Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Entity Registrant Name | ATEL 14, LLC | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Entity Central Index Key | 0001463389 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Filer Category | Non-accelerated Filer | |
Smaller Reporting Company | true | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Units Outstanding | 8,246,919 |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 607 | $ 2,831 |
Accounts receivable, net | 42 | 61 |
Investment in securities | 98 | 99 |
Warrants, fair value | 40 | 271 |
Equipment under operating leases, net | 14,316 | 14,657 |
Prepaid expenses and other assets | 71 | 79 |
Total assets | 15,174 | 17,998 |
Accounts payable and accrued liabilities: | ||
Affiliates | 45 | 32 |
Other | 242 | 212 |
Non-recourse debt | 3,797 | 4,022 |
Unearned operating lease income | 42 | |
Total liabilities | 4,084 | 4,308 |
Commitments and contingencies | ||
Members' capital: | ||
Managing Member | ||
Other Members | 11,090 | 13,690 |
Total Members' capital | 11,090 | 13,690 |
Total liabilities and Members' capital | $ 15,174 | $ 17,998 |
Statements of Operations
Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leasing and lending activities: | ||
Operating leases | $ 664 | $ 1,134 |
Interest on notes receivable | 17 | |
Gain on sales of operating lease assets and early termination of notes receivable | 1 | 405 |
Unrealized (loss) gain on fair value adjustment for warrants | (231) | 1 |
Unrealized gain (loss) on fair valuation of investments in securities | (1) | (8) |
Other | 2 | 4 |
Total revenues | 435 | 1,553 |
Expenses: | ||
Depreciation of operating lease assets | 332 | 649 |
Asset management fees to Managing Member | 27 | 56 |
Cost reimbursements to Managing Member and/or affiliates | 116 | 147 |
Interest expense | 34 | 33 |
Professional fees | 53 | 86 |
Outside services | 14 | 26 |
Taxes on income and franchise fees | 30 | 37 |
Bank charges | 2 | 3 |
Storage fees | 38 | 22 |
Railcar maintenance | 62 | 15 |
Freight and shipping | 35 | 13 |
Other | 18 | 43 |
Total expenses | 761 | 1,130 |
Net (loss) income | (326) | 423 |
Net (loss) income: | ||
Managing Member | 171 | |
Other Members | (497) | 423 |
Net (loss) income | $ (326) | $ 423 |
Net (loss) income per Limited Liability Company Unit (Other Members) | $ (0.06) | $ 0.05 |
Weighted average number of Units outstanding | 8,246,919 | 8,246,919 |
Statements of Changes in Member
Statements of Changes in Members' Capital - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Beginning Balance | $ 13,690 | $ 16,335 |
Distributions to Other Members | (2,103) | |
Distributions to Managing Member | (171) | |
Net (loss) income | (326) | 423 |
Ending Balance | $ 11,090 | $ 16,758 |
Other Members [Member] | ||
Beginning Balance (in Units) | 8,246,919 | 8,246,919 |
Beginning Balance | $ 13,690 | $ 16,335 |
Distributions to Other Members | (2,103) | |
Net (loss) income | $ (497) | $ 423 |
Ending Balance (in Units) | 8,246,919 | 8,246,919 |
Ending Balance | $ 11,090 | $ 16,758 |
Managing Member [Member] | ||
Distributions to Managing Member | (171) | |
Net (loss) income | $ 171 |
Statements of Changes in Memb_2
Statements of Changes in Members' Capital (Parenthetical) | 3 Months Ended |
Mar. 31, 2020$ / shares | |
Other Members [Member] | |
Distributions to Other Members, per Unit | $ 0.26 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating activities: | ||
Net (loss) income | $ (326) | $ 423 |
Adjustment to reconcile net (loss) income to cash provided by operating activities: | ||
Gain on sales of operating lease assets and early termination of notes receivable | (1) | (405) |
Depreciation of operating lease assets | 332 | 649 |
Provision for credit losses | 2 | 1 |
Unrealized (loss) gain on fair value adjustment for warrants | 231 | (1) |
Unrealized loss on fair value adjustment for investments in securities | 1 | 8 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 17 | 35 |
Prepaid expenses and other assets | 8 | 10 |
Accounts payable, Managing Member and affiliates | 13 | 43 |
Other accounts payable and accruals | 30 | (8) |
Unearned operating lease income | (42) | 55 |
Net cash provided by operating activities | 265 | 810 |
Investing activities: | ||
Proceeds from sales of lease assets and early termination of notes receivable | 10 | 514 |
Net cash provided by investing activities | 10 | 514 |
Financing activities: | ||
Repayments under non-recourse debt | (225) | (580) |
Repayments under credit facility | (600) | |
Net cash used in financing activities | (2,499) | (1,180) |
Net (decrease) increase in cash and cash equivalents | (2,224) | 144 |
Cash and cash equivalents at beginning of period | 2,831 | 1,056 |
Cash and cash equivalents at end of period | 607 | 1,200 |
Supplemental disclosures of cash flow information: | ||
Cash paid during period for interest | 34 | 13 |
Cash paid during period for taxes | 138 | 16 |
Other Members [Member] | ||
Operating activities: | ||
Net (loss) income | (497) | $ 423 |
Financing activities: | ||
Distributions to Members | (2,103) | |
Managing Member [Member] | ||
Operating activities: | ||
Net (loss) income | 171 | |
Financing activities: | ||
Distributions to Members | $ (171) |
Organization and Limited Liabil
Organization and Limited Liability Company Matters | 3 Months Ended |
Mar. 31, 2020 | |
Organization and Limited Liability Company Matters [Abstract] | |
Organization and Limited Liability Company Matters | 1. ATEL 14, LLC (the “Company” or the “Fund”) was formed under the laws of the state of California on April 1, 2009 (“Date of Inception”) for the purpose of equipment financing and acquiring equipment to engage in equipment leasing and sales activities. The Managing Member of the Company is ATEL Managing Member, LLC (the “Managing Member” or “Manager”), a Nevada limited liability company. Prior to May 9, 2011, the Manager was named ATEL Associates 14, LLC. The Managing Member is controlled by ATEL Financial Services, LLC (“AFS”), a wholly-owned subsidiary of ATEL Capital Group. The Fund may continue until December 31, 2030. Contributions in the amount of $500 were received as of May 8, 2009, which represented the initial member’s capital investment. As a limited liability company, the liability of any individual member for the obligations of the Fund is limited to the extent of capital contributions to the Fund by the individual member. The Company conducted a public offering of 15,000,000 Limited Liability Company Units (“Units”), at a price of $10 per Unit. As of December 2, 2009, subscriptions for the minimum number of Units (120,000, representing $1.2 million), excluding subscriptions from Pennsylvania investors, had been received and the Fund requested subscription proceeds to be released from escrow. On that date, the Company commenced initial operations and continued in its development stage activities until transitioning to an operating enterprise during the first quarter of 2010. Pennsylvania subscriptions are subject to a separate escrow and are released to the Fund only when aggregate subscriptions for all investors equal to at least $7.5 million. Total contributions to the Fund exceeded $7.5 million on February 12, 2010, at which time a request was processed to release the Pennsylvania escrowed amounts. The offering was terminated on October 6, 2011. As of March 31, 2020, cumulative gross contributions, less rescissions and repurchases (net of distributions paid and allocated syndication costs, as applicable), totaling $83.5 million (inclusive of the $500 initial Member’s capital investment) have been received. As of the same date, 8,246,919 Units were issued and outstanding. The Company’s principal objectives are to invest in a diversified portfolio of investments that will (i) preserve, protect and return the Company’s invested capital; (ii) generate regular cash distributions to Unitholders, with any balance remaining after required minimum distributions to be used to purchase additional investments during the Reinvestment Period (ending six calendar years after the completion of the Company’s public offering of Units) and (iii) provide additional cash distributions following the Reinvestment Period and until all investment portfolio assets has been sold or otherwise disposed. The Company is governed by the ATEL 14, LLC amended and restated Limited Liability Company Operating Agreement dated October 7, 2009 (the “Operating Agreement”). On January 1, 2018, the Company commenced liquidation phase activities pursuant to the guidelines of the Operating Agreement. Pursuant to the terms of the Operating Agreement, the Managing Member and/or its affiliates receives compensation for services rendered and reimbursements for costs incurred on behalf of the Company (Note 5). The Company is required to maintain reasonable cash reserves for working capital, the repurchase of Units and contingencies. The repurchase of Units is solely at the discretion of the Managing Member. These unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto contained in the report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of significant accounting policies: Basis of presentation: The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (‘‘GAAP’’) for interim financial information and with the instructions to Form 10-Q as mandated by the Securities and Exchange Commission. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the Managing Member, necessary for a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal recurring nature. