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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 2003
-------------------------------------------------------
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required]
Commission File Number 333-103503
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ICON Income Fund Ten, LLC
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 35-2193184
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
100 Fifth Avenue, 10th floor, New York, New York 10011
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 418-4700
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Limited Liability
Company Shares
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X] Yes [ ] No
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2) [ ] Yes [X] No
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last day of the registrant's most recently completed second fiscal quarter:
Not applicable. There is no established market for shares in the registrant.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
December 31, 2003
TABLE OF CONTENTS
Item Page
- ---- ----
PART I
1. Business 3
2. Properties 4
3. Legal Proceedings 4
4. Submission of Matters to a Vote of Security Holders 4
PART II
5. Market for the Registrant's Securities and Related
Security Holder Matters 4
6. Selected Financial Data 5
7. Manager's Discussion and Analysis of Financial
Condition and Results of Operations 6-10
7A. Qualitative and Quantitative Disclosures About Market Risk 11
8. Financial Statements 12-24
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 25
9A. Controls and Procedures 25
PART III
10. Directors and Executive Officers of the Registrant's
Manager 25-26
11. Executive Compensation 26
12. Security Ownership of Certain Beneficial Owners
and Management 27
13. Certain Relationships and Related Transactions 27
14. Principal Accounting Fees and Services 27
PART IV
15. Exhibits, Financial Statement Schedules and Reports on Form 8-K 27-28
SIGNATURES 29
Certifications 30-33
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
December 31, 2003
PART I
Item 1. Business
--------
General Development of Business
ICON Income Fund Ten, LLC (the "LLC") was formed on January 2, 2003 as a
Delaware Limited Liability Company. The initial capitalization of the LLC was
$1,000 by the Managing Member ("ICON Capital Corp."). The LLC is offering
membership interests up to $150,000,000 on a "best efforts" basis pursuant to a
Registration Statement, which was declared effective by the SEC on June 2, 2003.
The LLC had its initial closing on August 22, 2003 when it admitted 5,065.736
additional members, representing $5,065,736 in capital contributions. As of
December 31, 2003 the LLC had admitted a further 18,718.594 additional members,
representing $18,718,594 in capital contributions, bringing the total capital
contributions and additional member shares to $23,784,330 and 23,784.330,
respectively. The LLC will continue until December 31, 2023, unless terminated
sooner.
The Manager, ICON Capital Corp., is a Connecticut corporation. The Manager
manages and controls the business affairs of the LLC's equipment leases and
financing transactions under the terms of a management agreement with the LLC.
Segment Information
The LLC has only one operating segment: the business of acquiring equipment
subject to leases with companies that the LLC believes to be creditworthy, and
making related investments.
Narrative Description of Business
The LLC is an equipment leasing income fund. The principal objective of the
LLC is to obtain the maximum economic return from its investments for the
benefit of its members. To achieve this objective, the LLC intends to: (i)
acquire a diversified portfolio of low obsolescence equipment having long lives
and high residual values; (ii) make monthly cash distributions to its members
commencing with each member's admission to the LLC, continuing through the
reinvestment period, which period will end no later than the eighth anniversary
after the final closing date; (iii) re-invest substantially all undistributed
cash from operations and cash from sales of equipment and financing transactions
during the reinvestment period; and (iv) sell the LLC's investments and
distribute the cash from sales of such investments to its members after the end
of the reinvestment period.
The LLC has no direct employees. Except as expressly limited by the
Operating Agreement, the Manager has full and exclusive discretion in the
management and control of the LLC.
Lease Transactions
The LLC purchased equipment subject to leases for $3,600,000. The equipment
consists of Boeing 767 aircraft rotables and accessories, of which 80% is on
lease to Flugfelagid Atlanta hf, d/b/a Air Atlanta Icelandic ("Air Atlanta").
The lease expires on November 30, 2004. The remaining 20% was on lease with Air
Atlanta , but is, at the end of the year, being held for sale or lease with a
net book value of $665,321.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
December 31, 2003
Item 2. Properties
----------
The LLC neither owns nor leases office space or any other real property in
its business at the present time.
Item 3. Legal Proceedings
-----------------
The LLC, from time-to-time, in the ordinary course of business, commences
legal actions when necessary to protect or enforce the rights of the LLC. We are
not a defendant party to any litigation and are not aware of any pending or
threatened litigation against the LLC.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
No matters were submitted to a vote of security holders during the fourth
quarter 2003.
PART II
Item 5. Market for the Registrant's Securities and Related Security Holder
Matters
The LLC's shares are not publicly traded nor is there currently a market
for the LLC's shares. It is unlikely that any such market will develop.
Number of Equity Security Holders
Title of Class as of February 29, 2004
-------------- -----------------------
Manager (as a member) 1
Additional members 1,126
For 2003, the LLC made distributions to the additional members totaling
$273,126. For the three months ended March 30 2004, the LLC has made
distributions of $559,396 to the additional members.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
December 31, 2003
Item 6. Selected Financial Data
-----------------------
For the Period from August 22, 2003
(commencement of operations)
to December 31, 2003(1)
Total revenues $ 370,684
==========
Net loss $ (133,271)
==========
Net loss allocable to additional members $ (131,938)
==========
Net loss allocable to managing member $ (1,333)
==========
Weighted average number of additional member shares outstanding 13,050
==========
Net loss per weighted average additional member share $ (10.11)
==========
Distributions to additional members $ 273,126
==========
Distributions per unit based on weighted average units outstanding $ 20.93
==========
Distributions to managing member $ 2,759
==========
December 31,2003
----------------
Total assets $ 20,651,972
==============
Members' equity $ 20,165,289
==============
(1) Since the LLC was formed on January 2, 2003, and commenced operations
on August 22, 2003, the initial closing date, the results of operations for the
period ended December 31, 2003 do not reflect a full twelve months of activity.
The above selected financial data should be read in conjunction
with the financial statements and related notes appearing elsewhere in this
report.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
December 31, 2003
Item 7. Manager's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-Looking Information - The following discussion and analysis should
be read in conjunction with the audited financial statements included herein.
Certain statements within this document may constitute forward-looking
statements made pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995. These statements are identified by words such as
"anticipate," "believe," "estimate," "expects," "intend," "predict" or "project"
and similar expressions. This information may involve risks and uncertainties
that could cause actual results to differ materially from the forward-looking
statements. Although the LLC believes that the expectations reflected in such
forward-looking statements are based on reasonable assumptions, such statements
are subject to risks and uncertainties that could cause actual results to differ
materially from those projected.
