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Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

 

x 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

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from              to             

Commission File Number: 000-53904

 

 

MACQUARIE EQUIPMENT LEASING FUND, LLC

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Delaware   26-3291543

(State or Other Jurisdiction of

Incorporation or Organization)

 

(IRS Employer

Identification No.)

225 Franklin St, 17th Floor, Suite 1700

Boston, Massachusetts 02110

(Address of Principal Executive Offices) (Zip Code)

(617) 457-0645

(Registrant’s Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year if Changed Since Last Report): N/A

 

 

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  x    No  ¨

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  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large Accelerated Filer   ¨    Accelerated Filer   ¨
Non-accelerated Filer   ¨    Smaller Reporting Company   x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

There were 4,905,070 shares of limited liability company membership interests outstanding at August 10, 2011.

 

 

 


Table of Contents

MACQUARIE EQUIPMENT LEASING FUND, LLC

(a development stage enterprise)

Table of Contents

 

Part I.   Financial Information   
Item 1.   Financial Statements (Unaudited)      3   
  Balance Sheets as of June 30, 2011 and December 31, 2010 (Unaudited)      3   
  Statements of Operations for the period from August 21, 2008 (inception of the Fund) to June 30, 2011 and the Quarters and Six Months ended June 30, 2011 and 2010 (Unaudited)      4   
  Statements of Cash Flows for the period from August 21, 2008 (inception of the Fund) to June 30, 2011 and the Six Months ended June 30, 2011 and 2010 (Unaudited)      5   
  Statement of Changes in Members’ Equity for the period from August 21, 2008 (inception of the Fund) to June 30, 2011 (Unaudited)      6   
  Notes to Financial Statements (Unaudited)      7   
Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations      14   
Item 3.   Quantitative and Qualitative Disclosures About Market Risk      16   
Item 4.   Controls and Procedures      16   
Part II.   Other Information   
Item 1.   Legal Proceedings      18   
Item 1A.   Risk Factors      18   
Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds      18   
Item 3.   Defaults Upon Senior Securities      18   
Item 4.   Removed and Reserved      18   
Item 5.   Other Information      18   
Item 6.   Exhibits      18   
  Signatures      19   

Macquarie Equipment Leasing Fund, LLC is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia) and its obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of Macquarie Equipment Leasing Fund, LLC.

 

2


Table of Contents

Part I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

MACQUARIE EQUIPMENT LEASING FUND, LLC

(a development stage enterprise)

BALANCE SHEETS

(Unaudited)

 

     June 30, 2011     December 31, 2010  

ASSETS

    

Current Assets

    

Cash and cash equivalents

   $ 18,644,704      $ 8,970,075   

Restricted cash

     1,379,743        —     

Participating interest - Future lease income (related party)

     695,229        695,229   

Net investment in finance lease

     255,616        188,673   

Lease receivable

     179,834        76,722   

Prepayment (related party)

     1,918        —     

Maintenance reserve and other receivable

     105,371        —     
  

 

 

   

 

 

 
Total Current Assets      21,262,415        9,930,699   
Non-current Assets     

Participating interest - Residual value (related party)

     3,823,018        3,823,018   

Participating interest - Future lease income (related party)

     1,360,486        1,623,662   

Net investment in finance lease

     539,592        485,582   

Leased equipment at cost (net of accumulated depreciation of $476,541 and $56,877, respectively)

     11,392,673        2,040,476   
  

 

 

   

 

 

 
Total Non-current Assets      17,115,769        7,972,738   
  

 

 

   

 

 

 
Total Assets    $ 38,378,184      $ 17,903,437   
  

 

 

   

 

 

 

LIABILITIES AND MEMBERS’ EQUITY

    
Current Liabilities     

Commissions and fees payable (related party)

   $ 1,020,614      $ 889,411   

Capital contributions received in advance

     1,415,946        41,900   

Lease payments received in advance

     67,237        28,876   

Distribution payable

     265,057        135,953   

Other payable

     132,980        3,220   
  

 

 

   

 

 

 
Total Current Liabilities      2,901,834        1,099,360   
Non-current Liabilities     

Maintenance reserves

     1,481,785        —     
  

 

 

   

 

 

 
Total Non-current Liabilities      1,481,785        —     
  

 

 

   

 

 

 
Total Liabilities      4,383,619        1,099,360   

Commitments and Contingencies

     —          —     
Equity     

Shares of membership interests, $10.00 par value as may be reduced (i) under a distribution reinvestment plan, (ii) for volume discounts, or (iii) for reductions in selling commissions

    

Authorized: 15,800,500 shares;

    

Issued and outstanding: 4,205,258 shares as of June 30, 2011 and 2,113,196 shares as of December 31, 2010

     34,824,828        17,734,339   

Deficit accumulated during development stage

     (830,263     (930,262
  

 

 

   

 

 

 
Total Members’ Equity      33,994,565        16,804,077   
  

 

 

   

 

 

 
Total Liabilities and Members’ Equity    $ 38,378,184      $ 17,903,437   
  

 

 

   

 

 

 

See accompanying notes to the Financial Statements.