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the full year. Footnote and tabular amounts are presented in thousands, except as to Units and per Unit data. In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after March 31, 2020, up until the issuance of the financial statements. No events were noted which would require disclosure in the footnotes to the financial statements. Cash and cash equivalents: Cash and cash equivalents include cash in banks and cash equivalent investments such as U.S. Treasury instruments with original and/or purchased maturities of ninety days or less. Use of Estimates: The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates. Such estimates primarily relate to the determination of residual values at the end of the lease term and expected future cash flows used for impairment analysis purposes and for determination of the allowance for doubtful accounts and reserve for credit losses on notes receivable. Segment reporting: The Company is organized into one operating segment for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment in the United States. The Company’s principal decision makers are the Managing Member’s Chief Executive Officer and its Chief Financial Officer and Chief Operating Officer. The Company believes that its equipment leasing business operates as one reportable segment because: a) the Company measures profit and loss at the equipment portfolio level as a whole; b) the principal decision makers do not review information based on any operating segment other than the equipment leasing transaction portfolio; c) the Company does not maintain discrete financial information on any specific segment other than its equipment financing operations; d) the Company has not chosen to organize its business around different products and services other than equipment lease financing; and e) the Company has not chosen to organize its business around geographic areas. The primary geographic region in which the Company seeks leasing opportunities is North America. For the three months ended March 31, 2020 and 2019, and as of March 31, 2020 and December 31, 2019, all of the Company’s current operating revenues and long-lived assets relate to customers domiciled in the United States. Accounts receivable: Accounts receivable represent the amounts billed under operating and direct financing lease contracts, and notes receivable which are currently due to the Company. Allowances for doubtful accounts are typically established based on historical charge off and collection experience and the collectability of specifically identified lessees and borrowers, and invoiced amounts. Accounts receivable deemed uncollectible are generally charged off against the allowance on a specific identification basis. Recoveries of amounts that were previously written-off are recorded as other income in the period received. Investment in securities: Purchased securities The Company’s purchased securities registered for public sale with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company’s results of operations. The Company’s purchased securities that do not have readily determinable fair values are measured at cost minus impairment, and adjusted for changes in observable prices. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. The Company had $98 thousand and $9 9 thousand of purchased securities at March 31, 2020 and December 31, 2019, respectively. There were no impairment adjustments during the three months ended March 31, 2020 and 2019. For securities with readily determinable fair values, unrealized losses of $1 thousand and $8 thousand were recorded during the three months ended March 31, 2020 and 2019, respectively. There were no fair value adjustments on investment securities that do not have readily determinable fair values during the three months ended March 31, 2020 and 2019. Cumulatively, a total of $227 thousand was recorded to reduce the value of such investment in securities based on changes in observable prices. Warrants Warrants owned by the Company are not registered for public sale, but are considered derivatives and are reflected at an estimated fair value on the balance sheet as determined by the Managing Member. The Company recorded an unrealized loss of $231 thousand and an unrealized gain of $1 thousand on fair value adjustment of its warrants during the three months ended March 31, 2020 and March 31, 2019, respectively. Credit risk: Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, operating and direct financing lease receivables, notes receivable and accounts receivable. The Company places the majority of its cash deposits in noninterest-bearing accounts with financial institutions that have no less than $10 billion in assets. Such deposits are insured up to $250 thousand. The remainder of the Funds’ cash is temporarily invested in U.S. Treasury denominated instruments. The concentration of such deposits and temporary cash investments is not deemed to create a significant risk to the Company. Accounts and notes receivable represent amounts due from lessees or borrowers in various industries, related to equipment on operating and direct financing leases or notes receivable. Equipment on operating leases and related revenue recognition: Equipment subject to operating leases is stated at cost. Depreciation is being recognized on a straight-line method over the terms of the related leases to the equipment’s estimated residual values. Off-lease equipment is generally not subject to depreciation. The Company depreciates all lease assets, in accordance with guidelines consistent with Accounting Standards Codification (“ASC”) 360-10-35-3, over the periods of the lease terms contained in each asset’s respective lease contract to the estimated residual value at the end of the lease contract. All lease assets are purchased only concurrent with the execution of a lease commitment by the lessee. Thus, the original depreciation period corresponds with the term of the original lease. Once the term of an original lease contract is completed, the subject property is typically sold to the existing user, re-leased to the existing user, or, when off-lease, is held for sale. Assets which are re-leased continue to be depreciated using the terms of the new lease agreements and the estimated residual values at the end of the new lease terms, adjusted downward as necessary. Assets classified as held-for-sale are carried at the lower of carrying amount, or the fair value less cost to sell (ASC 360-10-35-43). The Company does not use the equipment held in its portfolio, but holds it solely for lease and ultimate sale. In the course of marketing equipment that has come off-lease, management may determine at some point that re-leasing the assets may provide a superior return for investors and would then execute another lease. Upon entering into a new lease contract, management will estimate the residual value once again and resume depreciation. If, and when, the Company, at any time, determines that depreciation in value may have occurred with respect to an asset held-for-sale, the Company would review the value to determine whether a material reduction in value had occurred and recognize any appropriate impairment. All lease assets, including off-lease assets, are subject to the Company’s quarterly impairment analysis, as described below. Maintenance costs associated with the Fund’s portfolio of leased assets are expensed as incurred. Major additions and betterments are capitalized. Operating lease revenue is recognized on a straight-line basis over the term of the underlying leases. The initial lease terms will vary as to the type of equipment subject to the leases, the needs of the lessees and the terms to be negotiated, but initial leases are generally on terms from 36 to 120 months. The difference between rent received and rental revenue recognized is recorded as unearned operating lease income on the balance sheet. Operating leases are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management considers the equipment underlying the lease contracts for impairment and periodically reviews the credit worthiness of all operating lessees with payments outstanding less than 90 days. Based upon management’s judgment, the related operating leases may be placed on non-accrual status. Leases placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid lease payments is probable. Until such time, revenues are recognized on a cash basis. Upon adoption of Accounting Standards Update (“ASU”) 2016-02, provisions for credit losses relating to operating leases are now included in lease income in the Company’s financial statements. Provisions for credit losses prior to January 1, 2019 were previously included in operating expenses in the Company’s financial statements. Initial direct costs: In 2019, with the adoption of ASU 2016-01, certain costs associated with the execution of the Company’s leases, which were previously capitalized and amortized over the life of their respective leases, are expensed as incurred. In 2018 and prior, the Company capitalized initial direct costs (“IDC”) associated with the origination and funding of lease assets and investments in notes receivable. IDC includes both internal costs (e.g., the costs of employees’ activities in connection with successful lease and loan originations) and external broker fees incurred with such originations. The costs are amortized on a lease by lease (or note by note) basis based on actual lease term using a straight-line method for operating leases and the effective interest rate method for direct financing leases and notes receivable. Upon disposal of the underlying lease assets and notes receivable, both the initial direct costs and the associated accumulated amortization are relieved. Costs related to leases or notes receivable that are not consummated are not eligible for capitalization as initial direct costs and are expensed as acquisition expense. Fair Value: Fair value measurements and disclosures are based on a fair value hierarchy as determined by significant inputs used to measure fair value. The three levels of inputs within the fair value hierarchy are defined as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, generally on a national exchange. Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuations in which all significant inputs are observable in the market. Level 3 – Valuation is modeled using significant inputs that are unobservable in the market. These unobservable inputs reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset or liability. The Company’s valuation policy is determined by members of the Asset Management, Credit and Accounting departments. Whenever possible, the policy is to obtain quoted market prices in active markets to estimate fair values for recognition and disclosure purposes. Where quoted market prices in active markets are not available, fair values are estimated using discounted cash flow analyses, broker quotes, information from third party remarketing agents, third party appraisals of collateral and/or other valuation techniques. These techniques are significantly affected by certain of the Company’s assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs are not considered in estimating fair values. As the Company is responsible for determining fair value, an analysis is performed on prices obtained from third parties. Such analysis is performed by asset management and credit department personnel who are familiar with the Company’s investments in equipment, notes receivable and equity securities of venture companies. The analysis may include a periodic review of price fluctuations and validation of numbers obtained from a specific third party by reference to multiple representative sources. Per Unit data: Net income (loss) and distributions per Unit are based upon the weighted average number of Other Members Units outstanding during the period. Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-03, Codification Improvements to Financial Instruments (“ASU 2020-03”). ASU 2020-03 improves and clarifies various financial instruments topics, including the current expected credit losses (CECL) standard issued in 2016. ASU 2020-03 includes seven different issues that describe the areas of improvement and the related amendments to GAAP that are intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments have different effective dates. Management is currently evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on the Fund’s financial statements and disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326) (“ASU 2016-13”). The main objective of this Update is to provide financial statement users with more decision useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. Management is currently evaluating the standard and expects the Update may potentially result in an increase in the allowance for credit losses given the change to estimated losses over the contractual life adjusted for expected prepayments. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments — Credit Losses (“ASU 2018-19”). The new standard clarifies certain aspects of the new CECL impairment model in ASU 2016-13. The amendment clarifies that receivables arising from operating leases are within the scope of ASC 842, rather than ASC 326; however, it will be applicable to the Companies note receivables and direct financing leases, if any. The effective date and transition requirements in this Update are the same as the effective dates and transition requirements in Update 2016-13, as amended by this Update, which is for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Management is currently evaluating the impact of the standard on the financial statements and related disclosure requirements. On August 15, 2019 the FASB issued a proposed ASU that would grant certain companies additional time to implement FASB standards on CECL and hedging. The proposed ASU defers the effective date for CECL to fiscal periods beginning after December 15, 2022, including interim periods within those fiscal years; and defers the effective date for hedging to fiscal periods beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The ASU was approved on October 16, 2019. In February 2020, the FASB issued ASU 2020-02 and delayed the effective date of Topic 326 until fiscal year beginning after December 15, 2022. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (“ASU 2018-13”), which amends the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. This ASU modifies disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Fund adopted ASU 2018-13 on January 1, 2020. Such adoption did not have a significant impact on the Fund’s financial statements and related disclosure requirements. |
Allowance for Credit Losses
Allowance for Credit Losses | 3 Months Ended |
Mar. 31, 2020 | |
Allowance for Credit Losses [Abstract] | |
Allowance for Credit Losses | 3. Allowance for credit losses: The Company’s allowance for credit losses are as follows (in thousands): Allowance for Doubtful Accounts Operating Leases Balance December 31, 2018 $ — Provision for credit losses 1 Balance March 31, 2019 $ 1 Balance December 31, 2019 $ 5 Provision for credit losses 2 Balance March 31, 2020 $ 7 |
Equipment Under Operating Lease
Equipment Under Operating Leases, Net | 3 Months Ended |
Mar. 31, 2020 | |
Equipment Under Operating Leases, Net [Abstract] | |
Equipment Under Operating Leases, Net | 4. Equipment under Operating Leases, net: The Company’s equipment under operating leases consists of the following (in thousands): Depreciation/ Reclassifications, Amortization Balance Improvements/ Expense or Balance December 31, Dispositions and Amortization March 31, 2019 Impairment Losses of Leases 2020 Equipment under operating leases, net $ 11,477 $ (2) $ (332) $ 11,143 Assets held for sale or lease, net 3,180 (7) — 3,173 Total $ 14,657 $ (9) $ (332) $ 14,316 The Company utilizes a straight line depreciation method over the term of the equipment lease for equipment on operating leases currently in its portfolio. Depreciation expense on the Company’s equipment totaled $332 thousand and $649 thousand for the three months ended March 31, 2020 and 2019, respectively. All of the Company’s lease asset purchases and capital improvements were made during the years from 2009 through 2015. Operating leases: Property on operating leases consists of the following (in thousands): Balance Balance December 31, Reclassifications March 31, 2019 Additions or Dispositions 2020 Marine vessel $ 19,410 $ — $ — $ 19,410 Transportation, rail 4,010 — — 4,010 Transportation 208 — — 208 Manufacturing 5,292 — (93) 5,199 Materials handling 326 — (43) 283 Construction 919 — — 919 Agriculture 542 — — 542 30,707 — (136) 30,571 Less accumulated depreciation (19,230) (332) 134 (19,428) Total $ 11,477 $ (332) $ (2) $ 11,143 The average estimated residual value for assets on operating leases was 21% of the assets’ original cost at March 31, 2020 and 25% at December 31, 2019. There were no operating leases in non-accrual status at both March 31, 2020 and December 31, 2019. At March 31, 2020, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands): Operating Leases Nine months ending December 31, 2020 $ 1,159 Year ended December 31, 2021 1,266 1,180 1,164 211 $ 4,980 The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of March 31, 2020 and December 31, 2019, the respective useful lives of each category of lease assets in the Company’s portfolio are as follows (in years): Equipment category Useful Life Transportation, rail 35 - 50 Marine vessel 20 - 30 Manufacturing 10 -15 Agriculture 7 - 10 Construction 7 - 10 Materials handling 7 - 10 Transportation 7 - 10 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 5 . Related party transactions: The terms of the Operating Agreement provide that the Managing Member and/or affiliates are entitled to receive certain fees for equipment management and resale and for management of the Company. The Operating Agreement allows for the reimbursement of costs incurred by the Managing Member and/or affiliates for providing administrative services to the Company. Administrative services provided include Company accounting, investor relations, legal counsel and lease and equipment documentation. The Managing Member is not reimbursed for services whereby it is entitled to receive a separate fee as compensation for such services, such as management of investments. Each of AFS and ATEL Leasing Corporation (“ALC”) is a wholly-owned subsidiary of ATEL Capital Group, Inc. and performs services for the Company on behalf of the Managing Member. Acquisition services, equipment management, lease administration and asset disposition services are performed by ALC; investor relations, communications and general administrative services are performed by AFS. Cost reimbursements to the Managing Member or its affiliates are based on its costs incurred in performing administrative services for the Company. These costs are allocated to each managed entity based on certain criteria such as total assets, number of investors or contributed capital based upon the type of cost incurred. The Managing Member believes that the costs reimbursed are the lower of (i) actual costs incurred on behalf of the Company or (ii) the amount the Company would be required to pay independent parties for comparable administrative services in the same geographic location. The Managing Member and/or affiliates earned fees and billed for reimbursements, pursuant to the Operating Agreement, during the three months ended March 31, 2020 and 2019 as follows (in thousands): Three Months Ended March 31, 2020 2019 Administrative costs reimbursed to Managing Member and/or affiliates $ 116 $ 147 Asset management fees to Managing Member 27 56 $ 143 $ 203 The Fund’s Operating Agreement places an annual and cumulative limit for cost reimbursements to AFS and/or its affiliates. Any reimbursable costs incurred by AFS and/or affiliates during the year exceeding the annual and/or cumulative limits cannot be reimbursed in the current year, though such costs may be reimbursable in future years to the extent such amounts may be payable if within the annual and cumulative limits in such future years. The Fund is a finite life and self-liquidating entity, and AFS and its affiliates have no recourse against the Fund for the amount of any unpaid excess reimbursable administrative expenses. The Fund will continue to require administrative services from AFS and its affiliates through the end of its term, and will therefore continue to incur reimbursable administrative expenses in each year. The Fund has determined that payment of any amounts in excess of the annual and cumulative limits is not probable, and the date any portion of such amount may be paid, if ever, is uncertain. When the Fund completes its liquidation stage and terminates, any unpaid amount will expire unpaid, with no claim by AFS or its affiliates against any liquidation proceeds or any party for the unpaid balance. As of March 31, 2020 and December 31, 2019, the Company has not exceeded the annual and/or cumulative limitations discussed above. |
Non-Recourse Debt
Non-Recourse Debt | 3 Months Ended |
Mar. 31, 2020 | |
Non-Recourse Debt [Abstract] | |
Non-Recourse Debt | 6 . Non-recourse debt: At March 31, 2020, non-recourse debt consists of a note payable to financial institutions. Such note is due in monthly installments. Interest on the note is at 3.40% per annum. The note is secured by assignments of lease payments and pledges of assets. At March 31, 2020, gross operating lease rentals totaled approximately $4.1 million; and the carrying value of the pledged assets is $8.2 million. The note matures in 2024. The non-recourse debt does not contain any material financial covenants. The debt is secured by a specific lien granted by the Company to the non-recourse lender on (and only on) the discounted lease transactions. The lender has recourse only to the following collateral: the leased equipment; the related lease chattel paper; the lease receivables; and proceeds of the foregoing items. The non-recourse obligation is payable solely out of the respective specific security and the Company does not guarantee (nor is the Company otherwise contractually responsible for) the payment of the non-recourse debt as a general obligation or liability of the Company. Although the Company does not have any direct or general liability in connection with the non-recourse debt apart from the security granted, the Company is directly and generally liable and responsible for certain representations, warranties, and covenants made to the lender, such as warranties as to genuineness of the transaction parties’ signatures, as to the genuineness of the respective lease chattel paper or the transaction as a whole, or as to the Company’s good title to or perfected interest in the secured collateral, as well as similar representations, warranties and covenants typically provided by non-recourse borrowers and customary in the equipment finance industry, and are viewed by such industry as being consistent with non-recourse discount financing obligations. Accordingly, as there are no financial covenants or ratios imposed on the Company in connection with the non-recourse debt, the Company has determined that there are no material covenants with respect to the non-recourse debt that warrant footnote disclosure. Future minimum payments of non-recourse debt are as follows (in thousands): Principal Interest Total Nine months ending December 31, 2020 $ 689 $ 89 $ 778 Year ended December 31, 2021 946 91 1,037 978 58 1,036 1,012 25 1,037 172 1 173 $ 3,797 $ 264 $ 4,061 |