Overview - The results of operations reflect the risk factors outlined in
the LLC's prospectus. Such risk factors include, but are not limited to, the
decline in the value of the LLC's equipment, no guarantee of profitability, the
potential of lessee default, and economic factors such as prevailing interest
rates. These risk factors affect the LLC's ability to realize income, in that
they increase the LLC's expenses by way of additional depreciation, impairment
loss, and provision for bad debt. In addition, depending on the size of the
portfolio and the amount of equipment purchased by the LLC during the
Reinvestment Period, the risk factors outlined above could negatively impact the
cash flow.
During the period ended December 31, 2003, our attention was primarily
focused on identifying investments which met our investment criteria in order to
seize acquisition opportunities.
Management anticipates that substantially all revenues will be generated
from the rentals derived from the equipment on lease, re-financing of existing
transactions, and proceeds from the sale of equipment. Our most significant
challenges and risks in the future include our ability to continue to identify
leases of business-essential equipment on lease to creditworthy lessees.
The U.S. economy appears to be recovering and the leasing industry's
outlook for 2004 is encouraging. Many experts foresee an increase in capital
spending by corporations through 2007 which should increase the pool of
available secondary market leases, and to that end, the LLC is seeing more
opportunities in this market. Nonetheless, a key obstacle still facing the
leasing industry is the continued low interest rate environment, which reduces
leasing volume inasmuch as customers are more prone to purchase than lease.
However, as economic growth may continue and interest rates may begin to rise
over time, more lessees are expected to return to the marketplace.
The LLC - The LLC was formed on January 2, 2003 as a Delaware Limited
Liability Company. The initial capitalization of the LLC was $1,000 by the
Managing Member. The LLC is offering membership interests on a "best efforts"
basis with the intention of raising up to $150,000,000 of capital. The LLC had
its initial closing on August 22, 2003 when it admitted 5,065.736 additional
members, representing $5,065,736 in capital contributions. As of December 31,
2003 the LLC had admitted a further 18,718.594 additional members, representing
$18,718,594 in capital contributions, bringing the total capital contributions
and additional member shares to $23,784,330 and 23,784.330, respectively. The
LLC will continue until December 31, 2023, unless terminated sooner.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
December 31, 2003
Results of Operations for the Period From August 22, 2003 (Commencement of
Operations) to December 31, 2003
The LLC commenced operations on August 22, 2003 with the admission of
members who, in the aggregate, subscribed for 5,065.736 shares. For the year
ended December 31, 2003 the LLC made cash distributions to members totaling
$275,885.
The LLC purchased equipment subject to leases for $3,600,000. The equipment
consists of Boeing 767 aircraft rotables and accessories, of which 80% is on
lease to Flugfelagid Atlanta hf, d/b/a Air Atlanta Icelandic ("Air Atlanta").
The lease expires on November 30, 2004. The remaining 20% was on lease with Air
Atlanta, but is, as of the end of the year, being held for sale or lease with a
net book value of $665,321.
Revenues for the period ended December 31, 2003 were $370,684 comprised of
rental income of $367,828 and interest income of $2,856. Expenses for the period
ended December 31, 2003 were $503,955 comprised of depreciation and amortization
expense of $402,088, general and administrative expenses of $76,119, management
fees - Manager of $18,391 and administrative expense reimbursements - Manager of
$7,357.
Net loss for the period ended December 31, 2003 was $133,271. The net loss
per weighted average share was $10.11. The revenue and expenses for the period
were consistent with the LLC's level of activity based upon the transactions
completed. Although we have closed only one acquisition to date for the LLC
(described above), the LLC is presently negotiating to acquire several lease
transactions. Also, since inception the LLC signed conditional agreements to
acquire other equipment, but our due diligence about the lessee's financial
conditions, or its operating plans for the business line in which the leased
equipment would be utilized, caused us not to complete the acquisitions. Due to
the size of the LLC's equipment portfolio during 2003, all distributions to
members in 2003 constituted a return of capital.
Liquidity and Capital Resources
Management anticipates that the LLC will continue to sell shares and admit
members. The LLC had its first admission of members on August 22, 2003 and,
through December 31, 2003, had admitted a total of 794 members. Those members
purchased 23,784.330 shares, resulting in gross offering proceeds of
$23,784,330, from which $4,756,866 was used to pay formation, sales and offering
expenses.
The LLC's cash flow from operating activities may be less than the LLC's
current level of expenses. To the extent that cash flow is insufficient to pay
such expenses, the LLC may be required to sell assets prior to maturity or
borrow against future cash flows.
The LLC purchased equipment subject to leases for $3,600,000. The equipment
consists of Boeing 767 aircraft rotables and accessories, of which 80% is on
lease to Air Atlanta Icelandic. The lease expires on November 30, 2004. The
remaining 20% was on lease with Air Atlanta Icelandic, but is, at the end of the
year, being held for sale or lease with a net book value of $665,321.
In the fourth quarter of 2003, we increased the target rate of
distributions to members from an annual rate of 7.5% to an annual rate of 8.6%
of their initial investment, in light of changes in the interest rate
environment. Distributions at that rate or any other rate are not guaranteed.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
December 31, 2003
Cash Flow
- ---------
The LLC's main source of cash flow was from financing activities, through
the issuance of additional members shares. The LLC is expecting to continue
raising capital within the next two years.
The LLC's outflow of cash was the utilization of such cash by investing
activities, from acquisitions of equipment subject to lease. The LLC is expected
to continue acquiring equipment subject to lease, and also make other types of
related investments.
As of December 31, 2003, there were no known trends or demands,
commitments, events or uncertainties, which are likely to have any material
effect on liquidity. As cash is realized from raising capital, operations and
additional borrowings, the LLC will continue to invest in equipment leases and
financings where it deems it to be prudent while retaining sufficient cash to
meet its reserve requirements and recurring obligations.
We do not consider the impact of inflation to be material in the analysis
of our overall operations.
