Attached files
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8-K - ICON ECI Fund Sixteen | body.htm |
Exhibit 99.1
ICON ECI Fund Sixteen
Portfolio Overview | ||
Second Quarter 2014 |
Table of Contents | |||
Introduction to Portfolio Overview
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1 | ||
Investments Following the Quarter | 1 | ||
Portfolio Overview | 2 | ||
Revolving Line of Credit | 2 | ||
Performance Analysis | 3 | ||
Transactions with Related Parties | 3 | ||
Financial Statements | 5 | ||
Forward Looking Statements | 9 | ||
Additional Information | 9 |
ICON ECI Fund Sixteen
As of November 30, 2014
Introduction to Portfolio Overview
We are pleased to present ICON ECI Fund Sixteen’s (the “Fund”) Portfolio Overview for the quarter ended June 30, 2014. References to “we,” “us,” and “our” are references to the Fund, references to the “Managing Owner” are references to the managing owner of the Fund, ICON MT 16, LLC, and references to the “Investment Manager” are references to the investment manager of the Fund, ICON Capital, LLC.
The Fund primarily makes investments in, or that are collateralized by, equipment and other corporate infrastructure (collectively, “Capital Assets”). The investments are in companies that utilize Capital Assets to operate their businesses. These investments are primarily structured as debt and debt-like financings such as loans, leases and other structured financing transactions in, or that are collateralized by, Capital Assets.
The Fund commenced its offering period on July 1, 2013. As of November 12, 2013, we raised a minimum of $1,200,000 (the “Initial Closing Date”), at which time shareholders were admitted and we commenced operations. As of June 13, 2014, we raised the $12,500,000 minimum offering amount for the Commonwealth of Pennsylvania. From the commencement of our offering through June 30, 2014, we sold 13,479 Class A shares and 223 Class I shares, representing an aggregate of $13,608,485 of capital contributions. The offering period will close on December 31, 2014, at which time, we will enter our operating period. During the operating period, we anticipate continuing to invest our offering proceeds and cash generated from operations in Capital Assets. Following our operating period, we will enter our wind down period, during which time the loans and leases we own will mature or be sold in the ordinary course of business.
Investments Following the Quarter
The Fund made the following investments after the quarter ended June 30, 2014:
Geokinetics, Inc.
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Investment Date:
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9/4/2014
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Collateral:
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Land based seismic testing equipment acquired for $10,677,000.
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Structure:
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Lease
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Expiration Date:
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8/31/2017
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Purchase Price:
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$10,677,000
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The Fund's Investment:
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$5,552,000
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Premier Trailer Leasing, Inc.
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Investment Date:
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9/24/2014
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Collateral:
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Trailers valued at $272,373,000.
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Structure:
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Loan
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Maturity Date:
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9/24/2020
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Facility Amount:
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$20,000,000
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Fund Participation:
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$2,500,000
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1
ICON ECI Fund Sixteen
Portfolio Overview
As of June 30, 2014, our portfolio consisted of the following investments:
Murray Energy Corporation | |||
Structure: | Lease | Collateral: | Mining equipment. |
Expiration Date: | 9/30/2015 | Net Carrying Value: |
$2,058,841*
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Current Status: | Performing | Credit Loss Reserve: | None |
Blackhawk Mining, LLC
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|||
Structure: | Lease | Collateral: | Mining equipment. |
Expiration Date: |
2/28/2018
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Net Carrying Value: |
$1,764,578*
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Current Status: | Performing | Credit Loss Reserve: | None |
D&T Trucking, LLC
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|||
Structure: | Lease | Collateral: |
Trucks, trailers and other equipment.
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Expiration Date: |
12/31/2018
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Net Carrying Value: |
$1,402,329*
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Current Status: | Performing | Credit Loss Reserve: | None |
*Net carrying value of our investment in joint ventures is calculated as follows: investment at cost plus/less our share of the cumulative net income /loss of the joint venture and less distributions since the date of our initial investment.
Revolving Line of Credit
On December 26, 2013, we entered into an agreement with California Bank & Trust (“CB&T”) for a revolving line of credit through March 31, 2015 of up to $5,000,000 (the “Facility”), which is secured by all of our assets not subject to a first priority lien. The interest rate for general advances under the Facility is CB&T’s prime rate. We may elect to designate up to five advances on the outstanding principal balance of the Facility to bear interest at the London Interbank Offered Rate plus 2.5% per year. In all instances, borrowings under the Facility are subject to an interest rate floor of 4.0% per year. In addition, we are obligated to pay an annualized 0.5% fee on unused commitments under the Facility. At June 30, 2014, there were no obligations outstanding under the Facility.
