned income (22,000 ) (33,000 ) Net investment in finance leases $ 345,000 $ 415,000 Our finance lease customers operate in various industries, and we have no significant customer concentration in any one industry. We assess credit risk for all of our customers, including those that lease under finance leases. This credit risk is assessed using an internally developed model which incorporates credits scores from third party providers and our own customer risk ratings and is periodically reviewed. Our internal ratings are weighted based on the industry that the customer operates in. Factors taken into consideration when assessing risk include both general and industry specific qualitative and quantitative metrics. We separately take in to consideration payment history, open lawsuits, liens and judgments. Typically, we will not extend credit to a company that has been in business for less than 5 years or that has filed for bankruptcy within the same period. Our internally based model may classify a company as high risk based on our analysis of their audited financial statements and their payment history. Additional considerations of high risk may include history of late payments, open lawsuits and liens or judgments. In an effort to mitigate risk, we typically require deposits from those in this category. A reserve for credit losses is deemed necessary when payment has not been received for one or more months of receivables due on the equipment held under finance leases. At the end of each period, management evaluates the open receivables due on this equipment and determines the need for a reserve based on payment history and any current factors that would have an impact on payments. The following table presents the credit risk profile, by creditworthiness category, of our finance lease receivables at June 30, 2016: Risk Level Percent of Total Low -% Moderate-Low 39% Moderate -% Moderate-High 61% High -% Net finance lease receivable 100% As of June 30, 2016 and December 31, 2015, we determined that we did not have a need for an allowance for uncollectible accounts associated with any of our finance leases, as the customer payment histories with us, associated with these leases, has been positive. CCC, on behalf of the Partnership and on behalf of other affiliated companies and partnerships (partnerships), acquires equipment subject to associated debt obligations and lease agreements and allocates a participation in the cost, debt and lease revenue to the various companies based on certain risk factors. The Partnerships share of the net investment in finance leases in which it participates with other partnerships and is included on its balance sheet at June 30, 2016 and December 31, 2015, was approximately $134,000 and $161,000, respectively. The total net investment in finance leases shared by the Partnership with other partnerships at June 30, 2016 and December 31, 2015, was approximately $269,000 and $322,000, respectively. The following is a schedule of future minimum rentals on non-cancelable direct financing leases at June 30, 2016: Amount Six months ended December 31, 2016 $ 76,000 2017 149,000 2018 68,000 2019 2,000 Total $ 295,000 |
Investment in Cof 2
Investment in Cof 2 | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure Text Block [Abstract] | |
Investment in Cof 2 | On August 13, 2015, the Partnership purchased 1,648 units for $1,500,000, of Commonwealth Opportunity Fund 2 (COF 2), an affiliate fund of the General Partner. In accordance with the Partnership Agreement, the Partnership is permitted to invest in equipment Programs formed by the General Partner or its affiliates. COF 2 is an affiliate program that broke escrow on August 13, 2015. The General Partner believes this action is in the best interests of all the Programs. The Partnership accounts for its investment in COF 2 under the equity method in accordance with ASC 323. The Partnerships net investment in COF 2 at June 30, 2016 was approximately $1,337,000 (see COF 2 Financial Summary below). During the six months ended June 30, 2016, COF 2 declared distributions to the Partnership of approximately $110,000. COF 2 Summarized Financial Information June 30, 2016 December 31, 2015 Assets $ 5,785,000 $ 5,234,000 Liabilities $ 1,899,000 $ 934,000 Partners' capital $ 3,886,000 $ 4,300,000 Revenue $ 394,000 $ 146,000 Expenses $ 573,000 $ 190,000 Net loss $ (179,000 ) $ (44,000 ) * As of December 31, 2015 and for the period August 13, 2015(date of inception) through December 31, 2015 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure Text Block [Abstract] | |
Related Party Transactions | As of June 30, 2016 and December 31, 2015, the Partnerships related party receivables and payables are short term, unsecured, and non-interest bearing. Six months ended June 30, 2016 2015 Reimbursable expenses The General Partner and its affiliates are entitled to reimbursement by the Partnership for the cost of goods, supplies or services obtained and used by the General Partner in connection with the administration and operation of the Partnership from third parties unaffiliated with the General Partner. In addition, the General Partner and its affiliates are entitled to reimbursement of certain expenses incurred by the General Partner and its affiliates in connection with the administration and operation of the Partnership. For the six months ended June 30, 2016 and 2015, the Partnership was charged approximately $309,000 and $412,000 in other LP expense, respectively. $ 651,000 $ 674,000 Equipment acquisition fee The General Partner earned an equipment acquisition fee of 4% of the purchase price of each item of equipment purchased as compensation for the negotiation of the acquisition of the equipment and lease thereof or sale under a conditional sales contract. For the six months ended June 30, 2016, the General Partner earned acquisition fees from operating and finance leases of approximately $30,000 and $0, respectively. At June 30, 2016, the remaining balance of prepaid acquisition fees was approximately $155,000, which is expected to be earned in future periods. $ 30,000 $ 12,000 Debt placement fee As compensation for arranging term debt to finance our acquisition of equipment, we will pay the general partner a fee equal to one percent of such indebtedness; provided, however, that such fee shall be reduced to the extent we incur such fees to third parties unaffiliated with the general partner or the lender with respect to