Significant Accounting Policies
The policies discussed below are considered by the Manager to be critical
to an understanding of the LLC's financial statements because their application
places the most significant demands on the Manager's judgments, with financial
reporting results relying on estimation about the effect of matters that are
inherently uncertain. Specific risks for these critical accounting policies are
described in the following paragraphs. For all of these policies, the Managing
Member cautions that future events rarely develop exactly as forecast, and the
best estimates routinely require adjustment.
Use of Estimates - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period. Significant management
estimates primarily include the allowance for doubtful accounts and estimated
unguaranteed residual values. In addition, management is required to disclose
contingent assets and contingent liabilities. Actual results could differ from
those estimates.
Leases and Revenue Recognition - The LLC accounts for owned equipment
leased to third parties as finance leases or operating leases, as appropriate.
Initial direct costs are capitalized and are amortized over the terms of the
related leases using the interest method.
For finance leases, the LLC records, at the inception of the lease, the
total minimum lease payments receivable, the estimated unguaranteed residual
values, the initial direct costs related to the leases and the related unearned
income. Unearned income represents the difference between the sum of the minimum
lease payments receivable plus the estimated unguaranteed residual minus the
cost of the leased equipment. Unearned income is recognized as finance income
over the terms of the related leases using the interest method.
For operating leases, equipment is recorded at cost and depreciated on the
straight-line method over the lease term to its estimated residual value at
lease termination and is subject to the LLC's impairment policy. Related lease
rentals are recognized on the straight line method over the lease terms. Billed
and uncollected operating lease receivables are included in other assets.
Equipment held for sale or lease - Off-lease equipment that is held for
sale or lease is carried at cost, less accumulated depreciation, subject to the
LLC's impairment review policy.
Credit Risk - Financial instruments that potentially subject the LLC to
concentrations of credit risk include cash and cash equivalents, direct finance
lease receivables and accounts receivable. The LLC places its cash deposits and
temporary cash investments with creditworthy, high quality financial
institutions. The concentration of such deposits and temporary cash investments
is not deemed to create a significant risk to the LLC.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
December 31, 2003
The LLC records a provision for doubtful accounts to provide for estimated
credit losses in its portfolio. The allowance for doubtful accounts is based on
an analysis of delinquency, an assessment of overall risk and a review of
historical loss experience. The LLC's write-off policy is based on an analysis
of the aging of the LLC's portfolio, a review of the non-performing receivables
and leases, and prior collection experience. An account is fully reserved for or
written-off when the analysis indicates that the probability of collection of
the account is remote.
Impairment - Residual values of the LLC's asset portfolio are periodically
reviewed to determine whether events or changes in circumstances indicate that
the carrying value of an asset may not be recoverable. The events or changes in
circumstances which generally indicate that the residual value of an asset may
be impaired are (i) the estimated fair value of the underlying equipment is less
than the LLC's carrying value or (ii) the lessee is experiencing financial
difficulties and it does not appear likely that the estimated proceeds from
disposition of the asset will be sufficient to satisfy the remaining obligation
to the non-recourse lender and the LLC's residual position. Generally in the
latter situation, the residual position relates to equipment subject to third
party non-recourse notes payable where the lessee remits their rental payments
directly to the lender and the LLC does not recover its residual until the
non-recourse note obligation is repaid in full.
An impairment loss is measured and recognized only if the estimated
undiscounted future cash flows of the asset are less than their net book value.
The estimated undiscounted future cash flows are the sum of the estimated
residual value of the asset at the end of the asset's expected holding period
and estimates of undiscounted future rents. The residual value assumes, among
other things, that the asset is utilized normally in an open, unrestricted and
stable market. Short-term fluctuations in the market place disregarded and it is
assumed that there is no necessity either to dispose of a significant number of
the assets simultaneously, if held in quantity, or to dispose of the asset
quickly. Impairment is measured as the difference between the fair value of the
assets and its carrying value on the measurement date.
Weighted Average Number of Additional Shares Outstanding - The weighted
average number of additional member shares outstanding is calculated as of the
operations commencement date, August 22, 2003.
Recent Accounting Pronouncements
In April 2003, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging Activities. SFAS No. 149
amends and clarifies accounting for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging activities
under SFAS No. 133. The Statement requires that contracts with comparable
characteristics be accounted for similarly and clarifies when a derivative
contains a financing component that warrants special reporting in the statement
of cash flows. SFAS No. 149 is effective for contracts entered into or modified
after June 30, 2003, except in certain circumstances, and for hedging
relationships designated after June 30, 2003. The adoption of this standard did
not have a material effect on the LLC's financial position or results of
operations. However, the LLC might be affected in the future depending on the
type of investments made.
In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. This Statement
establishes standards for how an issuer classifies and measures in its
statements of financial position certain financial instruments with
characteristics of both liabilities and equity. It requires that an issuer
classify a financial instrument that is within its scope as a liability (or an
asset in some circumstances) because that financial instrument embodies an
obligation of the issuer. This Statement is effective for financial instruments
entered into or modified after May 31, 2003, and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003, except for
mandatorily redeemable financial instruments of nonpublic entities. The adoption
of this Standard did not have a material effect on the LLC's financial position
or results of operations. However, the LLC might be affected in the future
depending on the type of investments made. However, the LLC might be affected in
the future depending on the type of investments made.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
December 31, 2003
In January 2003, the FASB issued FASB Interpretation ("FIN") 46,
Consolidation of Variable Interest Entities, an Interpretation of Accounting
Research Bulletin No. 51. In December 2003, the FASB issued a revision to FIN
46, or Revised Interpretation, to clarify some of the provisions of FIN 46. FIN
46 provides guidance on how to identify a variable interest entity, or VIE, and
determine when the assets, liabilities, non-controlling interests, and results
of operations of a VIE must be included in a company's consolidated financial
statements. A company that holds variable interests in an entity is required to
consolidate the entity if the company's interest in the VIE is such that the
company will absorb a majority of the VIEs expected losses and/or receive a
majority of the entity's expected residual returns, if any. VIEs created after
January 31, 2003, but prior to January 1, 2004, may be accounted for either
based on the original interpretation or the Revised Interpretation. However, the
Revised Interpretation must be applied no later than the first quarter of fiscal
year 2004. VIEs created after January 1, 2004 must be accounted for under the
Revised Interpretation. There has been no material impact to the LLC's financial
statements and there is no expected impact from the adoption of the deferred
provisions in the first quarter of fiscal year 2004.
