Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 31, 2015 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | ATEL Growth Capital Fund 8, LLC | |
Entity Central Index Key | 1,537,069 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Units Outstanding | 1,618,296 |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
ASSETS | ||
Cash and cash equivalents | $ 4,106 | $ 4,924 |
Notes receivable, net | 5,530 | 5,845 |
Investment in securities | 289 | 229 |
Fair value of warrants | 669 | 566 |
Due from Affiliates | 68 | 35 |
Prepaid expenses and other assets | 27 | 9 |
Total assets | 10,689 | 11,608 |
Accounts payable and accrued liabilities: | ||
Managing Member | 28 | 28 |
Accrued distributions to Other Members | 250 | 250 |
Other | 2 | |
Total liabilities | $ 280 | $ 278 |
Commitments and contingencies | ||
Members' capital: | ||
Managing Member | ||
Other Members | $ 10,409 | $ 11,330 |
Total Members' capital | 10,409 | 11,330 |
Total liabilities and Members' capital | $ 10,689 | $ 11,608 |
Statements of Operations
Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues: | ||||
Notes receivable interest income, including accretion of net note origination costs and discounts | $ 199 | $ 212 | $ 399 | $ 369 |
Gain on early termination of notes receivable | 14 | 14 | ||
Gain on sales or dispositions of securities | 9 | 46 | 9 | 46 |
Unrealized gain (loss) on fair valuation of warrants | 91 | (11) | 91 | (145) |
Other | 11 | 16 | 22 | 25 |
Total revenues | 310 | 277 | 521 | 309 |
Expenses: | ||||
Acquisition expense | 71 | 103 | 167 | 215 |
Cost reimbursements to affiliates | 48 | 44 | 99 | 76 |
Provision for credit losses | 51 | |||
Asset management fees to Managing Member | 20 | 18 | 37 | 29 |
Professional fees | 12 | 12 | 46 | 45 |
Outside services | 5 | 7 | 17 | 20 |
Taxes on income and franchise fees | 5 | 7 | 2 | |
Bank charges | 3 | 3 | 6 | 6 |
Printing and photocopying | 3 | 2 | 5 | 4 |
Other | 5 | 4 | 18 | 9 |
Total expenses | 172 | 193 | 453 | 406 |
Net income (loss) | 138 | 84 | 68 | (97) |
Net income (loss): | ||||
Managing Member | 50 | 41 | 99 | 75 |
Other Members | 88 | 43 | (31) | (172) |
Net income (loss) | $ 138 | $ 84 | 68 | $ (97) |
Other Members [Member] | ||||
Expenses: | ||||
Net income (loss) | (31) | |||
Net income (loss): | ||||
Net income (loss) | $ (31) | |||
Net loss per Limited Liability Company Unit (Other Members) | $ 0.05 | $ 0.03 | $ (0.02) | $ (0.14) |
Weighted average number of Units outstanding | 1,618,296 | 1,333,399 | 1,618,296 | 1,217,191 |
Statements of Changes in Member
Statements of Changes in Members' Capital - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Beginning Balance | $ 11,330 | $ 7,032 | $ 7,032 | |
Capital contributions | 4,154 | 5,967 | ||
Distributions to Other Members | (890) | (1,542) | ||
Distributions to Managing Member | (99) | (171) | ||
Net (loss) income | $ 138 | 68 | $ (97) | 54 |
Ending Balance | 10,409 | $ 10,409 | 11,330 | |
Selling Commissions to Affiliates [Member] | ||||
Organization and offering costs | (537) | |||
Syndication Costs [Member] | ||||
Organization and offering costs | $ 527 | |||
Other Members [Member] | ||||
Beginning Balance (in units) | 1,618,296 | 1,021,531 | 1,021,531 | |
Beginning Balance | $ 11,330 | $ 7,032 | $ 7,032 | |
Capital contributions | $ 5,967 | |||
Capital contributions (in units) | 596,765 | |||
Distributions to Other Members | $ (445) | (890) | $ (673) | $ (1,542) |
Net (loss) income | $ (31) | $ (117) | ||
Ending Balance (in units) | 1,618,296 | 1,618,296 | 1,618,296 | |
Ending Balance | $ 10,409 | $ 10,409 | $ 11,330 | |
Other Members [Member] | Selling Commissions to Affiliates [Member] | ||||
Organization and offering costs | (537) | |||
Other Members [Member] | Syndication Costs [Member] | ||||
Organization and offering costs | $ 527 | |||
Managing Member [Member] | ||||
Beginning Balance | ||||
Distributions to Managing Member | (99) | $ (171) | ||
Net (loss) income | $ 99 | $ 171 |
Statements of Changes in Membe5
Statements of Changes in Members' Capital (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Other Members [Member] | |||||
Distributions to Other Members, per unit | $ 0.27 | $ 0.28 | $ 0.55 | $ 0.55 | $ 1.10 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Operating activities: | ||||
Net income (loss) | $ 138 | $ 84 | $ 68 | $ (97) |
Adjustment to reconcile net income (loss) to cash used in operating activities: | ||||
Accretion of note discount - warrants | (21) | (17) | (42) | (30) |
Amortization of net note origination costs | 5 | 9 | 11 | 14 |
Gain on early termination of notes receivable | (14) | (14) | ||
Gain on sales or dispositions of securities | (9) | (46) | (9) | (46) |
Provision for credit losses | 51 | |||
Unrealized (gain) loss on fair valuation of warrants | (91) | 11 | (91) | 145 |
Changes in operating assets and liabilities: | ||||
Accounts receivable | 8 | 1 | 6 | |
Due from affiliates | (39) | (33) | ||
Prepaid expenses and other assets | (1) | (3) | (18) | (12) |
Accounts payable, Managing Member | (1) | |||
Accounts payable, other | 33 | 2 | 36 | |
Due to affiliates | (12) | 16 | ||
Unearned fee income related to notes receivable | (2) | 18 | (5) | 19 |
Net cash (used in) provided by operating activities | (12) | 63 | (66) | 37 |
Investing activities: | ||||
Advance payments | (10) | (21) | (108) | |
Purchase of securities | (60) | (204) | (60) | (229) |
Proceeds from early termination of notes receivable | 260 | 260 | ||
Proceeds from sales or dispositions of securities | 9 | 51 | 9 | 51 |
Payments of note origination costs | (3) | (16) | (3) | (33) |
Note receivable and warrants advances | (660) | (3,177) | (1,189) | (3,930) |
Principal payments received on notes receivable | 798 | 658 | 1,480 | 1,077 |
Net cash provided by (used in) investing activities | 74 | (2,449) | 237 | (2,912) |
Financing activities: | ||||
Capital contributions | 2,221 | 4,154 | ||
Net cash (used in) provided by financing activities | (495) | 1,505 | (989) | 2,850 |
Net decrease in cash and cash equivalents | (433) | (881) | (818) | (25) |
Cash and cash equivalents at beginning of period | 4,539 | 3,963 | 4,924 | 3,107 |
Cash and cash equivalents at end of period | 4,106 | 3,082 | 4,106 | 3,082 |
Supplemental disclosures of cash flow information: | ||||
Cash paid during the period for taxes | 5 | 5 | 3 | |
Schedule of non-cash investing and financing transactions: | ||||
Payables to Managing Member and affiliates at period-end (syndication costs) | 2 | 2 | ||
Selling Commissions to Affiliates [Member] | ||||
Financing activities: | ||||
Organization and offering costs | (200) | (374) | ||
Syndication Costs [Member] | ||||
Financing activities: | ||||
Organization and offering costs | (141) | (249) | ||
Other Members [Member] | ||||
Operating activities: | ||||
Net income (loss) | (31) | |||
Financing activities: | ||||
Distributions to Members | (445) | (338) | (890) | (613) |
Schedule of non-cash investing and financing transactions: | ||||
Distributions payable to Members at period-end | 250 | 219 | 250 | 219 |
Managing Member [Member] | ||||
Operating activities: | ||||
Net income (loss) | 99 | |||
Financing activities: | ||||
Distributions to Members | (50) | (37) | (99) | (68) |
Schedule of non-cash investing and financing transactions: | ||||
Distributions payable to Members at period-end | $ 28 | $ 24 | $ 28 | $ 24 |
Organization and Limited Liabil
Organization and Limited Liability Company Matters | 6 Months Ended |
Jun. 30, 2015 | |
Organization and Limited Liability Company Matters [Abstract] | |
