The following is a discussion of our current financial position and results of
operations. This discussion should be read together with our unaudited financial
statements and related notes included elsewhere in this Quarterly Report on Form
10-Q, the audited financial statements and related notes included in our Annual
Report on Form 10-K as filed with the
As used in this Quarterly Report on Form 10-Q, references to "we," "us," "our" or similar terms include
Certain statements within this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). These statements are being made pursuant to the PSLRA, with the intention of obtaining the benefits of the "safe harbor" provisions of the PSLRA, and, other than as required by law, we assume no obligation to update or supplement such statements. Forward-looking statements are those that do not relate solely to historical fact. They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. You can identify these statements by the use of words such as "may," "will," "could," "anticipate," "believe," "estimate," "expect," "continue," "further," "plan," "seek," "intend," "predict" or "project" and variations of these words or comparable words or phrases of similar meaning. These forward-looking statements reflect our current beliefs and expectations with respect to future events and are based on assumptions and are subject to risks and uncertainties and other factors outside our control that may cause actual results to differ materially from those projected. We undertake no obligation to update publicly or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
The Fund's offering was for a total of 15,000,000 Shares at a price of
The Fund's offering period ended on
Second Quarter Transactions GA8-TC320 Airvan Aircraft
The Fund purchased an additional GA8-TC320 Airvan aircraft for
Results of Operations for the Three and Six Months Ended
Total revenue for the three and six months ended
Total expenses for the three months ended
The Fund evaluated a number of equipment transactions during the first six months of 2014 and closed some of these transactions. To date, the Fund has not used leverage to finance these transactions. The Fund continues to pursue additional equipment investment as well as debt leverage opportunities on the existing equipment portfolio.
This section discusses the major balance sheet variances from
Total assets decreased by
Total liabilities increased by
Equity decreased by
Liquidity and Capital Resources
Cash Flows Summary The following table sets forth summary cash flow data for the six months ended
June 30, 2014and 2013. June 30, 2014 June 30, 2013 Net cash provided by (used in) : Operating activities $ 6,552,795 $ 5,113,989Investing activities (3,108,370 ) (25,435,602 ) Financing activities (3,895,291 ) (4,397,225 )
Net decrease in cash and cash equivalents
See the Statements of Cash Flows included in "Item 1. Financial Statements" of this Quarterly Report on Form 10-Q for additional information.
The cash used in investing activities for the six months ended
The cash used in financing activities for the six months ended
Cash and cash equivalents include cash in banks and highly liquid investments with original maturities of three months or less and are held in operating and money market accounts at
Sources and Uses of Cash
The Fund's main activities and principal use of cash has been to acquire a diversified portfolio of equipment, equipment leases and other equipment-related investments which are denominated in US dollars and are on lease to corporate clients around the world. We will also make investments in other equipment-related transactions which will allow us to directly or indirectly participate in the benefits and risks of equipment ownership or usage and make loans collaterized by equipment.
Participation interest in Commercial jet aircraft engines (sold in
$ 6,500,000Aircraft Bombardier CRJ 700 ER 9,758,734 Self-serve checkout equipment 2,097,353 ETS-364B semiconductor test system (sold in May 2012) 383,898 Furniture, office and other related equipments 811,400
Furniture, office and other related equipments (sold in
870,453 Semiconductor manufacturing tools (sold in
June 2012) 6,400,800 Aircraft engines (2 x CFM56-7B jet engines) 25,338,321 Flat bed rail cars 7,777,356 Racetrack equipment 5,311,507 Smart safes 3,294,695 Smart safes (sold in July 2013) 68,989 Machine tool equipment 5,768,966 Aircraft (Airbus model A320-200) 19,551,352 GA8-TC320 Airvan Aircraft 1,885,873 GA8-TC320 Airvan Aircraft (sold in May 2014) 572,274 $ 96,391,971Sources of Liquidity
We believe that cash generated from our operating activities and from debt borrowings, if required, will be sufficient to finance our liquidity requirements for the foreseeable future, including distributions to our members, funding of new investment opportunities, payment of management fees, equipment maintenance events, and administrative expense reimbursements. Our ability to generate cash in the future is subject to general economic, financial, competitive, regulatory and other factors that affect us and our lessees' businesses that are beyond our control.
The Fund's liquidity may be adversely affected by unanticipated or greater than anticipated operating costs or losses, including the inability of a client of the Fund to make timely lease payments or costs associated with off lease assets or assets available for sale. The Fund anticipates that it will fund its operations from cash flow generated by operating and financing activities. The Manager has no intent to permanently fund any cash flow deficit of the Fund or provide other financial assistance to the Fund.
The Fund also intends to incur indebtedness on future acquisitions for its portfolio. During periods of general illiquidity in financial markets, it may not be possible for the Manager to source debt on the Fund's behalf at an appropriate interest rate, on appropriate terms, at appropriate levels or at all.
The Fund began making monthly cash distributions on
While the Fund anticipates making monthly cash distributions, it may vary the amount of, or completely suspend making distributions at any time and without notice.
Commitments, Contingencies and Off-Balance Sheet Transactions
Other than obligations associated with our investing activities or as set forth in our Operating Agreement, we have no contractual obligations and commitments, contingencies or off-balance sheet transactions as of
Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of our assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements. Actual results may differ from these estimates under different assumptions or conditions.
Accounting Policies, Accounting Changes and Future Application of Accounting Standards
See Note 2, "Significant Accounting Policies", in our financial statements in "Financial Statements and Supplementary Data" in Part I, Item 1, of this Form 10-Q for financial information and further discussions, for a summary of the Company's significant accounting policies, including a discussion of recently adopted and issued accounting pronouncements.