such indebtedness. No such fee will be paid with respect to borrowings from the general partner or its affiliates. We intend to initially acquire leases on an all cash basis with the proceeds of this offering, but may borrow funds after the offering proceeds have been invested. The amount we borrow, and therefore the amount of the fee, will depend upon interest rates at the time of a loan, and the amount of leverage we determine is appropriate at the time. We do not intend to use more than 30% leverage overall in our portfolio. Fees will increase as the amount of leverage we use increases, and as turnover in the portfolio increases and additional equipment is purchased using leverage. $ 6,000 $ 1,000 Equipment management fee We pay our general partner a monthly fee equal to the lesser of (a) the fees which would be charged by an independent third party in the same geographic market for similar services and equipment or (b) the sum of (i) two percent of gross lease revenues attributable to equipment subject to full payout net leases which contain net lease provisions and (ii) five percent of the gross lease revenues attributable to equipment subject to operating leases. Our general partner, based on its experience in the equipment leasing industry and current dealings with others in the industry, will use its business judgment to determine if a given fee is competitive, reasonable and customary. The amount of the fee will depend upon the amount of equipment we manage, which in turn will depend upon the amount we raise in this offering. Reductions in market rates for similar services would also reduce the amount of this fee we will receive. $ 95,000 $ 175,000 Equipment liquidation fee Also referred to as a "resale fee." With respect to each item of equipment sold by the general partner, we will pay a fee equal to the lesser of (i) 50% of the competitive equipment sale commission or (ii) three percent of the sales price of the equipment. The payment of this fee is subordinated to the receipt by the limited partners of (i) a return of their capital contributions and a 10% per annum cumulative return, compounded daily, on adjusted capital contributions and (ii) the net disposition proceeds from such sale in accordance with the partnership agreement. Our general partner, based on its experience in the equipment leasing industry and current dealings with others in the industry, uses its business judgment to determine if a given sales commission is competitive, reasonable and customary. Such fee will be reduced to the extent any liquidation or resale fees are paid to unaffiliated parties. The amount of such fees will depend upon the sale price of equipment sold. Sale prices will vary depending upon the type, age and condition of equipment sold. The shorter the terms of our leases, the more often we may sell equipment, which will increase liquidation fees we receive. $ 9,000 33,000 |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure Text Block [Abstract] | |
Notes Payable | Notes payable consisted of the following approximate amounts: June 30, 2016 December 31, 2015 Installment note payable to bank; interest at 3.68% due in monthly installments of $16,526, including interest; with final payment in February 2016 $ - $ 33,000 Installment note payable to bank; interest at 4.23% due in quarterly installments of $24,780, including interest, with final payment in May 2016 - 49,000 Installment note payable to bank; interest at 4.23% due in quarterly installments of $11,329, including interest, with final payment in June 2016 - 22,000 Installment notes payable to bank; interest at 4.23% due in quarterly installments ranging from $14,427 to $19,170, including interest, with final payment in July 2016 33,000 99,000 Installment note payable to bank; interest at 4.23% due in quarterly installments of $25,798, including interest, with final payment in August 2016 26,000 76,000 Installment note payable to bank; interest at 4.85% due in quarterly installments of $47,859, including interest, with final payment in August 2016 47,000 140,000 Installment note payable to bank; interest at 4.23% due in quarterly installments of $26,817, including interest, with final payment in September 2016 27,000 79,000 Installment notes payable to bank; interest at 6.00% due in monthly installments ranging from $944 to $8,324, including interest, with final payment in September 2016 4,000 47,000 Installment note payable to bank; interest at 4.65% due in monthly installments of $598, including interest, with final payment in October 2016 2,000 6,000 Installment note payable to bank; interest at 4.23% due in quarterly installments of $22,434, including interest; with final payment due in December 2016 44,000 87,000 Installment note payable to bank; interest at 4.85% due in monthly installments of $6,284, including interest; with final payment due in December 2016 37,000 74,000 Installment note payable to bank; interest at 4.23% due in quarterly installments of $5,376, including interest; with final payment in February 2017 16,000 26,000 Installment notes payable to bank; interest at 4.23% due in quarterly installments ranging from $284 to $55,093, including interest, with final payment in May 2017 228,000 337,000 Installment note payable to bank; interest at 1.60% due in monthly installments of $8,154, including interest; with final payment in June 2017 97,000 145,000 Installment note payable to bank; interest at 1.60% due in monthly installments of $4,340, including interest, with final payment in July 2017 56,000 81,000 Installment notes payable to bank; interest ranging from 4.23% to 4.85% due in quarterly installments ranging from $1,051 to $25,788, including interest, with final payment in July 2017 242,000 335,000 Installment note payable to bank; interest at 4.23% due in quarterly installments of $610, including interest, with final payment in August 2017 3,000 4,000 Installment note payable to bank; interest at 4.85% due in monthly installments of $3,790, including interest, with final payment in August 2017 51,000 73,000 Installment note payable to bank; interest at 4.23% due in quarterly installments of $672, including interest, with final payment in October 2017 4,000 5,000 Installment note payable to bank; interest at 4.23% due in quarterly installments of $476, including interest, with final payment in November 2017 3,000 4,000 Installment notes payable to bank; interest at 6.00% due in monthly installments ranging