Organization and Limited Liability Company Matters | 1. Organization and Limited Liability Company matters: ATEL Growth Capital Fund 8, LLC (the “Company” or the “Fund”) was formed under the laws of the state of California on December 8, 2011 for the purpose of providing financing for the acquisition of equipment and other goods and services used by emerging growth companies and established privately held companies without publicly traded securities, and for providing other forms of financing for, and to acquire equity interests and warrants and rights to purchase equity interests in such companies. The Fund may continue until it is terminated in accordance with the ATEL Growth Capital Fund 8, LLC limited liability company operating agreement dated December 13, 2011 (the “Operating Agreement”). The Managing Member of the Company is AGC Managing Member, LLC (the “Managing Member” or “Manager”), the renamed AGC 8 Managing Member, LLC which was formed in December 2011 as a Nevada limited liability company. Such name change is the result of an amendment to the articles of incorporation filed with the State of Nevada effective March 18, 2014. Contributions in the amount of $ 500 were received as of December 31, 2011, 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 7,500,000 Limited Liability Company Unites (“Units”), at a price of $10 per Unit. As of November 14, 2012 , 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. Pennsylvania subscriptions are subject to a separate escrow and are released to the Fund only at such time as total subscription proceeds received by the Fund from all subscribers, including the escrowed Pennsylvania subscriptions, equal to not less than $ 3.75 million in gross proceeds. Total contributions to the Fund exceeded $ 3.75 million on March 13, 2013, at which time a request was processed to release the Pennsylvania escrowed amounts. The offering was terminated on August 20, 2014. As of June 30, 2015, cumulative contributions, net of rescissions and related distributions paid, totaling $16.2 million ( inclusive of the $500 initial M ember’s capital investment ) have been received. As of such date , a total of 1, 618,296 Units were issued and outstanding . Prior to the termination of its offering, the Fund, or Managing Member on behalf of the Fund, incurred costs in connection with the organization, registration and issuance of the Units. The amount of such costs borne by the Fund was limited by certain provisions of the Operating Agreement. 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) , (iii) provide additional distributions to Unitholders from any proceeds from sales of Equity interests and (iv) provide total cash distributions to Unitholders equal to a desirable rate of return on their investment capital . The Company is governed by the Operating Agreement. 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, 2014, filed with the Securities and Exchange Commission. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of S ignificant A ccounting P olicies: 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 and six months ended June 30 , 2015 are not necessarily indicative of the results to be expected for the full year. Certain prior period amounts may have been reclassified to conform to the current period presentation. These reclassifications had no significant effect on the reported financial position or results of operations. 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 June 30 , 2015, up until the issuance of the financial statements. No events were noted which would require additional disclosure in the footnotes to the financial statements. 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 credit losses on notes receivable and the fair valuation of equity securities and warrants. 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 financing business operates as one reportable segment because: a) the Company measures profit and loss at the portfolio assets level as a whole; b) the principal decision makers do not review information based on any operating segment other than the equipment financing 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 financing; and e) the Company has not chosen to organize its business around geographic areas. The primary geographic region in which the Company seeks financing opportunities is North America. Currently, 100 % of the Company’s operating revenues are from customers domiciled in North America. Investment in securities: From time to time, the Company may purchase securities of its borrowers or receive warrants and rights to purchase securities in connection with its lending arrangements. Purchased securities Purchased securities (primarily preferred stocks) are generally not registered for public sale and are carried at cost. Such securities are adjusted to fair value if the fair value is less than the carrying value and such impairment is deemed by the Managing Member to be other than temporary. 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. Management has concluded that there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the instruments and that it is not practicable to estimate the fair value of the investment because of its illiquidity. The Company made its initial investment in equity securities during the first quarter of 2014. As of June 30, 2015 and December 31, 2014, i nvestments in equity securities totaled $289 thousand and $229 thousand , respectively . There were no sales or dispositions of securities during the three and six months ended June 30, 2015 and 2014. 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. At June 30 , 2015 and December 31, 2014, the Managing Member estimated the fair value of warrants to be $669 thousand and $566 thousand, respectively. During both the three and six months ended June 30 , 2015 , the c ompany recorded unrealized gains of $91 thousand on fair valuation of its warrants. By comparison, during the three and six months ended June 30, 2014 , the Company recorded unrealized losses of $1 1 thousand and $145 thousand, respectively, on the fair valuation of its warrants. The Company also realized $9 thousand of gains on the net exercise of certain warrants during both three - and six- month periods ended June 30 , 2015 . Such realized gains totaled $46 thousand for both the three- and six-month periods ended June 30, 2014. See Note 10 for further discussion. Per Unit data: Net income ( loss ) per Unit is based upon the weighted average number of Other Members Units outstanding during the period. Recent accounting pronouncements: In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. On July 9, 2015, the FASB approved the deferral of the effective date of ASU 2014-09 by one year. As a result, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The board will also allow companies to adopt the standard as of the original effective date, which is January 2017, if they are inclined to do so. Early adoption is not permitted. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company evaluated the impact of the new standard on its financial statements and has determined that such impact is virtually non-existent as the new revenue guideline does not affect revenues from loans, which comprise the majority of the Company’s revenues . In August 2014, the FASB issued Accounting Standards Update 2014-15, Presentation of Financial Statements – Going Concern (subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The new standard provides guidance relative to management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. Management is currently evaluating the standard and its operational and related disclosure requirements . |
Notes Receivable, Net
Notes Receivable, Net | 6 Months Ended |
Jun. 30, 2015 | |
Notes Receivables, Net [Abstract] | |
