Attached files
file | filename |
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EX-31.1 - EX-31.1 - SQN Alternative Investment Fund III, L.P. | y04919exv31w1.htm |
EX-31.2 - EX-31.2 - SQN Alternative Investment Fund III, L.P. | y04919exv31w2.htm |
EXCEL - IDEA: XBRL DOCUMENT - SQN Alternative Investment Fund III, L.P. | Financial_Report.xls |
EX-32.1 - EX-32.1 - SQN Alternative Investment Fund III, L.P. | y04919exv32w1.htm |
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2011
OR
o | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION FROM _______ TO _______.
COMMISSION FILE NUMBER: 333-166195
SQN Alternative Investment Fund III L.P.
(Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization) |
27-2173346 (I.R.S. Employer ID No.) |
|
110 William Street, 26th Floor | ||
New York, NY (Address of principal executive offices) |
10038 (Zip code) |
Issuers telephone number: (212) 422-2166
120 Wall Street, 18th Floor
New York, NY 10005
(Former name, former address and former fiscal year, if changed since last report.)
New York, NY 10005
(Former name, former address and former fiscal year, if changed since last report.)
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. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files).
Yes o No þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or
a non-accelerated filer. See definition of accelerated filer and large accelerated filer in
Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer o | Accelerated filer o | Non-accelerated filer o | Smaller Reporting Company þ | |||
(Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o No þ
At August 10, 2011, there were 4,538.50 units of the Registrants partnership interests issued and
outstanding.
SQN Alternative Investment Fund III L.P.
INDEX
Item 1. Financial Statements |
||||||||
3 | ||||||||
4 | ||||||||
5 | ||||||||
6 | ||||||||
7 | ||||||||
13 | ||||||||
18 | ||||||||
18 | ||||||||
18 | ||||||||
19 | ||||||||
19 | ||||||||
19 | ||||||||
19 | ||||||||
19 | ||||||||
19 | ||||||||
20 | ||||||||
EX-31.1 | ||||||||
EX-31.2 | ||||||||
EX-32.1 | ||||||||
EX-101 INSTANCE DOCUMENT | ||||||||
EX-101 SCHEMA DOCUMENT | ||||||||
EX-101 CALCULATION LINKBASE DOCUMENT | ||||||||
EX-101 LABELS LINKBASE DOCUMENT | ||||||||
EX-101 PRESENTATION LINKBASE DOCUMENT | ||||||||
EX-101 DEFINITION LINKBASE DOCUMENT |
Table of Contents
Part I FINANCIAL INFORTATION
SQN Alternative Investment Fund III L.P.
Condensed Balance Sheets
Assets
June 30, 2011 | ||||||||
(Unaudited) | December 31, 2010 | |||||||
Cash and cash equivalents |
$ | 1,094,502 | $ | 232 | ||||
Escrow receivable |
840,834 | | ||||||
Investment in finance lease, net |
2,931,294 | | ||||||
Initial direct costs, net of accumulated
amortization of $- |
73,322 | | ||||||
Other assets |
1,750 | | ||||||
Total assets |
$ | 4,941,702 | $ | 232 | ||||
Liabilities and Partners Equity |
||||||||
Accrued expenses |
$ | 174,100 | $ | | ||||
Other Liabilities |
1,230,096 | | ||||||
Limited Partners contributions received in advance |
839,900 | | ||||||
Total liabilities |
2,244,096 | | ||||||
Equity Limited Partner |
2,699,564 | 133 | ||||||
Equity General Partner |
(1,958 | ) | 99 | |||||
Total Partners Equity |
2,697,606 | 232 | ||||||
Total Liabilities and Partners Equity |
$ | 4,941,702 | $ | 232 | ||||
See notes to condensed financial statements.
3
Table of Contents
SQN Alternative Investment Fund III L.P.
Condensed Statements of Operations
Three Months | Six Months Ended | |||||||
Ended June 30, 2011 | June 30, 2011 | |||||||
(Unaudited) | (Unaudited) | |||||||
Revenue: |
||||||||
Interest income |
$ | 934 | $ | 934 | ||||
Total revenue |
934 | 934 | ||||||
Expenses: |
||||||||
Management fees Investment Partner |
$ | 120,000 | $ | 120,000 | ||||
Administration fees |
11,800 | 22,300 | ||||||
Professional fees |
44,260 | 62,987 | ||||||
Other expenses |
1,295 | 1,349 | ||||||
Total expenses |
177,355 | 206,636 | ||||||
Net loss |
$ | (176,421 | ) | $ | (205,702 | ) | ||
Net loss allocable to: |
||||||||
Limited Partner |
$ | (174,657 | ) | $ | (203,645 | ) | ||
General Partner |
(1,764 | ) | (2,057 | ) | ||||
$ | (176,421 | ) | $ | (205,702 | ) | |||
Weighted average number of limited partnership
interests outstanding |
1,886 | 1,886 | ||||||
Net loss attributable to limited partners per
weighted average number of limited partnership
interests outstanding |
$ | (92.60 | ) | $ | (107.97 | ) | ||
See notes to condensed financial statements.
4
Table of Contents
SQN Alternative Investment Fund III L.P.
Condensed Statement of Changes in Partners Equity
Six Months Ended June 30, 2011
Limited | Subscription | |||||||||||||||||||
Partnership | General | Limited | Receivable - | |||||||||||||||||
Interests | Total | Partner | Partners | Limited Partner | ||||||||||||||||
Partners capital contributions |
1 | $ | 1,100 | $ | 100 | $ | 1,000 | $ | | |||||||||||
Less: subscription receivable |
| (750 | ) | | | (750 | ) | |||||||||||||
Net loss |
| (118 | ) | (1 | ) | (117 | ) | | ||||||||||||
Balance, December 31, 2010 |
1 | 232 | 99 | 883 | (750 | ) | ||||||||||||||
Partners capital contributions |
3,850 | 3,850,000 | | 3,850,000 | | |||||||||||||||
Add: subscription received |
| 500 | | | 500 | |||||||||||||||
Offering and Distribution
Expenses |
| (947,424 | ) | | (947,424 | ) | | |||||||||||||
Net loss |
| (205,702 | ) | (2,057 | ) | (203,645 | ) | | ||||||||||||
Balance, June 30, 2011
(Unaudited) |
3,851 | $ | 2,697,606 | $ | (1,958 | ) | $ | 2,699,814 | $ | (250 | ) | |||||||||
See notes to condensed financial statements.