from $1,471 to $3,589, including interest, with final payment in November 2017 50,000 70,000 Installment note payable to bank; interest at 4.85% due in monthly installments of $2,318, including interest; with final payment in December 2017 40,000 53,000 Installment note payable to bank; interest at 4.23% due in monthly installments of $458, including interest, with final payment in February 2018 3,000 4,000 Installment notes payable to bank; interest at 4.23% due in quarterly installments ranging from $458, including interest, with final payment in March 2018 6,000 8,000 Installment note payable to bank; interest at 4.85% due in monthly installments of $1,238, including interest; with final payment in March 2018 25,000 32,000 Installment note payable to bank; interest at 3.68% due in monthly installments of $4,528, including interest; with final payment in May 2018 105,000 - Installment notes payable to bank; interest at 4.23% due in quarterly installments ranging from $266 to $352, including interest, with final payment in October 2018 6,000 - Installment notes payable to bank; interest at 6.00% due in monthly installments ranging from $351 to $5,522, including interest, with final payment in October 2018 113,000 143,000 Installment note payable to bank; interest at 1.80% due in monthly installments of $2,533, including interest; with final payment in April 2019 84,000 - Installment note payable to bank; interest at 1.80% due in monthly installments of $8,677, including interest; with final payment in May 2019 304,000 - Installment notes payable to bank; interest at 6.00% due in monthly installments ranging from $101 to $831, including interest, with final payment in July 2019 25,000 29,000 Installment note payable to bank; interest at 4.88% due in monthly installments of $1,363, including interest, with final payment in May 2020 58,000 - $ 1,739,000 $ 2,061,000 The notes are secured by specific equipment with a carrying value of approximately $2,573,000 as of June 30, 2016 and are nonrecourse liabilities of the Partnership. As such, the notes do not contain any financial debt covenants with which we must comply on either an annual or quarterly basis. Aggregate maturities of notes payable for each of the periods subsequent to June 30, 2016 are as follows: Amount Six months ended December 31, 2016 $ 725,000 Year ended December 31, 2017 729,000 Year ended December 31, 2018 207,000 Year ended December 31, 2019 71,000 Year ended December 31, 2020 7,000 $ 1,739,000 During 2015, the General Partner executed a collateralized debt financing agreement on behalf of certain affiliates for a total shared loan amount of approximately $847,000, of which the Partnerships share was approximately $290,000. The Partnerships portion of the current loan amount at June 30, 2016 was approximately $192,000 and is secured by specific equipment under both operating and finance leases. The carrying value of the secured equipment under operating leases is approximately $101,000. The carrying value of the secured equipment under finance leases is approximately $227,000. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure Text Block [Abstract] | |
Supplemental Cash Flow Information | Other noncash activities included in the determination of net loss are as follows: Six months ended June 30, 2016 2015 Lease revenue net of interest expense on notes payable realized as a result of direct payment of principal by lessee to bank $ 885,000 $ 988,000 No interest or principal on notes payable was paid by the Partnership because direct payment was made by lessee to the bank in lieu of collection of lease income and payment of interest and principal by the Partnership. Noncash investing and financing activities include the following: Six months ended June 30, 2016 2015 Equipment acquisition fees earned by General Partner upon purchase of equipment from prepaid acquisition fees $ - $ 7,000 Debt assumed in connection with purchase of equipment $ 564,000 $ 72,000 Accrual for distributions to partners paid in July 2016 (included in other accrued expenses) $ 391,000 $ - Accrued expenses incurred in connection with the purchase of technology equipment $ - $ 67,000 During the six months ended June 30, 2016 and 2015, the Partnership wrote off fully amortized acquisition and finance fees of approximately $137,000 and $123,000, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure Text Block [Abstract] | |
Commitments and Contingencies | Medshare In January 2015, CCC, on behalf of the Funds, entered into a Purchase Agreement (Purchase Agreement) for the sale of the equipment to Medshare Technologies (Medshare) for approximately $3,400,000. The Partnerships share of the sale proceeds was approximately $1,033,000. As of August 2, 2016, the Partnership has received approximately $545,000 of the approximate $1,033,000 sale proceeds, has recorded a reserve against the outstanding receivable of $137,000. On April 3, 2015 Medshare was obligated to make payment in full and failed to do so. As a result, Medshare defaulted on its purchase agreement with CCC and was issued a demand letter for full payment of the Equipment. On June 25, 2015, Medshare filed a lawsuit in Texas state court for breach of contract (State Suit). On June 26, 2015, Commonwealth filed a lawsuit in the Northern District of Texas against Medshare seeking payment in full and/or return of the Equipment and damages. In July 2016, CCC, on behalf of the Funds, entered into a $1,400,000 binding Settlement Agreement (Settlement Agreement) with Medshare and its principal owner, Chris Cleary (collectively referred to as Defendants), who are held jointly and severally liable for the entire settlement. On August 2, 2016, the Defendants made payment to CCC of an initial $200,000 to be followed by 24 structured monthly payments of approximately $50,000 per month to begin no later than September 15, 2016. The Partnerships share of the Settlement Agreement is approximately $453,000 and is to be applied against the net Medshare receivable of approximately $350,000. The remaining $103,000 will be applied against the $137,000 reserve and recorded as a bad debt recovery. Should the Defendants default at any time, the settlement agreement includes a consent judgment that allows CCC to seek immediate judgment against the Defendants from a court of competent jurisdiction for the liquidated damage amount of $1.5 million (less any payment received after execution of the agreement). The