Attached files

file filename
EXCEL - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCFinancial_Report.xls
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR4.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR7.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR5.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR6.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR8.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR3.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR1.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR9.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR2.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR20.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR24.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR10.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR21.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR15.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR23.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR17.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR19.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR22.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR13.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR12.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR18.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR11.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR16.htm
XML - IDEA: XBRL DOCUMENT - ICON INCOME FUND TEN LLCR14.htm
EX-32.2 - CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 - ICON INCOME FUND TEN LLCex32-2.htm
EX-31.2 - CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 - ICON INCOME FUND TEN LLCex31-2.htm
EX-32.3 - CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 - ICON INCOME FUND TEN LLCex32-3.htm
EX-31.3 - CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 - ICON INCOME FUND TEN LLCex31-3.htm
EX-31.1 - CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 - ICON INCOME FUND TEN LLCex31-1.htm
EX-32.1 - CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 - ICON INCOME FUND TEN LLCex32-1.htm

 

 

 

 



 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

[x]         Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended

September 30, 2012

 

 

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:

000-50654

 

 

ICON Income Fund Ten, LLC

(Exact name of registrant as specified in its charter)

 

Delaware

35-2193184

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

3 Park Avenue, 36th  Floor, New York, New York

10016

(Address of principal executive offices)

(Zip code)

 

(212) 418-4700

(Registrant's telephone number, including area code)

 

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.

 þ  Yes     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).            

þ Yes     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.

 

Large accelerated filer o    

Accelerated filer 

Non-accelerated filer o (Do not check if a smaller reporting company)

Smaller reporting company þ 

        

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

o Yes    þ  No 

 

Number of outstanding shares of limited liability company interests of the registrant on November 7, 2012 is 148,211.

 

 

 

 


 

 

 

ICON Income Fund Ten, LLC

Table of Contents

 

 

Page

 

 

 

PART I - FINANCIAL INFORMATION

 

 

 

 

Item 1.  Consolidated Financial Statements

 

 

 

 

    Consolidated Balance Sheets

1

 

 

 

Consolidated Statements of Operations and Comprehensive Income (Loss)

2

 

 

 

Consolidated Statements of Changes in Equity

3

 

 

 

Consolidated Statements of Cash Flows

4

 

 

 

    Notes to Consolidated Financial Statements

5

 

 

 

Item 2. Manager's Discussion and Analysis of Financial Condition and Results of Operations

10

 

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

15

 

 

 

Item 4. Controls and Procedures

15

 

 

 

PART II – OTHER INFORMATION

 

 

 

 

Item 1. Legal Proceedings

 

16

 

 

 

Item 1A. Risk Factors

 

16

 

 

 

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

16

 

 

 

Item 3. Defaults Upon Senior Securities

16

 

 

 

Item 4. Mine Safety Disclosures

16

 

 

 

Item 5. Other Information

 

16

 

 

 

Item 6. Exhibits

 

17

 

 

 

Signatures

 

19

 

 


 

 

 

 PART I – FINANCIAL INFORMATION

 

Item 1.  Consolidated Financial Statements  

ICON Income Fund Ten, LLC

 

(A Delaware Limited Liability Company)

 

Consolidated Balance Sheets

 

 

 

 

 

 

September 30,

 

December 31,

 

 

 

 

2012 

 

2011 

 

 

 

 

(unaudited)

 

 

 

 

 

 

Assets

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

$

 904,740 

 

$

6,171,596 

 

Current portion of net investment in finance leases

 

 7,702,045 

 

 

183,913 

 

Current portion of notes receivable

 

 - 

 

 

422,568 

 

Other current assets

 

18,172 

 

 

38,341 

 

 

 

Total current assets

 

8,624,957 

 

 

6,816,418 

Non-current assets:

 

 

 

 

 

 

Net investment in finance leases, less current portion

 

34,165,729 

 

 

39,832,259 

 

Notes receivable, less current portion

 

 - 

 

 

20,097 

 

Investments in joint ventures

 

7,402,415 

 

 

8,378,185 

 

Other non-current assets

 

24,799 

 

 

25,717 

 

 

 

Total non-current assets

 

41,592,943 

 

 

48,256,258 

Total assets

$

50,217,900 

 

$

55,072,676 

 

 

 

 

 

 

 

Liabilities and Equity

Current liabilities:

 

 

 

 

 

 

Due to Manager and affiliates

$

 

$

111,615 

 

Accrued expenses

 

74,953 

 

 

162,530 

 

Accrued tax liability

 

371,603 

 

 

357,211 

 

Other current liabilities

 

43,000 

 

 

45,205 

 

 

 

Total liabilities

 

489,556 

 

 

676,561 

Commitments and contingencies (Note 8)

 

 

 

 

 

Equity:

 

 

 

 

 

 

Members’ equity:

 

 

 

 

 

 

 

Additional members

 

50,589,183 

 

 

55,278,766 

 

 

Manager

 

 (801,431) 

 

 

 (754,060) 

 

 

Accumulated other comprehensive loss

 

 (82,301) 

 

 

 (148,725) 

 

 

 

Total members’ equity

 

49,705,451 

 

 

54,375,981 

 

 Noncontrolling interests

 

22,893 

 

 

20,134 

 

 

 

Total equity

 

49,728,344 

 

 

54,396,115 

Total liabilities and equity

$

50,217,900 

 

$

55,072,676 

 

See accompanying notes to consolidated financial statements.