The LLC does not believe that any other recently issued, but not yet
effective, accounting standards will have a material effect on the LLC's
financial position or results of operations.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
December 31, 2003
Item 7A. Qualitative and Quantitative Disclosures About Market Risk
----------------------------------------------------------
The LLC is exposed to certain market risks, including changes in interest
rates and the demand for equipment (and the related residuals) owned by the LLC.
Except as discussed below, the LLC believes its exposure to other market risks
are insignificant to both its financial position and results of operations.
The LLC manages its interest rate risk by obtaining fixed rate debt either
directly or through its joint ventures. The fixed rate debt service obligations
are matched with fixed rate lease receivable streams generated by the leases.
The LLC manages its exposure to equipment and residual risk by monitoring
the market and maximizing remarketing proceeds through re-lease or sale of
equipment.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
December 31, 2003
Item 8. Financial Statements
--------------------
Index to Financial Statements
Page Number
-----------
Independent Auditor's Report 14
Balance Sheet as of December 31, 2003 15
Statement of Operations for the Period
from August 22, 2003 (commencement of operations)
to December 31, 2003 16
Statement of Changes in Members' Equity
for the Period from August 22, 2003
(commencement of operations) to December 31, 2003 17
Statement of Cash Flows for the Period
from August 22, 2003 (commencement of operations)
to December 31, 2003 18
Notes to Financial Statements 19-24
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Financial Statements
December 31, 2003
(With Independent Auditors' Report Thereon)
INDEPENDENT AUDITORS' REPORT
----------------------------
The Members
ICON Income Fund Ten, LLC
We have audited the accompanying balance sheet of ICON Income Fund Ten, LLC (a
Delaware limited liability company) as of December 31, 2003 and the related
statements of operations, changes in members' equity, and cash flows for the
period from August 22, 2003 (commencement of operations) to December 31, 2003.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ICON Income Fund Ten, LLC as of
December 31, 2003, and the results of its operations and its cash flows for the
period from August 22, 2003 (commencement of operations) to December 31, 2003 in
conformity with accounting principles generally accepted in the United States of
America.
/s/ Hays & Company LLP
February 3, 2004
New York, New York
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Balance Sheet
December 31, 2003
Assets
Cash and cash equivalents $ 15,908,041
------------------
Investments in operating leases
Equipment at cost 2,880,000
Accumulated depreciation (219,423)
------------------
2,660,577
------------------
Equipment held for sale or lease, net 665,321
------------------
Formation fees, net 1,417,995
Due from affiliates 38
------------------
1,418,033
------------------
Total assets $ 20,651,972
==================
Liabilities and Members' Equity
Security deposits and other liabilities $ 233,524
Refunds payable 203,000
Due to Manager 50,159
------------------
Total liabilities 486,683
------------------
Commitment and Contingencies
Members' equity
Manager (one share outstanding,
$1,000 per share original issue price) (3,092)
Additional members (23,784.330 shares outstanding,
$1,000 per share original issue price) 20,168,381
------------------
Total members' equity 20,165,289
------------------
Total liabilities and members' equity $ 20,651,972
==================
See accompanying notes to financial statements.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Statement of Operations
For the Period from August 22, 2003
(Commencement of Operations) to December 31, 2003
Revenues
Rental income $ 367,828
Interest income 2,856
------------------
Total revenues 370,684
------------------
Expenses
Depreciation expense 274,102
Amortization of formation fees 127,986
General and administrative 76,119
Management fees - Manager 18,391
Administrative expense reimbursements - Manager 7,357
------------------
Total expenses 503,955
------------------
Net loss $ (133,271)
==================
Net loss allocable to:
Managing member $ (1,333)
Additional members (131,938)
------------------
$ (133,271)
==================
Weighted average number of additional
member shares outstanding 13,050
==================
Net loss per weighted average
additional member share $ (10.11)
==================
See accompanying notes to financial statements.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Statement of Changes in Members' Equity
For the Period from
August 22, 2003 (Commencement of Operations) to December 31, 2003
Additional Members Distributions
--------------------------------
Return of Investment Additional Managing
Capital Income Members Member Total
------- ------ ------- ------ -----
(Per weighted average share)
Balance at August 22, 2003 $ - $ 1,000 $ 1,000
Proceeds from issuance of additional members
shares (23,784.330 shares) 23,784,330 - 23,784,330
Sales and offering expenses (3,210,885) - (3,210,885)
Cash distributions
to members $ 20.93 $ - (273,126) (2,759) (275,885)
Net loss (131,938) (1,333) (133,271)
--------------- ------------ --------------
Balance at December 31, 2003 $ 20,168,381 $ (3,092) $ 20,165,289
=============== ============ ==============
See accompanying notes to financial statements.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Statement of Cash Flows
For the Period from August 22, 2003
(Commencement of Operations) to
December 31, 2003
Cash flows from operating activities:
Net loss $ (133,271)
--------------
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation expense 274,102
Amortization of formation fees 127,986
Changes in operating assets and liabilities:
Due from affiliates (38)
Security deposits and other 83,524
Refunds payable 203,000
Due to Manager 50,159
--------------
Total adjustments 738,733
--------------
Net cash provided by operating activities 605,462
--------------
Cash flows used in investing activities:
Investment in operating leases,
net of security deposits assumed (2,730,000)
Formation fees paid (1,545,981)
Investment in equipment held for sale or lease (720,000)
--------------
Net cash used in investing activities (4,995,981)
--------------
Cash flow provided by financing activities:
Issuance of additional membership shares,
net of sales and offering expenses 20,573,445
Cash distributions to members (275,885)
--------------
Net cash provided by financing activities 20,297,560
--------------
Net increase in cash and cash equivalents 15,907,041
Cash and cash equivalents at beginning of period 1,000
--------------
Cash and cash equivalents at end of period $ 15,908,041
==============
See accompanying notes to financial statements.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Notes to Financial Statements
December 31, 2003
1. Organization
ICON Income Fund Ten, LLC (the "LLC") was formed on January 2, 2003 as a
Delaware Limited Liability Company. The initial capitalization of the LLC was
$1,000 by the Managing Member. The LLC is offering membership interests on a
"best efforts" basis with the intention of raising up to $150,000,000 of capital
from additional members. The LLC had its initial closing on August 22, 2003 when
it admitted 5,065.736 additional members shares, representing $5,065,736 in
capital contributions. As of December 31, 2003 the LLC had admitted a further
18,718.594 additional members shares, representing $18,718,594 in capital
contributions, bringing the total capital contributions and additional member
shares to $23,784,330 and 23,784.330, respectively. The LLC will continue until
December 31, 2023, unless terminated sooner.