Partnerships share of the judgment would be approximately $486,000. Based on discussions with counsel, management believes that the likelihood of loss is remote. As such, management believes that the settlement of the lawsuits will not result in any adverse financial impact on the Funds, but no assurance can be provided until the proceeding is resolved. FINRA On May 3, 2013, the FINRA Department of Enforcement filed a complaint naming Commonwealth Capital Securities Corp. (CCSC) and the owner of the firm, Kimberly Springsteen-Abbott, as respondents; however on October 22, 2013, FINRA filed an amended complaint that dropped the allegations against CCSC and reduced the scope of the allegations against Ms. Springsteen-Abbott. The sole remaining charge was that Ms. Springsteen-Abbott had approved the misallocation of some expenses to certain Funds. Management believes that the expenses at issue include amounts that were proper and that were properly allocated to Funds, and also identified a smaller number of expenses that had been allocated in error, but were adjusted and repaid to the affected Funds when they were identified in 2012. During the period in question, Commonwealth Capital Corp. (CCC) and Ms. Springsteen-Abbott provided important financial support to the Funds, voluntarily absorbed expenses and voluntarily waived fees in amounts aggregating in excess of any questioned allocations. That Panel ruled on March 30, 2015, that Ms. Springsteen-Abbott should be barred from the securities industry because the Panel concluded that she allegedly misallocated $208,000 of expenses involving certain Funds over the course of three years. As such, management has allocated approximately $87,000 of the $208,000 in allegedly misallocated expenses back to the affected funds as a contingency accrual in CCCs financial statements and a good faith payment for the benefit of those Income Funds. Decisions issued by FINRA's Office of Hearing Officers may be appealed to FINRA's National Adjudicatory Council (NAC) pursuant to FINRA Rule 9311. In December of 2015, Ms. Springsteen-Abbott vigorously challenged the Panels decision at an appeal hearing that was conducted before a NAC panel. A decision has not been rendered on this matter. While a panel decision is on appeal, the sanction is not enforced against the individual. Management believes that resolution of the appeal will not result in any material adverse financial impact on the Funds, but no assurance can be provided until the FINRA matter is resolved. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Policy Text Block [Abstract] | |
Basis of Presentation | The financial information presented as of any date other than December 31, 2015 has been prepared from the books and records without audit. The following unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Financial information as of December 31, 2015 has been derived from the audited financial statements of the Partnership, but does not include all disclosures required by generally accepted accounting principles to be included in audited financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial information for the periods indicated, have been included. Operating results for the six months ended June 30, 2016 are not necessarily indicative of financial results that may be expected for the full year ended December 31, 2016. |
Recently Adopted Accounting Pronouncements | In June 2015, the FASB issued Accounting Standards Update No. 2015-10, Technical Corrections and Improvements- In January 2015, the FASB issued Accounting Standards Update No. 2015-01, Income StatementExtraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. |
Equity Method Investment | The Partnership accounts for its 34% investment in COF2 under the equity method in accordance with Accounting Standards Codification (ASC) 323. Under the equity method, the Partnership records its proportionate share of the Funds net income (loss). Capital contributions, distributions and net income (loss) of such entities are recorded in accordance with the terms of the governing documents. An allocation of net income (loss) may differ from the stated ownership percentage interest in such entity as a result of distributions and allocation formulas, if any, as described in such governing documents. |
Disclosure of Fair Value of Financial Instruments | Estimated fair value was determined by management using available market information and appropriate valuation methodologies. However, judgment was necessary to interpret market data and develop estimated fair value. Cash and cash equivalents, receivables, accounts payable and accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values as of June 30, 2016 and December 31, 2015 due to the short term nature of these financial instruments. The Partnerships long-term debt consists of notes payable, which are secured by specific equipment and are nonrecourse liabilities of the Partnership. The estimated fair value of this debt at June 30, 2016 and December 31, 2015 approximates the carrying value of these instruments, due to the interest rates on the debt approximating current market interest rates. The Partnership classifies the fair value of its notes payable within Level 2 of the valuation hierarchy based on the observable inputs used to estimate fair value. |
Cash | We consider cash equivalents to be highly liquid investments with the original maturity dates of 90 days or less. At June 30, 2016, cash and cash equivalents was held in two bank accounts maintained at one financial institution with an aggregate balance of approximately $1,399,000. Bank accounts are federally insured up to $250,000 by the FDIC. At June 30, 2016, the total cash bank balance was as follows: At June 30, 2016 Balance Total bank balance $ 1,399,000 FDIC insured (250,000 ) Uninsured amount $ 1,149,000 The Partnership believes it mitigates the risk of holding uninsured deposits by only depositing funds with major financial institutions. The Partnership has not experienced any losses in our accounts, and believes it is not exposed to any significant credit risk. The amounts in such accounts will fluctuate throughout 2016 due to many factors, including cash receipts, equipment acquisitions, interest rates and distributions to limited partners. |