1

 


 

 

 

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Consolidated Statements of Operations and Comprehensive Income (Loss)

(unaudited)

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2012 

 

2011 

 

2012 

 

2011 

Revenue and other income:

 

 

 

 

 

 

 

 

Rental income

$

 - 

 

$

 125,140 

 

$

 4,944 

 

$

 418,731 

 

Finance income

 

 1,726,497 

 

 

 1,617,892 

 

 

 5,101,790 

 

 

 4,705,700 

 

Servicing income

 

 - 

 

 

 1,139,138 

 

 

 - 

 

 

 3,590,536 

 

Loss from investments in joint ventures

 

 (343,189) 

 

 

 (184,350) 

 

 

 (1,098,877) 

 

 

 (9,143,897) 

 

Net gain on sales of equipment and unguaranteed residual values

 

 - 

 

 

 2,468 

 

 

 - 

 

 

 801,215 

 

Interest and other income

 

 (13,275) 

 

 

 146,698 

 

 

 10,867 

 

 

 330,838 

 

 

Total revenue and other income

 

 1,370,033 

 

 

 2,846,986 

 

 

 4,018,724 

 

 

 703,123 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Management fees

 

 - 

 

 

 79,847 

 

 

 224,216 

 

 

 349,437 

 

Administrative expense reimbursements

 

 - 

 

 

 165,810 

 

 

 273,488 

 

 

 618,780 

 

General and administrative

 

 184,840 

 

 

 1,721,898 

 

 

 779,807 

 

 

 5,445,847 

 

Impairment loss

 

 - 

 

 

 23,393 

 

 

 - 

 

 

 23,393 

 

Depreciation and amortization

 

 - 

 

 

 370,022 

 

 

 590 

 

 

 1,161,957 

 

 

Total expenses

 

 184,840 

 

 

 2,360,970 

 

 

 1,278,101 

 

 

 7,599,414 

Net income (loss)

 

 1,185,193 

 

 

 486,016 

 

 

 2,740,623 

 

 

 (6,896,291) 

 

Less: net income (loss) attributable to noncontrolling interests

 

 3,249 

 

 

 (49,853) 

 

 

 2,759 

 

 

 (69,624) 

Net income (loss) attributable to Fund Ten

$

 1,181,944 

 

$

 535,869 

 

$

 2,737,864 

 

$

 (6,826,667) 

Net income (loss) attributable to Fund Ten allocable to:

 

 

 

 

 

 

 

 

 

 

 

 

Additional members

$

 1,170,125 

 

$

 530,510 

 

$

 2,710,487 

 

$

 (6,758,400) 

 

Manager

 

 11,819 

 

 

 5,359 

 

 

 27,377 

 

 

 (68,267) 

 

$

 1,181,944 

 

$

 535,869 

 

$

 2,737,864 

 

$

 (6,826,667) 

Comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

 1,185,193 

 

$

 486,016 

 

$

 2,740,623 

 

$

 (6,896,291) 

 

Change in fair value of derivative financial instruments

 

 20,845 

 

 

 35,116 

 

 

 67,575 

 

 

 139,897 

 

Currency translation adjustments

 

 - 

 

 

 (60,950) 

 

 

 (1,151) 

 

 

 50,310 

Total comprehensive income (loss)

 

 1,206,038 

 

 

 460,182 

 

 

 2,807,047 

 

 

 (6,706,084) 

 

Less: comprehensive income (loss) attributable to

 

 

 

 

 

 

 

 

 

 

 

 

 

noncontrolling interests

 

 3,249 

 

 

 (65,091) 

 

 

 2,759 

 

 

 (57,047) 

Comprehensive income (loss) attributable to Fund Ten

$

 1,202,789 

 

$

 525,273 

 

$

 2,804,288 

 

$

 (6,649,037) 

Weighted average number of additional shares of limited

 

 

 

 

 

 

 

 

 

 

 

 

liability company interests outstanding

 

 148,211 

 

 

 148,211 

 

 

 148,211 

 

 

 148,211 

Net income (loss) attributable to Fund Ten per weighted average

 

 

 

 

 

 

 

 

 

 

 

 

additional share of limited liability company interests outstanding

$

 7.89 

 

$

 3.58 

 

$

 18.29 

 

$

 (45.60) 

 

See accompanying notes to consolidated financial statements.