The Manager, ICON Capital Corp., is a Connecticut corporation. The Manager
manages and controls the business affairs of the LLC's equipment leases and
financing transactions under the terms of a management agreement with the LLC.
ICON Securities Corp., an affiliate of the Manager, receives or is entitled
to receive, an underwriting fee from the gross proceeds from sales of all shares
to the additional members. The Manager is also entitled to receive organization
and offering expenses and formation fees from the gross proceeds of such sales.
The total underwriting compensation paid by the LLC, including underwriting
commissions, sales commissions to unaffiliated selling dealers, public offering
expense reimbursements, due diligence activities and formation fees is limited
to 20% of gross proceeds up to the first $37,500,000 raised, 19% of gross
offering proceeds from $37,5000,001 to $75,000,000 and 18% of gross offering
proceeds from $75,000,001 to $150,000,000. At December 31, 2003, sales and
offering expenses aggregating $1,308,138 were paid or accrued to the Manager or
its affiliates and charged directly to members' equity. In addition, at December
31, 2003, $1,545,981 of formation fees were paid to the Manager or its
affiliates and capitalized in the accompanying balance sheet.
The LLC is an equipment leasing income fund. The principal objective of the
LLC is to obtain the maximum economic return from its investments for the
benefit of its members. To achieve this objective, the LLC intends to: (i)
acquire a diversified portfolio of low obsolescence equipment having long lives
and high residual values; (ii) make monthly cash distributions to its members
commencing with each member's admission to the LLC, continuing through the
reinvestment period, which period will end no later than the eighth anniversary
after the final closing date; (iii) re-invest substantially all undistributed
cash from operations and cash from sales of equipment and financing transactions
during the reinvestment period; and (iv) sell the LLC's investments and
distribute the cash from sales of such investments to its members after the end
of the reinvestment period.
Profits, losses, cash distributions and disposition proceeds are allocated
99% to the members and 1% to the Manager until each member has received cash
distributions and disposition proceeds sufficient to reduce its adjusted capital
contribution account to zero and receive, in addition, other distributions and
allocations which would provide an 8% per annum cumulative return on its
outstanding adjusted capital contribution account. After such time, the
distributions will be allocated 90% to the members and 10% to the Manager.
2. Significant Accounting Policies
Use of Estimates - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period. Significant management
estimates primarily include the allowance for doubtful accounts and estimated
unguaranteed residual values. In addition, management is required to disclose
contingent assets and contingent liabilities. Actual results could differ from
those estimates.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Notes to Financial Statements - Continued
December 31, 2003
Cash and cash equivalents - Cash and cash equivalents include cash in banks
and highly liquid investments with original maturity dates of three months or
less. The LLC's cash and cash equivalents are held principally at one financial
institution and at times may exceed insured limits. As of December 31, 2003, the
LLC had cash and cash equivalents of $15,908,041. These funds will be utilized
to acquire a portfolio of equipment subject to lease that meets the investment
criteria of the LLC. The Managing Member is actively seeking to make equipment
acquisitions on behalf of the LLC.
Leases and Revenue Recognition - The LLC accounts for owned equipment
leased to third parties as finance leases, leveraged leases, or operating
leases, as appropriate. Initial direct costs are capitalized and are amortized
over the terms of the related leases using the interest method.
For finance leases, the LLC records, at the inception of the lease, the
total minimum lease payments receivable, the estimated unguaranteed residual
values, the initial direct costs related to the leases and the related unearned
income. Unearned income represents the difference between the sum of the minimum
lease payments receivable plus the estimated unguaranteed residual minus the
cost of the leased equipment. Unearned income is recognized as finance income
over the terms of the related leases using the interest method.
For operating leases, equipment is recorded and depreciated on the
straight-line method over the lease term to its estimated residual value at
lease termination and is subject to the LLC's impairment policy. Related lease
rentals are recognized on the straight line method over the lease terms. Billed
and uncollected operating lease receivables are included in other assets.
Equipment held for sale or lease - Off-lease equipment that is held for
sale or lease is carried at cost, less accumulated depreciation, subject to the
LLC's impairment review policy.
Credit Risk - Financial instruments that potentially subject the LLC to
concentrations of credit risk include cash and cash equivalents, direct finance
lease receivables and accounts receivable. The LLC places its cash deposits and
temporary cash investments with creditworthy, high quality financial
institutions. The concentration of such deposits and temporary cash investments
is not deemed to create a significant risk to the LLC.
The LLC records a provision for doubtful accounts to provide for estimated
credit losses in its portfolio. The allowance for doubtful accounts is based on
an analysis of delinquency, an assessment of overall risk and a review of
historical loss experience. The LLC's write-off policy is based on an analysis
of the aging of the LLC's portfolio, a review of the non-performing receivables
and leases, and prior collection experience. An account is fully reserved or
written off when the analysis indicates that the probability of collection of
the account is remote.
Impairment - Residual values of the LLC's asset portfolio are periodically
reviewed to determine whether events or changes in circumstances indicate that
the carrying value of an asset may not be recoverable. The events or changes in
circumstances which generally indicate that the residual value of an asset may
be impaired are (i) the estimated fair value of the underlying equipment is less
than the LLC's carrying value or (ii) the lessee is experiencing financial
difficulties and it does not appear likely that the estimated proceeds from
disposition of the asset will be sufficient to satisfy the remaining obligation
to the non-recourse lender and the LLC's residual position. Generally in the
latter situation, the residual position relates to equipment subject to third
party non-recourse notes payable where the lessee remits their rental payments
directly to the lender and the LLC does not recover its residual until the
non-recourse note obligation is repaid in full.
An impairment loss is measured and recognized only if the estimated
undiscounted future cash flows of the asset are less than their net book value.