5
Table of Contents
SQN Alternative Investment Fund III L.P.
Condensed Statement of Cash Flows
Six Months Ended June 30, 2011
(Unaudited)
Cash flows from operating activities: |
||||
Net loss |
$ | (205,702 | ) | |
Change in operating assets and liabilities: |
||||
Other assets |
(1,750 | ) | ||
Accrued expenses |
24,100 | |||
Net cash used in operating activities |
(183,352 | ) | ||
Cash flows from investing activities: |
||||
Purchase of finance leases |
(1,774,520 | ) | ||
Net cash used in investing activities |
(1,774,520 | ) | ||
Cash flows from financing activities: |
||||
Proceeds from limited partner capital contributions |
3,850,500 | |||
Cash paid for offering and distribution expenses |
(797,424 | ) | ||
Increase in escrow deposits |
(840,834 | ) | ||
Limited Partners capital contributions received in advance |
839,900 | |||
Net cash provided by financing activities |
3,052,142 | |||
Net increase in cash and cash equivalents |
1,094,270 | |||
Cash and cash equivalents, beginning of period |
232 | |||
Cash and cash equivalents, end of period |
$ | 1,094,502 | ||
See notes to condensed financial statements.
6
Table of Contents
SQN Alternative Investment Fund III L.P.
Notes to Condensed Financial Statements
June 30, 2011
(Unaudited)
1. | Organization and Nature of Operations |
Nature of business and operations The condensed financial statements at June 30, 2011 and for the three and six months ended June 30, 2011 are unaudited, but in the opinion of management include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results for the interim periods. The results reported in these condensed financial statements should not necessarily be taken as indicative of results that may be expected for the entire year. The financial information included herein should be read in conjunction with the financial statements and notes in the Prospectus, dated March 17, 2011, contained in the Partnerships Registration Statement on Form S-1, as amended. |
SQN Alternative Investment Fund III L.P. (the Partnership) was organized as a Delaware limited partnership on March 10, 2010 and is engaged in a single business segment, the ownership and investment in leased equipment, which includes: (i) purchasing equipment and leasing it to third-party end users; (ii) providing equipment and other asset financing; (iii) acquiring equipment subject to lease and (iv) acquiring ownership rights (residual value interests) in leased equipment at lease expiration. From time to time, the Partnership may also purchase equipment and sell it directly to its leasing customers. The Partnership will terminate no later than December 31, 2034. |
The principal investment strategy of the Partnership is to invest in business-essential, revenue-producing equipment with high in-place value and long, relative to the investment term, economic life. The Partnership expects to achieve its investment strategy by making investments in equipment already subject to lease or originating equipment leases in such equipment. |
The General Partner of the Partnership is SQN AIF III GP, LLC (the General Partner), a wholly-owned subsidiary of the Partnerships Investment Manager, SQN Capital Management, LLC (the Investment Manager). Both the Partnerships General Partner and its Investment Manager are Delaware limited liability companies. The General Partner will manage and control the day to day activities and operations of the Partnership, pursuant to the terms of the Partnership Agreement. The General Partner paid an aggregate capital contribution of $100 for a 1% interest in the Partnerships income, losses and distributions. The Investment Manager will make all investment decisions and manage the investment portfolio of the Partnership. On June 28, 2011 the officers of Summit Asset Management Limited (SAM) which prior to that date had equal ownership of the Investment Manager with SQN Capital Corporation resigned from both the General Partner and the Investment Manager. At this time, SAM redeemed its ownership interest in the Investment Manager. In doing so, SAM will be able to provide credit enhancement and origination services that could not be provided as an affiliate of the Partnership under NASAA Guidelines. |
SQN Capital Corporation and SAM will, from time to time, originate transactions on their own behalf and offer to sell all or part of such transactions to the Partnership either individually or as a portfolio depending upon, among other things, the appropriateness of the proposed investment for the Partnership (as determined by the Investment Manager, in its sole discretion) and the amount available for investment by the Partnership at such time. |
The Partnership will make, at the sole discretion of the Investment Manager, semi-annual cash distributions to each partner computed at 3% (pro-rated to the date of admission for each limited partner) of each partners capital contribution, beginning six months after the Partnerships initial closing which occurred on May 2, 2011. The Partnerships income, losses and distributions are allocated 99% to the limited partners and 1% to the General Partner until the limited partners have received total distributions equal to each limited partners capital contribution plus an 8%, compounded annually, cumulative return on each limited partners capital contribution. After such time, income, losses and distributions will be allocated 80% to the limited partners and 20% to the General Partner. |
A limited partner may not redeem their partnership units in the Partnership without the prior written consent of the General Partner. The General Partner has the sole discretion to approve or deny any redemption requested by a limited partner. |
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Table of Contents
SQN Alternative Investment Fund III L.P.