2

 


 

 

 

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Consolidated Statements of Changes in Equity

 

 

 

Members' Equity

 

 

 

 

Additional Shares of Limited Liability Company Interests

 

Additional Members

 

Manager

 

Accumulated Other Comprehensive (Loss) Income

 

Total Members' Equity

 

Noncontrolling Interests

 

Total Equity

Balance, December 31, 2011

 148,211 

 

$

 55,278,766 

 

$

 (754,060) 

 

$

 (148,725) 

 

$

 54,375,981 

 

$

 20,134 

 

$

 54,396,115 

 

Net income (loss)

 - 

 

 

 750,551 

 

 

 7,581 

 

 

 - 

 

 

 758,132 

 

 

 (490) 

 

 

 757,642 

 

Change in fair value of derivative financial instruments

 - 

 

 

 - 

 

 

 - 

 

 

 16,862 

 

 

 16,862 

 

 

 - 

 

 

 16,862 

 

Currency translation adjustments

 - 

 

 

 - 

 

 

 - 

 

 

 (1,151) 

 

 

 (1,151) 

 

 

 - 

 

 

 (1,151) 

 

Cash distributions

 - 

 

 

 (5,500,044) 

 

 

 (55,556) 

 

 

 - 

 

 

 (5,555,600) 

 

 

 - 

 

 

 (5,555,600) 

Balance, March 31, 2012 (unaudited)

 148,211 

 

 

 50,529,273 

 

 

 (802,035) 

 

 

 (133,014) 

 

 

 49,594,224 

 

 

 19,644 

 

 

 49,613,868 

 

Net income

 - 

 

 

 789,811 

 

 

 7,977 

 

 

 - 

 

 

 797,788 

 

 

 - 

 

 

 797,788 

 

Change in fair value of derivative financial instruments

 - 

 

 

 - 

 

 

 - 

 

 

 29,868 

 

 

 29,868 

 

 

 - 

 

 

 29,868 

 

Cash distributions

 - 

 

 

 (850,010) 

 

 

 (8,586) 

 

 

 - 

 

 

 (858,596) 

 

 

 - 

 

 

 (858,596) 

Balance, June 30, 2012 (unaudited)

 148,211 

 

 

 50,469,074 

 

 

 (802,644) 

 

 

 (103,146) 

 

 

 49,563,284 

 

 

 19,644 

 

 

 49,582,928 

 

Net income

 - 

 

 

 1,170,125 

 

 

 11,819 

 

 

 - 

 

 

 1,181,944 

 

 

 3,249 

 

 

 1,185,193 

 

Change in fair value of derivative financial instruments

 - 

 

 

 - 

 

 

 - 

 

 

 20,845 

 

 

 20,845 

 

 

 - 

 

 

 20,845 

 

Cash distributions

 - 

 

 

 (1,050,016) 

 

 

 (10,606) 

 

 

 - 

 

 

 (1,060,622) 

 

 

 - 

 

 

 (1,060,622) 

Balance, September 30, 2012 (unaudited)

 148,211 

 

$

 50,589,183 

 

$

 (801,431) 

 

$

 (82,301) 

 

$

 49,705,451 

 

$

 22,893 

 

$

 49,728,344 

 

See accompanying notes to consolidated financial statements.

3

 


 

 

 

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Consolidated Statements of Cash Flows

(unaudited)

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

 

 

 

2012 

 

 

2011 

Cash flows from operating activities:

 

 

 

 

 

 

Net income (loss)

$

2,740,623  

 

$

(6,896,291)

 

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

 

 

 

 

 

 

 

Finance income

 

(5,101,790)

 

 

(4,705,700)

 

 

Loss from investments in joint ventures

 

1,098,877  

 

 

9,143,897  

 

 

Depreciation and amortization

 

590  

 

 

1,161,957  

 

 

Impairment loss

 

–    

 

 

23,393  

 

 

Net gain on sales of equipment and unguaranteed residual values

 

–    

 

 

(801,215)

 

 

Loss on financial instruments

 

–    

 

 

70,669  

 

 

Stock-based compensation

 

–    

 

 

906,862  

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Collection of finance leases

 

3,250,188  

 

 

1,766,773  

 

 

Service contracts receivable

 

–    

 

 

246,225  

 

 

Distributions from joint ventures

 

–    

 

 

333,363  

 

 

Other assets, net

 

20,376  

 

 

(957,926)

 

 

Due to Manager and affiliates, net

 

(116,479)

 

 

32,159  

 

 

Accrued expenses

 

(87,577)

 

 

(153,719)

 

 

Other current liabilities

 

12,187  

 

 

(42,627)

Net cash provided by operating activities

 

1,816,995  

 