Notes Receivable, Net | 3. Notes receivable, net: The Company has various notes receivable from borrowers who have financed the purchase of equipment through the Company. As of June 30, 2015, the terms of the notes receivable are from 24 to 42 months and bear interest at implicit or stated rates ranging from 11.26 % to 18.00 % per annum. The notes are secured by the equipment financed and have maturity dates ranging from 2015 through 2018 . The Company had three notes receivable which were on non-accrual status as of June 30, 2015 and December 31, 2014. The notes were originally placed on non-accrual status effective December 1, 2014. As of December 31, 2014, these notes had net recorded investment of $40 thousand, $79 thousand and $53 thousand, respectively, and rates ranging from 11.54% to 11.73% . During the first quarter of 2015, management continued to deem the notes impaired and recorded fair value adjustments totaling $12 thousand, $23 thousand and $1 6 thousand, respectively. Such amounts also represent total fair value adjustments during the three and six months ended June 30, 2015. There were no fair value adjustments during the three and six months ended June 30, 2014. As of June 30, 2015 the fair values of such notes were $2 6 thousand, $5 0 thousand and $3 6 thousand, respectively, before accretion of net note origination costs and discounts. Effective January 1, 2015, the notes were modified to defer the repayment of principal while maintaining interest-only payments at their original rates through June 30, 2015. During the second quarter of 2015, an additional modification was made to the notes which extended the interest only payments through October 31, 2015. As of November 1, 2015, the entire balance outstanding on these notes will be due. The payments will be adjusted such that the ultimate amounts paid will reflect interest earned at a composite rate of 18.00% per annum as related to the entire term of the indebtedness from the original funding date. Payments received on these nonaccrual notes have been fully applied against principal pursuant to the Company’s policy on non-accrual notes. Interest not recorded relative to the original terms of the non-accrual notes approximated $ 10 thousand from December 2014 to June 2015. As of June 30, 2015 , the minimum future payments receivable are as follows (in thousands) : Six months ending December 31, 2015 $ Year ending December 31, 2016 Less: portion representing unearned interest income, net Less: allowance for credit losses Notes receivable, net $ |
Allowance for Credit Losses
Allowance for Credit Losses | 6 Months Ended |
Jun. 30, 2015 | |
Allowance for Credit Losses [Abstract] | |
Allowance for Credit Losses | 4. Allowance for credit losses: The Company’s allowance for credit losses are as follows (in thousands): Allowance for Doubtful Accounts - Notes Receivable Valuation Adjustments - Notes Receivable Total Allowance for Credit Losses Balance December 31, 2013 $ - $ - $ - Provision for credit losses - - - Balance December 31, 2014 - - - Provision for credit losses - Balance June 30, 2015 $ - $ $ Allowance for Doubtful Accounts Accounts receivable represent the amounts billed under notes receivable which are currently due to the Company. Allowances for doubtful accounts are typically established based upon their aging and historical charge off and collection experience and the creditworthiness of specifically identified 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. Accounts receivable 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 periodically reviews the creditworthiness of companies with note payments outstanding less than 90 days. Based upon management’s judgment, such notes may be placed in non-accrual status. Notes 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 receivable is probable. All payments received on amounts billed under notes receivable are applied only against outstanding principal balances. Valuation Adjustments In addition to the allowance established for delinquent accounts receivable, the total allowance also includes anticipated impairment charges on notes receivable. Notes are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest when due according to the contractual terms of the note agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest when due. If it is determined that a loan is impaired with regard to scheduled payments, the Company will perform an analysis of the note to determine if an impairment valuation reserve is necessary. This analysis considers the estimated cash flows from the note, or the collateral value of the property underlying the note when note repayment is collateral dependent. Any required valuation reserve is charged to earnings when determined; and notes are charged off to the allowance as they are deemed uncollectible. The Company’s allowance for credit losses and its recorded investment in notes receivable as of June 30, 2015 and December 31, 2014 were as follows (in thousands): June 30, 2015 Notes Receivable Allowance for credit losses: Ending balance $ Ending balance: individually evaluated for impairment $ Ending balance: collectively evaluated for impairment $ - Ending balance: loans acquired with deteriorated credit quality $ - Financing receivables: Ending balance $ Ending balance: individually evaluated for impairment $ Ending balance: collectively evaluated for impairment $ - Ending balance: loans acquired with deteriorated credit quality $ - December 31, 2014 Notes Receivable Allowance for credit losses: Ending balance $ - Ending balance: individually evaluated for impairment $ - Ending balance: collectively evaluated for impairment $ - Ending balance: loans acquired with deteriorated credit quality $ - Financing receivables: Ending balance $ Ending balance: individually evaluated for impairment $ Ending balance: collectively evaluated for impairment $ - Ending balance: loans acquired with deteriorated credit quality $ - The Company evaluates the credit quality of its notes receivables on a scale equivalent to the following quality indicators related to corporate risk profiles: Pass – Any account whose debtor, co-debtor or any guarantor has a credit rating on publicly traded or privately placed debt issues as rated by Moody’s or S&P for either Senior Unsecured debt, Long Term Issuer rating or Issuer rating that are in the tiers of ratings generally recognized by the investment community as constituting an Investment Grade credit rating; or, has been determined by the Manager to be an Investment Grade Equivalent or High Quality Corporate Credit per its Credit Policy or has a Not Rated internal rating by the Manager and the account is not considered by the Chief Credit Officer of the Manager to fall into one of the three risk profiles below. Special Mention – Any traditional corporate type account with potential weaknesses (e.g. large net losses or major industry downturns) or, any growth capital account that has less than three months of cash as of the end of the calendar quarter to fund their continuing operations. These accounts deserve management’s close attention. If left uncorrected, those potential weaknesses may result in deterioration of the Fund’s receivable at some future date. Substandard – Any account that is inadequately protected by the current worth and paying capacity of the borrower or of the collateral pledged, if any. Accounts that are so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Fund will sustain some loss as the likelihood of fully collecting all receivables may be questionable if the deficiencies are not corrected. Such accounts are on the Manager’s Credit Watch List. Doubtful – Any account where the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Accordingly, an account that is so classified is on the Manager’s Credit Watch List, and has been declared in default and the Manager has repossessed, or is attempting to repossess, the equipment it financed. This category includes impaired notes and leases as applicable. At June 30, 2015 and December 31, 2014, the