Recent Accounting Pronouncements | In May 2016, the FASB issued Accounting Standards Update No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients- Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In April 2016, the FASB issued Accounting Standards Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing- Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)- Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In March 2016, the FASB issued Accounting Standards Update No. 2016-07, InvestmentsEquity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting- In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) Section ALeases: Amendments to the FASB Accounting Standards Codification® Section BConforming Amendments Related to Leases: Amendments to the FASB Accounting Standards Codification® Section CBackground Information and Basis for Conclusions In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Financial InstrumentsOverall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In August 2015, the FASB issued Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In August 2014, the FASB issued Accounting Standards Update No. 2014 -15, Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Table Text Block Supplement [Abstract] | |
Schedule of Cash and Cash Equivalents | At June 30, 2016 Balance Total bank balance $ 1,399,000 FDIC insured (250,000 ) Uninsured amount $ 1,149,000 |
Information Technology, Medic17
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Table Text Block Supplement [Abstract] | |
Schedule of future minimum rentals on non-cancellable operating leases | Periods Ended December 31, Amount Six months ended December 31, 2016 $ 1,214,000 Year Ended December 31, 2017 901,000 Year Ended December 31, 2018 221,000 Year Ended December 31, 2019 70,000 Year Ended December 31, 2020 7,000 $ 2,413,000 |
Net investment in direct financing leases | At June 30, June 30, 2016 December 31, 2015 Total minimum lease payments to be received $ 295,000 $ 372,000 Estimated residual value of leased equipment (unguaranteed) 66,000 66,000 Initial direct costs finance leases 6,000 10,000 Less: unearned income (22,000 ) (33,000 ) Net investment in finance leases $ 345,000 $ 415,000 |
Finance lease risk level | Risk Level Percent of Total Low -% Moderate-Low 39% Moderate -% Moderate-High 61% High -% Net finance lease receivable 100% |
Schedule of future minimum rentals on non-cancelable direct financing leases | Amount Six months ended December 31, 2016 $ 76,000 2017 149,000 2018 68,000 2019 2,000 Total $ 295,000 |
Investment in Cof 2 (Tables)
Investment in Cof 2 (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Table Text Block Supplement [Abstract] | |
COF 2 Summarized Financial Information | COF 2 Summarized Financial Information June 30, 2016 December 31, 2015 Assets $ 5,785,000 $ 5,234,000 Liabilities $ 1,899,000 $ 934,000 Partners' capital $ 3,886,000 $ 4,300,000 Revenue $ 394,000 $ 146,000 Expenses $ 573,000 $ 190,000 Net loss $ (179,000 ) $ (44,000 ) |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Table Text Block Supplement [Abstract] | |
Schedule of Related Party Transactions | Six months ended June 30, 2016 2015 Reimbursable expenses The General Partner and its affiliates are entitled to reimbursement by the Partnership for the cost of goods, supplies or services obtained and used by the General Partner in connection with the administration and operation of the Partnership from third parties unaffiliated with the General Partner. In addition, the General Partner and its affiliates are entitled to reimbursement of certain expenses incurred by the General Partner and its affiliates in connection with the administration and operation of the Partnership. For the six months ended June 30, 2016 and 2015, the Partnership was charged approximately $309,000 and $412,000 in other LP expense, respectively. $ 651,000 $ 674,000 Equipment acquisition fee The General Partner earned an equipment acquisition fee of 4% of the purchase price of each item of equipment purchased as compensation for the negotiation of the acquisition of the equipment and lease thereof or sale under a conditional sales contract. For the six months ended June 30, 2016, the General Partner earned acquisition fees from operating and finance leases of approximately $30,000 and $0, respectively. At June 30, 2016, the remaining balance of prepaid acquisition fees was approximately $155,000, which is expected to be earned in future periods. $ 30,000 $ 12,000 Debt placement fee As compensation for arranging term debt to finance our acquisition of equipment, we will pay the general partner a fee equal to one percent of such indebtedness; provided, however, that such fee shall be reduced to the extent we incur such fees to third parties unaffiliated with the general partner or the lender with respect to such indebtedness. No such fee will be paid with respect to borrowings from the general partner or its affiliates. We intend to initially acquire leases on an all cash basis with the proceeds of this offering, but may borrow funds after the offering proceeds have been invested. The amount we borrow, and therefore the amount of the fee, will depend upon interest rates at the time of a loan, and the amount of leverage we determine is appropriate at the time. We do not intend to use more than 30% leverage overall in our portfolio. Fees will increase as the amount of leverage we use increases, and as turnover in the portfolio increases and additional equipment is purchased using leverage. $ 6,000 $ 1,000 Equipment management fee We pay our general partner a monthly fee equal to the lesser of (a) the fees which would be charged by an independent third party in the same geographic market for similar services and equipment or (b) the sum of (i) two percent of gross lease revenues attributable to equipment subject to full payout net leases which contain net lease provisions and (ii) five percent of the gross lease revenues attributable to equipment subject to operating leases. Our general partner, based on its experience in the equipment leasing industry and current dealings with others in the industry, will use its business judgment to determine if a given fee is competitive, reasonable and customary. The amount of the fee will depend upon the amount of equipment we manage, which in turn will depend upon the amount we raise in this offering. Reductions in market rates for similar services would also reduce the amount of this fee we will receive. $ 95,000 $ 175,000 Equipment liquidation fee Also referred to as a "resale fee." With respect to each item of equipment sold by the general partner, we will pay a