 

127,820  

Cash flows from investing activities:

 

 

 

 

 

 

Proceeds from sales of equipment and unguaranteed residual values

 

–    

 

 

2,118,652  

 

Investments in joint ventures

 

(55,532)

 

 

(8,158)

 

Distributions received from joint ventures in excess of profits

 

–    

 

 

1,958,651  

 

Principal repayment on notes receivable

 

446,499  

 

 

646,206  

Net cash provided by investing activities

 

390,967  

 

 

4,715,351  

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from sales of subsidiary shares

 

–    

 

 

158,639  

 

Distributions to noncontrolling interests

 

–    

 

 

(597,758)

 

Cash distributions to members

 

(7,474,818)

 

 

(2,474,772)

Net cash used in financing activities

 

(7,474,818)

 

 

(2,913,891)

Effects of exchange rates on cash and cash equivalents

 

–    

 

 

(12,738)

Net (decrease) increase in cash and cash equivalents

 

(5,266,856)

 

 

1,916,542  

Cash and cash equivalents, beginning of period

 

6,171,596  

 

 

2,740,590  

Cash and cash equivalents, end of period

$

904,740  

 

$

4,657,132  

Supplemental disclosure of non-cash investing activities:

 

 

 

 

 

 

Transfer from investments in joint ventures to notes receivable

$

–    

 

$

1,251,414  

See accompanying notes to consolidated financial statements.

4

 


 

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

September 30, 2012

(unaudited)

 

 

(1)        Basis of Presentation and Consolidation

The accompanying consolidated financial statements of ICON Income Fund Ten, LLC (the “LLC”) have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission for Quarterly Reports on Form 10-Q.  In the opinion of the manager of the LLC, ICON Capital Corp., a Delaware corporation (the “Manager”), all adjustments, which are of a normal recurring nature, considered necessary for a fair presentation have been included.  These consolidated financial statements should be read together with the consolidated financial statements and notes included in the LLC’s Annual Report on Form 10-K for the year ended December 31, 2011.  The results for the interim period are not necessarily indicative of the results for the full year.

 

Certain reclassifications have been made to the accompanying consolidated financial statements in prior periods to conform to the current presentation.

   

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and IFRSs, which amends its guidance related to fair value measurements in order to align the definition of fair value measurements and the related disclosure requirements between US GAAP and International Financial Reporting Standards. The new pronouncement also changes certain existing fair value measurement principles and disclosure requirements. The adoption of ASU 2011-04 became effective for the LLC on January 1, 2012 and did not have a material impact on the LLC’s consolidated financial statements.

 

In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income, which revises the manner in which companies present comprehensive income in their financial statements. The new pronouncement removes the option to report other comprehensive income and its components in the statement of changes in equity and instead requires presentation in one continuous statement of comprehensive income or two separate but consecutive statements. The adoption of ASU 2011-05 became effective for the LLC on January 1, 2012 and did not have a material impact on the LLC’s consolidated financial statements, as it only required a change in the format of presentation.

 

(2)         Net Investment in Finance Leases 

Net investment in finance leases consisted of the following:

 

 

September 30,

 

December 31,

 

 

2012 

 

2011 

 

Minimum rents receivable

$

48,794,163 

 

$

52,044,351 

 

Estimated residual values

 

7,300,000 

 

 

7,300,000 

 

Unearned income

 

(14,226,389)

 

 

(19,328,179)

 

Net investment in finance leases

 

41,867,774 

 

 

40,016,172 

 

Less: current portion of net investment in finance leases

 

7,702,045 

 

 

183,913 

 

Net investment in finance leases, less current portion

$

34,165,729 

 

$

39,832,259 

5

 


 

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

September 30, 2012

(unaudited)

 

 

 

Credit Quality of Direct Finance Leases and Credit Loss Reserve

The Manager weighs all credit decisions based on a combination of external credit ratings as well as internal credit evaluations of all borrowers. A borrower’s credit is analyzed using those credit ratings as well as the borrower’s financial statements and other financial data deemed relevant.

 

As the LLC’s direct finance leases are limited in number, the LLC is able to estimate the credit loss reserve based on a detailed analysis of each lease as opposed to using portfolio based metrics and credit loss reserve. Leases are analyzed quarterly and categorized as either performing or non-performing based on payment history. If a lease becomes non-performing due to a borrower’s missed scheduled payments or failed financial covenants, the Manager analyzes whether a credit loss reserve should be established or whether the lease should be restructured. Material events would be specifically disclosed in the discussion of each lease held.