Company’s notes receivables by credit quality indicator and by class of financing receivables are as follows (excludes initial direct costs) (in thousands): Notes Receivable June 30, 2015 December 31, 2014 Pass $ $ Special mention Substandard - Doubtful - - Total $ $ As of June 30, 2015, the Company’s impaired loans were as follows (in thousands): Impaired Loans Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With no related allowance recorded Notes receivable $ - $ - $ - $ - $ - With an allowance recorded Notes receivable - Total $ $ $ $ $ - At June 30, 2015 and December 31, 2014, investment in financing receivables is aged as follows (in thousands): June 30, 2015 31-60 Days Past Due 61-90 Days Past Due Greater Than 90 Days Total Past Due Current Total Financing Receivables Recorded Investment>90 Days and Accruing Notes receivable $ - $ - $ - $ - $ $ $ - Total $ - $ - $ - $ - $ $ $ - December 31, 2014 31-60 Days Past Due 61-90 Days Past Due Greater Than 90 Days Total Past Due Current Total Financing Receivables Recorded Investment>90 Days and Accruing Notes receivable $ - $ - $ - $ - $ $ $ - Total $ - $ - $ - $ - $ $ $ - As of June 30, 2015 and December 31, 2014, the Company had three notes receivable which were on non-accrual status (See Note 3 for details). |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2015 | |
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 equipment financing 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. 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. During the three and six months ended June 30, 2015 and 2014, the Managing Member and/or affiliates earned commissions and fees, and billed for reimbursements of costs and expenses pursuant to the Operating Agreement as follows (in thousands) : Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Selling commissions, equal to 9% of the selling price of the Limited Liability Company Units, deducted from Other Members' capital $ - $ $ - $ Administrative costs reimbursed to Managing Member and/or affiliates Asset management fees to Managing Member Acquisition costs and note origination fees paid to Managing Member $ $ $ $ |
Syndication Costs
Syndication Costs | 6 Months Ended |
Jun. 30, 2015 | |
Syndication Costs [Abstract] | |
Syndication Costs | 6 . Syndication costs: Syndication costs are reflected as a reduction to Members’ capital as such costs are netted against the capital raised. The amount shown is primarily comprised of selling commissions as well as fees pertaining to the organization of the Fund, document preparation, regulatory filing fees, and accounting and legal costs. There were no syndication costs during the current year three- and six-month periods as such efforts and related costs ceased upon the termination of the Fund’s offering on August 20, 2014. By comparison, s yndication costs totaled $ 200 thousand and $374 thousand for the respective three and six months ended June 30, 2014 . The Operating Agreement places a limit for cost reimbursements to the Managing Member and/or affiliates. When added to selling commissions, such cost reimbursements may not exceed a total equal to 15 % of all offering proceeds. Through August 20, 2014 , the Managing Member incurred $ 527 thousand of syndication s costs in excess of those allocable for reimbursement under the Fund’s Operating Agreement. Whereas such costs were accrued by the Fund, they were effectively reversed during the third quarter of 2014 when the offering was terminated. |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2015 | |
Commitments [Abstract] | |
Commitments | 7 . Commitments: At June 30, 2015 , there were commitments to fund investments in notes receivable totaling $ 3 . 2 million . Th ese amount s represent contract awards which may be canceled by the prospective borrower/investee or may not be accepted by the Company. |
Guarantees
Guarantees | 6 Months Ended |
Jun. 30, 2015 | |
Guarantees [Abstract] | |
Guarantees | 8 . Guarantees: The Company enters into contracts that contain a variety of indemnifications. The Company’s maximum exposure under these arrangements is unknown. However, based upon the Manager’s experience, there have not been any prior claims or losses pursuant to these types of contracts and the expectation of risk of loss is remote. The Managing Member knows of no facts or circumstances that would make the Company’s contractual commitments outside standard mutual covenants applicable to commercial transactions between businesses. Accordingly, the Company believes that these indemnification obligations are made in the ordinary course of business as part of standard commercial and industry practice, and that any potential liability under the Company’s similar commitments is remote. Should any such indemnification obligation become payable, the Company would separately record and/or disclose such liability in accordance with GAAP. |
Members' Capital
Members' Capital | 6 Months Ended |
Jun. 30, 2015 | |
Members' Capital [Abstract] | |
Members' Capital | 9 . Members’ Capital: A total of 1, 618,296 Units were issued and outstanding as of June 30, 2015 and December 31, 2014 . The Fund is authorized to issue up to 7,500,000 Units in addition to the Units issued to the initial M ember ( 50 Units). From the commencement of the Fund until the initial closing date, as defined in the Operating Agreement, the Company’s net income and net losses are allocated 100 % to the Manager. Commencing with the initial closing date, net income and net losses are allocated 100 % to the Members. An amount e qual to 5 % of all Distributions of Cash Available for Distribution and Net Disposition Proceeds will be allocated to the Manager as the carried interest. An amount equal to (i) an additional 5 % of all Distributions from Cash Available for Distribution and 1 % of all Distributions of Net Disposition Proceeds will be paid to the Manager as a promotional interest until investors have received total distributions in amounts equal to their Capital Contributions plus an amount equal to a priority return of 8 % per annum as defined in the Operating Agreement; and (ii) then 15 % of all subsequent distributions will be allocated to the Manager as a promotional interest. Distributions not allocated to the Manager as carried or promotional interests will be allocated and paid to the Unitholders. Distributions to the Other Members for the three and six months ended June 30, 2015 and 2014 are as follows (in thousands, except as to Units and per Unit data) : Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Distributions declared $ $ $ $ Weighted average number of Units outstanding Weighted average distributions per Unit $ $ $ $ |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 10 . Fair value measurements: 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. 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. At June 30, 2015 and December 31, 2014 , only the Company’s warrants were measured on a recurring basis. In addition, during the first six months of 2015, the Company recorded non-recurring adjustments to reflect the fair values of certain impaired notes receivable. The Company had not recorded any nonrecurring fair value adjustments prior to the first quarter of 2015 . 