fee equal to the lesser of (i) 50% of the competitive equipment sale commission or (ii) three percent of the sales price of the equipment. The payment of this fee is subordinated to the receipt by the limited partners of (i) a return of their capital contributions and a 10% per annum cumulative return, compounded daily, on adjusted capital contributions and (ii) the net disposition proceeds from such sale in accordance with the partnership agreement. Our general partner, based on its experience in the equipment leasing industry and current dealings with others in the industry, uses its business judgment to determine if a given sales commission is competitive, reasonable and customary. Such fee will be reduced to the extent any liquidation or resale fees are paid to unaffiliated parties. The amount of such fees will depend upon the sale price of equipment sold. Sale prices will vary depending upon the type, age and condition of equipment sold. The shorter the terms of our leases, the more often we may sell equipment, which will increase liquidation fees we receive. $ 9,000 33,000 |
Notes Payable (Tables)
Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Table Text Block Supplement [Abstract] | |
Notes payable | June 30, 2016 December 31, 2015 Installment note payable to bank; interest at 3.68% due in monthly installments of $16,526, including interest; with final payment in February 2016 $ - $ 33,000 Installment note payable to bank; interest at 4.23% due in quarterly installments of $24,780, including interest, with final payment in May 2016 - 49,000 Installment note payable to bank; interest at 4.23% due in quarterly installments of $11,329, including interest, with final payment in June 2016 - 22,000 Installment notes payable to bank; interest at 4.23% due in quarterly installments ranging from $14,427 to $19,170, including interest, with final payment in July 2016 33,000 99,000 Installment note payable to bank; interest at 4.23% due in quarterly installments of $25,798, including interest, with final payment in August 2016 26,000 76,000 Installment note payable to bank; interest at 4.85% due in quarterly installments of $47,859, including interest, with final payment in August 2016 47,000 140,000 Installment note payable to bank; interest at 4.23% due in quarterly installments of $26,817, including interest, with final payment in September 2016 27,000 79,000 Installment notes payable to bank; interest at 6.00% due in monthly installments ranging from $944 to $8,324, including interest, with final payment in September 2016 4,000 47,000 Installment note payable to bank; interest at 4.65% due in monthly installments of $598, including interest, with final payment in October 2016 2,000 6,000 Installment note payable to bank; interest at 4.23% due in quarterly installments of $22,434, including interest; with final payment due in December 2016 44,000 87,000 Installment note payable to bank; interest at 4.85% due in monthly installments of $6,284, including interest; with final payment due in December 2016 37,000 74,000 Installment note payable to bank; interest at 4.23% due in quarterly installments of $5,376, including interest; with final payment in February 2017 16,000 26,000 Installment notes payable to bank; interest at 4.23% due in quarterly installments ranging from $284 to $55,093, including interest, with final payment in May 2017 228,000 337,000 Installment note payable to bank; interest at 1.60% due in monthly installments of $8,154, including interest; with final payment in June 2017 97,000 145,000 Installment note payable to bank; interest at 1.60% due in monthly installments of $4,340, including interest, with final payment in July 2017 56,000 81,000 Installment notes payable to bank; interest ranging from 4.23% to 4.85% due in quarterly installments ranging from $1,051 to $25,788, including interest, with final payment in July 2017 242,000 335,000 Installment note payable to bank; interest at 4.23% due in quarterly installments of $610, including interest, with final payment in August 2017 3,000 4,000 Installment note payable to bank; interest at 4.85% due in monthly installments of $3,790, including interest, with final payment in August 2017 51,000 73,000 Installment note payable to bank; interest at 4.23% due in quarterly installments of $672, including interest, with final payment in October 2017 4,000 5,000 Installment note payable to bank; interest at 4.23% due in quarterly installments of $476, including interest, with final payment in November 2017 3,000 4,000 Installment notes payable to bank; interest at 6.00% due in monthly installments ranging from $1,471 to $3,589, including interest, with final payment in November 2017 50,000 70,000 Installment note payable to bank; interest at 4.85% due in monthly installments of $2,318, including interest; with final payment in December 2017 40,000 53,000 Installment note payable to bank; interest at 4.23% due in monthly installments of $458, including interest, with final payment in February 2018 3,000 4,000 Installment notes payable to bank; interest at 4.23% due in quarterly installments ranging from $458, including interest, with final payment in March 2018 6,000 8,000 Installment note payable to bank; interest at 4.85% due in monthly installments of $1,238, including interest; with final payment in March 2018 25,000 32,000 Installment note payable to bank; interest at 3.68% due in monthly installments of $4,528, including interest; with final payment in May 2018 105,000 - Installment notes payable to bank; interest at 4.23% due in quarterly installments ranging from $266 to $352, including interest, with final payment in October 2018 6,000 - Installment notes payable to bank; interest at 6.00% due in monthly installments ranging from $351 to $5,522, including interest, with final payment in October 2018 113,000 143,000 Installment note payable to bank; interest at 1.80% due in monthly installments of $2,533, including interest; with final payment in April 2019 84,000 - Installment note payable to bank; interest at 1.80% due in monthly installments of $8,677, including interest; with final payment in May 2019 304,000 - Installment notes payable to bank; interest at 6.00% due in monthly installments ranging from $101 to $831, including interest, with final payment in July 2019 25,000 29,000 Installment note payable to bank; interest at 4.88% due in monthly installments of $1,363, including interest, with final payment in May 2020 58,000 - $ 1,739,000 $ 2,061,000 |