 

(3)        Notes Receivable

Effective January 1, 2011, the LLC exchanged its 12.25% ownership interest in a joint venture for notes receivable from Northern Capital Associates XIV, L.P. (“Northern Capital Associates”), which notes receivable were previously owned by the joint venture. As of January 1, 2011, the aggregate principal balance of the notes was approximately $1,237,000, and the notes earned interest at rates ranging from 9.47% to 9.895% per year. On May 2, 2012, Northern Capital Associates satisfied its remaining obligations in connection with these notes by making a payment of approximately $355,000. No material gain or loss was recorded as a result of this transaction.

 

(4)        Investments in Joint Ventures 

ICON Mayon, LLC

 

On June 26, 2007, the LLC and ICON Leasing Fund Twelve, LLC, an affiliate of the Manager (“Fund Twelve”), formed a joint venture with ownership interests of 49% and 51%, respectively. The joint venture purchased a 98,507 deadweight ton Aframax product tanker, the Mayon Spirit, from an affiliate of Teekay Corporation (“Teekay”), which was bareboat chartered back to Teekay for a term of 48 months. As a result of negotiations to remarket and ultimately dispose of certain vessels, the Manager reviewed the LLC’s investment in the joint venture and determined that the net book value of the vessel under lease exceeded the fair value. As a result, during the nine months ended September 30, 2011, the joint venture recognized impairment charges of approximately $21,858,000, of which the LLC’s share was approximately $10,710,000. On September 23, 2011, the joint venture sold the vessel for net proceeds of approximately $8,275,000 and satisfied the remaining third-party debt.

 

Information as to the results of operations of ICON Mayon, LLC is summarized below:

 

 

Three Months Ended September 30, 2011

 

Nine Months Ended September 30, 2011

 

Revenue

$

761,164 

 

$

3,860,275 

 

Net loss

$

(984,444)

 

$

(21,207,345)

 

LLC’s share of net loss

$

(477,566)

 

$

(10,349,136)

 

 

 

 

 

 

 

 

(5)        Transactions with Related Parties 

The LLC paid the Manager (i) management fees ranging from 1% to 5% based on a percentage of the rentals and other contractual payments recognized either directly by the LLC or through its joint ventures and (ii) acquisition fees, through the end of the operating period, of 3% of the purchase price of the LLC’s investments. In addition, the

6

 


 

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

September 30, 2012

(unaudited)

 

 

Manager was reimbursed for administrative expenses incurred in connection with the LLC’s operations. The Manager also has a 1% interest in the LLC’s profits, losses, cash distributions and liquidation proceeds. The Manager performs certain services relating to the management of the LLC’s equipment leasing and other financing activities. Such services include, but are not limited to, the collection of lease payments from the lessees of the equipment, re-leasing services in connection with equipment which is off-lease, inspections of the equipment, liaising with and general supervision of lessees to ensure that the equipment is being properly operated and maintained, monitoring performance by the lessees of their obligations under the leases and the payment of operating expenses.

 

Administrative expense reimbursements are costs incurred by the Manager or its affiliates that are necessary to the LLC’s operations. These costs include the Manager’s and its affiliates’ legal, accounting, investor relations and operations personnel costs, as well as professional fees and other costs that are charged to the LLC based upon the percentage of time such personnel dedicate to the LLC. Excluded are salaries and related costs, office rent, travel expenses and other administrative costs incurred by individuals with a controlling interest in the Manager.

 

During the three months ended September 30, 2012, the Manager suspended the collection of management fees and administrative expense reimbursements of approximately $108,000 and $90,000, respectively.

 

Fees and other expenses paid or accrued by the LLC to the Manager or its affiliates were as follows:

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

 

 

 Entity

 

 Capacity

 

 Description

 

2012 

 

2011 

 

2012 

 

2011 

 

ICON Capital Corp.

 

Manager

 

Management fees (1)

 

$

 - 

 

$

79,847 

 

$

224,216 

 

$

349,437 

 

ICON Capital Corp.

 

Manager

 

Administrative expense reimbursements (1)

 

 

 - 

 

 

165,810 

 

 

 273,488 

 

 

618,780 

 

 

 

$

 - 

 

$

245,657 

 

$

497,704 

 

$

968,217 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)  Amount charged directly to operations.

 

 

 

 

 

 

 

 

 

 

 

 

 

At September 30, 2012 and December 31, 2011, the LLC had a net payable of $0 and $111,615, respectively, due to the Manager and its affiliates that primarily consisted of administrative expense reimbursements.

 

(6)         Derivative Financial Instruments

The LLC may enter into derivative transactions for purposes of hedging specific financial exposures, including movements in foreign currency exchange rates and changes in interest rates on its non-recourse long-term debt. The LLC enters into these instruments only for hedging underlying exposures. The LLC does not hold or issue derivative financial instruments for purposes other than hedging. Certain derivatives may not meet the established criteria to be designated as qualifying accounting hedges, even though the LLC believes that these are effective economic hedges.