Notes to Condensed Financial Statements
June 30, 2011
(Unaudited)
The Partnership is currently in the Offering Period, which expires the earlier of raising $50,000,000 in limited partner capital contributions (50,000 units at $1,000 per unit) or March 17, 2013. During the Operating Period the Partnership will invest most of the net proceeds from its offering in items of equipment that are subject to leases, equipment financing transactions, and in residual ownership rights in leased equipment. The Operating Period begins when the Partnership starts investing the offering proceeds, which occurred on June 29, 2011, and is expected to last for three years, unless it is extended, at the sole discretion of the Partnerships General Partner for a maximum of two one-year extensions. After the net offering proceeds are invested, additional investments will be made with the cash generated from the Partnerships initial investments, to the extent that cash is not needed for expenses, reserves, or distributions to partners. The investment in additional equipment in this manner is called reinvestment. After the Operating Period, the Partnership will sell its assets in the ordinary course of business, a time frame called the Liquidation Period. The Liquidation Period is expected to last four years, unless it is extended, at the sole discretion of the Partnerships General Partner for a maximum of two one-year extensions. |
On May 2, 2011, the first business day after April 30, 2011, the Partnership admitted its initial 19 limited partners with total capital contributions of $1,200,000. From May 3, 2011 through June 30, 2011, the Partnership admitted an additional 38 limited partners with total capital contributions of $2,650,000. |
2. | Summary of Significant Accounting Policies |
Cash and cash equivalents - The Partnership considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist of funds maintained in checking and money market accounts held at financial institutions. |
The Partnerships cash and cash equivalents are held principally at one financial institution and at times may exceed federally insured limits. The Partnership has placed these funds in high quality institutions in order to minimize risk relating to exceeding insured limits. |
Finance lease receivables and allowance for doubtful accounts - In the normal course of business, the Partnership provides credit or financing to its customers, performs credit evaluations of these customers, and maintains reserves for potential credit losses. These credit or financing transactions are normally collateralized by the equipment being financed. In determining the amount of allowance for doubtful accounts, the Investment Manager considers historical credit losses, the past due status of receivables, payment history, and other customer-specific information. The past due status of a receivable is based on its contractual terms. Expected credit losses are recorded as an allowance for doubtful accounts. Receivables are written off when the Investment Manager determines they are uncollectible. An allowance for doubtful accounts is not currently provided since, in the opinion of the Investment Manager, all accounts recorded on the books are deemed collectible. |
Risks and uncertainties - In the normal course of business, the Partnership is exposed to credit risk. Credit risk is the risk of a lessees inability or unwillingness to make contractually required payments. Concentrations of credit risk with respect to lessees are dispersed across different industry segments within the United States of America and throughout the United Kingdom. Although the Partnership does not currently foresee a concentrated credit risk associated with these customers, lease payments are dependent upon the financial stability of the industry segments in which they operate. |
Asset impairments - The significant assets in the Partnerships investment portfolio are periodically reviewed, no less frequently than annually or when indicators of impairment exist, to determine whether events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss is recognized only if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value. If there is an indication of impairment, the Partnership estimates the future cash flows (undiscounted and without interest charges) expected from the use of the asset and its eventual disposition. Future cash flows are the future cash inflows expected to be generated by an asset less the future outflows expected to be necessary to obtain those inflows. If impairment is determined to exist, impairment loss is measured as the amount by which the carrying value of a long-lived asset exceeds its fair value and recorded in the statement of operations in the period the determination is made. |
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Table of Contents
SQN Alternative Investment Fund III L.P.
Notes to Condensed Financial Statements
June 30, 2011
(Unaudited)
The events or changes in circumstances that generally indicate that an asset may be impaired are, (i) the estimated fair value of the underlying equipment is less than its carrying value, (ii) the lessee is experiencing financial difficulties and (iii) it does not appear likely that the estimated proceeds from the disposition of the asset will be sufficient to satisfy the residual value in the asset. The preparation of the undiscounted cash flows requires the use of assumptions and estimates, including the level of future rents or receipts from the sale of the residual value investment, estimated downtime between re-leasing events, and the amount of re-leasing costs. The Investment Managers review for impairment includes a consideration of the existence of impairment indicators, including third party appraisals, published values for similar assets, recent transactions for similar assets, adverse changes in market conditions for specific asset types, and the occurrence of significant adverse changes in general industry and market conditions that could affect the fair value of the asset. |
Revenue recognition - The Partnership records revenue based upon the lease classification determined at the inception of the transaction and based upon the terms of lease. |
The Partnership leases equipment to third parties and each such lease may be classified as either a finance lease or an operating lease. Initial direct costs will be capitalized and amortized over the term of the related lease for a finance lease. For an operating lease, the initial direct costs will be included as a component of the cost of the equipment and depreciated. |
For finance leases, the Partnership will record, at lease inception, the total minimum lease payments receivable from the lessee, the estimated unguaranteed residual value of the equipment upon lease termination, the initial direct costs, if any, related to the lease and the related unearned income. Unearned income represents the difference between the sum of the minimum lease payments receivable plus the estimated unguaranteed residual value, minus the cost of the leased equipment. Unearned income will be recognized as finance income over the term of the lease using the effective interest rate method. |
For operating leases, rental income will be recognized on a straight line basis over the lease term. Billed and uncollected operating lease receivables will be included in accounts receivable. Accounts receivable will be stated at their estimated net realizable value. Deferred rental income is the difference between the timing of the cash payments and the income recognized on a straight line basis. |
The Investment Manager has an investment committee that approves each new equipment lease, financing transaction, and lease acquisition. As part of its process it determines the unguaranteed residual value, if any, to be used once the acquisition has been approved. The factors considered in determining the unguaranteed residual value include, but are not limited to, the creditworthiness of the potential lessee, the type of equipment being considered, how the equipment is integrated into the potential lessees business, the length of the lease and the industry in which the potential lessee operates. Unguaranteed residual values are reviewed for impairment in accordance with the Partnerships policy relating to impairment review. |
Initial direct costs - The Partnership capitalizes initial direct costs (IDC) associated with the origination and funding of lease assets. IDC includes both internal costs (e.g., labor and overhead) and external broker fees incurred with the origination. These costs are amortized on a lease by lease basis based on actual contract term using a straight-line method for operating leases and the effective interest rate method for finance leases. Upon disposal of the underlying lease assets, both the IDC and the associated accumulated amortization are relieved. Costs related to leases that are not consummated are not eligible for capitalization as initial direct costs and are expensed as incurred as acquisition expense. |
Acquisition expense - Acquisition expense represents costs which include, but are not limited to, legal fees and expenses, travel and communication expenses, cost of appraisals, accounting fees and expenses, and miscellaneous expenses related to selection and acquisition of equipment which are to be borne by the Partnership under the terms of the Registration Statement, as amended. As these costs are not eligible for capitalization as initial direct costs, such amounts are expensed as incurred. |
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SQN Alternative Investment Fund III L.P.