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 and 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 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. The measurement methodology is as follows : 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 volatility of respective similar publicly traded companies, a risk free interest rate for the term(s) of the warrant exercise(s), and the respective exercise prices and number of warrants. As of June 30, 2015 and December 31, 2014, the calculated fair value of the Fund’s warrant portfolio totaled $ 669 thousand and $ 566 thousand, respectively. Such valuation is classified within Level 3 of the valuation hierarchy. The following reconciles the beginning and ending balances of the Company’s Level 3 recurring assets (in thousands) : Level 3 Assets Balance at December 31, 2013 $ Fair value of new warrants, recorded during the period (included as a discount on notes receivable) Net exercise of warrants Unrealized loss on warrants, net recorded during the year Balance at December 31, 2014 Fair value of new warrants, recorded during the period (included as a discount on notes receivable) Unrealized gain on warrants, net recorded during the period Balance at June 30, 2015 $ Impaired notes receivable The fair value of the Company’s notes receivable, when impairment adjustments are required, is estimated using either third party appraisals or estimations of the value of collateral (for collateral dependent loans) or discounted cash flow analyses (by discounting estimated future cash flows) using the effective interest rate contained in the terms of the original loan. During the first quarter of 2015, the Company had recorded fair value adjustments totaling $51 thousand relative to three impaired notes. Such amount also represents total adjustments for the first six months of 2015. The Company had no fair value adjustments relative to impaired notes receivable prior to the current year period. The fair value adjustments recorded in 2015 were non-recurring and were based upon an estimated valuation of underlying collateral. Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, the fair value of the impaired notes receivable is classified within Level 3 of the valuation hierarchy. The valuation utilizes a market approach technique and uses inputs from third party appraisers that utilize current market transactions as adjusted for certain factors specific to the underlying collateral. The following table presents the fair value measurement of impaired assets measured at fair value on a non-recurring basis and the level within the hierarchy in which the fair value measurements fall at June 30 , 2015 (in thousands): June 30, 2015 Level 1 Estimated Fair Value Level 2 Estimated Fair Value Level 3 Estimated Fair Value Impaired notes receivable $ $ - $ - $ The following tables summarize the valuation techniques and significant unobservable inputs used for the Company’s recurring and nonrecurring fair value calculation categorized as Level 3 in the fair value hierarchy at June 30, 2015 and December 31, 2014: June 30, 2015 Valuation Valuation Unobservable Range of Name Frequency Technique Inputs Input Values Warrants Recurring Black-Scholes formulation Stock price $0.15 - $25.76 Exercise price $0.05 - $25.76 Time to maturity (in years) 5.50 - 9.46 Risk-free interest rate 1.74% - 2.30% Annualized volatility 100.00% Notes Receivable Non-recurring Market Approach Third Party Agents' estimate of the value of collateral $13,700 - $53,600 Condition of collateral (equipment) Poor to Average December 31, 2014 Valuation Valuation Unobservable Range of Name Frequency Technique Inputs Input Values Warrants Recurring Black-Scholes formulation Stock price $0.05 - $25.76 Exercise price $0.05 - $25.76 Time to maturity (in years) 4.50 - 9.35 Risk-free interest rate 1.51% - 2.13% Annualized volatility 100.00% 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 has determined 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. Notes receivable The fair value of the Company’s notes receivable is generally estimated based upon various methodologies deployed by financial and credit management including, but not limited to, credit analysis, third party appraisal and/or discounted cash flow analysis based upon current market valuation techniques and market rates for similar types of lending arrangements, which may consider adjustments for impaired loans as deemed necessary. Investment in securities The Company’s investment securities are not registered for public sale and are carried at cost which management believes approximates fair value, as appropriately adjusted for impairment. 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 June 30 , 2015 and December 31, 2014 (in thousands): June 30, 2015 Carrying Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents $ $ $ - $ - $ Notes receivable, net - - Investment in securities - - Warrants - - December 31, 2014 Carrying Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents $ $ $ - $ - $ Notes receivable, net - - Investment in securities - - Warrants - - |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policy) | 6 Months Ended |
Jun. 30, 2015 | |
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 and six months ended June 30 , 2015 are not necessarily indicative of the results to be expected for the full year. Certain prior period amounts may have been reclassified to conform to the current period presentation. These reclassifications had no significant effect on the reported financial position or results of operations. 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 June 30 , 2015, up until the issuance of the financial statements. No events were noted which would require additional disclosure in the footnotes to the financial statements. |
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 credit losses on notes receivable and the fair valuation of equity securities and warrants. |
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 financing business operates as one reportable segment because: a) the Company measures profit and loss at the portfolio assets level as a whole; b) the principal decision makers do not review information based on any operating segment other than the equipment financing 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 financing; and e) the Company has not chosen to organize its business around geographic areas. The primary geographic region in which the Company seeks financing opportunities is North America. Currently, 100 % of the Company’s operating revenues are from customers domiciled in North America. |
Investment in Securities | Investment in securities: From time to time, the Company may purchase securities of its borrowers or receive warrants and rights to purchase securities in connection with its lending arrangements. Purchased securities Purchased securities (primarily preferred stocks) are generally not registered for public sale and are carried at cost. Such securities are adjusted to fair value if the fair value is less than the carrying value and such impairment is deemed by the Managing Member to be other than temporary. 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. Management has concluded that there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the instruments and that it is not practicable to estimate the fair value of the investment because of its illiquidity. The Company made its initial investment in equity securities during the first quarter of 2014. As of June 30, 2015 and December 31, 2014, i nvestments in equity securities totaled $289 thousand and $229 thousand , respectively . There were no sales or dispositions of securities during the three and six months ended June 30, 2015 and 2014. 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. At June 30 , 2015 and December 31, 2014, the Managing Member estimated the fair value of warrants to be $669 thousand and $566 thousand, respectively. During both the three and six months ended June 30 , 2015 , the c ompany recorded unrealized gains of $91 thousand on fair valuation of its warrants. By comparison, during the three and six months ended June 30, 2014 , the Company recorded unrealized losses of $1 1 thousand and $145 thousand, respectively, on the fair valuation of its warrants. The Company also realized $9 thousand of gains on the net exercise of certain warrants during both three - and six- month periods ended June 30 , 2015 . Such realized gains totaled $46 thousand for both the three- and six-month periods ended June 30, 2014. See Note 10 for further discussion. |