Borrowing Facilities
Borrowing Facilities | 3 Months Ended |
Mar. 31, 2020 | |
Borrowing Facilities [Abstract] | |
Borrowing Facilities | 7. Borrowing facilities: The Company was a party with ATEL Capital Group and certain subsidiaries, and affiliated funds in a $75 million revolving credit facility with a syndicate of financial institutions as lenders. The credit facility was renewed during the fourth quarter of 2019, upon which, the Company ceased to be a participant . |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2020 | |
Commitments [Abstract] | |
Commitments | 8 . Commitments: At March 31, 2020, there were no commitments to purchase lease assets and fund investments in notes receivable. |
Members' Capital
Members' Capital | 3 Months Ended |
Mar. 31, 2020 | |
Members' Capital [Abstract] | |
Members' Capital | 9. Members’ capital: A total of 8,246,919 Units were issued and outstanding at March 31, 2020 and December 31, 2019, including the 50 Units issued to the initial Member (Managing Member). The Fund was authorized to issue up to 15,000,000 Units in addition to the Units issued to the initial Member. The Company has the right, exercisable at the Managing Member’s discretion, but not the obligation, to repurchase Units of a Unitholder who ceases to be a U.S. Citizen, for a price equal to 100% of the holder’s capital account. The Company is otherwise permitted, but not required, to repurchase Units upon a holder’s request. The repurchase of Fund units is made in accordance with Section 13 of the Amended and Restated Limited Liability Company Operating Agreement. The repurchase would be at the discretion of the Managing Member on terms it determines to be appropriate under given circumstances, in the event that the Managing Member deems such repurchase to be in the best interest of the Company; provided, the Company is never required to repurchase any Units. Upon the repurchase of any Units by the Fund, the tendered Units are cancelled. Units repurchased in prior periods were repurchased at amounts representing the original investment less cumulative distributions made to the Unitholder with respect to the Units. All Units repurchased during a quarter are deemed to be repurchased effective the last day of the preceding quarter, and are not deemed to be outstanding during, or entitled to allocations of net income, net loss or distributions for the quarter in which such repurchase occurs. The Fund’s net income or net losses are to be allocated 100% to the Members. From the commencement of the Fund until the initial closing date, net income and net loss were allocated 99% to the Managing Member and 1% to the initial Other Members. Commencing with the initial closing date, net income and net loss are to be allocated 92.5% to the Other Members and 7.5% to the Managing Member. Fund distributions are to be allocated 7.5% to the Managing Member and 92.5% to the Other Members. The Company commenced periodic distributions in December 2009. Distributions to the Other Members for the three months ended March 31, 2020 and 2019 were as follows (in thousands except Units and per Unit data): Three Months Ended March 31, 2020 2019 Distributions declared $ 2,103 $ — Weighted average number of Units outstanding 8,246,919 8,246,919 Weighted average distributions per Unit $ 0.26 $ — |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 10. Fair value measurements: Under applicable accounting standards, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. At March 31, 2020 and December 31, 2019, certain investment in securities registered for public sale and warrants were measured on a recurring basis. In addition, certain off-lease equipment deemed impaired were measured at fair value on a non-recurring basis as of March 31, 2020 and December 31, 2019. Such fair value adjustments utilized the following methodology: Warrants (recurring) Warrants owned by the Company are not registered for public sale, but are considered derivatives and are carried on the balance sheet at an estimated fair value at the end of the period. The valuation of the warrants was determined using a Black-Scholes formulation of value based upon the stock price(s), the exercise price(s), the volatility of comparable venture companies, time to maturity, and a risk free interest rate for the term(s) of the warrant exercise(s). As of March 31, 2020 and December 31, 2019, the calculated fair value of the Fund’s warrant portfolio approximated $40 thousand and $271 thousand, respectively. Such valuations are classified within Level 3 of the valuation hierarchy. The fair value of warrants that were accounted for on a recurring basis for the three months ended March 31, 2020 and 2019 and classified as level 3 are as follows (in thousands): Three Months Ended March 31, 2020 2019 Fair value of warrants at beginning of period $ 271 $ 229 Unrealized (loss) gain on fair value adjustment for warrants (231) 1 Fair value of warrants at end of period $ 40 $ 230 Investment securities (recurring) The Company’s investment securities registered for public sale with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company’s results of operations. The fair value of investment securities that were accounted for on a recurring basis as of the three months ended March 31, 2020 and 2019 and classified as Level 1 are as follows (in thousands): Three Months Ended March 31, 2020 2019 Fair value of securities at beginning of period $ 15 $ 112 Unrealized loss on fair value of securities (1) (8) Fair value of investment securities at end of period $ 14 $ 104 Impaired off-lease equipment (non-recurring) Subsequent to the first quarter of 2019, the Company had deemed certain equipment to be impaired and recorded fair value adjustments totaling $801 thousand, all of which were recorded during the third quarter of 2019. Such adjustments reduced the cost basis of certain off-lease transportation equipment. There was no additional impairment recorded during the first quarter of 2020. Level 1 Level 2 Level 3 March 31, Estimated Estimated Estimated 2020 Fair Value Fair Value Fair Value Assets measured at fair value on a non-recurring basis (in thousands): Impaired lease and off-lease equipment $ 96 $ — $ — $ 96 Level 1 Level 2 Level 3 December 31, Estimated Estimated Estimated 2019 Fair Value Fair Value Fair Value Assets measured at fair value on a non-recurring basis (in thousands): Impaired lease and off-lease equipment $ 104 $ — $ — $ 104 Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, the fair value of impaired lease assets were classified within Level 3 of the valuation hierarchy as the data sources utilized for the valuation of such assets reflect significant inputs that are unobservable in the market. Such valuation utilizes a market approach technique and uses inputs that reflect the sales price of similar assets sold by affiliates and/or information from third party remarketing agents not readily available in the market. The following tables summarize the valuation techniques and significant unobservable inputs used for the Company’s recurring and non-recurring fair value calculation/adjustments categorized as Level 3 in the fair value hierarchy at March 31, 2020 and December 31, 2019: March 31, 2020 Valuation Valuation Unobservable Range of Input Values Name Frequency Technique Inputs (Weighted Average) Warrants Recurring Black-Scholes formulation Stock price $0.12 - $5.23 ($0.29) Exercise price $0.10 - $1,000.00 ($0.49) Time to maturity (in years) 0.37 - 5.83 (1.66) Risk-free interest rate 0.15% - 0.45% (0.22%) Annualized volatility 35.15% - 114.63% (46.41%) Off-lease equipment Non-recurring Market Approach Third Party Agents' Pricing $0 - $8,000 Quotes - per equipment (total of $96,000) Equipment Condition Poor to Average December 31, 2019 Valuation Valuation Unobservable Range of Input Values Name Frequency Technique Inputs (Weighted Average) Warrants Recurring Black-Scholes formulation Stock price $0.12 - $12.92 ($0.38) Exercise price $0.10 - $1,000.00 ($0.50) Time to maturity (in years) 0.99 - 6.08 (2.05) Risk-free interest rate 1.58% - 1.73% (1.59%) Annualized volatility 43.92% - 109.07% (50.73%) Off-lease equipment Non-recurring Market Approach Third Party Agents' Pricing $0 - $8,000 Quotes - per equipment (total of $104,000) Equipment Condition Poor to Average The following disclosure of the estimated fair value of financial instruments is made in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification. Fair value estimates, methods and assumptions, set forth below for the Company’s financial instruments, are made solely to comply with the requirements of the Financial Instruments Topic and should be read in conjunction with the Company’s financial statements and related notes. The Company determines the estimated fair value amounts by using market information and valuation methodologies that it considers appropriate and consistent with the fair value accounting guidance. Considerable judgment is required to interpret market data to develop the estimates of fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Cash and cash equivalents The recorded amounts of the Company’s cash and cash equivalents approximate fair value because of the liquidity and short-term maturity of these instruments. Non-recourse debt The fair value of the Company’s non-recourse debt is estimated using discounted cash flow analyses, based upon current market borrowing rates for similar types of borrowing arrangements. Commitments and Contingencies Management has determined that no recognition for the fair value of the Company’s loan commitments is necessary because their terms are made on a market rate basis and require borrowers to be in compliance with the Company’s credit requirements at the time of funding. The fair value of contingent liabilities (or guarantees) is not considered material because management believes there has been no event that has occurred wherein a guarantee liability has been incurred or will likely be incurred. The following tables present estimated fair values of the Company’s financial instruments in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification at March 31, 2020 Fair Value Measurements at March 31, 2020 Carrying Value Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents $ 607 $ 607 $ — $ — $ 607 Investment in securities 14 14 — — 14 Warrants, fair value 40 — — 40 40 Financial liabilities: Non-recourse debt 3,797 — — 3,817 3,817 Fair Value Measurements at December 31, 2019 Carrying Value Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents $ 2,831 $ 2,831 $ — $ — $ 2,831 Investment in securities 15 15 — — 15 Warrants, fair value 271 — — 271 271 Financial liabilities: Non-recourse debt 4,022 — — 4,027 4,027 |
Global Health Emergency
Global Health Emergency | 3 Months Ended |
Mar. 31, 2020 | |
Global Health Emergency [Abstract] | |