Notes to Condensed Financial Statements
June 30, 2011
(Unaudited)
Income taxes - As a partnership no provision for income taxes will be recorded since the liability for such taxes is that of each of the partners rather than the Partnership. The Partnerships income tax returns are subject to examination by the federal and state taxing authorities, and changes, if any, could adjust the individual income tax of the members. |
Uncertain tax positions - The Partnership has adopted the provisions of Accounting for Uncertainty in Income Taxes (Uncertain Tax Position). Uncertain Tax Position prescribes recognition thresholds that must be met before a tax position is recognized in the financial statements and provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Under Uncertain Tax Position, an entity may only recognize or continue to recognize tax positions that meet a more likely than not threshold. The Partnership has evaluated its tax position for the period ended December 31, 2010 and the six months ended June 30, 2011, and does not expect any material adjustments to be made. The tax year 2010 remains open to examination by the major taxing jurisdictions to which the Partnership is subject. |
Per Share Data - Net loss attributable to the Partnerships weighted average number of limited partnership interests is calculated based upon the weighted average number of limited partnership interests outstanding during the period. |
Foreign currency transactions - The Partnership has designated the United States of America dollar as the functional currency for most of the Partnerships operations in international locations. In those countries where the Partnership has designated the United States of America dollar as the functional currency, certain assets and liabilities are translated at historical exchange rates, revenues and expenses in these countries are translated at the average rate of exchange for the period, and all transaction gains or losses are reflected in the periods results of operations. |
Use of estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the General Partner and Investment Manager to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates primarily include the determination of allowances for doubtful accounts, depreciation and amortization, impairment losses, estimated useful lives, and residual values. Actual results could differ from those estimates. | ||
Recent Accounting Pronouncements |
In June 2011, the Financial Accounting Standards Board (the FASB) issued new accounting guidance related to the presentation of other comprehensive income (OCI). This guidance eliminates the option to present components of OCI as part of the statement of changes in partners equity. The guidance allows for a one-statement or two-statement approach, outlined as follows: |
| One-statement approach: Present the components of net income and total net income, the components of OCI and total OCI, along with the total comprehensive income in a single continuous statement. | ||
| Two-statement approach: Present the components of net income and total net income in the statement of operations. A statement of OCI would immediately follow the statement of operations and include the components of OCI and a total for OCI, along with the total of comprehensive income. |
The guidance also requires an entity to present on the face of the financial statements any reclassification adjustments for items that are reclassified from OCI to net income. The guidance is effective for interim and annual periods beginning after December 15, 2011. The adoption of this guidance will not have an effect on the Partnerships financial position or results of operations | ||
In May 2011, the FASB issued amendments to its accounting guidance related to fair value measurements in order to more closely align its disclosure requirements with those in International Financial Reporting Standards (IFRS). This guidance clarifies the application of existing fair value measurement and disclosure requirements and also changes certain principles or requirements for measuring fair value or for disclosing information about fair value measurements. The guidance is effective for interim and annual periods beginning |
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SQN Alternative Investment Fund III L.P.
Notes to Condensed Financial Statements
June 30, 2011
(Unaudited)
after December 15, 2011. The adoption of this guidance is not expected to have a material effect on the Partnerships financial position or results of operations. |
3. | Related Party Transactions |
The General Partner is responsible for the day-to-day operations of the Partnership and the Investment Manager makes all investment decisions and manages the investment portfolio of the Partnership. The Partnership pays the General Partner an allowance for organizational and offering costs not to exceed 2% of all capital contributions received by the Partnership. The General Partner also has a promotional interest in the Partnership equal to 20% of all distributed cash available for distribution, after the Partnership has provided an 8% cumulative return, compounded annually, to the limited partners on their capital contributions. The General Partner also has a 1% interest in the profits, losses and distributions of the Partnership. |
The Partnership also pays the Investment Manager an amount equal to or the greater of; (i) a fixed monthly management fee of $60,000 or (ii) 1.975% per annum of the aggregate offering proceeds. The monthly management fee reimburses the Investment Manager for normal overhead expenses, which include, but are not limited to, employee compensation, rent, professional services, office equipment, and supplies. For the three and six months ended June 30, 2011, the Partnership paid the Investment Manager $120,000 for management fees which is included in the condensed statement of operations. |
SQN Securities, LLC (Securities) is a Delaware limited liability company and is a majority-owned subsidiary of the Partnerships Investment Manager. Securities is the sole selling agent of the Partnerships interests and is a member of both the Financial Industry Regulatory Authority and the Security Investor Protection Corporation. The Partnership pays Securities a distribution expense equal to 2% of the aggregate offering proceeds, excluding proceeds from the General Partner or any affiliated entities. For the three and six months ended June 30, 2011, Securities was paid $77,010, which is included in offering and distribution expense in the condensed statement of changes in partners equity. |
On June 28, 2011 the officers of Summit Asset Management Limited (SAM) which prior to that date had equal ownership of the Investment Manager with SQN Capital Corporation resigned from both the General Partner and the Investment Manager. At this time, SAM redeemed its ownership interest in the Investment Manager. In doing so, SAM will be able to provide credit enhancement and origination services that could not be provided as an affiliate of the Partnership under NASAA Guidelines. |
SQN Capital Corporation and SAM, will, from time to time, originate transactions on their own behalf and offer to sell all or part of such transactions to the Partnership either individually or as a portfolio depending upon, among other things, the appropriateness of the proposed investment for the Partnership (as determined by the Investment Manager, in its sole discretion) and the amount available for investment by the Partnership at such time. |
4. | Investment in finance lease |
On June 29, 2011, the Partnership entered into a lease transaction for a bottle recycling and extrusion line located in the United Kingdom for £1,830,000 ($2,931,294 applying exchange rates at June 30, 2011) with a lease term of 60 months. Under the terms of the agreement the Partnership is to fund the lessee in two installments; an initial installment of £1,100,000 and a second installment of £730,000. The Partnership paid the initial installment on June 29, 2011, in the amount of $1,774,520. The second installment is contingent upon the lessee raising its own equity of £3,000,000. The Partnership accrued the second installment totaling $1,156,774 which is included in other liabilities in the accompanying condensed balance sheet. At lease termination the lessee has an option to purchase the leased equipment for £253,821 ($406,570 applying exchange rates at June 30, 2011). At June 30, 2011, the Partnership incurred and accrued initial direct costs of $73,322, which is included in other liabilities in the accompanying condensed balance sheet. |
The initial rental period may last up to 12 months if certain milestones are not reached. During the initial rental period the Partnership will earn monthly rental income of £11,229 ($17,987 applying exchange rates at June 30, |
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SQN Alternative Investment Fund III L.P.