 

3


Table of Contents

MACQUARIE EQUIPMENT LEASING FUND, LLC

(a development stage enterprise)

STATEMENTS OF OPERATIONS

(Unaudited)

 

    

Period from August 21,

2008 (inception

of the Fund) to June 30,

    Quarter Ended     Six Months Ended  
   2011     June 30, 2011      June 30, 2010     June 30, 2011      June 30, 2010  

REVENUE

            

Participating interest income (related party)

   $ 219,257      $ 40,403       $ 39,361      $ 83,335       $ 41,440   

Finance and rental income

     1,028,165        682,038         —          937,376         —     

Other income

     614        —           57        401         213   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total revenue

     1,248,036        722,441         39,418        1,021,112         41,653   

EXPENSES

            

Operating expenses (related party)

     1,087,597        114,267         193,275        237,467         310,583   

Acquisition fees (related party)

     195,000        —           99,000        —           195,000   

Management fees (related party)

     102,802        45,614         8,494        70,659         8,817   

Depreciation

     476,541        290,494         —          419,664         —     

Other expenses

     216,577        107,163         3,318        193,323         3,430   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total expenses

     2,078,517        557,538         304,087        921,113         517,830   

Net (loss) income before income taxes

     (830,481     164,903         (264,669     99,999         (476,177

Income tax benefit

     218        —           —          —           —     
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Net (loss) income

   $ (830,263   $ 164,903       $ (264,669   $ 99,999       $ (476,177
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Basic and diluted (loss) income per share

   $ (0.93   $ 0.04       $ (0.35   $ 0.03       $ (1.10

Weighted average number of shares outstanding: basic and diluted

     894,490        3,698,624         746,172        3,147,312         430,991   

See accompanying notes to the Financial Statements.

 

4


Table of Contents

MACQUARIE EQUIPMENT LEASING FUND, LLC

(a development stage enterprise)

STATEMENTS OF CASH FLOWS

(Unaudited)

 

     Period from August 21,
2008 (inception

of the Fund) to June 30,
2011
             
       Six Months Ended  
       June 30, 2011     June 30, 2010  

Cash flow from operating activities:

      

Net (loss) income

   $ (830,263   $ 99,999      $ (476,177

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:

      

Depreciation

     476,541        419,664        —     

Changes in operating assets and liabilities:

      

Commission and fees payable (related party)

     1,014,900        150,106        310,583   

Equipment lease receivable

     (179,834     (103,112     —     

Net investment in finance lease

     133,853        104,628        —     

Taxes receivable (related party)

     —          —          134   

Prepayment (related party)

     (1,918     (1,918     —     

Other receivable

     (3,330     (3,330     —     

Other payable

     106,641        103,421        —     

Lease payments received in advance

     67,237        38,361        28,876   
  

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     783,827        807,819        (136,584
  

 

 

   

 

 

   

 

 

 

Cash flow from investing activities:

      

Payment for participating interest - Residual value and Future lease income (related party)

     (6,500,000     —          (6,500,000

Proceeds from participating interest - Future lease income (related party)

     621,267        263,176        106,060   

Purchase of equipment

     (11,842,875     (9,745,522     —     

Investment in capital leased asset

     (928,496     (225,016     —     

Restricted cash

     (1,379,743     (1,379,743     —     
  

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (20,029,847     (11,087,105     (6,393,940
  

 

 

   

 

 

   

 

 

 

Cash flow from financing activities:

      

Proceeds from issuance of shares

     41,109,685        20,352,541        9,646,576   

Payment of offering related expenses

     (4,723,031     (2,371,662     (1,016,457

Distribution paid to members

     (1,255,441     (758,525     (90,310

Capital contributions received in advance

     1,415,946        1,374,046        175,000   

Repurchase of shares

     (36,178     (22,228     —     

Maintenance reserves

     1,379,743        1,379,743        —     
  

 

 

   

 

 

   

 

 

 

Net cash provided by financing activities

     37,890,724        19,953,915        8,714,809   
  

 

 

   

 

 

   

 

 

 

Net increase in cash and cash equivalents

     18,644,704        9,674,629        2,184,285   

Cash and cash equivalents, beginning of the period

     —          8,970,075        4,474   
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents, end of the period

   $ 18,644,704      $ 18,644,704      $ 2,188,759   
  

 

 

   

 

 

   

 

 

 

Supplemental disclosures of cash flow information

      

Non cash investing and financing activities

      

Issuance of shares under Distribution reinvestment plan

   $ 474,325      $ 332,944      $ 17,996   

Accrued purchase of equipment and investment in capital leased asset

   $ 26,902      $ 26,902      $ —     

Accrued offering cost

   $ 5,151      $ 5,151      $ —     

See accompanying notes to the Financial Statements.

 

5


Table of Contents

MACQUARIE EQUIPMENT LEASING FUND, LLC

(a development stage enterprise)

STATEMENT OF CHANGES IN MEMBERS’ EQUITY

Period from August 21, 2008 (inception of the Fund) to June 30, 2011

(Unaudited)

 

     Members’ shares     Additional
members’  equity (1)
    Managing
member’s  equity
    Total  

Opening balance - August 21, 2008

     —        $ —        $ —        $ —     

Issuance of members’ shares

     4,156,477        39,604,685        1,505,000        41,109,685   

Issuance of members’ shares - Distribution Reinvestment Plan

     52,703        474,325        —          474,325   

Offering - related expenses

     —          (4,640,552     (87,629     (4,728,181

Repurchase of shares

     (3,922     (36,178     —          (36,178

Distribution to members

     —          (1,853,049     (141,774     (1,994,823

Net loss

     —          (726,318     (103,945     (830,263
  

 

 

   

 

 

   

 

 

   

 

 

 

Balance at June 30, 2011

     4,205,258      $ 32,822,913      $ 1,171,652      $ 33,994,565   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Additional members represent all members other than the Managing member.

See accompanying notes to the Financial Statements.

 

6


Table of Contents

MACQUARIE EQUIPMENT LEASING FUND, LLC

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

1. ORGANIZATION AND BUSINESS OPERATIONS

Macquarie Equipment Leasing Fund, LLC ( the “Fund” or the “Company”), a Delaware limited liability company, was formed on August 21, 2008 for the purpose of being an equipment leasing program that will acquire a diversified portfolio of equipment, equipment leases and other equipment-related investments. The majority of the equipment is expected to be leased to corporate clients. The Fund’s objective is to generate income through the collection of lease rentals and other revenues, through the sale of leased equipment and through other portfolio investments. The Fund’s fiscal year end is December 31.