2
ICON ECI Fund Sixteen
Performance Analysis
Capital Invested as of June 30, 2014 | $6,071,664 |
Leverage Ratio |
0.10:1**
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% of Receivables Collected for the Quarter ended June 30, 2014 | 100%*** |
** Leverage ratio is defined as total liabilities divided by total equity.
*** Collections as of November 30, 2014
Transactions with Related Parties
We have entered into certain agreements with our Managing Owner, Investment Manager and ICON Securities, LLC (“ICON Securities”), a wholly-owned subsidiary of our Investment Manager and the dealer-manager of our offering, whereby we pay certain fees and reimbursements to these parties. ICON Securities is entitled to receive (i) a dealer-manager fee for the Class A shares sold in the offering equal to 2% of gross offering proceeds and (ii) a distribution fee equal to 0.55% of gross offering proceeds from Class I shares sold in the offering for managing the distribution of the Class I shares.
In addition, we reimburse our Investment Manager and its affiliates for organization and offering expenses incurred in connection with our organization and offering of our shares. The reimbursement of these expenses will be capped at the lesser of 1.44% of the maximum primary offering amount of $241,000,000 and the actual costs and expenses incurred by our Investment Manager and its affiliates. Accordingly, our Investment Manager and its affiliates may ultimately be reimbursed for less than the actual costs and expenses incurred.
We pay or paid our Investment Manager (i) a management fee equal to 3.5% of the gross periodic payments due and paid from our investments and (ii) acquisition fees of 2.5% of the total purchase price (including indebtedness incurred or assumed therewith) of, or the value of the Capital Assets secured by or subject to, each of our investments. For a more detailed analysis of the fees payable to our Investment Manager, please see the Fund’s prospectus. In connection with the investments made for the period January 1, 2014 through November 30, 2014, we paid our Investment Manager aggregate acquisition fees in the amount of approximately $339,000.
Administrative expense reimbursements are costs incurred by our Investment Manager or its affiliates that are necessary to our operations. These costs include our Investment Manager’s and its affiliates’ legal, accounting, investor relations and operations personnel, as well as professional fees and other costs that are charged to us. Excluded are salaries and related costs, office rent, travel expenses and other administrative costs incurred by individuals with a controlling interest in our Investment Manager.
Our Managing Owner also has a 1% interest in our profits, losses, distributions and liquidation proceeds, subject to increase based on our investors achieving a preferred return. We paid or accrued distributions to our Managing Owner of $1,834 and $2,459 for the three and six months ended June 30, 2014, respectively. Additionally, our Managing Owner’s interest in the net loss attributable to us was $1,477 and $3,325 for the three and six months ended June 30, 2014, respectively.
3
ICON ECI Fund Sixteen
Transactions with Related Parties (continued)
Three Months Ended | Six Months Ended | |||||||||
Entity
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Capacity
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Description
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June 30, 2014
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June 30, 2014
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ICON Capital, LLC
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Investment Manager
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Offering expense reimbursements (1)
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$
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50,002
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$
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105,921
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ICON Capital, LLC |
Investment Manager
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Organization cost reimbursements (2) |
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2,401
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5,575
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ICON Capital, LLC
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Investment Manager
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General and administrative reimbursements (2) |
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7,251
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41,644
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ICON Capital, LLC
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Investment Manager
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Management fees (2)
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22,087
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34,373
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ICON Securities, LLC
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Dealer-manager
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Dealer-manager fees (1)
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106,134
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224,901
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ICON Capital, LLC
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Investment Manager
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Administrative expense reimbursements (2) |
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151,480
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327,073
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ICON Capital, LLC
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Investment Manager
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Acquisition fees (3)
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-
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101,524
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$
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339,355
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$
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841,011
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(1) Amount charged directly to shareholders' equity.
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(2) Amount charged directly to operations.
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(3) Amount capitalized and amortized to operations.
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At June 30, 2014, we had a net payable of approximately $730,000 due to our Investment Manager and its affiliates that primarily consisted of administrative expense reimbursements of approximately $407,000, offering expenses of approximately $125,000, acquisition fees of approximately $102,000 and general and administrative expense reimbursements of approximately $43,000. At December 31, 2013, we had a net payable of approximately $106,000 due to our Investment Manager and its affiliates that primarily consisted of administrative expense reimbursements of approximately $80,000 and offering expenses of approximately $19,000.
From July 1, 2014 through November 30, 2014, we raised an additional $3,128,721 in capital contributions and incurred dealer-manager and distribution fees in the amount of $60,444.