Notes to Condensed Financial Statements
June 30, 2011
(Unaudited)
2011). Once the lease commences, the Partnership will receive monthly payments of £40,937 ($65,573 applying exchange rates at June 30, 2011). |
Investment in finance lease consists of the following at June 30, 2011: |
Minimum rental payments |
$ | 4,340,944 | ||
Estimated residual value |
| |||
Unearned income |
(1,409,650 | ) | ||
$ | 2,931,294 | |||
At June 30, 2011, the aggregate amounts of future minimum lease payments receivable are as follows: |
Years Ending June 30, |
||||
2012 |
$ | 655,729 | ||
2013 |
786,875 | |||
2014 |
786,875 | |||
2015 |
786,875 | |||
2016 |
786,875 | |||
Thereafter |
537,715 | |||
$ | 4,340,944 | |||
5. | Indemnifications |
The Partnership enters into contracts that contain a variety of indemnifications. The Partnerships maximum exposure under these arrangements is not known. |
In the normal course of business, the Partnership enters into contracts of various types, including lease contracts, contracts for the sale or purchase of lease assets, and management contracts. It is prevalent industry practice for most contracts of any significant value to include provisions that each of the contracting parties, in addition to assuming liability for breaches of the representations, warranties, and covenants that are part of the underlying contractual obligations, to also assume an obligation to indemnify and hold the other contractual party harmless for such breaches, and for harm caused by such partys gross negligence and willful misconduct, including, in certain instances, certain costs and expenses arising from the contract. Generally, to the extent these contracts are performed in the ordinary course of business under the reasonable business judgment of the General Partner and Investment Manager, no liability will arise as a result of these provisions. The General Partner and Investment Manager knows of no facts or circumstances that would make the Partnerships contractual commitments outside standard mutual covenants applicable to commercial transactions between businesses. Accordingly, the Partnership 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 Partnerships similar commitments is remote. Should any such indemnification obligation become payable, the Partnership would separately record and/or disclose such liability in accordance with accounting principles generally accepted in the United States of America. |
6. | Subsequent Events |
During July 2011, the Partnership admitted an additional 16 limited partners with capital contributions totaling $688,000. At July 31, 2011, the Partnership incurred and paid to Securities $13,760 in distribution expenses related to the capital contributions raised during July 2011. |
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Item 2. General Partners Discussion and Analysis of Financial Condition and Results of Operations
The following is a discussion of our current financial position and results of operations.
This discussion should be read together with our Prospectus, dated March 17, 2011, contained in our
Registration Statement on Form S-1, as amended. This discussion should also be read in conjunction
with the disclosures below regarding Forward-Looking Statements and the Risk Factors set forth
in Item 1A of Part II of this Quarterly Report on Form 10-Q.
As used in this Quarterly Report on Form 10-Q, references to we, us, our or similar
terms include SQN Alternative Investment Fund III L.P.
Forward-Looking Statements
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, intend, predict, continue, further, seek, plan, 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.
Overview
We are a Delaware limited partnership formed on March 10, 2010. We operate a fund in which the
capital invested by partners is pooled together. This pool of capital is then used to invest in
business-essential, revenue-producing (or cost-saving) equipment and other physical assets with
substantial economic lives and, in many cases, associated revenue streams. The pooled capital
contributions are also used to pay fees and expenses associated with our organization and to fund a
capital reserve.
Many of our investments are structured as full payout or operating equipment leases. In
addition, we invest by way of participation agreements and residual sharing agreements where we
acquire an interest in a pool of equipment or other assets or rights to those equipment or other
assets, at a future date. We also structure investments as project financings that are secured by,
among other things, essential use equipment and/or assets. Finally, we use other investment
structures, such as vendor and rental (hire) programs that our Investment Manager believes will
provide us the appropriate level of security, collateralization, and flexibility to optimize our
return on investment while protecting against downside risk. In most cases, the structure includes
us holding title to or a priority position in the equipment or other asset.
Although the overall composition of our portfolio cannot be determined at this stage, we
invest in assets and equipment that are considered essential use or core to a business or operation
in the agricultural, energy, environmental, medical, manufacturing, technology, and transportation
industries. Our Investment Manager also may identify other assets or industries that meet our
investment objectives. We invest in assets and equipment located primarily within the United
States, Canada and the European Union.