Aggregate maturities of notes payable | Amount Six months ended December 31, 2016 $ 725,000 Year ended December 31, 2017 729,000 Year ended December 31, 2018 207,000 Year ended December 31, 2019 71,000 Year ended December 31, 2020 7,000 $ 1,739,000 |
Supplemental Cash Flow Inform21
Supplemental Cash Flow Information (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Table Text Block Supplement [Abstract] | |
Other noncash activities | Six months ended June 30, 2016 2015 Lease revenue net of interest expense on notes payable realized as a result of direct payment of principal by lessee to bank $ 885,000 $ 988,000 |
Noncash investing and financing activities | Six months ended June 30, 2016 2015 Equipment acquisition fees earned by General Partner upon purchase of equipment from prepaid acquisition fees $ - $ 7,000 Debt assumed in connection with purchase of equipment $ 564,000 $ 72,000 Accrual for distributions to partners paid in July 2016 (included in other accrued expenses) $ 391,000 $ - Accrued expenses incurred in connection with the purchase of technology equipment $ - $ 67,000 |
Business (Details Narrative)
Business (Details Narrative) | 6 Months Ended |
Jun. 30, 2016 | |
Text Block [Abstract] | |
Entity Incorporation, State | Commonwealth of Pennsylvania |
Entity Incorporation, Date of Incorporation | Nov. 14, 2008 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Details) | Jun. 30, 2016USD ($) |
Text Block [Abstract] | |
Total bank balance | $ 1,399,000 |
FDIC insured | (250,000) |
Uninsured amount | $ 1,149,000 |
Information Technology, Medic24
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment (Details) | Jun. 30, 2016USD ($) |
Text Block [Abstract] | |
Six months ended December 31, 2016 | $ 1,214,000 |
Year Ended December 31, 2017 | 901,000 |
Year Ended December 31, 2018 | 221,000 |
Year Ended December 31, 2019 | 70,000 |
Year Ended December 31, 2020 | 7,000 |
Total | $ 2,413,000 |
Information Technology, Medic25
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment (Details 1) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Text Block [Abstract] | ||
Total minimum lease payments to be received | $ 295,000 | $ 372,000 |
Estimated residual value of leased equipment (unguaranteed) | 66,000 | 66,000 |
Initial direct costs finance leases | 6,000 | 10,000 |
Less: unearned income | (22,000) | (33,000) |
Net Investment in Finance Leases | $ 345,000 | $ 405,000 |
Information Technology, Medic26
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment (Details 2) | Jun. 30, 2016 |
Text Block [Abstract] | |
Low | 0.00% |
Moderate-Low | 39.00% |
Moderate | 0.00% |
Moderate-High | 61.00% |
High | 0.00% |
Net finance lease receivable | 100.00% |
Information Technology, Medic27
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment (Details 3) | Jun. 30, 2016USD ($) |
Text Block [Abstract] | |
Six months ended December 31, 2016 | $ 76,000 |
2,017 | 149,000 |
2,018 | 68,000 |
2,019 | 2,000 |
Total | $ 295,000 |
Information Technology, Medic28
Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment (Details Narrative) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Text Block [Abstract] | ||
Equipment Shared | $ 8,708,000 | $ 8,708,000 |
Debt Shared | 512,000 | 939,000 |
Total Shared Equipment | 20,830,000 | 20,830,000 |
Outstanding Debt Total | $ 1,074,000 | $ 2,023,000 |
Investment in Cof 2 (Details)
Investment in Cof 2 (Details) - USD ($) | 5 Months Ended | 6 Months Ended |
Dec. 31, 2015 | Jun. 30, 2016 | |
Text Block [Abstract] | ||
Assets | $ 5,234,000 | $ 5,785,000 |
Liabilities | 934,000 | 1,899,000 |
Partners' Capital | 4,300,000 | 3,886,000 |
Revenue | 146,000 | 394,000 |
Expenses | 190,000 | 573,000 |
Net loss | $ (44,000) | $ (179,000) |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Text Block [Abstract] | ||
Other LP Expense | $ 309,000 | $ 412,000 |
Reimbursable Expenses | 651,000 | 674,000 |
Equipment acquisition fee earned by General Partner from operating leases | 30,000 | |
Equipment acquisition fee earned by General Partner from Financing leases | 0 | |
Remaining balance of prepaid acquisition fees | 155,000 | |
Equipment Acquisition Fees | 30,000 | 12,000 |
Debt placement fees | 6,000 | 1,000 |
Equipment Management Fee | 95,000 | 175,000 |
Equipment liquidation fee | $ 9,000 | $ 33,000 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Long-term Debt, Gross | $ 1,739,000 | $ 2,061,000 |
Note 1 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 3.68% due in monthly installments of $16,526, including interest; with final payment in February 2016 | |
Long-term Debt, Gross | $ 0 | 33,000 |
Note 2 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 4.23% due in quarterly installments of $24,780, including interest, with final payment in May 2016 | |
Long-term Debt, Gross | $ 0 | 49,000 |
Note 3 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 4.23% due in quarterly installments of $11,329, including interest, with final payment in June 2016 | |
Long-term Debt, Gross | $ 0 | 22,000 |
Note 4 | ||
Debt Instrument, Description | Installment notes payable to bank; interest at 4.23% due in quarterly installments ranging from $14,427 to $19,170, including interest, with final payment in July 2016 | |
Long-term Debt, Gross | $ 33,000 | 99,000 |
Note 5 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 4.23% due in quarterly installments of $25,798, including interest, with final payment in August 2016 | |
Long-term Debt, Gross | $ 26,000 | 76,000 |
Note 6 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 4.85% due in quarterly installments of $47,859, including interest, with final payment in August 2016 | |
Long-term Debt, Gross | $ 47,000 | 140,000 |
Note 7 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 4.23% due in quarterly installments of $26,817, including interest, with final payment in September 2016 | |
Long-term Debt, Gross | $ 27,000 | 79,000 |
Note 8 | ||
Debt Instrument, Description | Installment notes payable to bank; interest at 6.00% due in monthly installments ranging from $944 to $8,324, including interest, with final payment in September 2016 | |
Long-term Debt, Gross | $ 4,000 | 47,000 |
Note 9 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 4.65% due in monthly installments of $598, including interest, with final payment in October 2016 | |
Long-term Debt, Gross | $ 2,000 | 6,000 |