Your participation in the Fund is greatly appreciated.
We are committed to protecting the privacy of our investors in compliance with all applicable laws. Please be advised that, unless required by a regulatory authority such as FINRA or ordered by a court of competent jurisdiction, we will not share any of your personally identifiable information with any third party.
4
ICON ECI Fund Sixteen
(A Delaware Statutory Trust)
Financial Statements
Balance Sheets
June 30,
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December 31,
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2014
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2013
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(unaudited)
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|||||||||
Assets
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|||||||||
Cash
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$
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7,446,362
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$
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1,027,327
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Investment in joint ventures
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5,225,748
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897,996
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Other assets
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11,293
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18,693
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Total assets
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$
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12,683,403
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$
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1,944,016
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Liabilities and Equity
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|||||||||
Liabilities:
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|||||||||
Due to Investment Manager and affiliates
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$
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730,098
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$
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105,564
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Accrued expenses and other liabilities
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415,680
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92,513
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Total liabilities
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1,145,778
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198,077
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Commitments and contingencies
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Equity:
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Shareholders' capital:
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Class A
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11,354,857
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1,693,429
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Class I
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182,768
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52,510
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Total shareholders' capital
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11,537,625
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1,745,939
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Total liabilities and equity
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$
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12,683,403
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$
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1,944,016
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5
ICON ECI Fund Sixteen
(A Delaware Statutory Trust)
Financial Statements
Statement of Operations (unaudited)
Three Months Ended
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Six Months Ended
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June 30, 2014
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June 30, 2014
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Revenue:
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Income from investment in joint ventures
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$
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133,774
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$
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199,005
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Total revenue
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133,774
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199,005
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Expenses:
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Management fees
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22,087
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34,373
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Administrative expense reimbursements
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151,480
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327,073
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General and administrative
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99,680
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154,502
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Interest
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5,765
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9,930
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Organization costs
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2,401
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5,575
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Total expenses
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281,413
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531,453
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Net loss
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$
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(147,639)
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$
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(332,448)
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Net loss attributable to Fund Sixteen allocable to:
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Additional Class A and Class I shareholders
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$
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(146,162)
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$
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(329,123)
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Managing Owner
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(1,477)
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(3,325)
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$
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(147,639)
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$
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(332,448)
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Additional Class A shares:
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|||||||
Net loss attributable to Fund Sixteen allocable to additional Class A shareholders
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$
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(143,841)
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$
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(324,502)
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Weighted average number of additional Class A shares outstanding
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10,645
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7,864
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Net loss attributable to Fund Sixteen per weighted average additional Class A share
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$
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(13.51)
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$
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(41.26)
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Additional Class I shares:
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|||||||
Net loss attributable to Fund Sixteen allocable to additional Class I shareholders
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$
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(2,321)
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$
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(4,621)
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Weighted average number of additional Class I shares outstanding
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174
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120
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Net loss attributable to Fund Sixteen per weighted average additional Class I share
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$
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(13.32)
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$
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(38.62)
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6
ICON ECI Fund Sixteen
(A Delaware Statutory Trust)
Financial Statements
Statements of Changes in Equity
Class A
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Class I
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Total
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|||||||||||||||||||||||
Managing Owner
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Additional Shareholders
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Total Class A
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Additional Shareholders
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||||||||||||||||||||||
Shares
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Amount
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Shares
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Amount
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Shares
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Amount
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Shares
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Amount
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Shares
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Amount
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||||||||||||||||
Balance, December 31, 2013
|
0.001
|
$
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(1,161)