We will conduct our activities for at least seven years and divide our life into three
periods: the Offering Period, the Operating Period and the Liquidation Period. During the Offering
Period we raise money from investors for the earlier of; (i) $50,000,000 or (ii) two years from the
date of our Prospectus, which was March 17, 2011. During the Operating Period we invest the
offering proceeds in business-essential, revenue-producing (or cost-saving) equipment and other
physical assets with substantial economic lives and, in many cases, associated revenue streams. The
Operating Period begins and, unless extended by our General Partner, will last for three years from
the date we acquired our first leased equipment which was June 29, 2011. During the Operating
Period, we anticipate paying a semi-annual cash distribution to our partners equal to 3% of their
capital contributions. We anticipate that the Operating Period will overlap with the Offering
Period. The Liquidation Period, unless extended at the sole discretion of our General Partner will
last four years. During the Liquidation Period we will make irregular
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distributions to our partners as the investments in our portfolio mature. We generally will
not be reinvesting the proceeds from investments during this period. It is our intention to wind
down the portfolio and distribute proceeds to our partners during this period.
Our General Partner manages and controls our business affairs, including, but not limited to,
our investments in equipment leases, under the terms of our Partnership Agreement. Our Investment
Manager, an affiliate of our General Partner, will originate and service our investments. Our
Investment Manager also sponsors and manages three other equipment leasing and finance funds.
Recent Significant Transactions
Bottle recycling and extrusion line
On June 29, 2011, we entered into a finance lease transaction with Eco Plastics Limited for a
bottle recycling and extrusion line located in the United Kingdom for £1,830,000 ($2,931,294
applying exchange rates at June 30, 2011) with a lease term of 60 months. Under the terms of the
agreement we will fund the lessee in two installments; an initial installment of £1,100,000 and a
second installment of £730,000. We paid the initial installment on June 29, 2011, in the amount of
$1,774,520. The second installment is contingent upon the lessee raising its own equity of
£3,000,000. We have accrued the second installment totaling $1,156,774. At lease termination the
lessee has an option to purchase the leased equipment for £253,821 ($406,570 applying exchange
rates at June 30, 2011). At June 30, 2011, we incurred and accrued initial direct costs of $73,322.
During the initial rental period, which may last up to 12 months if certain milestones are not
reached, we will earn monthly rental income of £11,229 ($17,987 applying exchange rates at June 30,
2011). Once the lease commences, we will receive monthly payments of £40,937 ($65,573 applying
exchange rates at June 30, 2011).
Recent Accounting Pronouncements
In June 2011, the Financial Accounting Standards Board (the FASB) issued new accounting
guidance related to the presentation of other comprehensive income (OCI). This guidance
eliminates the option to present components of OCI as part of the statement of changes in
partners equity. The guidance allows for a one-statement or two-statement approach, outlined
as follows:
| One-statement approach: Present the components of net income and total net income, the components of OCI and total OCI, along with the total comprehensive income in a single continuous statement. | ||
| Two-statement approach: Present the components of net income and total net income in the statement of operations. A statement of OCI would immediately follow the statement of operations and include the components of OCI and a total for OCI, along with the total of comprehensive income. |
The guidance also requires an entity to present on the face of the financial statements any
reclassification adjustments for items that are reclassified from OCI to net income. The guidance
is effective for interim and annual periods beginning after December 15, 2011. The adoption of this
guidance will not have an effect on our financial position or results of operations
In May 2011, the FASB issued amendments to its accounting guidance related to fair value
measurements in order to more closely align its disclosure requirements with those in International
Financial Reporting Standards (IFRS). This guidance clarifies the application of existing fair
value measurement and disclosure requirements and also changes certain principles or requirements
for measuring fair value or for disclosing information about fair value measurements. The guidance
is effective for interim and annual periods beginning after December 15, 2011. The adoption of this
guidance is not expected to have a material effect on our financial position or results of
operations.
Critical Accounting Policies
An understanding of our critical accounting policies is necessary to understand our financial
results. The preparation of financial statements in accounting principles generally accepted in the
United States of America requires our General Partner and Investment Manager to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities as of the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Significant estimates
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primarily include the determination of allowance for doubtful accounts, depreciation and
amortization, impairment losses, estimated useful lives and residual values. Actual results could
differ from those estimates.
Lease Classification and Revenue Recognition
Each equipment lease we enter into is classified as either a finance lease or an operating
lease, which is determined at lease inception, based upon the terms of each lease. For a finance
lease, initial direct costs are capitalized and amortized over the lease term. For an operating
lease, the initial direct costs are included as a component of the cost of the equipment and
depreciated over the lease term.
For finance leases, we record, at lease inception, the total minimum lease payments receivable
from the lessee, the estimated unguaranteed residual value of the equipment at lease termination,
the initial direct costs related to the lease, if any, and the related unearned income. Unearned
income represents the difference between the sum of the minimum lease payments receivable, plus the
estimated unguaranteed residual value, minus the cost of the leased equipment. Unearned income is
recognized as finance income over the term of the lease using the effective interest rate method.
For operating leases, rental income is recognized on a straight-line basis over the lease
term. Billed operating lease receivables are included in accounts receivable until collected.
Accounts receivable are stated at their estimated net realizable value. Deferred revenue is the
difference between the timing of the receivables billed and the income recognized on a
straight-line basis.
Our Investment Manager has an investment committee that approves each new equipment lease and
other financing transaction. As part of its process, the investment committee determines the
residual value, if any, to be used once the investment has been approved. The factors considered in
determining the residual value include, but are not limited to, the creditworthiness of the
potential lessee, the type of equipment considered, how the equipment is integrated into the
potential lessees business, the length of the lease and the industry in which the potential lessee
operates. Residual values are reviewed for impairment in accordance with our impairment review
policy.
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 marketplace are disregarded
and it is assumed that there is no necessity either to dispose of a significant number of the
assets, if held in quantity, simultaneously or to dispose of the asset quickly. The residual value
is calculated using information from various external sources, such as trade publications, auction
data, equipment dealers, wholesalers and industry experts, as well as inspection of the physical
asset and other economic indicators.