The manager of the Fund is Macquarie Asset Management Inc. (the “Manager”), a member of the Macquarie Group of Companies which is comprised of Macquarie Group Limited and its subsidiaries and affiliates worldwide (the “Macquarie Group”). Macquarie Group Limited is headquartered in Australia and is listed on the Australian Stock Exchange. The Manager earns fees by providing or arranging all services necessary and desirable for the operations of the Fund, including those relating to equipment acquisitions and disposals, asset management and administrative, reporting and regulatory services. Further, the Fund reimburses the Manager for costs incurred for managing the Fund and the Fund’s portfolio of equipment, equipment lease and other equipment-related investments.

The Fund filed Post-Effective Amendment No. 3 to Registration Statement on Form S-1 (the “Registration Statement on Form S-1”) with the Securities and Exchange Commission on April 11, 2011. The Fund is considered to be a development stage enterprise as limited operations have commenced since its first effectiveness order received on June 19, 2009 and it is in the offering period. The initial capital contribution to the Fund was $5,000 from the Manager and the Manager made an additional contribution of $1,500,000 to the Fund. The Fund is offering membership interests with the intention of raising up to $157,200,000 of equity. The Fund expects the share offering period to last for up to 33 months from the date of the first effectiveness order. This follows approval during June 2011 by the Manager, by shareholders holding a majority of the Fund’s shares, and by regulators, to extend the share offering period from 24 to 33 months from the date of the first effectiveness order.

The initial closing date for the Fund was March 5, 2010, the date at which the Fund raised over $2,500,000 and reached the minimum offering amount. For the period from inception through June 30, 2011, the Fund has received and accepted cumulative subscriptions for 4,205,258 shares (including the Distribution Reinvestment Plan, or “DRP”, shares and net of repurchase of shares) of limited liability company interest (“shares”) for $36,819,651, net of offering costs, including the capital contributions from the Manager.

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting and Use of Estimates

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. This requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Fund considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. Cash and cash equivalents are maintained with one financial institution.

Restricted Cash

Restricted cash consists of cash collected for aircraft maintenance reserves as discussed in Note 4, Leased Equipment at Cost.

Income Taxes

The Fund is treated as a partnership for federal and state income tax purposes. As a partnership, the Fund itself is not subject to federal and state income taxes, while each member will be individually liable for income taxes, if any, on their share of net taxable income from the Fund. Interest, dividends and other income realized by the Fund may be subject to withholding tax in the jurisdiction in which the income is sourced.

Leased Equipment at Cost

Investment in leased equipment is stated at cost less accumulated depreciation. Leased equipment is depreciated on a straight line basis over the lease term to the assets’ residual value. The factors considered in determining the residual value include, but are not limited to, the type of equipment, how the equipment is integrated into the potential lessee’s business, the length of the lease and the industry in

 

7


Table of Contents

MACQUARIE EQUIPMENT LEASING FUND, LLC

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

 

which the potential lessee operates. Initial direct costs associated with the leases are included in the leased equipment cost.

Maintenance reserve

Where the lessee is responsible for maintenance and repairs, including major maintenance events over the term of the lease, the lessee pays additional rentals based on the usage of the equipment. This is recognized as a liability on the Fund’s Balance Sheet. As the maintenance is performed, the lessee is reimbursed for costs incurred up to, but not exceeding, the related additional rentals the Fund receives from the lessee. For each maintenance event, the difference between the liability and reimbursement paid to the lessee is recorded as revenue when management is satisfied that the remaining reserve is considered sufficient to cover future maintenance or repairs.

Revenue recognition

For finance leases, at inception date, the Fund records 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 and the related unearned income in Net investment in finance lease. 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 in the Statement of Operations 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.

Impairments

The significant assets in the Fund’s portfolio are reviewed for impairment at least annually or when indicators of impairment exist. An impairment loss will be recognized only if the carrying value of a long-lived asset is not recoverable and exceeds its fair market value. The Manager’s assessment for impairment includes review of published values for similar assets, recent transactions for similar assets, lease terms, asset condition, 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. No impairments have been recorded since inception of the Fund.

Allowance for doubtful accounts

The Fund evaluates the collectability of its receivables by analyzing the counterparties’ payment history, general creditworthiness and current economic trends. The Fund records an allowance when the analysis indicates that the probability of full collection is unlikely. No allowance was deemed necessary as at June 30, 2011.

Write offs

The Fund takes write offs when it determines that a receivable is uncollectible and when all economically sensible means of recovery have been exhausted. No write offs have been required since the inception of the Fund.

Development Stage Company

The Fund complies with the reporting requirements of Accounting Standards Codification 915, Development Stage Entities.

New Accounting Pronouncements

In July 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses, an amended guidance for disclosures about the credit quality of financing receivables and the allowance for credit losses. This update amends existing guidance by requiring more robust and disaggregated disclosures by an entity about the credit quality of its financing receivables and its allowance for credit losses. These disclosures will provide financial statement users with additional information about the nature of credit risks inherent in a company’s financing receivables, how a company analyzes and assesses credit risk in determining its allowance for credit losses, and the reasons for any changes a company may make in its allowance for credit losses. The disclosure as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010; however, certain aspects of the update pertaining to activity that occurs during a reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010. The adoption of the new guidance had no significant effect on the Fund’s financial statements.

In May 2011, the FASB issued new guidance ASU 2011-4, Fair Value Measurements - amendments to achieve common fair value measurement and disclosure requirements between GAAP and International Financial Reporting Standards. This new guidance amends

 

8


Table of Contents

MACQUARIE EQUIPMENT LEASING FUND, LLC

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

 

current fair value measurement and disclosure guidance to include increased transparency around valuation inputs and investment categorization. This new guidance is effective for fiscal years and interim periods beginning after December 15, 2011. The adoption of this new guidance, in the first quarter of 2012 is not expected to have a significant impact on the Fund’s financial statements.