 

The LLC recognizes all derivatives as either assets or liabilities on the consolidated balance sheets and measures those instruments at fair value. Changes in the fair value of such instruments are recognized immediately in earnings unless certain criteria are met. These criteria demonstrate that the derivative is expected to be highly effective at offsetting changes in the fair value or expected cash flows of the underlying exposure at both the inception of the hedging relationship and on an ongoing basis and include an evaluation of the counterparty risk and the impact, if any, on the effectiveness of the derivative. If these criteria are met, which the LLC must document and assess at inception and on an ongoing basis, the LLC recognizes the changes in fair value of such instruments in accumulated other

7

 


 

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

September 30, 2012

(unaudited)

 

 

comprehensive income (loss) (“AOCI”), a component of equity on the consolidated balance sheets. Changes in the fair value of the ineffective portion of all derivatives are recognized immediately in earnings.

 

Interest Rate Risk

The LLC’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements on its variable non-recourse debt. The LLC’s strategy to accomplish these objectives is to match the projected future cash flows with the underlying debt service. Interest rate swaps designated as cash flow hedges involve the receipt of floating-rate interest payments from a counterparty in exchange for the LLC making fixed-rate interest payments over the life of the agreements without exchange of the underlying notional amount.

 

Designated Derivatives

As of September 30, 2012, the LLC has interests through joint ventures in two floating-to-fixed interest rate swaps relating to ICON Eagle Corona Holdings, LLC and ICON Eagle Carina Holdings, LLC designated and qualifying as cash flow hedges with an aggregate notional amount of $17,378,965. These interest rate swaps mature on November 14, 2013.

 

For these derivatives, the joint ventures record their interest in the gain or loss from the effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges in AOCI and such gain or loss is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings and is recorded as a component of loss from investments in joint ventures.

 

During the twelve months ending September 30, 2013, the LLC estimates that approximately $79,000 will be reclassified from AOCI to loss from investments in joint ventures.

 

The tables below present the effect of the LLC’s share of the joint ventures’ derivative financial instruments designated as cash flow hedging instruments on the consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2012 and 2011:

 

8

 


 

ICON Income Fund Ten, LLC

(A Delaware Limited Liability Company)

Notes to Consolidated Financial Statements

September 30, 2012

(unaudited)

 

 

 

Period

 

Derivatives Designated as Hedging Instruments

 

Amount of Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion)

 

Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)

 

Gain (Loss) Reclassified from AOCI into Income (Effective Portion)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2012

 

Interest rate swaps

 

$

 (8,648) 

 

Loss from investments in joint ventures

 

$

 (29,493) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2012

 

Interest rate swaps

 

$

 (31,441) 

 

Loss from investments in joint ventures

 

$

 (99,016) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2011

 

Interest rate swaps

 

$

 (22,575) 

 

Loss from investments in joint ventures

 

$

 (57,691) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2011

 

Interest rate swaps

 

$

 (99,933) 

 

Loss from investments in joint ventures

 

$

 (239,830) 

 

At September 30, 2012, the total unrealized loss recorded to AOCI related to the joint ventures’ interest in the change in fair value of interest rate swaps was approximately $82,000. During the three and nine months ended September 30, 2012, the LLC recorded no hedge ineffectiveness in earnings.

 

Derivative Risks

The LLC manages exposure to possible defaults on derivative financial instruments by monitoring the concentration of risk that the LLC has with any individual bank and through the use of minimum credit quality standards for all counterparties. The LLC does not require collateral or other security in relation to derivative financial instruments. Since it is the LLC’s policy to enter into derivative contracts only with banks of internationally acknowledged standing, the LLC considers the counterparty risk to be remote.

 

(7)        Accumulated Other Comprehensive Loss

AOCI includes accumulated unrealized losses on derivative financial instruments of joint ventures of approximately $82,000 at September 30, 2012, and accumulated unrealized losses on derivative financial instruments of joint ventures of approximately $150,000 and accumulated unrealized gains on currency translation adjustments of $1,151 at December 31, 2011.

 

(8)         Commitments and Contingencies

At the time the LLC acquires or divests of its interest in an equipment lease or other financing transaction, the LLC may, under very limited circumstances, agree to indemnify the seller or buyer for specific contingent liabilities. The Manager believes that any liability of the LLC that may arise as a result of any such indemnification obligations will not have a material adverse effect on the consolidated financial condition or results of operations of the LLC taken as a whole.

9

 


 

 

 

Item 2.  Manager's Discussion and Analysis of Financial Condition and Results of Operations

The following is a discussion of our current financial position and results of operations. This discussion should be read together with our unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2011.  This discussion should also be read in conjunction with the disclosures below regarding “Forward-Looking Statements” and the “Risk Factors” set forth in Item 1A of Part II of this Quarterly Report on Form 10-Q.

 

As used in this Quarterly Report on Form 10-Q, references to “we,” “us,” “our” or similar terms include ICON Income Fund Ten, LLC and its consolidated subsidiaries.