Asset Impairments
The significant assets in our portfolio are periodically reviewed, no less frequently than
annually or when indicators of impairment exist, to determine whether events or changes in
circumstances indicate that the carrying value of an asset may not be recoverable. An impairment
loss will be recognized only if the carrying value of a long-lived asset is not recoverable and
exceeds its fair value. If there is an indication of impairment, we will estimate the future cash
flows (undiscounted and without interest charges) expected from the use of the asset and its
eventual disposition. Future cash flows are the future cash inflows expected to be generated by an
asset less the future outflows expected to be necessary to obtain those inflows. If an impairment
is determined to exist, the impairment loss will be measured as the amount by which the carrying
value of a long-lived asset exceeds its fair value and recorded in the statement of operations in
the period the determination is made.
The events or changes in circumstances that generally indicate that an asset may be impaired
are, (i) the estimated fair value of the underlying equipment is less than its carrying value, (ii)
the lessee is experiencing financial difficulties and (iii) it does not appear likely that the
estimated proceeds from the disposition of the asset will be sufficient to satisfy the residual
position in the asset. The preparation of the undiscounted cash flows requires the use of
assumptions and estimates, including the level of future rents, the residual value expected to be
realized upon disposition of the asset, estimated downtime between re-leasing events and the amount
of re-leasing costs. Our Investment Managers review for impairment includes a consideration of the
existence of impairment indicators including third-party appraisals, published values for similar
assets, recent transactions for similar assets, adverse changes in market conditions for specific
asset types and the occurrence of significant adverse changes in general industry and market
conditions that could affect the fair value of the asset.
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Depreciation
We record depreciation expense on equipment when the lease is classified as an operating
lease. In order to calculate depreciation, we first determine the depreciable equipment cost,
which is the cost less the estimated residual value. The estimated residual value is our estimate
of the value of the equipment at lease termination. Depreciation expense is recorded by applying
the straight-line method of depreciation to the depreciable equipment cost over the lease term.
Results of Operations from April 1, 2011 through June 30, 2011 (the 2011 Quarter)
We are currently in our Offering Period and entered into our initial lease transaction on June
29, 2011, which marks the beginning of our Operating Period. The Offering Period is designated as
the period in which we are raising capital from investors. During this period we expect to generate
the majority of our cash flow from financing activities. During the 2011 Quarter we admitted 57
limited partners totaling $3,850,000 in limited partner capital contributions. We have also entered
our Operating Period, which is defined as the period in which we invest the net proceeds from the
Offering Period into business-essential, revenue-producing (or cost saving) equipment and other
physical assets with substantial economic lives and, in many cases, associated revenue streams.
During this period we anticipate substantial cash outflows from investing activities as we acquire
leased equipment.
For the 2011 Quarter we earned interest income of $934 and incurred $177,355 in expenses.
For the 2011 Quarter we did not earn any revenue from leased equipment, all of our revenue was
derived from interest income. We entered into our initial equipment lease on June 29, 2011 and will
have revenue from equipment leases going forward. As we acquire additional equipment leases we
expect our revenue to grow substantially.
During the 2011 Quarter we incurred $177,355 in expenses. Our largest expense during this
period was $120,000 for management fees paid to our Investment Manager. We also incurred
professional fees totaling $44,260, which was comprised of accounting fees and legal fees.
Net Loss
As a result of the factors discussed above we incurred a net loss for the 2011 Quarter of
$176,421.
Results of Operations from January 1, 2011 through June 30, 2011 (the 2011 Period)
On March 17, 2011 the Securities and Exchange Commission (the SEC) declared our Registration
Statement effective. Since that date, we have completed our application process to sell our
partnership interests in numerous states and are continuing the process in other states. For the
2011 Period, in those states where we have completed the application process, we have admitted 57
limited partners and accepted $3,850,000 in limited partner capital contributions.
We are currently in our Offering Period and entered into our initial lease transaction on June
29, 2011, which marks the beginning of our Operating Period. The Offering Period is designated as
the period in which we are raising capital from investors. During this period we expect to generate
the majority of our cash flow from financing activities. We have also entered our Operating Period,
which is defined as the period in which we invest the net proceeds from the Offering Period into
business-essential, revenue-producing (or cost saving) equipment and other physical assets with
substantial economic lives and, in many cases, associated revenue streams. During this period we
anticipate substantial cash outflows from investing activities as we acquire leased equipment.
For the 2011 Period we earned interest income of $934 and incurred $206,636 in expenses.
For the 2011 Period we did not earn any revenue from leased equipment, all of our revenue was
derived from interest income. We entered into our initial equipment lease on June 29, 2011 and will
have revenue from equipment leases going forward. As we acquire additional equipment leases we
expect our revenue to grow substantially.
During the 2011 Period we incurred $206,636 in expenses. Our largest expense during this
period was $120,000 for management fees paid to our Investment Manager. We also incurred
professional fees totaling $62,987, which was comprised of accounting fees and legal fees and we
incurred $22,300 in fund administration expense.
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Net Loss
As a result of the factors discussed above we incurred a net loss for the 2011 Period of
$205,702.
Liquidity and Capital Resources
Cash Flows Summary
For the 2011 Period, we increased our overall cash position by
$1,094,270. This increase was
primarily the result of our entering the Offering Period and admitting 57 limited partners, who
combined, contributed $3,850,500 in capital contributions. We also incurred various cash outflows,
the acquisition of leased equipment totaled $1,774,520 which was from investing activities and
$797,424 relating to costs paid for offering and distribution expenses which were from financing
activities.
Operating Activities
For the 2011 Period, we incurred net cash flows used in operating activities of $183,352. This
was principally due to our net loss for the 2011 Period of $205,702, which was offset by our
increase in cash flows from accrued expenses of $24,100. We anticipate generating cash flow from
operating activities once we begin our Operating Period and acquire various types of leased
equipment which we expect will include positive cash flow streams.
Investing Activities
For the 2011 Period, we experienced net cash flows used in investing activities of $1,774,520.