3. PARTICIPATING INTEREST

On March 24, 2010, the Fund entered into a participation agreement with Macquarie Bank Limited (“MBL”) a member of the Macquarie Group of companies to acquire an economic interest of up to 10% ($6,500,000) in a sale leaseback transaction. Pursuant to the participation agreement, the Fund made installment payments to, and will receive monthly payments from, MBL in a manner which mirrors the cash flows arising in connection with the commercial aircraft engines leased by a third party (“the underlying airline”) subject to leases of between 51 to 69 months. MBL will pay the Fund approximately 10% (consistent with the investment percentage) of the monthly lease payments received from the third party and approximately 10% of the engine sales proceeds, remaining maintenance reserves and damages and insurance proceeds (collectively referred to as “residual value”), at the end of the lease term when the engines have been successfully remarketed. Under a separate agreement, the Fund shall pay Macquarie Aviation Capital Limited, a member of the Macquarie Group of companies, via its fund manager, a fee (5% of the lease rental receipts) for the ongoing management of the engines and for the collection and remittance of rentals.

The Fund is entitled to receive cash payments of $57,752 per month and approximately 10% of the residual value from MBL. The $6,500,000 investment has been bifurcated on the face of the balance sheet into two assets based upon relative fair value in accordance with the accounting guidance described below:

1) Participating Interest—Engine residual value: Representing the present value of the residual engine value as of the time of investment. The acquisition of the residual value in leased assets by a third party has been recorded in accordance with ASC 360-10-25 Acquisition of the Residual Value in Leased Asset by a Third Party. The asset is tested for impairment in accordance with ASC 320 Investments—Debt and Equity Securities. No impairments have been recognized since the acquisition of the economic interest.

The proceeds related to the residual value will be recouped if remarketing of the engines at the end of the lease term is successful. Any gains or losses on the residual value will be recognized based on the difference between the proceeds and the carrying amount.

2) Participating Interest—Future lease income: Representing the present value of the discounted future cash flows as of each balance sheet date based on the accounting guidance of ASC 470-10-25 Sales of Future Revenues or Various Other Measures of Income. Income associated with the cash flows will be recognized monthly based on an effective yield over the lease term as required by ASC 470-10-25.

The Fund is exposed to the credit risk of the underlying airline. Neither MBL nor any other member of the Macquarie Group guarantees the payment obligations of the underlying airline, and the Fund has no recourse against any member of the Macquarie Group in the event the underlying airline fails to meet its payment obligations. Although the Fund currently has no reason to believe that the underlying airline will fail to meet its contractual obligations, a risk of loss to the Fund exists to the extent that the underlying airline fails to meet its payment obligations and the net remarketing proceeds from the sale of (repossessed) equipment are not sufficient to reimburse the Fund for its investment in the transaction. The Fund also faces risk of loss should MBL fail to meet its payment obligation under the participation agreement.

4. LEASED EQUIPMENT AT COST

In October 2010, the Fund acquired 451 new NCR Self-Serv kiosks (customer self-service terminals). These customer self-service terminals are on lease to a leading U.S. retailer for a period of 59 months and will be used in the retailer’s stores across the U.S. The retailer is an existing client of an entity affiliated with the Fund’s Manager. The acquisition of the equipment was facilitated by the entity affiliated with the Fund’s Manager purchasing the equipment and then simultaneously selling it to the Fund. The purchase price for the equipment, including the initial direct costs was $2,097,353. No leverage was used to finance this acquisition by the Fund. Rentals of $38,361 are received monthly by the Fund. At the end of the lease term the lessee may return the equipment, continue to rent the equipment, or purchase the equipment for its then fair market value.

In March 2011, the Fund entered into an agreement to purchase a 2002 vintage Bombardier CRJ-700ER aircraft (“the Aircraft”). The Aircraft is on lease until April 2014 to an airline which is wholly owned by the Government of India and will be used by the airline for its domestic routes in India. The purchase price for the aircraft, including the estimated initial direct costs was $9,771,861.

 

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MACQUARIE EQUIPMENT LEASING FUND, LLC

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

 

The Fund also inherited the related maintenance reserve of $1,236,497, which is recorded as a liability on the Balance Sheet. No leverage was used to finance this acquisition by the Fund. At the end of the lease term, the lessee may return or continue to rent the equipment. Rentals of $181,000 are received monthly by the Fund. In addition to the inherited maintenance reserve balance, the Fund is entitled to receive additional rentals based on the usage of the aircraft during the lease term. Cash received for the additional rentals is presented as Restricted Cash in the Fund’s Balance Sheet and will be used to reimburse the lessee for the maintenance of the aircraft.

Leased equipment at cost consisted of the following:

 

     June 30, 2011     December 31, 2010  

Self-serve checkout equipment

   $ 2,097,353      $ 2,097,353   

Aircraft

     9,771,861        —     

Less: Accumulated depreciation

     (476,541     (56,877
  

 

 

   

 

 

 
   $ 11,392,673      $ 2,040,476   
  

 

 

   

 

 

 

Annual minimum future rental receivable over the next 5 years consist of the following:

 

For the period July 1 to December 31, 2011

   $ 1,435,451   

For the year ending December 31, 2012

     2,632,334   

For the year ending December 31, 2013

     2,632,334   

For the year ending December 31, 2014

     1,183,556   

For the year ending December 31, 2015

     345,251   
  

 

 

 
   $ 8,228,926   
  

 

 

 

The Fund is exposed to risks under these transactions, including risk associated with the leasing clients’ creditworthiness and risks associated with the future market value of the equipment. Although the Fund currently has no reason to believe that the clients will fail to meet their contractual obligations, a risk of loss to the Fund exists should the client fail to meet its payment obligations under the lease. A risk of loss or lower than expected returns also exists if the market value of the equipment at the end of the lease term is lower than anticipated.