The estimated undiscounted future cash flows are the sum of the estimated
residual value of the asset at the end of the asset's expected holding period
and estimates of undiscounted future rents. The residual value assumes, among
other things, that the asset is utilized normally in an open, unrestricted and
stable market. Short-term fluctuations in the market place are disregarded and
it is assumed that there is no necessity either to dispose of a significant
number of the assets, simultaneously if held in quantity, or to dispose of the
asset quickly. Impairment is measured as the difference between the fair value
of the assets and its carrying value on the measurement date.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Notes to Financial Statements - Continued
December 31, 2003
Formation Fees - The LLC pays the Manager 6.5% of gross proceeds from the
sale of shares to additional members for the initial selection and acquisition
of equipment and interests in equipment. The Manager's obligation to perform
these services extends until six months after the final admission of additional
members. Since these costs relate to the acquisition of equipment on lease, they
are capitalized on the LLC's balance sheet and amortized to operations over the
estimated average lease term.
Weighted Average Number of Additional Shares Outstanding - The weighted
average number of additional member shares outstanding is calculated as of the
operations commencement date, August 22, 2003.
Fair Value of Financial Instruments - Statement of Financial Accounting
Standards ("SFAS") No. 107, "Disclosures About Fair Values of Financial
Instruments," requires disclosures about the fair value of financial
instruments, except for lease related assets and liabilities. Separate
disclosure of fair value information as of December 31, 2003 and 2002 with
respect to the Partnership's assets and liabilities is not separately provided
since (i) SFAS No. 107 does not require fair value disclosures of lease
arrangements and (ii) the carrying value of financial assets, other than lease
related investments, and the recorded value of payables approximates market
value.
Income Taxes - No provision for income taxes has been recorded as the
liability for such taxes is that of each of the members rather than the LLC. The
LLC's income tax returns are subject to examination by the federal and state
taxing authorities, and changes, if any, could adjust the individual income
taxes of the members.
Recent Accounting Pronouncements - In April 2003, the FASB issued SFAS No.
149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities. SFAS No. 149 amends and clarifies accounting for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities under SFAS No. 133. The Statement requires
that contracts with comparable characteristics be accounted for similarly and
clarifies when a derivative contains a financing component that warrants special
reporting in the statement of cash flows. SFAS No. 149 is effective for
contracts entered into or modified after June 30, 2003, except in certain
circumstances, and for hedging relationships designated after June 30, 2003. The
adoption of this standard did not have a material effect on the LLC's financial
position or results of operations.
In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. This Statement
establishes standards for how an issuer classifies and measures in its
statements of financial position certain financial instruments with
characteristics of both liabilities and equity. It requires that an issuer
classify a financial instrument that is within its scope as a liability (or an
asset in some circumstances) because that financial instrument embodies an
obligation of the issuer. This Statement is effective for financial instruments
entered into or modified after May 31, 2003, and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003, except for
mandatorily redeemable financial instruments of nonpublic entities. The adoption
of this Standard did not have a material effect on the LLC's financial position
or results of operations.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Notes to Financial Statements - Continued
December 31, 2003
In January 2003, the FASB issued FIN 46, Consolidation of Variable Interest
Entities, an Interpretation of ARB No. 51. In December 2003, the FASB issued a
revision to FIN 46, or Revised Interpretation, to clarify some of the provisions
of FIN 46. FIN 46 provides guidance on how to identify a variable interest
entity, or VIE, and determine when the assets, liabilities, non-controlling
interests, and results of operations of a VIE must be included in a company's
consolidated financial statements. A company that holds variable interests in an
entity is required to consolidate the entity if the company's interest in the
VIE is such that the company will absorb a majority of the VIEs expected losses
and/or receive a majority of the entity's expected residual returns, if any.
VIEs created after January 31, 2003, but prior to January 1, 2004, may be
accounted for either based on the original interpretation or the Revised
Interpretations. However, the Revised Interpretations must be applied no later
than the first quarter of fiscal year 2004. VIEs created after January 1, 2004
must be accounted for under the Revised Interpretations. There has been no
material impact to the LLC's financial statements and there is no expected
impact from the adoption of the deferred provisions in the first quarter of
fiscal year 2004.
The LLC does not believe that any other recently issued, but not yet
effective, accounting standards will have a material effect on the LLC's
financial position or results of operations.
3. Related Party Transactions
Fees and expenses paid or accrued by the LLC to the Manager or its
affiliates were as follows for the period ended December 31, 2003:
Formation fees $ 1,545,981 Capitalized
Organization and offering expenses 832,451 Charged to members' equity
Underwriting commissions 475,687 Charged to members' equity
Management fees 18,391 Charged to operations
Administrative expense reimbursements 7,357 Charged to operations
-----------
$ 2,879,867
===========
In accordance with the terms of the Management Agreement, the Partnership
pays the Manager acquisition fees of 6.50% of equipment value acquired, as
defined. Additionally, the Manager is entitled to management fees based upon
lease rentals (ranging from 1% to 7% depending upon the lease structure). The
Manager is also reimbursed for expenses incurred in connection with the LLC's
operations (See Note 1 for information relating to organization and offering
expenses and underwriting commissions).
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Notes to Financial Statements - Continued
December 31, 2003
4. Investment in Operating Leases
The investment in operating leases at December 31, 2003 consist of the
following:
Equipment at cost, beginning of period $ -
Equipment acquisitions 2,880,000
-------------
Equipment at cost, end of year 2,880,000
-------------
Accumulated depreciation, beginning of period -
Depreciation expense 219,423
-------------
Accumulated depreciation, end of year 219,423
-------------
Investments in operating leases, end of year $ 2,660,577
=============
During the quarter ended September 30, 2003, the LLC purchased equipment
subject to leases for $3,600,000. The equipment consists of Boeing 767 aircraft
rotables and accessories, of which 80% is on lease to Flugfelagid Atlanta hf,
d/b/a Air Atlanta Icelandic ("Air Atlanta"). The monthly rental payment is
$91,957. The lease expires on November 30, 2004. The remaining 20% was on lease
with Air Atlanta, but is, at the end of the year, being held for sale or lease
at a net book value of $665,321. The estimated economic useful life of this
equipment is approximately 20 years.