Global Health Emergency | 11. Global health emergency: On January 30, 2020, the World Health Organization declared the novel coronavirus outbreak a public health emergency. The Fund’s operations is located in California, which has restricted gatherings of people due to the coronavirus outbreak. At present, the Fund’s operations have not been adversely affected and continues to function effectively. Due to the dynamic nature of these unprecedented circumstances and possible business disruption, the Fund will continue to monitor the situation closely, but given the uncertainty about the situation, an estimate of the future impact, if any, cannot be made at this time. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policy) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation: The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (‘‘GAAP’’) for interim financial information and with the instructions to Form 10-Q as mandated by the Securities and Exchange Commission. The unaudited interim financial statements reflect all adjustments which are, in the opinion of the Managing Member, necessary for a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal recurring nature. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the full year. Footnote and tabular amounts are presented in thousands, except as to Units and per Unit data. In preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Managing Member, events that have occurred after March 31, 2020, up until the issuance of the financial statements. No events were noted which would require disclosure in the footnotes to the financial statements. |
Cash and Cash Equivalents | Cash and cash equivalents: Cash and cash equivalents include cash in banks and cash equivalent investments such as U.S. Treasury instruments with original and/or purchased maturities of ninety days or less. |
Use of Estimates | Use of Estimates: The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates. Such estimates primarily relate to the determination of residual values at the end of the lease term and expected future cash flows used for impairment analysis purposes and for determination of the allowance for doubtful accounts and reserve for credit losses on notes receivable. |
Segment Reporting | Segment reporting: The Company is organized into one operating segment for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment in the United States. The Company’s principal decision makers are the Managing Member’s Chief Executive Officer and its Chief Financial Officer and Chief Operating Officer. The Company believes that its equipment leasing business operates as one reportable segment because: a) the Company measures profit and loss at the equipment portfolio level as a whole; b) the principal decision makers do not review information based on any operating segment other than the equipment leasing transaction portfolio; c) the Company does not maintain discrete financial information on any specific segment other than its equipment financing operations; d) the Company has not chosen to organize its business around different products and services other than equipment lease financing; and e) the Company has not chosen to organize its business around geographic areas. The primary geographic region in which the Company seeks leasing opportunities is North America. For the three months ended March 31, 2020 and 2019, and as of March 31, 2020 and December 31, 2019, all of the Company’s current operating revenues and long-lived assets relate to customers domiciled in the United States. |
Accounts Receivable | Accounts receivable: Accounts receivable represent the amounts billed under operating and direct financing lease contracts, and notes receivable which are currently due to the Company. Allowances for doubtful accounts are typically established based on historical charge off and collection experience and the collectability of specifically identified lessees and borrowers, and invoiced amounts. Accounts receivable deemed uncollectible are generally charged off against the allowance on a specific identification basis. Recoveries of amounts that were previously written-off are recorded as other income in the period received. |
Investment in Securities | Investment in securities: Purchased securities The Company’s purchased securities registered for public sale with readily determinable fair values are measured at fair value with any changes in fair value recognized in the Company’s results of operations. The Company’s purchased securities that do not have readily determinable fair values are measured at cost minus impairment, and adjusted for changes in observable prices. Factors considered by the Managing Member in determining fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and indications of the issuer’s subsequent ability to raise capital. The Company had $98 thousand and $9 9 thousand of purchased securities at March 31, 2020 and December 31, 2019, respectively. There were no impairment adjustments during the three months ended March 31, 2020 and 2019. For securities with readily determinable fair values, unrealized losses of $1 thousand and $8 thousand were recorded during the three months ended March 31, 2020 and 2019, respectively. There were no fair value adjustments on investment securities that do not have readily determinable fair values during the three months ended March 31, 2020 and 2019. Cumulatively, a total of $227 thousand was recorded to reduce the value of such investment in securities based on changes in observable prices. Warrants Warrants owned by the Company are not registered for public sale, but are considered derivatives and are reflected at an estimated fair value on the balance sheet as determined by the Managing Member. The Company recorded an unrealized loss of $231 thousand and an unrealized gain of $1 thousand on fair value adjustment of its warrants during the three months ended March 31, 2020 and March 31, 2019, respectively. |
Credit Risk | Credit risk: Financial instruments that potentially subject the Company to concentrations of credit risk include cash and cash equivalents, operating and direct financing lease receivables, notes receivable and accounts receivable. The Company places the majority of its cash deposits in noninterest-bearing accounts with financial institutions that have no less than $10 billion in assets. Such deposits are insured up to $250 thousand. The remainder of the Funds’ cash is temporarily invested in U.S. Treasury denominated instruments. The concentration of such deposits and temporary cash investments is not deemed to create a significant risk to the Company. Accounts and notes receivable represent amounts due from lessees or borrowers in various industries, related to equipment on operating and direct financing leases or notes receivable. |
Equipment on Operating Leases and Related Revenue Recognition | Equipment on operating leases and related revenue recognition: Equipment subject to operating leases is stated at cost. Depreciation is being recognized on a straight-line method over the terms of the related leases to the equipment’s estimated residual values. Off-lease equipment is generally not subject to depreciation. The Company depreciates all lease assets, in accordance with guidelines consistent with Accounting Standards Codification (“ASC”) 360-10-35-3, over the periods of the lease terms contained in each asset’s respective lease contract to the estimated residual value at the end of the lease contract. All lease assets are purchased only concurrent with the execution of a lease commitment by the lessee. Thus, the original depreciation period corresponds with the term of the original lease. Once the term of an original lease contract is completed, the subject property is typically sold to the existing user, re-leased to the existing user, or, when off-lease, is held for sale. Assets which are re-leased continue to be depreciated using the terms of the new lease agreements and the estimated residual values at the end of the new lease terms, adjusted downward as necessary. Assets classified as held-for-sale are carried at the lower of carrying amount, or the fair value less cost to sell (ASC 360-10-35-43). The Company does not use the equipment held in its portfolio, but holds it solely for lease and ultimate sale. In the course of marketing equipment that has come off-lease, management may determine at some point that re-leasing the assets may provide a superior return for investors and would then execute another lease. Upon entering into a new lease contract, management will estimate the residual value once again and resume depreciation. If, and when, the Company, at any time, determines that depreciation in value may have occurred with respect to an asset held-for-sale, the Company would review the value to determine whether a material reduction in value had occurred and recognize any appropriate impairment. All lease assets, including off-lease assets, are subject to the Company’s quarterly impairment analysis, as described below. Maintenance costs associated with the Fund’s portfolio of leased assets are expensed as incurred. Major additions and betterments are capitalized. Operating lease revenue is recognized on a straight-line basis over the term of the underlying leases. The initial lease terms will vary as to the type of equipment subject to the leases, the needs of the lessees and the terms to be negotiated, but initial leases are generally on terms from 36 to 120 months. The difference between rent received and rental revenue recognized is recorded as unearned operating lease income on the balance sheet. Operating leases are generally placed in a non-accrual status (i.e., no revenue is recognized) when payments are more than 90 days past due. Additionally, management considers the equipment underlying the lease contracts for impairment and periodically reviews the credit worthiness of all operating lessees with payments outstanding less than 90 days. Based upon management’s judgment, the related operating leases may be placed on non-accrual status. Leases placed on non-accrual status are only returned to an accrual status when the account has been brought current and management believes recovery of the remaining unpaid lease payments is probable. Until such time, revenues are recognized on a cash basis. Upon adoption of Accounting Standards Update (“ASU”) 2016-02, provisions for credit losses relating to operating leases are now included in lease income in the Company’s financial statements. Provisions for credit losses prior to January 1, 2019 were previously included in operating expenses in the Company’s financial statements. |