5. NET INVESTMENT IN FINANCE LEASE

In November 2010, the Fund acquired various items of furniture and other related equipment for use in model display apartments. This equipment is on lease to a leading U.S. owner and operator of senior housing and retirement communities for a 36 month period. The equipment will be used in the client’s facilities across the U.S. The purchase price for the equipment, including the initial direct cost, was $703,480. No leverage was used to finance this acquisition by the Fund. Rentals of $21,646 are received monthly by the Fund. At the end of the lease term, the lessee may return the equipment, continue to rent the equipment, or purchase the equipment for its then fair market value.

During the first quarter of 2011, the Fund acquired additional items of furniture, office and other related equipment for use in model display apartments and administrative offices. This equipment is on lease to the same operator of senior housing and retirement communities for a period between 36 – 38 months. The purchase price for the equipment, including the estimated initial direct costs was $166,972. No leverage was used to finance this acquisition by the Fund. Rentals of $15,481 are received quarterly by the Fund. At the end of the lease term, the lessee may return the equipment, continue to rent the equipment, or purchase the equipment for its then fair market value.

During the second quarter of 2011, the Fund acquired additional items of office equipment for use in the administrative offices of the same operator aforementioned. The equipment is on lease for a period of 39 months. The purchase price for the equipment, including the estimated initial direct costs was $58,608. No leverage was used to finance this acquisition by the Fund. Rentals of $5,410 are to be received quarterly by the Fund. At the end of the lease term, the lessee may return the equipment, continue to rent the equipment, or purchase the equipment for its then fair market value.

Net investment in finance lease (current and non-current) consisted of the following:

 

     June 30, 2011     December 31, 2010  

Minimum lease payments receivable

   $ 847,353      $ 735,949   

Estimated residual values of leased property (unguaranteed)

     100,671        72,354   

Less: Unearned income

     (152,816     (134,048
  

 

 

   

 

 

 

Net investment in finance lease

   $ 795,208      $ 674,255   
  

 

 

   

 

 

 

 

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MACQUARIE EQUIPMENT LEASING FUND, LLC

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

 

Annual minimum future rental receivable over the next 4 years consist of the following:

 

For the period July 1 to December 31, 2011

   $ 195,283   

For the year ending December 31, 2012

     343,308   

For the year ending December 31, 2013

     300,019   

For the year ending December 31, 2014

     31,711   
  

 

 

 
   $ 870,321   
  

 

 

 

The Fund is exposed to risks under these transactions, including risk associated with the leasing client’s creditworthiness and risks associated with the future market value of the equipment. Although the Fund currently has no reason to believe that the client will fail to meet its contractual obligations, a risk of loss to the Fund exists should the client fail to meet its payment obligations under the lease. A risk of loss or lower than expected returns also exists if the market value of the equipment at the end of the lease term is lower than anticipated.

6. TRANSACTIONS WITH AFFILIATES

As discussed in Note 1, the Fund is required to pay fees to the Manager and its affiliates for providing or arranging all services necessary for its operations, including those relating to equipment acquisitions and disposals, asset management and administrative, reporting and regulatory services.

Macquarie Capital (USA) Inc. (the “dealer manager”), a member of the Macquarie Group of companies, acts as dealer manager for the Fund and manages a group of selling dealers, including other unaffiliated broker dealers.

The Manager and the dealer manager receive fees from the Fund for offering services during the offering period including:

 

   

Selling commission of up to 7% of the offering proceeds from each share sold by the dealer manager or selling dealers, payable to the dealer manager (and re-allowed to unaffiliated selling dealers);

 

   

Due diligence expense reimbursement for detailed and itemized bona fide accountable due diligence expenses, payable to the dealer manager (and re-allowed to unaffiliated selling dealers);

 

   

Dealer manager fees of 3% of the offering proceeds from each share sold, payable to the dealer manager; and

 

   

Organization and offering expense allowance, which varies based upon the actual organization and offering expenses incurred by the Manager and its affiliates and the number of shares sold, payable to the Manager.

The organization and offering expense allowance will not exceed the actual fees and expenses incurred by the Manager or its affiliates in connection with the Fund’s organization and offering and will be calculated as follows:

 

   

up to 2.433% of the offering proceeds from each share sold for the first 3,500,000 shares;

 

   

up to 2.09% of the offering proceeds from each share sold for shares sold that exceed 3,500,000 but amount to 7,500,000 or fewer shares; and

 

   

up to 1.60% of the offering proceeds from each share sold for shares sold that exceed 7,500,000 shares.

The Fund pays the Manager and its affiliates fees for operating services performed during the offering period and on an ongoing basis once the Fund has commenced operations, including:

 

   

Acquisition fees of 3% of the purchase price that the Fund pays for each item of equipment or direct or indirect interest in equipment acquired, including under lease agreements, trading transactions, residual value guarantees, pay per use agreements, forward purchase agreements, total lease return swaps, participation agreements, equipment purchase options,

 

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MACQUARIE EQUIPMENT LEASING FUND, LLC

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

 

 

other equipment-related transactions, joint ventures, special purpose vehicles and other Fund arrangements;

 

   

Asset management fees equal to the lesser of: (a) (i) 5% of gross rental payments from non-full payout leases (except that 1% of gross rental payments shall be payable with respect to non-full payout leases for which management services are performed by non-affiliates under the Manager’s supervision); (ii) 2% of gross rental payments from full payout leases which contain net lease provisions; and (iii) 7% of gross rental payments from equipment for which the Fund provides services in addition to equipment management relating to the continued and active operation of the Fund’s equipment such as, but not limited to, ongoing marketing and re-leasing of equipment and hiring or arranging for the hiring of crews or operating personnel for the Fund’s equipment and similar services; or (b) the amount of fees which are competitive for similar services;

 

   