Aggregate minimum future rentals on non-cancellable leases is $1,011,527 at
December 31, 2003. Collectible by November 2004.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
Notes to Financial Statements - Continued
December 31, 2003
5. Tax Information (Unaudited)
The following table reconciles the net loss for financial statement
reporting purposes to income for federal income tax reporting purposes for the
period ended December 31, 2003:
Net loss for financial statement reporting purposes $ (133,271)
Difference due to:
Depreciation and amortization expense 293,421
------------
Income for federal income tax reporting purposes $ 160,150
============
As of December 31, 2003, the total members' equity included in the
financial statements was $20,165,289 compared to the capital accounts for
federal income tax reporting purposes of $23,669,595 (unaudited). The difference
arises primarily from sales and offering expenses reported as a reduction in the
additional members' capital accounts for financial statement reporting purposes
but not for federal income tax reporting purposes as well as the temporary
difference described above.
6. Selected Quarterly Financial Data (Unaudited)
The following table is a summary of selected financial data by quarter for
the period from the LLC's commencement of operations on August 22, 2003 through
December 31, 2003:
For the Quarters Ended (1)
--------------------------
March 31, June 30, September 30, December 31,
Revenues $ - $ - $ 94,786 $ 275,898
============== ============= ============== ===============
Net (loss) allocable to
additional members $ - $ - $ (4,342) $ (127,596)
============== ============= ============== ===============
Net (loss) per weighted
average additional member
share $ - $ - $ (.60) $ (9.51)
============== ============= ============== ===============
(1) The LLC's date of inception was January 2, 2003 but operations did not
commence until August 22, 2003, its initial additional member closing date.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
December 31, 2003
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
Item 9A. Control and Procedures
----------------------
The LLC carried out an evaluation, under the supervision and with the
participation of management of ICON Capital Corp., the Manager of the LLC,
including the Chief Executive Officer and the Principal Financial Officer, of
the effectiveness of the design and operation of the LLC's disclosure controls
and procedures as of the end of the period covered by this report pursuant to
the Securities Exchange Act of 1934. Based upon the evaluation, the Chief
Executive Officer and the Principal Financial Officer concluded that the LLC's
disclosure controls and procedures were effective.
There were no significant changes in the Partnership's internal control
over financial reporting during the Partnership's fourth fiscal quarter that
have materially affected, or are likely to materially affect, the Partnership's
internal control over financial reporting.
PART III
Item 10. Directors and Executive Officers of the Registrant's Manager
------------------------------------------------------------
The Manager, a Connecticut corporation, was formed in 1985. The Manager's
principal offices are located at 100 Fifth Avenue, New York, New York 10011, and
its telephone number is (212) 418-4700. The officers of the Manager have
extensive experience with transactions involving the acquisition, leasing,
financing and disposition of equipment, including acquiring and disposing of
equipment subject to leases and full financing transactions.
The manager of the LLC's business is the Manager. The Manager is engaged in
a broad range of equipment leasing and financing activities. Through its sales
representatives and through various broker relationships throughout the United
States, the Manager offers a broad range of equipment leasing services.
The Manager performs certain functions relating to the management of the
equipment of the LLC. Such services include the collection of lease payments
from the lessees of the equipment, re-leasing services in connection with
equipment which is off-lease, inspections of the equipment, liaison with and
general supervision of lessees to assure that the equipment is being properly
operated and maintained, monitoring performance by the lessees of their
obligations under the leases and the payment of operating expenses.
ICON Income Fund Ten LLC
(A Delaware Limited Liability Company)
December 31, 2003
The officers and directors of the Manager are as follows:
Beaufort J.B. Clarke Chairman, Chief Executive Officer and Director
Paul B. Weiss President and Director
Thomas W. Martin Executive Vice President and Director
Beaufort J.B. Clarke, age 57, has been Chairman, Chief Executive Officer
and Director of the Manager since 1996. Prior to his present position, Mr.
Clarke was founder and the President and Chief Executive Officer of Griffin
Equity Partners, Inc. Mr. Clarke formerly was an attorney with Shearman and
Sterling and has over 20 years of senior management experience in the United
States leasing industry.
Paul B. Weiss, age 43, is President and Director of the Manager. Mr. Weiss
has been exclusively engaged in lease acquisitions since 1988 from his
affiliations with the Manager since 1996, Griffin Equity Partners (as Executive
Vice President from 1993-1996); Gemini Financial Holdings (as Senior Vice
President-Portfolio Acquisitions from 1991-1993) and Pegasus Capital Corporation
(as Vice President-Portfolio Acquisitions from 1988-1991). He was previously an
investment banker and a commercial banker.
Thomas W. Martin, age 50, has been Executive Vice President and Director of
the Manager since 1996. Prior to his present position, Mr. Martin was the
Executive Vice President and Chief Financial Officer of Griffin Equity Partners,
Inc. (1993-1996), Gemini Financial Holdings (as Senior Vice President from
1992-1993) and Chancellor Corporation (as Vice President-Syndication's from
1985-1992). Mr. Martin has 19 years of senior management experience in the
leasing business.
Item 11. Executive Compensation
----------------------
The LLC has no directors or officers. The Manager and its affiliates were
paid or accrued the following compensation and reimbursement for costs and
expenses for the year ended December 31, 2003.
Entity Capacity Type of Compensation Amount
------ -------- -------------------- ------
ICON Capital Corp. Manager Formation fees $ 1,545,981
ICON Capital Corp. Manager Organization and
offering expenses 832,451
ICON Securities Corp. Dealer-Manager Underwriting commissions 475,687
ICON Capital Corp. Manager Management fees 18,391
ICON Capital Corp. Manager Administrative expense
reimbursements 7,357
-------------
$ 2,879,867
=============
In accordance with the terms of the Management Agreement, the Partnership
pays the General Partner acquisition fees of 6.50% of equipment value acquired,
as defined. Additionally, the General Partner is entitled to management fees
based upon lease rentals (ranging from 1% to 7% depending upon the lease
structure). The General Partner is also reimbursed for expenses incurred in
connection with the Partnership's operations (See Note 1 for information
relating to organization and offering expenses and underwriting commissions).
The General Partner also owns a 1% interest in the profits and distributions of
the LLC.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
December 31, 2003
Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
(a) No person of record owns, or is known by the LLC to own beneficially, more
than 5% of any class of securities of the LLC.
(b) As of March 30, 2004, Directors and Officers of the Manager do not own any
equity securities of the LLC.
(c) The Manager owns the equity securities of the LLC as of December 31, 2003
set forth in the following table:
Title Amount Beneficially Percent
of Class Owned of Class
Manager interest represents initially a 1% and potentially a 100%
10% interest in the LLC's income, gain
and loss deductions.