This was solely due to our acquisition of an equipment lease on June 29, 2011. During the early
part of our Operating Period we expect our use of cash from investing activities to increase
significantly. We will use this cash to purchase various types of leased equipment, including
operating and finance leases, enter into participation agreements and residual sharing agreements.
Financing Activities
For the 2011 Period we generated cash flow from financing activities of
$3,052,142. This was
predominately due to our entering our Offering Period and admitting
57 limited partners, who combined
contributed $3,850,500 in capital contributions. We also had various cash outflows during the 2011
Period, most notable for offering and distribution expenses which totaled $797,424. We anticipate,
during the Offering Period that most, if not all, of our source of cash will be from capital
contributions from new investors purchasing our limited partnership interests.
Contractual Obligations
At June 30, 2011, we have a contractual obligation for $1,156,774, which is the remaining
balance due on our June 29, 2011 equipment lease acquisition. In addition we have a $73,322
commitment to pay for initial direct costs associated with the equipment lease acquired on June 29,
2011. We also have contractual obligations with our Investment Manager and SQN Securities, LLC
(Securities). We will pay the Investment Manager either a fixed monthly management fee of $60,000
or 1.975% per annum of the aggregate offering proceeds. The monthly management fee reimburses the
Investment Manager for normal overhead expenses, which include, but are not limited to, employee
compensation, rent, professional services, office equipment, and supplies. We anticipate that we
will pay this monthly management fee through the Operating Period. We will pay Securities a
distribution expense equal to 2% of the aggregate offering proceeds, excluding proceeds from the
General Partner or any affiliated entities. At June 30, 2011, we cannot determine what this amount
will be.
During the Operating Period, we anticipate paying a semi-annual cash distribution to our
partners equal to 3% of their capital contributions.
Commitments and Contingencies and Off-Balance Sheet Transactions
At June 30, 2011, we had entered into no commitments and had no off balance sheet
transactions.
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Subsequent Event
During July 2011, we admitted an additional 16 Limited Partners with capital contributions
totaling $688,000. At July 31, 2011, we incurred and paid to SQN Securities, LLC $13,760 in
distribution expenses related to the capital contributions raised during July 2011.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
In April 2011, a major credit rating agency put United States government debt on its watch
list for a possible downgrade due to the political stalemate revolving around raising the debt
ceiling of the United States. On August 5, 2011, this same credit rating agency downgraded the
United States government debt from AAA to AA+. We are currently evaluating this action and have not
determined the possible effect this may have on our business.
There are no material changes to the disclosures related to these items since we filed our
Prospectus, dated March 17, 2011, contained in our Registration Statement on Form S-1, as amended.
Item 4. Controls and Procedures
Evaluation of disclosure controls and procedures
In connection with the preparation of this Quarterly Report on Form 10-Q for the quarter ended
June 30, 2011, as well as the financial statements for our General Partner, our General Partner
carried out an evaluation, under the supervision and with the participation of the management of
our General Partner, including its Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of our General Partners disclosure controls and
procedures as of the end of the period covered by this Report pursuant to the Securities Exchange
Act of 1934. Based on the foregoing evaluation, the Chief Executive Officer and the Chief Financial
Officer concluded that our General Partners disclosure controls and procedures were effective.
In designing and evaluating our General Partners disclosure controls and procedures, our
General Partner recognized that disclosure controls and procedures, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the objectives of the
disclosure controls and procedures are met. Our General Partners disclosure controls and
procedures have been designed to meet reasonable assurance standards. Disclosure controls and
procedures cannot detect or prevent all error and fraud. Some inherent limitations in disclosure
controls and procedures include costs of implementation, faulty decision-making, simple error and
mistake. Additionally, controls can be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management override of the controls. The design of any
system of controls is based, in part, upon certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving its stated goals
under all anticipated and unanticipated future conditions. Over time, controls may become
inadequate because of changes in conditions, or the degree of compliance with established policies
or procedures.
Evaluation of internal control over financial reporting
There have been no changes in our internal control over financial reporting during the most
recently completed fiscal quarter that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
In the ordinary course of conducting our business, there may be certain claims, suits and
complaints filed against us. In the opinion of management, the outcome of such matters, if any,
will not have a material impact on our financial position or results of operations. We are not
aware of any material legal proceedings that are currently pending against us or against any of our
assets.
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Item 1A. | Risk Factors |
There have been no material changes from the risk factors disclosed in our prospectus, dated
March 17, 2011, contained in our Registration Statement on Form S-1, as amended.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Our Registration Statement on Form S-1, as amended, was declared effective by the SEC on March
17, 2011. Our Offering Period commenced on March 17, 2011 and is anticipated to end no later than
March 16, 2013. From March 17, 2011 through June 30, 2011 we received capital contributions
totaling $3,850,000. For the 2011 Period we have paid distribution expenses to SQN Securities, LLC
of $77,010 and we have paid or accrued offering expenses totaling $870,414.
During July 2011, we admitted an additional 16 limited partners with capital contributions
totaling $688,000. At July 31, 2011, we incurred and paid to SQN Securities, LLC $13,760 in
distribution expenses related to the capital contributions raised during July 2011.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the quarter ended June 30,
2011.
Item 5. Other Information
Not applicable.
Item 6. Exhibits
Exhibits 31.1
Exhibits 31.2
Exhibits 32.1
Exhibits 31.2
Exhibits 32.1
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SIGNATURES
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.
File No. 333-166195
SQN AIF III GP, LLC
SQN AIF III GP, LLC
General Partner of the Registrant
August 12, 2011
/s/ Jeremiah Silkowski |
||
Jeremiah Silkowski |
||
Chief Executive Officer and President |
||
(Principal Executive Officer) |
||
August 12, 2011 |
||
/s/ David C. Wright |
||
David C. Wright |
||
Chief Financial Officer |
||
(Principal Accounting and Financial Officer)
|
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