Remarketing fees equal to the lesser of (i) 3% of the purchase price paid to the Fund by the purchaser of the investment, or (ii) one-half of reasonable, customary and competitive brokerage fees paid for services rendered in connection with the sale of equipment of similar size, type and location. Payment of remarketing fees shall be subordinated until such time when investor return has been achieved. “Investor return” means such time when the aggregate amount of distributions to the members equals, as of any determination date, an amount equal to a pre-tax eight percent (8.0%) per annum internal rate of return compounded daily on all capital contributions of members;

 

   

Out-performance fees depending upon the extent to which investor return has been achieved prior to the time that investor return is achieved, cash distributions will be made 99.0% to the Fund’s members and 1.0% to the Manager. After the time that investor return is achieved, cash distributions will be made 81.0% to the Fund’s members and 19.0% to the Manager; and

 

   

Reimbursement of operating expenses depending upon the scope of services the Manager provides to the Fund.

For the quarters and six months ended June 30, 2011 and 2010 the Fund has accrued or paid to the Manager or its affiliates the following amounts:

 

               Quarter Ended June 30,      Six Months Ended June 30,  

Entity

   Capacity   

Description

   2011      2010      2011      2010  

Maquarie Asset Management Inc.

   Manager    Organization and Offering expense allowance (1)    $ 269,928       $ 126,072       $ 478,170       $ 239,783   

Macquarie Capital (USA) Inc.

   Dealer Manager    Selling commissions and Dealer Manager fees (1)    $ 277,880       $ 134,150       $ 464,228       $ 195,404   

Macquarie Capital (USA) Inc.

   Dealer Manager    Due diligence expense (1)    $ 10,720       $ —         $ 38,638       $ —     

Maquarie Asset Management Inc.

   Manager    Acquisition fees (2)    $ 1,691       $ 96,000       $ 280,211       $ 195,000   

Maquarie Asset Management Inc.

   Manager    Management fee (3)    $ 45,614       $ 323       $ 70,659       $ 8,817   

Maquarie Asset Management Inc.

   Manager    Operating Expenses (3)    $ 114,267       $ 117,308       $ 237,467       $ 310,583   

Maquarie Asset Management Inc.

   Manager    Outperformance fee (3)    $ 6,489       $ —         $ 10,916       $ 1,085   

 

(1) Amount charged directly to member’s equity.
(2) Amount either charged directly to operations or capitalized and amortized.
(3) Amount charged directly to operations.

7. EQUITY CONTRIBUTION

For the period from inception through June 30, 2011, the Fund has received and accepted subscriptions for 4,205,258 shares of limited liability company interest (including the DRP shares and net of repurchase of shares) for $36,819,651, net of offering costs. The subscriptions received include total contributions of $1,505,000 from the Manager, excluding the offering costs.

8. SUBSEQUENT EVENTS

As of August 10, 2011 the Fund has raised and accepted additional cumulative subscription for 699,812 shares of limited liability company interest for $6,153,919, net of offering costs.

 

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MACQUARIE EQUIPMENT LEASING FUND, LLC

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

 

In July 2011, the Fund acquired an ETS-364B Test System, an item of semiconductor testing equipment manufactured by Teradyne, Inc. This item of equipment is on lease to the U.S. subsidiary of a semiconductor manufacturing company headquartered in Germany. The lease is for a 36 month period. The equipment will be used in the client’s U.S. facilities. The purchase price for the equipment, including the initial direct cost, was $383,898. No leverage was used to finance this acquisition by the Fund. The first rental will be $92,729, including an amount of revenue which will be deferred for accounting purpose. For the subsequent monthly rental periods, rentals of $8,211 are to be received by the Fund. At the end of the lease term, the lessee may return the equipment, continue to rent the equipment, or purchase the equipment for its then fair market value. The lease will be recorded as an operating lease with rental income recognized on a straight line basis over the lease term.

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is a discussion of our current financial position. This discussion should be read together with our unaudited financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, the audited financial statements and related notes included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on February 15, 2011, and with our Registration Statement on Form S-1 as filed with the Securities and Exchange Commission on October 15, 2008, as amended (“Registration Statement”). This discussion should also be read in conjunction with the disclosures below regarding “Forward-Looking Statements.”

As used in this Quarterly Report on Form 10-Q, references to “we,” “us,” “our” or similar terms include Macquarie Equipment Leasing Fund, LLC (the “Fund”).

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,” “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.

Overview

Macquarie Equipment Leasing Fund, LLC, a Delaware limited liability company, was formed on August 21, 2008 for the purpose of acquiring a diversified portfolio of equipment and equipment leases. The Fund will also make investments in other equipment-related transactions which will allow it to directly or indirectly participate in the benefits and risks of equipment ownership or usage.

The Fund is currently in its offering period, which commenced on June 19, 2009 and is anticipated to end in March 2012. This follows approval during June 2011 by the Manager, by shareholders holding a majority of the Fund’s shares, and by regulators, to extend the share offering period from 24 to 33 months from the date of the first effectiveness order. The Fund is currently in the process of raising capital. On March 5, 2010, subscriptions for the minimum number of shares of limited liability company interest (“Shares”), being 290,509 Shares for $2,837,350, excluding subscriptions from Pennsylvania investors, had been received. As a result, subscription proceeds were released from escrow to commence principal operations and reimburse organization and offering fees and expenses. Subsequent capital contributions will be used to fund operations, invest in equipment, equipment leases and other equipment-related transactions and pay fees and expenses as described in the Fund’s Registration Statement. As of August 10, 2011, the Fund has received and accepted cumulative subscriptions for 4,905,070 Shares (including the DRP shares and net of repurchase of shares) for $42,973,570, net of offering costs. When the Fund’s offering period ends, the Fund will enter into its operating period, whereupon it may continue to make investments in equipment, equipment leases and other equipment-related transactions.