 

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. They are based on assumptions and are subject to risks and uncertainties and other factors outside our control that may cause actual results to differ materially from those projected.  We undertake no obligation to update publicly or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

 

Overview

We operated as an equipment leasing program in which the capital our members invested was pooled together to make investments, pay fees and establish a small reserve. We primarily engaged in the business of purchasing equipment and leasing or servicing it to third parties, equipment financing, acquiring equipment subject to lease and, to a lesser degree, acquiring ownership rights to items of leased equipment at lease expiration. Some of our equipment leases were acquired for cash and provide current cash flow, which we refer to as “income” leases. For our other equipment leases, we financed the majority of the purchase price through borrowings from third parties. We refer to these leases as “growth” leases. These growth leases generate little or no current cash flow because substantially all of the rental payments received from the lessee are used to service the indebtedness associated with acquiring or financing the lease. For these leases, we anticipated that the future value of the leased equipment would exceed the cash portion of the purchase price.

 

Our Manager manages and controls our business affairs, including, but not limited to, our equipment leases and other financing transactions.

 

Effective April 30, 2010, we completed our operating period. On May 1, 2010, we entered our liquidation period, during which we have sold and will continue to sell our assets in the ordinary course of business. If our Manager believes it would benefit our members to reinvest the proceeds received from investments in additional investments during the liquidation period, our Manager may do so. Our Manager will not receive any acquisition fees on equipment purchased during the liquidation period.

10

 


 

 

 

 

Recent Significant Transaction

We engaged in the following significant transaction since December 31, 2011:

 

Notes Receivable

On May 2, 2012, Northern Capital Associates satisfied its remaining obligations in connection with certain notes receivable by making a payment of approximately $355,000. No material gain or loss was recorded as a result of this transaction.

 

Recent Accounting Pronouncements

We do not believe any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our consolidated financial statements.

 

Results of Operations for the Three Months Ended September 30, 2012 (the “2012 Quarter”) and 2011 (the “2011 Quarter”)

Revenue and other income for the 2012 Quarter and the 2011 Quarter is summarized as follows:

 

 

 

 

Three Months Ended September 30,

 

 

 

 

 

2012 

 

2011 

 

Change

 

Rental income

$

 - 

 

$

 125,140 

 

$

 (125,140) 

 

Finance income

 

 1,726,497 

 

 

 1,617,892 

 

 

 108,605 

 

Servicing income

 

 - 

 

 

 1,139,138 

 

 (1,139,138) 

 

Loss from investments in joint ventures

 

 (343,189) 

 

 

 (184,350) 

 

 

 (158,839) 

 

Net gain on sales of equipment and unguaranteed residual values

 - 

 

 

 2,468 

 

 

 (2,468) 

 

Interest and other income

 

 (13,275) 

 

 

 146,698 

 

 

 (159,973) 

 

 

Total revenue and other income

$

1,370,033 

 

$

2,846,986 

 

$

(1,476,953)

 

Total revenue and other income for the 2012 Quarter decreased $1,476,953, or 51.9%, as compared to the 2011 Quarter. The decrease in total revenue and other income was primarily due to no longer earning any servicing income during the 2012 Quarter as a result of the sale of Pretel Group Limited (“Pretel”) in December 2011.

 

Expenses for the 2012 Quarter and the 2011 Quarter are summarized as follows:

 

 

 

 

Three Months Ended September 30,

 

 

 

 

 

2012 

 

2011 

 

Change

 

Management fees

$

 - 

 

$

 79,847 

 

$

 (79,847) 

 

Administrative expense reimbursements

 

 - 

 

 

 165,810 

 

 (165,810) 

 

General and administrative

 

 184,840 

 

 

 1,721,898 

 

 (1,537,058) 

 

Impairment loss

 

 - 

 

 

 23,393 

 

 (23,393) 

 

Depreciation and amortization

 

 - 

 

 

 370,022 

 

 (370,022) 

 

Total expenses

$

 184,840 

 

$

 2,360,970 

 

$

 (2,176,130) 

 

Total expenses for the 2012 Quarter decreased $2,176,130, or 92.2%, as compared to the 2011 Quarter. The decrease in total expenses was primarily due to the decrease in general and administrative expense and depreciation and amortization expense as a result of the sale of Pretel in December 2011. In addition, our Manager suspended the collection of administrative expense reimbursements and management fees during the 2012 Quarter.

 

Noncontrolling Interests

11

 


 

 

 

Net income (loss) attributable to noncontrolling interests increased $53,102 from a net loss attributable to noncontrolling interests of $49,853 for the 2011 Quarter to net income attributable to noncontrolling interests of $3,249 for the 2012 Quarter. The increase was primarily attributable to the sale of assets on lease to Global Crossing Telecommunications, Inc., as well as the sale of Pretel.