Initial Direct Costs | Initial direct costs: In 2019, with the adoption of ASU 2016-01, certain costs associated with the execution of the Company’s leases, which were previously capitalized and amortized over the life of their respective leases, are expensed as incurred. In 2018 and prior, the Company capitalized initial direct costs (“IDC”) associated with the origination and funding of lease assets and investments in notes receivable. IDC includes both internal costs (e.g., the costs of employees’ activities in connection with successful lease and loan originations) and external broker fees incurred with such originations. The costs are amortized on a lease by lease (or note by note) basis based on actual lease term using a straight-line method for operating leases and the effective interest rate method for direct financing leases and notes receivable. Upon disposal of the underlying lease assets and notes receivable, both the initial direct costs and the associated accumulated amortization are relieved. Costs related to leases or notes receivable that are not consummated are not eligible for capitalization as initial direct costs and are expensed as acquisition expense. |
Fair Value | Fair Value: Fair value measurements and disclosures are based on a fair value hierarchy as determined by significant inputs used to measure fair value. The three levels of inputs within the fair value hierarchy are defined as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, generally on a national exchange. Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuations in which all significant inputs are observable in the market. Level 3 – Valuation is modeled using significant inputs that are unobservable in the market. These unobservable inputs reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset or liability. The Company’s valuation policy is determined by members of the Asset Management, Credit and Accounting departments. Whenever possible, the policy is to obtain quoted market prices in active markets to estimate fair values for recognition and disclosure purposes. Where quoted market prices in active markets are not available, fair values are estimated using discounted cash flow analyses, broker quotes, information from third party remarketing agents, third party appraisals of collateral and/or other valuation techniques. These techniques are significantly affected by certain of the Company’s assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs are not considered in estimating fair values. As the Company is responsible for determining fair value, an analysis is performed on prices obtained from third parties. Such analysis is performed by asset management and credit department personnel who are familiar with the Company’s investments in equipment, notes receivable and equity securities of venture companies. The analysis may include a periodic review of price fluctuations and validation of numbers obtained from a specific third party by reference to multiple representative sources. |
Per Unit Data | Per Unit data: Net income (loss) and distributions per Unit are based upon the weighted average number of Other Members Units outstanding during the period. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-03, Codification Improvements to Financial Instruments (“ASU 2020-03”). ASU 2020-03 improves and clarifies various financial instruments topics, including the current expected credit losses (CECL) standard issued in 2016. ASU 2020-03 includes seven different issues that describe the areas of improvement and the related amendments to GAAP that are intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments have different effective dates. Management is currently evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on the Fund’s financial statements and disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326) (“ASU 2016-13”). The main objective of this Update is to provide financial statement users with more decision useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018. Management is currently evaluating the standard and expects the Update may potentially result in an increase in the allowance for credit losses given the change to estimated losses over the contractual life adjusted for expected prepayments. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments — Credit Losses (“ASU 2018-19”). The new standard clarifies certain aspects of the new CECL impairment model in ASU 2016-13. The amendment clarifies that receivables arising from operating leases are within the scope of ASC 842, rather than ASC 326; however, it will be applicable to the Companies note receivables and direct financing leases, if any. The effective date and transition requirements in this Update are the same as the effective dates and transition requirements in Update 2016-13, as amended by this Update, which is for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Management is currently evaluating the impact of the standard on the financial statements and related disclosure requirements. On August 15, 2019 the FASB issued a proposed ASU that would grant certain companies additional time to implement FASB standards on CECL and hedging. The proposed ASU defers the effective date for CECL to fiscal periods beginning after December 15, 2022, including interim periods within those fiscal years; and defers the effective date for hedging to fiscal periods beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The ASU was approved on October 16, 2019. In February 2020, the FASB issued ASU 2020-02 and delayed the effective date of Topic 326 until fiscal year beginning after December 15, 2022. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (“ASU 2018-13”), which amends the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. This ASU modifies disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Fund adopted ASU 2018-13 on January 1, 2020. Such adoption did not have a significant impact on the Fund’s financial statements and related disclosure requirements. |
Allowance for Credit Losses (Ta
Allowance for Credit Losses (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Allowance for Credit Losses [Abstract] | |
Activity in Allowance for Doubtful Accounts | The Company’s allowance for credit losses are as follows (in thousands): Allowance for Doubtful Accounts Operating Leases Balance December 31, 2018 $ — Provision for credit losses 1 Balance March 31, 2019 $ 1 Balance December 31, 2019 $ 5 Provision for credit losses 2 Balance March 31, 2020 $ 7 |
Equipment Under Operating Lea_2
Equipment Under Operating Leases, Net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equipment Under Operating Leases, Net [Abstract] | |
Investment in Leases | The Company’s equipment under operating leases consists of the following (in thousands): Depreciation/ Reclassifications, Amortization Balance Improvements/ Expense or Balance December 31, Dispositions and Amortization March 31, 2019 Impairment Losses of Leases 2020 Equipment under operating leases, net $ 11,477 $ (2) $ (332) $ 11,143 Assets held for sale or lease, net 3,180 (7) — 3,173 Total $ 14,657 $ (9) $ (332) $ 14,316 |
Property On Operating Leases | Property on operating leases consists of the following (in thousands): Balance Balance December 31, Reclassifications March 31, 2019 Additions or Dispositions 2020 Marine vessel $ 19,410 $ — $ — $ 19,410 Transportation, rail 4,010 — — 4,010 Transportation 208 — — 208 Manufacturing 5,292 — (93) 5,199 Materials handling 326 — (43) 283 Construction 919 — — 919 Agriculture 542 — — 542 30,707 — (136) 30,571 Less accumulated depreciation (19,230) (332) 134 (19,428) Total $ 11,477 $ (332) $ (2) $ 11,143 |
Future Minimum Lease Payments Receivable | At March 31, 2020, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands): Operating Leases Nine months ending December 31, 2020 $ 1,159 Year ended December 31, 2021 1,266 1,180 1,164 211 $ 4,980 |
Schedule of Useful Lives of Lease Assets | The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of March 31, 2020 and December 31, 2019, the respective useful lives of each category of lease assets in the Company’s portfolio are as follows (in years): Equipment category Useful Life Transportation, rail 35 - 50 Marine vessel 20 - 30 Manufacturing 10 -15 Agriculture 7 - 10 Construction 7 - 10 Materials handling 7 - 10 Transportation 7 - 10 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Managing Member and/or Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement | The Managing Member and/or affiliates earned fees and billed for reimbursements, pursuant to the Operating Agreement, during the three months ended March 31, 2020 and 2019 as follows (in thousands): Three Months Ended March 31, 2020 2019 Administrative costs reimbursed to Managing Member and/or affiliates $ 116 $ 147 Asset management fees to Managing Member 27 56 $ 143 $ 203 |
Non-Recourse Debt (Tables)
Non-Recourse Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Non-Recourse Debt [Abstract] | |
Future Minimum Payments of Non-Recourse Debt | Future minimum payments of non-recourse debt are as follows (in thousands): Principal Interest Total Nine months ending December 31, 2020 $ 689 $ 89 $ 778 Year ended December 31, 2021 946 91 1,037 978 58 1,036 1,012 25 1,037 172 1 173 $ 3,797 $ 264 $ 4,061 |
Members' Capital (Tables)
Members' Capital (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Members' Capital [Abstract] | |
Distributions to Other Members | Distributions to the Other Members for the three months ended March 31, 2020 and 2019 were as follows (in thousands except Units and per Unit data): Three Months Ended March 31, 2020 2019 Distributions declared $ 2,103 $ — Weighted average number of Units outstanding 8,246,919 8,246,919 Weighted average distributions per Unit $ 0.26 $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurements [Abstract] | |
Fair Value, Warrants Measured on Recurring Basis | The fair value of warrants that were accounted for on a recurring basis for the three months ended March 31, 2020 and 2019 and classified as level 3 are as follows (in thousands): Three Months Ended March 31, 2020 2019 Fair value of warrants at beginning of period $ 271 $ 229 Unrealized (loss) gain on fair value adjustment for warrants (231) 1 Fair value of warrants at end of period $ 40 $ 230 |
Fair Value, Investment Securities Measured on Recurring Basis | The fair value of investment securities that were accounted for on a recurring basis as of the three months ended March 31, 2020 and 2019 and classified as Level 1 are as follows (in thousands): Three Months Ended March 31, 2020 2019 Fair value of securities at beginning of period $ 15 $ 112 Unrealized loss on fair value of securities (1) (8) Fair value of investment securities at end of period $ 14 $ 104 |
Fair Value Measurement of Impaired Assets at Fair Value on Non-Recurring Basis | Subsequent to the first quarter of 2019, the Company had deemed certain equipment to be impaired and recorded fair value adjustments totaling $801 thousand, all of which were recorded during the third quarter of 2019. Such adjustments reduced the cost basis of certain off-lease transportation equipment. There was no additional impairment recorded during the first quarter of 2020. Level 1 Level 2 Level 3 March 31, Estimated Estimated Estimated 2020 Fair Value Fair Value Fair Value Assets measured at fair value on a non-recurring basis (in thousands): Impaired lease and off-lease equipment $ 96 $ — $ — $ 96 Level 1 Level 2 Level 3 December 31, Estimated Estimated Estimated 2019 Fair Value Fair Value Fair Value Assets measured at fair value on a non-recurring basis (in thousands): Impaired lease and off-lease equipment $ 104 $ — $ — $ 104 |