The Fund is offering a total of 15,000,000 Shares for a price of $10.00 per share, subject to certain reductions. The Fund is also offering up to 800,000 Shares pursuant to its Distribution Reinvestment Plan (“DRP”) at a public offering price of $9.00 per Share. The Fund’s manager, Macquarie Asset Management Inc. (“Manager”), has contributed a total of $1,505,000. The Fund’s fiscal year end is December 31.

Recent Transactions

Office Equipment

During the second quarter of 2011, the Fund acquired items of office equipment for use in the administrative offices of an existing client. The client is a leading U.S. owner and operator of senior housing and retirement communities, and the equipment is on lease for a period of 39 months. The purchase price for the equipment, including the estimated initial direct costs was $58,608. No leverage was used to finance this acquisition by the Fund. Rentals of $5,410 are to be received quarterly by the Fund. At the end of the lease term, the lessee may return the equipment, continue to rent the equipment, or purchase the equipment for its then fair market value.

Extension of Offering Period

 

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During June 2011, the Fund’s offering period was extended by nine months from June 19, 2011 to March 19, 2012, or until such earlier time as (a) the Fund’s maximum offering has been sold, or (b) the Manager otherwise terminates the Fund’s offering. This will result in a maximum total offering period for the Fund of two years and nine months. This extension was approved by the Manager, by shareholders holding a majority of the Fund’s shares, and by various regulators.

So as to maintain the same total anticipated Fund duration, the Fund’s operating period has been reduced by a corresponding nine month period, such that the operating period will end four years and three months after the end of the offering period, provided that the operating period may be extended at the discretion of the Manager by a further period not exceeding an additional twelve (12) months. The Fund may undertake investing activities during both the offering and operating periods.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of our assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Investments in Participating Interest

Our participating interest in the sales leaseback transaction consists of the sum of the total fair value of the future minimum lease payments receivable plus the estimated fair value of the unguaranteed residual value of the leased equipment. Bifurcation of the investment into the portions attributable to the Residual Value and the Future Lease Income and the timing of income recognition has been based on estimates. Assumptions have been made regarding engine utilization, condition and maintenance costs based on independent third party data.

Leased Equipment at Cost

Leased equipment is depreciated on a straight line basis over the lease term to the assets’ estimated residual value. The factors considered in estimating the residual value include, but are not limited to, the type of equipment, how the equipment is integrated into the potential lessee’s business, the length of the lease and the industry in which the potential lessee operates. The economic life of the leased equipment is also estimated to determine the classification of the lease at inception date.

Net Investment in Finance Lease

For finance leases, at inception date, the Fund records 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 and the related unearned income in Net investment in finance lease. The unguaranteed residual value of the equipment at lease termination requires management estimates. The economic life of the leased equipment is also estimated to determine the classification of the lease at inception date.

Results of Operations for the Quarter and Six Months Ended June 30, 2011 and 2010

We are currently in our offering period. Through June 30, 2011, we have received and accepted cumulative subscription of $36,819,651, net of offering costs and as at August 10, 2011, the Fund had raised total equity of $42,973,570, net of offering costs.

Total revenue for the quarter and six months ended June 30, 2011 increased by $683,023 and $979,459, respectively, compared to quarter and six months ended June 30, 2010. The increase in revenue was primarily due to additional revenue from our recently acquired self serve checkout kiosks, furniture and fixture and an aircraft which are on lease to various lessees.

Total expenses for the quarter and six months ended June 30, 2011 increased by $253,451 and $403,283, respectively compared to quarter and six months ended June 30, 2010. The increase is primarily due to increase in depreciation recognized on assets purchased for various leases. As a result of the foregoing factors, the net income for the quarter and six months ended June 30, 2011 was $164,903 and $99,999, respectively.

Liquidity and Capital Resources

Cash Flows Summary

At June 30, 2011, the Fund had cash and cash equivalents of $18,644,704. During our offering period, our main source of cash will be from financing activities and our main use of cash will be to acquire a diversified portfolio of equipment, equipment leases and other equipment-related investments. We will also make investments in other equipment-related transactions which will allow us to directly

 

15


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or indirectly participate in the benefits and risks of equipment ownership or usage.

Cash and cash equivalents include cash in banks and highly liquid investments with original maturity dates of three months or less. Until offering proceeds are used for the acquisition or operation of the Fund’s portfolio, the offering proceeds will be held in an operating account at Wells Fargo Bank, National Association.

Sources and Uses of Cash

The Fund will continue to sell its shares until the end of the offering period. As additional shares are sold, the Fund will experience an increase in liquidity as cash is received. As the Fund uses cash to acquire equipment or other equipment-related investments, its liquidity will decrease. The Fund’s maximum offering amount is $150,000,000, plus up to an additional $7,200,000 under the Fund’s DRP.

Our offering period ends on March 19, 2012. This follows approval during June 2011 by the Manager, by shareholders holding a majority of the Fund’s shares, and by regulators, to extend the share offering period from 24 to 33 months from the date of the first effectiveness order. Although we intend to raise up to $157,200,000 in total capital in the period from the inception of the Fund to the end of our offering period, we do not presently anticipate raising that full amount. The rate of our capital raising was initially impacted by poor general economic conditions in the U.S., which produced a number of consequential industry effects which further dampened our rate of capital raising. We anticipate that our total capital raise will amount to between $110,000,000 and $120,000,000 through March 2012. We believe that this amount is sufficient to meet our investment objectives. This anticipated amount is subject to change, and may be higher than we currently expect.

For the period from inception through June 30, 2011, we sold 4,205,258 Shares (including the DRP shares and net of repurchase of shares), representing $36,819,651 of capital contributions, net of offering costs. For the period from the commencement of our operations on March 5, 2010 through June 30, 2011, we have paid or accrued sales commissions to third parties of $2,712,830, dealer manager commissions to Macquarie Capital (USA) Inc. of $988,007 and due diligence expense to Macquarie Capital (USA) Inc. of $38,638. In addition, organization and offering expenses of $988,706 were paid or incurred by us to our Manager or its affiliates during this period.