Per Unit Data | Per Unit data: Net income ( loss ) per Unit is based upon the weighted average number of Other Members Units outstanding during the period. |
Recent Accounting Pronouncements | Recent accounting pronouncements: In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. On July 9, 2015, the FASB approved the deferral of the effective date of ASU 2014-09 by one year. As a result, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The board will also allow companies to adopt the standard as of the original effective date, which is January 2017, if they are inclined to do so. Early adoption is not permitted. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company evaluated the impact of the new standard on its financial statements and has determined that such impact is virtually non-existent as the new revenue guideline does not affect revenues from loans, which comprise the majority of the Company’s revenues . In August 2014, the FASB issued Accounting Standards Update 2014-15, Presentation of Financial Statements – Going Concern (subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The new standard provides guidance relative to management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. Management is currently evaluating the standard and its operational and related disclosure requirements . |
Notes Receivable, Net (Tables)
Notes Receivable, Net (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Notes Receivables, Net [Abstract] | |
Minimum Future Payments Receivable | As of June 30, 2015 , the minimum future payments receivable are as follows (in thousands) : Six months ending December 31, 2015 $ Year ending December 31, 2016 Less: portion representing unearned interest income, net Less: allowance for credit losses Notes receivable, net $ |
Allowance for Credit Losses (Ta
Allowance for Credit Losses (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
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 - Notes Receivable Valuation Adjustments - Notes Receivable Total Allowance for Credit Losses Balance December 31, 2013 $ - $ - $ - Provision for credit losses - - - Balance December 31, 2014 - - - Provision for credit losses - Balance June 30, 2015 $ - $ $ |
Recorded Investment in Financing Receivables | The Company’s allowance for credit losses and its recorded investment in notes receivable as of June 30, 2015 and December 31, 2014 were as follows (in thousands): June 30, 2015 Notes Receivable Allowance for credit losses: Ending balance $ Ending balance: individually evaluated for impairment $ Ending balance: collectively evaluated for impairment $ - Ending balance: loans acquired with deteriorated credit quality $ - Financing receivables: Ending balance $ Ending balance: individually evaluated for impairment $ Ending balance: collectively evaluated for impairment $ - Ending balance: loans acquired with deteriorated credit quality $ - December 31, 2014 Notes Receivable Allowance for credit losses: Ending balance $ - Ending balance: individually evaluated for impairment $ - Ending balance: collectively evaluated for impairment $ - Ending balance: loans acquired with deteriorated credit quality $ - Financing receivables: Ending balance $ Ending balance: individually evaluated for impairment $ Ending balance: collectively evaluated for impairment $ - Ending balance: loans acquired with deteriorated credit quality $ - |
Financing Receivables by Credit Quality Indicator and by Class | At June 30, 2015 and December 31, 2014, the Company’s notes receivables by credit quality indicator and by class of financing receivables are as follows (excludes initial direct costs) (in thousands): Notes Receivable June 30, 2015 December 31, 2014 Pass $ $ Special mention Substandard - Doubtful - - Total $ $ |
Schedule of Impaired Loans | As of June 30, 2015, the Company’s impaired loans were as follows (in thousands): Impaired Loans Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized With no related allowance recorded Notes receivable $ - $ - $ - $ - $ - With an allowance recorded Notes receivable - Total $ $ $ $ $ - |
Net Investment in Financing Receivables by Age | At June 30, 2015 and December 31, 2014, investment in financing receivables is aged as follows (in thousands): June 30, 2015 31-60 Days Past Due 61-90 Days Past Due Greater Than 90 Days Total Past Due Current Total Financing Receivables Recorded Investment>90 Days and Accruing Notes receivable $ - $ - $ - $ - $ $ $ - Total $ - $ - $ - $ - $ $ $ - December 31, 2014 31-60 Days Past Due 61-90 Days Past Due Greater Than 90 Days Total Past Due Current Total Financing Receivables Recorded Investment>90 Days and Accruing Notes receivable $ - $ - $ - $ - $ $ $ - Total $ - $ - $ - $ - $ $ $ - |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement | During the three and six months ended June 30, 2015 and 2014, the Managing Member and/or affiliates earned commissions and fees, and billed for reimbursements of costs and expenses pursuant to the Operating Agreement as follows (in thousands) : Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Selling commissions, equal to 9% of the selling price of the Limited Liability Company Units, deducted from Other Members' capital $ - $ $ - $ Administrative costs reimbursed to Managing Member and/or affiliates Asset management fees to Managing Member Acquisition costs and note origination fees paid to Managing Member $ $ $ $ |
Members' Capital (Tables)
Members' Capital (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Members' Capital [Abstract] | |
Distributions to Other Members | Distributions to the Other Members for the three and six months ended June 30, 2015 and 2014 are as follows (in thousands, except as to Units and per Unit data) : Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Distributions declared $ $ $ $ Weighted average number of Units outstanding Weighted average distributions per Unit $ $ $ $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Measurements [Abstract] | |
Reconciliation of Level 3 Recurring Assets | The following reconciles the beginning and ending balances of the Company’s Level 3 recurring assets (in thousands) : Level 3 Assets Balance at December 31, 2013 $ Fair value of new warrants, recorded during the period (included as a discount on notes receivable) Net exercise of warrants Unrealized loss on warrants, net recorded during the year Balance at December 31, 2014 Fair value of new warrants, recorded during the period (included as a discount on notes receivable) Unrealized gain on warrants, net recorded during the period Balance at June 30, 2015 $ |
Fair Value Measurement of Assets and Liabilities Measured at Fair Value on Non-Recurring Basis | The following table presents the fair value measurement of impaired assets measured at fair value on a non-recurring basis and the level within the hierarchy in which the fair value measurements fall at June 30 , 2015 (in thousands): June 30, 2015 Level 1 Estimated Fair Value Level 2 Estimated Fair Value Level 3 Estimated Fair Value Impaired notes receivable $ $ - $ - $ |