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2,016
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$
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1,694,590
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2,016
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$
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1,693,429
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65
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$
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52,510
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2,081
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$
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1,745,939
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||||||||||
Net loss
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-
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(1,848)
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-
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(180,661)
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-
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(182,509)
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-
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(2,300)
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-
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(184,809)
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Proceeds from sale of shares
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-
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-
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6,005
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5,968,452
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6,005
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5,968,452
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-
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-
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6,005
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5,968,452
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|||||||||||||||
Sales and offering expenses
|
-
|
-
|
-
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(587,385)
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-
|
(587,385)
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-
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(1,308)
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-
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(588,693)
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|||||||||||||||
Distributions
|
-
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(625)
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-
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(60,524)
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-
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(61,149)
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-
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(1,273)
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-
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(62,422)
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|||||||||||||||
Balance, March 31, 2014 (unaudited)
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0.001
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(3,634)
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8,021
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6,834,472
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8,021
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6,830,838
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65
|
47,629
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8,086
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6,878,467
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|||||||||||||||
Net loss
|
-
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(1,477)
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-
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(143,841)
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-
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(145,318)
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-
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(2,321)
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-
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(147,639)
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|||||||||||||||
Proceeds from sale of shares
|
-
|
-
|
5,458
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5,422,039
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5,458
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5,422,039
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158
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147,100
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5,616
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5,569,139
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|||||||||||||||
Sales and offering expenses
|
-
|
-
|
-
|
(541,813)
|
-
|
(541,813)
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-
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(6,237)
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-
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(548,050)
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|||||||||||||||
Distributions
|
-
|
(1,834)
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-
|
(209,055)
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-
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(210,889)
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-
|
(3,403)
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-
|
(214,292)
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|||||||||||||||
Balance, June 30, 2014 (unaudited)
|
0.001
|
$
|
(6,945)
|
13,479
|
$
|
11,361,802
|
13,479
|
$
|
11,354,857
|
223
|
$
|
182,768
|
13,702
|
$
|
11,537,625
|
7
ICON ECI Fund Sixteen
(A Delaware Statutory Trust)
Financial Statements
Statement of Cash Flows (unaudited)
Six Months Ended
|
||||
June 30, 2014
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||||
Cash flows from operating activities:
|
||||
Net loss
|
$
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(332,448)
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||
Adjustments to reconcile net loss to net cash provided by operating activities:
|
||||
Income from investment in joint ventures
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(199,005)
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|||
Interest expense from amortization of debt financing costs
|
7,400
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|||
Interest expense, other
|
2,529
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|||
Changes in operating assets and liabilities:
|
||||
Due to Investment Manager and affiliates, net
|
409,662
|
|||
Accrued expenses and other liabilities
|
31,234
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|||
Distributions from joint ventures
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179,389
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|||
Net cash provided by operating activities
|
98,761
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|||
Cash flows from investing activities:
|
||||
Purchase of equipment
|
-
|
|||
Investment in joint ventures
|
(4,904,295)
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|||
Distributions received from joint ventures in excess of profit
|
697,683
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|||
Net cash used in investing activities
|
(4,206,612)
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|||
Cash flows from financing activities:
|
||||
Sale of Class A and Class I shares
|
11,537,591
|
|||
Sales and offering expenses paid
|
(736,112)
|
|||
Distributions to shareholders
|
(274,593)
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|||
Net cash provided by financing activities
|
10,526,886
|
|||
Net increase in cash
|
6,419,035
|
|||
Cash, beginning of period
|
1,027,327
|
|||
Cash, end of period
|
$
|
7,446,362
|
||
Supplemental disclosure of non-cash investing and financing activities:
|
||||
Offering expenses payable to Investment Manager charged to equity
|
$
|
105,921
|
||
Distribution fees payable to dealer-manager
|
$
|
5,323
|
||
Distribution payable to Managing Owner
|
$
|
2,121
|
||
Sales commission trail payable to third parties
|
$
|
289,404
|
||
Acquisition fee payable to Investment Manager
|
$
|
101,524
|
8
ICON ECI Fund Sixteen
Forward Looking Statements
Certain statements within this document may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). These statements are being made pursuant to the PSLRA, with the intention of obtaining the benefits of the “safe harbor” provisions of the PSLRA, and, other than as required by law, we assume no obligation to update or supplement such statements. Forward-looking statements are those that do not relate solely to historical fact. They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. You can identify these statements by the use of words such as “may,” “will,” “could,” “anticipate,” “believe,” “estimate,” “expect,” “continue,” “further,” “plan,” “seek,” “intend,” “predict” or “project” and variations of these words or comparable words or phrases of similar meaning. These forward-looking statements reflect our current beliefs and expectations with respect to future events and are based on assumptions and are subject to risks and uncertainties and other factors outside our control that may cause actual results to differ materially from those projected. We undertake no obligation to update publicly or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
Additional Information
A detailed financial report on SEC Form 10-Q or 10-K (whichever is applicable) is available to you. It is typically filed either 45 or 90 days after the end of a quarter or year, respectively. Usually this means a filing will occur on or around March 31, May 15, August 14, and November 14 of each year. It contains financial statements and detailed sources and uses of cash plus explanatory notes. You are always entitled to these reports. Please access them by:
·
|
Visiting www.iconinvestments.com, or
|
·
|
Visiting www.sec.gov, or
|
·
|
Writing us at: Angie Seenauth c/o ICON Investments, 3 Park Avenue, 36th Floor, New York, NY 10016
|
We do not distribute these reports to you directly in order to keep our expenses down as the cost of mailing this report to all investors is significant. Nevertheless, the reports are immediately available upon your request.
9