Note 10 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 4.23% due in quarterly installments of $22,434, including interest; with final payment due in December 2016 | |
Long-term Debt, Gross | $ 44,000 | 87,000 |
Note 11 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 4.85% due in monthly installments of $6,284, including interest; with final payment due in December 2016 | |
Long-term Debt, Gross | $ 37,000 | 74,000 |
Note 12 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 4.23% due in quarterly installments of $5,376, including interest; with final payment in February 2017 | |
Long-term Debt, Gross | $ 16,000 | 26,000 |
Note 13 | ||
Debt Instrument, Description | Installment notes payable to bank; interest at 4.23% due in quarterly installments ranging from $284 to $55,093, including interest, with final payment in May 2017 | |
Long-term Debt, Gross | $ 228,000 | 337,000 |
Note 14 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 1.60% due in monthly installments of $8,154, including interest; with final payment in June 2017 | |
Long-term Debt, Gross | $ 97,000 | 145,000 |
Note 15 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 1.60% due in monthly installments of $4,340, including interest, with final payment in July 2017 | |
Long-term Debt, Gross | $ 56,000 | 81,000 |
Note 16 | ||
Debt Instrument, Description | Installment notes payable to bank; interest ranging from 4.23% to 4.85% due in quarterly installments ranging from $1,051 to $25,788, including interest, with final payment in July 2017 | |
Long-term Debt, Gross | $ 242,000 | 335,000 |
Note 17 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 4.23% due in quarterly installments of $610, including interest, with final payment in August 2017 | |
Long-term Debt, Gross | $ 3,000 | 4,000 |
Note 18 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 4.85% due in monthly installments of $3,790, including interest, with final payment in August 2017 | |
Long-term Debt, Gross | $ 51,000 | 73,000 |
Note 19 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 4.23% due in quarterly installments of $672, including interest, with final payment in October 2017 | |
Long-term Debt, Gross | $ 4,000 | 5,000 |
Note 20 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 4.23% due in quarterly installments of $476, including interest, with final payment in November 2017 | |
Long-term Debt, Gross | $ 3,000 | 4,000 |
Note 21 | ||
Debt Instrument, Description | Installment notes payable to bank; interest at 6.00% due in monthly installments ranging from $1,471 to $3,589, including interest, with final payment in November 2017 | |
Long-term Debt, Gross | $ 50,000 | 70,000 |
Note 22 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 4.85% due in monthly installments of $2,318, including interest; with final payment in December 2017 | |
Long-term Debt, Gross | $ 40,000 | 53,000 |
Note 23 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 4.23% due in monthly installments of $458, including interest, with final payment in February 2018 | |
Long-term Debt, Gross | $ 3,000 | 4,000 |
Note 24 | ||
Debt Instrument, Description | Installment notes payable to bank; interest at 4.23% due in quarterly installments ranging from $458, including interest, with final payment in March 2018 | |
Long-term Debt, Gross | $ 6,000 | 8,000 |
Note 25 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 4.85% due in monthly installments of $1,238, including interest; with final payment in March 2018 | |
Long-term Debt, Gross | $ 25,000 | 32,000 |
Note 26 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 3.68% due in monthly installments of $4,528, including interest; with final payment in May 2018 | |
Long-term Debt, Gross | $ 105,000 | 0 |
Note 27 | ||
Debt Instrument, Description | Installment notes payable to bank; interest at 4.23% due in quarterly installments ranging from $266 to $352, including interest, with final payment in October 2018 | |
Long-term Debt, Gross | $ 6,000 | 0 |
Note 28 | ||
Debt Instrument, Description | Installment notes payable to bank; interest at 6.00% due in monthly installments ranging from $351 to $5,522, including interest, with final payment in October 2018 | |
Long-term Debt, Gross | $ 113,000 | 143,000 |
Note 29 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 1.80% due in monthly installments of $2,533, including interest; with final payment in April 2019 | |
Long-term Debt, Gross | $ 84,000 | 0 |
Note 30 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 1.80% due in monthly installments of $8,677, including interest; with final payment in May 2019 | |
Long-term Debt, Gross | $ 304,000 | 0 |
Note 31 | ||
Debt Instrument, Description | Installment notes payable to bank; interest at 6.00% due in monthly installments ranging from $101 to $831, including interest, with final payment in July 2019 | |
Long-term Debt, Gross | $ 25,000 | 29,000 |
Note 32 | ||
Debt Instrument, Description | Installment note payable to bank; interest at 4.88% due in monthly installments of $1,363, including interest, with final payment in May 2020 | |
Long-term Debt, Gross | $ 58,000 | $ 0 |
Notes Payable (Details 1)
Notes Payable (Details 1) | Jun. 30, 2016USD ($) |
Text Block [Abstract] | |
Six months ended December 31, 2016 | $ 725,000 |
Year ended December 31, 2017 | 729,000 |
Year ended December 31, 2018 | 207,000 |
Year ended December 31, 2019 | 71,000 |
Year ended December 31, 2020 | 7,000 |
Long-term Debt | $ 1,739,000 |
Supplemental Cash Flow Inform33
Supplemental Cash Flow Information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Text Block [Abstract] | ||
Lease revenue net of interest expense on notes payable realized as a result of direct payment of principal by lessee to bank | $ 885,000 | $ 988,000 |
Supplemental Cash Flow Inform34
Supplemental Cash Flow Information (Details 1) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Text Block [Abstract] | ||
Equipment acquisition fees earned by General Partner upon purchase of equipment from prepaid acquisition fees | $ 0 | $ 7,000 |
Debt assumed in connection with purchase of equipment | 564,000 | 72,000 |
Accrual for distributions to partners paid in July 2016 (included in other accrued expenses) | 391,000 | 0 |
Accrued expenses incurred in connection with the purchase of technology equipment | $ 0 | $ 67,000 |
Supplemental Cash Flow Inform35
Supplemental Cash Flow Information (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Text Block [Abstract] | ||
Fully Amortized Fees Written Off | $ 137,000 | $ 123,000 |