Summary of Valuation Techniques and Significant Unobservable Inputs Used | The following tables summarize the valuation techniques and significant unobservable inputs used for the Company’s recurring and non-recurring fair value calculation/adjustments categorized as Level 3 in the fair value hierarchy at March 31, 2020 and December 31, 2019: March 31, 2020 Valuation Valuation Unobservable Range of Input Values Name Frequency Technique Inputs (Weighted Average) Warrants Recurring Black-Scholes formulation Stock price $0.12 - $5.23 ($0.29) Exercise price $0.10 - $1,000.00 ($0.49) Time to maturity (in years) 0.37 - 5.83 (1.66) Risk-free interest rate 0.15% - 0.45% (0.22%) Annualized volatility 35.15% - 114.63% (46.41%) Off-lease equipment Non-recurring Market Approach Third Party Agents' Pricing $0 - $8,000 Quotes - per equipment (total of $96,000) Equipment Condition Poor to Average December 31, 2019 Valuation Valuation Unobservable Range of Input Values Name Frequency Technique Inputs (Weighted Average) Warrants Recurring Black-Scholes formulation Stock price $0.12 - $12.92 ($0.38) Exercise price $0.10 - $1,000.00 ($0.50) Time to maturity (in years) 0.99 - 6.08 (2.05) Risk-free interest rate 1.58% - 1.73% (1.59%) Annualized volatility 43.92% - 109.07% (50.73%) Off-lease equipment Non-recurring Market Approach Third Party Agents' Pricing $0 - $8,000 Quotes - per equipment (total of $104,000) Equipment Condition Poor to Average |
Estimated Fair Values of Financial Instruments | The following tables present estimated fair values of the Company’s financial instruments in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification at March 31, 2020 Fair Value Measurements at March 31, 2020 Carrying Value Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents $ 607 $ 607 $ — $ — $ 607 Investment in securities 14 14 — — 14 Warrants, fair value 40 — — 40 40 Financial liabilities: Non-recourse debt 3,797 — — 3,817 3,817 Fair Value Measurements at December 31, 2019 Carrying Value Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents $ 2,831 $ 2,831 $ — $ — $ 2,831 Investment in securities 15 15 — — 15 Warrants, fair value 271 — — 271 271 Financial liabilities: Non-recourse debt 4,022 — — 4,027 4,027 |
Organization and Limited Liab_2
Organization and Limited Liability Company Matters (Narrative) (Details) - USD ($) | Dec. 02, 2009 | Oct. 08, 2009 | Mar. 31, 2020 | Oct. 06, 2017 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Feb. 12, 2010 | May 08, 2009 |
Business activities, description | equipment financing and acquiring equipment to engage in equipment leasing and sales activities | |||||||||
Business formation date | Apr. 1, 2009 | |||||||||
Business formation State | California | |||||||||
Business termination date | Dec. 31, 2030 | |||||||||
Public offering of Limited Liability Company Units | 15,000,000 | |||||||||
Public offering of Limited Liability Company Units, price per unit | $ 10 | |||||||||
Sale of Limited Liability Company Units, number of units | 120,000 | |||||||||
Proceeds from sale of Limited Liability Company Units | $ 1,200,000 | |||||||||
Contributions received, net of rescissions | $ 83,500,000 | $ 83,500,000 | ||||||||
Reinvestment period | 6 years | |||||||||
Minimum [Member] | ||||||||||
Amount of aggregate subscriptions for Pennsylvania subscriptions to be released to the Fund | $ 7,500,000 | |||||||||
Contributions received, net of rescissions | $ 7,500,000 | |||||||||
Other Members [Member] | ||||||||||
Units issued | 8,246,919 | 8,246,919 | 8,246,919 | |||||||
Units outstanding | 8,246,919 | 8,246,919 | 8,246,919 | 8,246,919 | 8,246,919 | |||||
Initial Member [Member] | ||||||||||
Contributions of capital | $ 500 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
Equipment on operating leases , depreciation method | straight-line | ||
Warrants, fair value | $ 40 | $ 271 | |
Number of operating segments | segment | 1 | ||
Number of reportable segments | segment | 1 | ||
Investment in securities | $ 98 | $ 99 | |
Impairment losses on investment in securities | 0 | $ 0 | |
Unrealized gain (loss) on fair value adjustment for warrants | (231) | 1 | |
Unrealized gain (loss) on fair valuation of investments in securities | (1) | (8) | |
Securities without readily determinable fair value, fair value adjustments | 0 | 0 | |
Securities with Readily Determinable Fair Values [Member] | |||
Unrealized gain (loss) on fair valuation of investments in securities | (1) | $ (8) | |
Securities without Readily Determinable Fair Values, Cumulative Amount [Member] | |||
Unrealized gain (loss) on fair valuation of investments in securities | 0 | ||
Minimum [Member] | |||
Required assets value of financial institutions for cash deposits | $ 10,000,000 | ||
Operating leases, initial terms | 36 months | ||
Operating leases, period for non-accrual status | 90 days | ||
Maximum [Member] | |||
U.S. Treasury instruments maturity period | 90 days | ||
Cash deposits, insured amount | $ 250 | ||
Operating leases, initial terms | 120 months | ||
Equipment and lessee period of review for impairment | 90 days |
Allowance for Credit Losses (Ac
Allowance for Credit Losses (Activity in Allowance for Doubtful Accounts) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Provision for credit losses | $ 2 | $ 1 |
Allowance For Doubtful Accounts [Member] | Operating Leases [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Beginning Balance | 5 | |
Provision for credit losses | 2 | 1 |
Ending Balance | $ 7 | $ 1 |
Equipment Under Operating Lea_3
Equipment Under Operating Leases, Net (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Equipment Under Operating Leases, Net [Abstract] | |||
Depreciation of operating lease assets | $ 332 | $ 649 | |
Average estimated residual value of assets on operating leases | 21.00% | 25.00% | |
Operating leases in non-accrual status | $ 0 | $ 0 |
Equipment Under Operating Lea_4
Equipment Under Operating Leases, Net (Investment in Leases) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Lessor, Lease, Description [Line Items] | |
Balance December 31, 2019 | $ 14,657 |
Reclassifications, Improvements/ Dispositions and Impairment Losses | (9) |
Depreciation/Amortization Expense or Amortization of Leases | (332) |
Balance March 31, 2020 | 14,316 |
Operating Leases [Member] | |
Lessor, Lease, Description [Line Items] | |
Balance December 31, 2019 | 11,477 |
Reclassifications, Improvements/ Dispositions and Impairment Losses | (2) |
Depreciation/Amortization Expense or Amortization of Leases | (332) |
Balance March 31, 2020 | 11,143 |
Assets Held for Sale or Lease, Net [Member] | |
Lessor, Lease, Description [Line Items] | |
Balance December 31, 2019 | 3,180 |
Reclassifications, Improvements/ Dispositions and Impairment Losses | (7) |
Balance March 31, 2020 | $ 3,173 |
Equipment Under Operating Lea_5
Equipment Under Operating Leases, Net (Property on Operating Leases) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Lessor, Lease, Description [Line Items] | ||
Property on operating leases, gross | $ 30,571 | $ 30,707 |
Less accumulated depreciation | (19,428) | (19,230) |
Property on operating leases, net | 11,143 | 11,477 |
Additions, less accumulated depreciation | (332) | |
Additions, net | (332) | |
Reclassifications or dispositions, gross | (136) | |
Reclassifications or dispositions, less accumulated depreciation | 134 | |
Reclassifications or dispositions, net | (2) | |
Marine Vessel [Member] | ||
Lessor, Lease, Description [Line Items] | ||
Property on operating leases, gross | 19,410 | 19,410 |
Transportation, Rail [Member] | ||
Lessor, Lease, Description [Line Items] | ||
Property on operating leases, gross | 4,010 | 4,010 |
Transportation [Member] | ||
Lessor, Lease, Description [Line Items] | ||
Property on operating leases, gross | 208 | 208 |
Manufacturing [Member] | ||
Lessor, Lease, Description [Line Items] | ||
Property on operating leases, gross | 5,199 | 5,292 |
Reclassifications or dispositions, gross | (93) | |
Materials Handling [Member] | ||
Lessor, Lease, Description [Line Items] | ||
Property on operating leases, gross | 283 | 326 |
Reclassifications or dispositions, gross | (43) | |
Construction [Member] | ||
Lessor, Lease, Description [Line Items] | ||
Property on operating leases, gross | 919 | 919 |
Agriculture [Member] | ||
Lessor, Lease, Description [Line Items] | ||
Property on operating leases, gross | $ 542 | $ 542 |
Equipment Under Operating Lea_6
Equipment Under Operating Leases, Net (Future Minimum Lease Payments Receivable) (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Operating Leases | |
Nine months ending December 31, 2020 | $ 1,159 |
Year ended December 31, 2021 | 1,266 |
2022 | 1,180 |
2023 | 1,164 |
2024 | 211 |
Operating leases, future minimum payments receivable, total | $ 4,980 |
Equipment Under Operating Lea_7
Equipment Under Operating Leases, Net (Schedule of Useful Lives of Lease Assets) (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Transportation, Rail [Member] | Minimum [Member] | |
Lessor, Lease, Description [Line Items] | |
Useful lives of lease assets | 35 years |
Transportation, Rail [Member] | Maximum [Member] | |
Lessor, Lease, Description [Line Items] | |
Useful lives of lease assets | 50 years |
Marine Vessel [Member] | Minimum [Member] | |
Lessor, Lease, Description [Line Items] | |
Useful lives of lease assets | 20 years |
Marine Vessel [Member] | Maximum [Member] | |
Lessor, Lease, Description [Line Items] | |
Useful lives of lease assets | 30 years |
Manufacturing [Member] | Minimum [Member] | |
Lessor, Lease, Description [Line Items] | |
Useful lives of lease assets | 10 years |
Manufacturing [Member] | Maximum [Member] | |
Lessor, Lease, Description [Line Items] | |
Useful lives of lease assets | 15 years |
Agriculture [Member] | Minimum [Member] | |
Lessor, Lease, Description [Line Items] | |
Useful lives of lease assets | 7 years |
Agriculture [Member] | Maximum [Member] | |
Lessor, Lease, Description [Line Items] | |
Useful lives of lease assets | 10 years |
Construction [Member] | Minimum [Member] | |
Lessor, Lease, Description [Line Items] | |
Useful lives of lease assets | 7 years |
Construction [Member] | Maximum [Member] | |
Lessor, Lease, Description [Line Items] | |
Useful lives of lease assets | 10 years |
Materials Handling [Member] | Minimum [Member] | |
Lessor, Lease, Description [Line Items] | |
Useful lives of lease assets | 7 years |
Materials Handling [Member] | Maximum [Member] | |
Lessor, Lease, Description [Line Items] | |
Useful lives of lease assets | 10 years |
Transportation [Member] | Minimum [Member] | |
Lessor, Lease, Description [Line Items] | |
Useful lives of lease assets | 7 years |
Transportation [Member] | Maximum [Member] | |
Lessor, Lease, Description [Line Items] | |
Useful lives of lease assets | 10 years |
Related Party Transactions (Man