Sources of Liquidity

Cash generated from our financing activities will be our most significant source of liquidity during our offering period. We believe that cash generated from our financing activities, as well as the expected results of our operations, will be sufficient to finance our liquidity requirements for the foreseeable future, including distributions to our members, new investment opportunities, management fees, equipment maintenance events and administrative expense reimbursements. Our ability to generate cash in the future is subject to general economic, financial, competitive, regulatory and other factors that affect us and our lessees’ businesses that are beyond our control.

The Fund’s liquidity may be adversely affected by unanticipated or greater than anticipated operating costs or losses, including the inability of a client of the Fund to make timely lease payments. The Fund anticipates that it will fund its operations from cash flow generated by operating and financing activities. The Manager has no intent to permanently fund any cash flow deficit of the Fund or provide other financial assistance to the Fund.

The Fund also intends to incur indebtedness in purchasing its portfolio. During periods of general illiquidity in financial markets, it may not be possible for the Manager to source debt on the Fund’s behalf at an appropriate interest rate, on appropriate terms, at appropriate levels or at all.

Distributions

The Fund began making monthly cash distributions on April 15, 2010. We paid cash distributions to our members in the amount of $446,707 and $758,525 for the quarter and six months ended June 30, 2011.

While the Fund anticipates making monthly cash distributions, it may vary the amount of, or completely suspend making distributions at any time and without notice.

Commitments, Contingencies and Off-Balance Sheet Transactions

Other than obligations associated with our investing activities or as set forth in our Operating Agreement, we have no contractual obligations and commitments, contingencies or off-balance sheet transactions at June 30, 2011.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

 

Item 4. Controls and Procedures

 

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Under the direction and with the participation of our Manager’s President and Principal Financial Officer, we evaluated our disclosure controls and procedures (as such term is defined under Rule 13a-15(e) or Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our Manager’s President and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2011. There has been no change in our internal controls over financial reporting (as defined in Rule 13a-15(f) or Rule 15d-15(f) of the Exchange Act) that occurred during the quarter ended June 30, 2011 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

 

 

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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. No material legal proceedings are currently pending or threatened, to our knowledge, against us or against any of our assets.

 

Item 1a. Risk Factors

There have been no material changes from the risk factors disclosed in our Post-Effective Amendment No. 3 to Registration Statement on Form S-1, dated April 11, 2011.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) None.

(b) We registered 15,800,000 shares of limited liability company interest, (SEC File No. 333-154278, effective June 19, 2009), of which we registered 15,000,000 shares at $10.00 per share to be offered to the public in a primary offering and 800,000 shares offered to our investors pursuant to our DRP at $9.00 per share. The Fund is currently in its offering period, which commenced on June 19, 2009 and is anticipated to end in March 2012.

Through August 10, 2011, we received capital contributions in the amount of $42,973,570, net of offering costs. Through August 10, 2011, we have paid or accrued sales commissions to third parties of $3,216,341, organization and offering expense to our Manager of $1,133,089, and dealer manager, selling commissions and due diligence expense to Macquarie Capital (USA) Inc. of $1,178,360.

As of August 10, 2011 we have used approximately $19.7 million of the offering proceeds to acquire a participation interest in a portfolio of commercial jet aircraft engines, a 2002 vintage Bombardier CRJ-700ER aircraft , 451 self-serve kiosks on lease to a major U.S. retailer, an ETS-364B semiconductor test system, and various items of furniture, office and other related equipments on lease to leading U.S owner and operator of senior housing and retirement communities.

 

Item 3. Defaults Upon Senior Securities

Not applicable.

 

Item 4. [Removed and Reserved]

 

Item 5. Other Information

None.

 

Item 6. Exhibits

An exhibit index has been filed as part of this Report on page E-1.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

MACQUARIE EQUIPMENT LEASING FUND, LLC

 

By:  

/S/     DAVID FAHY

Name:   David Fahy
Title:   President of the Manager and Principal Executive
  Officer of Registrant
  Date: August 10, 2011
By:  

/S/     FRANK V. SARACINO

Name:   Frank V. Saracino
Title:   Principal Financial Officer of the Manager and Principal
  Accounting Officer of Registrant
  Date: August 10, 2011

 

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Exhibit Index

 

Exhibit

Number

 

Description

31.1*   Rule 13a-14(a)/15d-14(a) Certification of President of the Manager and Principal Executive Officer of Registrant.
31.2*   Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer of the Manager and Principal Accounting Officer of Registrant
32.1*   Section 1350 Certification of President of the Manager and Principal Executive Officer of Registrant
32.2*   Section 1350 Certification of Principal Financial Officer of the Manager and Principal Accounting Officer of Registrant
101.0**   The following materials from the Quarterly Report on Form 10-Q of Macquarie Equipment Leasing Fund, LLC for the quarter ended June 30, 2011, filed on August 10, 2011, formatted in Extensible Business Reporting Language (XBRL): (i) the Balance Sheets as of June 30, 2011 and December 31, 2010 (Unaudited), (ii) the Statement of Operations for the period from August 21, 2008 (inception of the Fund) to June 30, 2011 and the Quarters and Six Months Ended June 30, 2011 and 2010 (Unaudited), (iii) the Statements of Cash Flows for the period from August 21, 2008 (inception of the Fund) to June 30, 2011 and the Six Months Ended June 30, 2011 and 2010 (Unaudited) (iv) the Statements of Changes in Members’ Equity for the period from August 21, 2008 (inception of the Fund) to June 30, 2011 (Unaudited) and (v) the Notes to Financial Statements (Unaudited).

 

* Filed herewith.

 

** Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

 

E-1