Summary of Valuation Techniques and Significant Unobservable Inputs | The following tables summarize the valuation techniques and significant unobservable inputs used for the Company’s recurring and nonrecurring fair value calculation categorized as Level 3 in the fair value hierarchy at June 30, 2015 and December 31, 2014: June 30, 2015 Valuation Valuation Unobservable Range of Name Frequency Technique Inputs Input Values Warrants Recurring Black-Scholes formulation Stock price $0.15 - $25.76 Exercise price $0.05 - $25.76 Time to maturity (in years) 5.50 - 9.46 Risk-free interest rate 1.74% - 2.30% Annualized volatility 100.00% Notes Receivable Non-recurring Market Approach Third Party Agents' estimate of the value of collateral $13,700 - $53,600 Condition of collateral (equipment) Poor to Average December 31, 2014 Valuation Valuation Unobservable Range of Name Frequency Technique Inputs Input Values Warrants Recurring Black-Scholes formulation Stock price $0.05 - $25.76 Exercise price $0.05 - $25.76 Time to maturity (in years) 4.50 - 9.35 Risk-free interest rate 1.51% - 2.13% Annualized volatility 100.00% |
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 June 30 , 2015 and December 31, 2014 (in thousands): June 30, 2015 Carrying Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents $ $ $ - $ - $ Notes receivable, net - - Investment in securities - - Warrants - - December 31, 2014 Carrying Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents $ $ $ - $ - $ Notes receivable, net - - Investment in securities - - Warrants - - |
Organization and Limited Liab23
Organization and Limited Liability Company Matters (Narrative) (Details) - USD ($) | 6 Months Ended | 54 Months Ended | ||||||
Jun. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 13, 2013 | Nov. 14, 2012 | Aug. 20, 2012 | Dec. 31, 2011 | |
Contributions of capital, initial | $ 500 | |||||||
Sale of Limited Liability Company Units, number of units | 7,500,000 | |||||||
Issuance of Limited Liability Company Units, per unit | $ 10 | |||||||
Minimum amount of subscriptions to release proceeds in escrow | $ 1,200,000 | |||||||
Minimum units to release proceeds in escrow | 120,000 | |||||||
Minimum gross proceeds required to release Pennsylvania subscriptions | $ 3,750,000 | |||||||
Capital contribution | $ 16,200,000 | |||||||
Reinvestment period | 6 years | |||||||
Other Members [Member] | ||||||||
Units issued | 1,618,296 | 1,618,296 | 1,618,296 | |||||
Units outstanding | 1,618,296 | 1,618,296 | 1,618,296 | 1,021,531 |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)segment | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Number of operating segments | segment | 1 | ||||
Number of reportable segments | segment | 1 | ||||
Investments in equity securities | $ 289 | $ 289 | $ 229 | ||
Fair value of warrants | 669 | 669 | $ 566 | ||
Unrealized gain (loss) on fair valuation of warrants | 91 | $ (11) | 91 | $ (145) | |
Gains realized on the net exercise of warrants | $ 9 | $ 46 | $ 9 | $ 46 | |
North America [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Percentage of operating revenues | 100.00% |
Notes Receivable, Net (Narrativ
Notes Receivable, Net (Narrative) (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Jun. 30, 2014 | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable fair value adjustments | $ 51 | $ 0 | ||
Notes receivable, fair value | 5,520 | $ 5,828 | ||
Interest not recorded relative to the original terms of the non-accrual notes | 10 | $ 10 | ||
Notes receivable, composite interest rate | 18.00% | |||
Note Receivable One [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable fair value adjustments | $ 12 | |||
Notes receivable, fair value | 26 | |||
Notes receivable in non-accrual status principal balance outstanding | $ 40 | |||
Note Receivable Two [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable fair value adjustments | 23 | |||
Notes receivable, fair value | 50 | |||
Notes receivable in non-accrual status principal balance outstanding | 79 | |||
Note Receivable Three [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Notes receivable fair value adjustments | $ 16 | |||
Notes receivable, fair value | $ 36 | |||
Notes receivable in non-accrual status principal balance outstanding | $ 53 | |||
Minimum [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Terms of the notes receivable | 24 months | |||
Notes receivable, interest rate | 11.26% | 11.54% | ||
Notes maturity period | 2,015 | |||
Maximum [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Terms of the notes receivable | 42 months | |||
Notes receivable, interest rate | 18.00% | 11.73% | ||
Notes maturity period | 2,018 |
Notes Receivable, Net (Minimum
Notes Receivable, Net (Minimum Future Payments Receivable) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Notes Receivables, Net [Abstract] | |||
Six months ending December 31, 2015 | $ 2,073 | ||
Year ending December 31, 2016 | 3,057 | ||
2,017 | 1,118 | ||
2,018 | 212 | ||
Notes receivable, gross | 6,460 | ||
Less: portion representing unearned interest income, net | (879) | ||
Less:allowance for credit losses | (51) | ||
Notes receivable, net | $ 5,530 | $ 5,845 |
Allowance for Credit Losses (Na
Allowance for Credit Losses (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2015 | |
Allowance for Credit Losses [Abstract] | |
Accounts receivable, period for non-accrual status | 90 days |
Accounts receivable, period for review of impairment | 90 days |
Allowance for Credit Losses (Ac
Allowance for Credit Losses (Activity in Allowance for Doubtful Accounts) (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Beginning Balance | ||
Provision for credit losses | $ (51) | |
Ending Balance | $ (51) | |
Allowance For Doubtful Accounts-Notes Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Beginning Balance | ||
Provision for credit losses | ||
Ending Balance | ||
Valuation Adjustments-Notes Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Beginning Balance | ||
Provision for credit losses | $ (51) | |
Ending Balance | $ (51) |
Allowance for Credit Losses (Re
Allowance for Credit Losses (Recorded Investment in Financing Receivables) (Details) - Notes Receivable [Member] - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Allowances for credit losses: | ||
Ending balance | $ 51 | |
Ending balance: individually evaluated for impairment | $ 51 | |
Ending balance: collectively evaluated for impairment | ||
Ending balance: loans acquired with deteriorated credit quality | ||
Notes Receivables, Net [Abstract] | ||
Ending balance | $ 5,581 | $ 5,845 |
Ending balance: individually evaluated for impairment | $ 5,581 | $ 5,845 |
Ending balance: collectively evaluated for impairment | ||
Ending balance: loans acquired with deteriorated credit quality |
Allowance for Credit Losses (Fi
Allowance for Credit Losses (Financing Receivables by Credit Quality Indicator and by Class) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Financing Receivable, Recorded Investment [Line Items] | ||
Notes receivable | $ 5,581 | $ 5,845 |
Pass [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Notes receivable | 3,951 | 4,134 |
Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Notes receivable | 1,467 | $ 1,711 |
Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Notes receivable | $ 163 | |
Doubtful [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Notes receivable |
Allowance for Credit Losses (Sc
Allowance for Credit Losses (Schedule of Impaired Loans) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Allowance for Credit Losses [Abstract] | ||
Notes receivable, With no allowance recorded, Recorded investment | ||
Notes receivable, With no allowance recorded, Unpaid principal balance | ||
Notes receivable, With no allowance recorded, Average recorded investment | ||
Notes receivable, With no allowance recorded, Interest income recognized | ||
Notes receivable, With an allowance recorded, Recorded investment | $ 163 | |
Notes receivable, With an allowance recorded, Unpaid principal balance | 166 | |
Notes receivable, With an allowance recorded, Related allowance | 51 | $ 0 |
Notes receivable, With an allowance recorded, Average recorded investment | $ 166 | |
Notes receivable, With an allowance recorded, Interest income recognized | ||
Recorded investment, Total | $ 163 | |