Related Party Transactions (Managing Member and/or Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Related Party Transactions [Abstract] | ||
Administrative costs reimbursed to Managing Member and/or affiliates | $ 116 | $ 147 |
Asset management fees to Managing Member | 27 | 56 |
Related party transaction, total | $ 143 | $ 203 |
Non-Recourse Debt (Narrative) (
Non-Recourse Debt (Narrative) (Details) - Non-Recourse Debt [Member] $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Debt Instrument [Line Items] | |
Fixed interest rate on note | 3.40% |
Gross operating lease rentals and future payments on direct financing leases | $ 4.1 |
Carrying value of pledged assets | $ 8.2 |
Note maturity date, description | The note matures in 2024. |
Non-Recourse Debt (Future Minim
Non-Recourse Debt (Future Minimum Payments of Non-Recourse Debt) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Principal | ||
Nine months ending December 31, 2020 | $ 689 | |
Year ended December 31, 2021 | 946 | |
2022 | 978 | |
2023 | 1,012 | |
2024 | 172 | |
Non-recourse debt | 3,797 | $ 4,022 |
Interest | ||
Nine months ending December 31, 2020 | 89 | |
Year ended December 31, 2021 | 91 | |
2022 | 58 | |
2023 | 25 | |
2024 | 1 | |
Long-term debt interest, total | 264 | |
Total | ||
Nine months ending December 31, 2020 | 778 | |
Year ended December 31, 2021 | 1,037 | |
2022 | 1,036 | |
2023 | 1,037 | |
2024 | 173 | |
Long-term debt principal and interest, total | $ 4,061 |
Borrowing Facilities (Narrative
Borrowing Facilities (Narrative) (Details) $ in Millions | Mar. 31, 2020USD ($) |
Revolving Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Maximum amount of Credit Facility | $ 75 |
Commitments (Narrative) (Detail
Commitments (Narrative) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Commitments [Abstract] | |
Commitments to purchase lease assets and fund investments in notes receivable | $ 0 |
Members' Capital (Narrative) (D
Members' Capital (Narrative) (Details) - shares | 3 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Other Members Capital Account [Line Items] | ||||
Potential repurchase price of Units as percentage of holder's capital account | 100.00% | |||
Allocation of net income or net losses | 100.00% | |||
Managing Member [Member] | ||||
Other Members Capital Account [Line Items] | ||||
Operating company net income loss allocation percentage from commencement until initial closing date | 99.00% | |||
Operating company net income loss allocation percentage commencing with initial closing date | 7.50% | |||
Percentage of fund distribution | 7.50% | |||
Other Members [Member] | ||||
Other Members Capital Account [Line Items] | ||||
Members capital account, units issued | 8,246,919 | 8,246,919 | ||
Members capital account, units outstanding | 8,246,919 | 8,246,919 | 8,246,919 | 8,246,919 |
Operating company net income loss allocation percentage from commencement until initial closing date | 1.00% | |||
Operating company net income loss allocation percentage commencing with initial closing date | 92.50% | |||
Percentage of fund distribution | 92.50% | |||
Maximum [Member] | Other Members [Member] | ||||
Other Members Capital Account [Line Items] | ||||
Members capital account, units authorized | 15,000,000 | 15,000,000 | ||
Maximum [Member] | Initial Member [Member] | ||||
Other Members Capital Account [Line Items] | ||||
Members capital account, units issued | 50 | 50 |
Members' Capital (Distributions
Members' Capital (Distributions to Other Members) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Distribution Made to Limited Liability Company (LLC) Member [Line Items] | ||
Distributions declared | $ 2,103 | |
Weighted average number of Units outstanding | 8,246,919 | 8,246,919 |
Other Members [Member] | ||
Distribution Made to Limited Liability Company (LLC) Member [Line Items] | ||
Distributions declared | $ 2,103 | |
Weighted average number of Units outstanding | 8,246,919 | 8,246,919 |
Weighted average distributions per Unit | $ 0.26 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | |
Fair Value Measurements [Abstract] | |||
Warrants, fair value | $ 40 | $ 271 | |
Fair value adjustments recorded on equipment | $ 801 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value, Warrants Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Fair value of warrants at beginning of period | $ 271 | |
Unrealized (loss) gain on fair value adjustment for warrants | 231 | $ (1) |
Fair value of warrants at end of period | 40 | |
Level 3 Estimated Fair Value [Member] | ||
Fair value of warrants at beginning of period | 271 | 229 |
Unrealized (loss) gain on fair value adjustment for warrants | (231) | 1 |
Fair value of warrants at end of period | $ 40 | $ 230 |
Fair Value Measurements (Fair_2
Fair Value Measurements (Fair Value, Investment Securities Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Fair value of securities at beginning of period | $ 15 | |
Unrealized loss on fair value of securities | 1 | $ 8 |
Fair value of securities at end of period | 14 | |
Level 1 Estimated Fair Value [Member] | ||
Fair value of securities at beginning of period | 15 | 112 |
Unrealized loss on fair value of securities | (1) | (8) |
Fair value of securities at end of period | $ 14 | $ 104 |
Fair Value Measurements (Fair_3
Fair Value Measurements (Fair Value Measurement of Impaired Assets at Fair Value on Non-Recurring Basis) (Details) - Nonrecurring [Member] - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired lease and off-lease equipment | $ 96 | $ 104 |
Level 3 Estimated Fair Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired lease and off-lease equipment | $ 96 | $ 104 |
Fair Value Measurements (Summar
Fair Value Measurements (Summary of Valuation Techniques and Significant Unobservable Inputs Used) (Details) | Mar. 31, 2020USD ($)Y$ / shares | Dec. 31, 2019USD ($)Y$ / shares |
Nonrecurring [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Impaired lease and off-lease equipment | $ 96,000 | $ 104,000 |
Level 3 Estimated Fair Value [Member] | Nonrecurring [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Impaired lease and off-lease equipment | 96,000 | 104,000 |
Level 3 Estimated Fair Value [Member] | Nonrecurring [Member] | Impaired Off-Lease Equipment [Member] | Market Approach [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Impaired lease and off-lease equipment | $ 96,000 | $ 104,000 |
Level 3 Estimated Fair Value [Member] | Minimum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Stock Price [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | $ / shares | 0.12 | 0.12 |
Level 3 Estimated Fair Value [Member] | Minimum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Exercise Price [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | $ / shares | 0.10 | 0.10 |
Level 3 Estimated Fair Value [Member] | Minimum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Time to maturity (in years) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | Y | 0.37 | 0.99 |
Level 3 Estimated Fair Value [Member] | Minimum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Risk Free Interest Rate [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | 0.0015 | 0.0158 |
Level 3 Estimated Fair Value [Member] | Minimum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Annualized Volatility [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | 0.3515 | 0.4392 |
Level 3 Estimated Fair Value [Member] | Minimum [Member] | Nonrecurring [Member] | Impaired Off-Lease Equipment [Member] | Market Approach [Member] | Measurement Inputs, Third Party Agents' Estimate of the Value of Collateral [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Impaired lease and off-lease equipment | $ 0 | $ 0 |
Level 3 Estimated Fair Value [Member] | Maximum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Stock Price [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | $ / shares | 5.23 | 12.92 |
Level 3 Estimated Fair Value [Member] | Maximum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Exercise Price [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | $ / shares | 1,000 | 1,000 |
Level 3 Estimated Fair Value [Member] | Maximum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Time to maturity (in years) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | Y | 5.83 | 6.08 |
Level 3 Estimated Fair Value [Member] | Maximum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Risk Free Interest Rate [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | 0.0045 | 0.0173 |
Level 3 Estimated Fair Value [Member] | Maximum [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Annualized Volatility [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | 1.1463 | 1.0907 |
Level 3 Estimated Fair Value [Member] | Maximum [Member] | Nonrecurring [Member] | Impaired Off-Lease Equipment [Member] | Market Approach [Member] | Measurement Inputs, Third Party Agents' Estimate of the Value of Collateral [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Impaired lease and off-lease equipment | $ 8,000 | $ 8,000 |
Level 3 Estimated Fair Value [Member] | Weighted Average [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Stock Price [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | $ / shares | 0.29 | 0.38 |
Level 3 Estimated Fair Value [Member] | Weighted Average [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Exercise Price [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | $ / shares | 0.49 | 0.50 |
Level 3 Estimated Fair Value [Member] | Weighted Average [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Time to maturity (in years) [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | Y | 1.66 | 2.05 |
Level 3 Estimated Fair Value [Member] | Weighted Average [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Risk Free Interest Rate [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | 0.0022 | 0.0159 |
Level 3 Estimated Fair Value [Member] | Weighted Average [Member] | Recurring [Member] | Warrant [Member] | Black-Scholes Model [Member] | Unobservable Inputs, Annualized Volatility [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants, Range of Input Values | 0.4641 | 0.5073 |
Fair Value Measurements (Estima
Fair Value Measurements (Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Financial assets: | ||||
Cash and cash equivalents | $ 607 | $ 2,831 | ||
Investment in securities | 14 | 15 | ||
Warrants, fair value | 40 | 271 | ||
Financial liabilities: | ||||
Non-recourse debt | 3,817 | 4,027 | ||
Level 1 Estimated Fair Value [Member] | ||||
Financial assets: | ||||
Cash and cash equivalents | 607 | 2,831 | ||
Investment in securities | 14 | 15 | $ 104 | $ 112 |
Level 3 Estimated Fair Value [Member] | ||||
Financial assets: | ||||
Warrants, fair value | 40 | 271 | $ 230 | $ 229 |
Financial liabilities: | ||||
Non-recourse debt | 3,817 | 4,027 | ||
Carrying Amount [Member] | ||||
Financial assets: | ||||
Cash and cash equivalents | 607 | 2,831 | ||
Investment in securities | 14 | 15 | ||
Warrants, fair value | 40 | 271 | ||
Financial liabilities: | ||||
Non-recourse debt | $ 3,797 | $ 4,022 |