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
None other than those disclosed in Item 11 herein.
Item 14. Principal Accounting Fees and Services
--------------------------------------
2003 Description
---- -----------
Audit fees $ 27,000 Audit and review
Audit related fees -
Tax fees -
All other fees -
-------------
Total $ 27,000
=============
PART IV
Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K
---------------------------------------------------------------
(a) 1. Financial Statements - See Part II, Item 8 hereof.
2. Financial Statement Schedule - None.
Schedules not listed above have been omitted because they are not
applicable or the information required to be set forth therein is
included in the financial statements or notes thereto.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
December 31, 2003
3. Exhibits - The following exhibits are incorporated herein by reference:
(i) Amended and Restated Operating Agreement of ICON Income Fund Ten,
LLC (Incorporated by reference to Exhibit A to pre-effective
Amendment No. 1 to Form S-1 Registration Statement filed with the
Securities and Exchange Commission dated June 2, 2003).
(ii) Certificate of Limited Liability Company (Incorporated herein by
reference to Exhibit 4.3 to pre-effective Form S-1 Registration
Statement filed with the Securities and Exchange Commission dated
February 28, 2003).
(b) Reports on Form 8-K
None.
(c) Exhibits
31.1 Rule 13a-14(a)/15d-14(a) certifications
31.2 Rule 13a-14(a)/15d-14(a) certifications
32.1 Certification of Chairman and Chief Executive Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2 Certification of Executive Vice President and Principal Financial
and Accounting Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
ICON Income Fund Ten, LLC
(A Delaware Limited Liability Company)
December 31, 2003
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, LLC has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ICON Income Fund Ten, LLC
File No. 333-103503 (Registrant)
By its Manager, ICON Capital Corp.
Date: March 30, 2004 /s/ Beaufort J.B. Clarke
----------------------------------
Beaufort J.B. Clarke
Chairman, Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacity and on the dates indicated.
ICON Capital Corp.
sole Manager of the Registrant
Date: March 30, 2004 /s/ Beaufort J.B. Clarke
-----------------------------------
Beaufort J.B. Clarke
Chairman, Chief Executive Officer and Director
Date: March 30, 2004 /s/ Paul B. Weiss
-----------------------------------
Paul B. Weiss
President and Director
Date: March 30, 2004 /s/ Thomas W. Martin
-----------------------------------
Thomas W. Martin
Executive Vice President and Director
(Principal Financial and Accounting Officer)
Supplemental Information to be Furnished With Reports Filed Pursuant to Section
15(d) of the Act by Registrant Which have not Registered Securities Pursuant to
Section 12 of the Act
No annual report or proxy material has been sent to security holders. An annual
report will be sent to the members and a copy will be forwarded to the
Commission.
Exhibit 31.1
Principal Executive Officer Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)
Certifications - 10-K
---------------------
I, Beaufort J.B. Clarke, certify that:
1. I have reviewed this annual report on Form 10-K of ICON Income Fund Ten,
LLC;
2. Based on my knowledge, this annual report does not contain any untrue
statements of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and we have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this annual report our conclusions
about the effectiveness of the disclosure controls and procedures as
of the end of the period covered by this annual report based on such
evaluation; and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the board of directors of the Corporate
Manager (or persons performing the equivalent function):
a) all significant deficiencies and material weaknesses in the design or
operation of internal control, are reasonably likely to materially
affect the LLC's ability to record, process, summarize and report
financial information and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls over financial reporting.
Dated: March 30, 2004
/s/ Beaufort J.B. Clarke
- -----------------------------
Beaufort J. B. Clarke
Chairman and Chief Executive Officer
ICON Capital Corp.
Manager of ICON Income Fund Ten, LLC
Exhibit 31.2 Principal Executive Officer Certification Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)
Certifications - 10-K
---------------------
I, Thomas W. Martin, certify that:
1. I have reviewed this annual report on Form 10-K of ICON Income Fund Ten,
LLC;
2. Based on my knowledge, this annual report does not contain any untrue
statements of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and we have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this annual report our conclusions
about the effectiveness of the disclosure controls and procedures as
of the end of the period covered by this annual report based on such
evaluation; and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the board of directors of the Corporate
Manager (or persons performing the equivalent function):
a) all significant deficiencies and material weaknesses in the design or
operation of internal control, are reasonably likely to materially
affect the LLC's ability to record, process, summarize and report
financial information and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls over financial reporting.
Dated: March 30, 2004
/s/ Thomas W. Martin
- ----------------------------------------
Thomas W. Martin
Executive Vice President
(Principal Financial and Accounting Officer)
ICON Capital Corp.
Manager of ICON Income Fund Ten, LLC
Exhibit 31.1
Principal Executive Officer Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)
I, Beaufort J.B. Clarke, Chairman and Chief Executive Officer of ICON
Capital Corp, the Manager of the LLC in connection with the Annual Report of
ICON Income Fund Ten, LLC (the "LLC") on Form 10-K for the year ended December
31, 2003, as filed with the Securities and Exchange Commission on the date
hereof (the "Annual Report") certify, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:
(1) the Annual Report fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
(2) the information contained in the Annual Report fairly presents, in all
material respects, the financial condition and results of operations of the LLC
Dated: March 30, 2004
/s/ Beaufort J.B. Clarke
------------------------------------------------------
Beaufort J.B. Clarke
Chairman and Chief Executive Officer
ICON Capital Corp.
Manager of ICON Income Fund Ten, LLC
Exhibit 31.2
Principal Executive Officer Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)
I, Thomas W. Martin, Executive Vice President (Principal Financial and
Accounting Officer) of ICON Capital Corp, the Manager of the LLC in connection
with the Annual Report of ICON Income Fund Ten, LLC (the "LLC") on Form 10-K for
the year ended December 31, 2003, as filed with the Securities and Exchange
Commission on the date hereof (the "Annual Report") certify, pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and
belief:
(1) the Annual Report fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
(2) the information contained in the Annual Report fairly presents, in all
material respects, the financial condition and results of operations of the LLC
Dated: March 30, 2004
/s/ Thomas W. Martin
- -------------------------------------------------------
Thomas W. Martin
Executive Vice President (Principal
Financial and Accounting Officer)
ICON Capital Corp.
Manager of ICON Income Fund Ten, LLC