Unpaid principal balance, Total | 166 | |
Average recorded investment, Total | $ 166 | |
Interest income recognized, Total |
Allowance for Credit Losses (Ne
Allowance for Credit Losses (Net Investment in Financing Receivables by Age) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
31-60 Days Past Due | ||
61-90 Days Past Due | ||
Greater Than 90 Days | ||
Total Past Due | ||
Current | $ 5,581 | $ 5,845 |
Total financing receivables | $ 5,581 | 5,845 |
Recorded Investment > 90 Days and Accruing | ||
Notes Receivable [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
31-60 Days Past Due | ||
61-90 Days Past Due | ||
Greater Than 90 Days | ||
Total Past Due | ||
Current | $ 5,581 | 5,845 |
Total financing receivables | $ 5,581 | $ 5,845 |
Recorded Investment > 90 Days and Accruing |
Related Party Transactions (Aff
Related Party Transactions (Affiliates Earned Commissions and Billed for Reimbursements Pursuant to Operating Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Related Party Transaction [Line Items] | ||||
Administrative costs reimbursed to Managing Member and/or affiliates | $ 48 | $ 44 | $ 99 | $ 76 |
Asset management fees to Managing Member | 20 | 18 | 37 | 29 |
Acquisition costs and note origination fees paid to Managing Member | 74 | 118 | 170 | 247 |
Related party transaction, total | $ 142 | $ 380 | $ 306 | $ 726 |
Selling commission rate | 9.00% | 9.00% | 9.00% | 9.00% |
Selling Commissions to Affiliates [Member] | ||||
Related Party Transaction [Line Items] | ||||
Organization and offering costs | $ 200 | $ 374 |
Syndication Costs (Narrative) (
Syndication Costs (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Aug. 20, 2014 | |
Cost reimbursements as percentage of all offering proceeds, maximum | 15.00% | |||
Syndication costs in excess of limitation | $ 527 | |||
Selling Commissions to Affiliates [Member] | ||||
Syndication costs | $ 200 | $ 374 |
Commitments (Narrative) (Detail
Commitments (Narrative) (Details) $ in Millions | Jun. 30, 2015USD ($) |
Commitments [Abstract] | |
Commitments to fund investments in notes receivable | $ 3.2 |
Members' Capital (Narrative) (D
Members' Capital (Narrative) (Details) - shares | 6 Months Ended | ||
Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Other Members [Member] | |||
Other Members Capital Account [Line Items] | |||
Other Members capital account, Units issued | 1,618,296 | 1,618,296 | |
Other Members capital account, Units outstanding | 1,618,296 | 1,618,296 | 1,021,531 |
Other Members capital account, Units authorized | 7,500,000 | 7,500,000 | |
Allocation of net income or net losses commencing with initial closing date | 100.00% | ||
Managing Member [Member] | |||
Other Members Capital Account [Line Items] | |||
Other Members capital account, Units issued | 50 | 50 | |
Allocation of net income or net losses from commencement until initial closing date | 100.00% | ||
Allocation of all distributions of cash available for distribution and net disposition proceeds | 5.00% | ||
Allocation percentage, distributions of cash available for distribution | 5.00% | ||
Allocation percentage, distributions of net disposition proceeds | 1.00% | ||
Total distribution, priority return | 8.00% | ||
Allocation of subsequent distributions | 15.00% |
Members' Capital (Distributions
Members' Capital (Distributions to Other Members) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Distribution Made to Limited Liability Company (LLC) Member [Line Items] | |||||
Distributions declared | $ 890 | $ 1,542 | |||
Other Members [Member] | |||||
Distribution Made to Limited Liability Company (LLC) Member [Line Items] | |||||
Distributions declared | $ 445 | $ 367 | $ 890 | $ 673 | $ 1,542 |
Weighted average number of Units outstanding | 1,618,296 | 1,333,399 | 1,618,296 | 1,217,191 | |
Weighted average distributions per Unit | $ 0.27 | $ 0.28 | $ 0.55 | $ 0.55 | $ 1.10 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 |
Fair Value Measurements [Abstract] | |||
Fair value of warrants | $ 669 | $ 566 | |
Notes receivable fair value adjustments | $ 51 | $ 0 |
Fair Value Measurements (Reconc
Fair Value Measurements (Reconciliation of Level 3 Recurring Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Balance | $ 566 | ||||
Unrealized gain (loss) on warrants, net recorded during the year | $ 91 | $ (11) | 91 | $ (145) | |
Balance | 669 | 669 | $ 566 | ||
Level 3 Estimated Fair Value [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Balance | 566 | $ 607 | 607 | ||
Fair value of new warrants, recorded during the period (included as a discount on notes receivable) | 12 | 93 | |||
Net exercise of warrants | (5) | ||||
Unrealized gain (loss) on warrants, net recorded during the year | 91 | (129) | |||
Balance | $ 669 | $ 669 | $ 566 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value Measurement of Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis) (Details) $ in Thousands | Jun. 30, 2015USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Impaired notes receivable, net | $ 112 |
Level 1 Estimated Fair Value [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Impaired notes receivable, net | |
Level 2 Estimated Fair Value [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Impaired notes receivable, net | |
Level 3 Estimated Fair Value [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Impaired notes receivable, net | $ 112 |
Fair Value Measurements (Summar
Fair Value Measurements (Summary of Valuation Techniques and Significant Unobservable Inputs) (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Recurring [Member] | Black-Scholes Formulation [Member] | Warrant [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Annualized volatility | 100.00% | 100.00% |
Recurring [Member] | Black-Scholes Formulation [Member] | Minimum [Member] | Warrant [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Stock price | $ 0.15 | $ 0.05 |
Exercise price | $ 0.05 | $ 0.05 |
Time to maturity (in years) | 5 years 6 months | 4 years 6 months |
Risk-free interest rate | 1.74% | 1.51% |
Recurring [Member] | Black-Scholes Formulation [Member] | Maximum [Member] | Warrant [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Stock price | $ 25.76 | $ 25.76 |
Exercise price | $ 25.76 | $ 25.76 |
Time to maturity (in years) | 9 years 5 months 16 days | 9 years 4 months 6 days |
Risk-free interest rate | 2.30% | 2.13% |
Non-recurring [Member] | Market Approach [Member] | Minimum [Member] | Notes Receivable [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Fair value inputs, third party agents' pricing quotes per equipment. | $ 13,700 | |
Non-recurring [Member] | Market Approach [Member] | Maximum [Member] | Notes Receivable [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Fair value inputs, third party agents' pricing quotes per equipment. | $ 53,600 |
Fair Value Measurements (Estima
Fair Value Measurements (Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Financial assets: | |||
Cash and cash equivalents | $ 4,106 | $ 4,924 | |
Notes receivable, net | 5,520 | 5,828 | |
Investment in securities | 289 | 229 | |
Warrants | 669 | 566 | |
Level 1 Estimated Fair Value [Member] | |||
Financial assets: | |||
Cash and cash equivalents | $ 4,106 | $ 4,924 | |
Level 2 Estimated Fair Value [Member] | |||
Financial assets: | |||
Cash and cash equivalents | |||
Notes receivable, net | |||
Investment in securities | |||
Warrants | |||
Level 3 Estimated Fair Value [Member] | |||
Financial assets: | |||
Notes receivable, net | $ 5,520 | $ 5,828 | |
Investment in securities | 289 | 229 | |
Warrants | 669 | 566 | $ 607 |
Carrying Amount [Member] | |||
Financial assets: | |||
Cash and cash equivalents | 4,106 | 4,924 | |
Notes receivable, net | 5,530 | 5,845 | |
Investment in securities | 289 | 229 | |
Warrants | $ 669 | $ 566 |