 

Net Income Attributable to Fund Ten

As a result of the foregoing factors, net income attributable to us for the 2012 Quarter and the 2011 Quarter was $1,181,944 and $535,869, respectively. Net income attributable to us per weighted average additional share of limited liability company interests (“Share”) outstanding for the 2012 Quarter and the 2011 Quarter was $7.89 and $3.58, respectively.

 

Results of Operations for the Nine Months Ended September 30, 2012 (the “2012 Period”) and 2011 (the “2011 Period”)

Revenue and other income for the 2012 Period and the 2011 Period is summarized as follows:

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

2012 

 

2011 

 

Change

 

Rental income 

$

 4,944 

 

$

 418,731 

 

$

 (413,787) 

 

Finance income

 

 5,101,790 

 

 

 4,705,700 

 

 

 396,090 

 

Servicing income

 

 - 

 

 

 3,590,536 

 

 (3,590,536) 

 

Loss from investments in joint ventures

 

 (1,098,877) 

 

 

 (9,143,897) 

 

 8,045,020 

 

Net gain on sales of equipment and unguaranteed residual values

 - 

 

 

 801,215 

 

 

 (801,215) 

 

Interest and other income

 

 10,867 

 

 

 330,838 

 

 

 (319,971) 

 

 

Total revenue and other income

$

4,018,724 

 

$

703,123 

 

$

3,315,601 

 

Total revenue and other income for the 2012 Period increased $3,315,601 as compared to the 2011 Period.  The increase in total revenue and other income was primarily due to a more significant loss in the 2011 Period as compared to the 2012 Period from investments in joint ventures from our 49% ownership interest in ICON Mayon, LLC, which recognized impairment charges of approximately $21,858,000, of which our share was approximately $10,710,000. This increase was partially offset by no longer earning any servicing income or recognizing a net gain on sales of equipment and unguaranteed residual values during the 2012 Period, primarily as a result of the sale of Pretel in December 2011.

 

Expenses for the 2012 Period and the 2011 Period are summarized as follows:

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

2012 

 

2011 

 

Change

 

Management fees

$

 224,216 

 

$

 349,437 

 

$

 (125,221) 

 

Administrative expense reimbursements

 

 273,488 

 

 

 618,780 

 

 

 (345,292) 

 

General and administrative

 

 779,807 

 

 

 5,445,847 

 

 (4,666,040) 

 

Impairment loss

 

 - 

 

 

 23,393 

 

 

 (23,393) 

 

Depreciation and amortization

 

 590 

 

 

 1,161,957 

 

 (1,161,367) 

 

 

Total expenses

$

1,278,101 

 

$

7,599,414 

 

$

(6,321,313)

 

Total expenses for the 2012 Period decreased $6,321,313, or 83.2%, as compared to the 2011 Period. The decrease in total expenses was primarily due to the decrease in general and administrative expense and depreciation and amortization expense as a result of the sale of Pretel in December 2011.

 

Noncontrolling Interests

12

 


 

 

 

Net income (loss) attributable to noncontrolling interests increased $72,383 from a net loss attributable to noncontrolling interests of $69,624 for the 2011 Period to net income attributable to noncontrolling interests of $2,759 for the 2012 Period. The increase was primarily attributable to the sale of assets on lease to Global Crossing Telecommunications, Inc., as well as the sale of Pretel.

 

Net Income (Loss) Attributable to Fund Ten

As a result of the foregoing factors, net income (loss) attributable to us for the 2012 Period and the 2011 Period was $2,737,864  and ($6,826,667), respectively. Net income (loss) attributable to us per weighted average additional Share outstanding for the 2012 Period and the 2011 Period was $18.29 and ($45.60), respectively.  

 

Financial Condition

This section discusses the major balance sheet variances at September 30, 2012 compared to December 31, 2011.

 

Total Assets

Total assets decreased $4,854,776, from $55,072,676 at December 31, 2011 to $50,217,900 at September 30, 2012.  The decrease was primarily due to cash distributions made to our members and the loss from investments in joint ventures during the 2012 Period. The decrease was partially offset by the appreciation of our finance leases resulting from the finance income accrued during the 2012 Period exceeding the cash collected.

 

Current Assets

Current assets increased $1,808,539, from $6,816,418 at December 31, 2011 to $8,624,957 at September 30, 2012. The increase was primarily due to the increase in the current portion of the net investment in finance lease resulting from the scheduled change in charter payments due pursuant to the bareboat charters on two of our vessels. The increase was partially offset by cash distributions made to our members in the 2012 Period.

 

Total Liabilities

Total liabilities decreased $187,005, from $676,561 at December 31, 2011 to $489,556 at September 30, 2012.  The decrease was primarily the result of the settlement of amounts previously due to our Manager.

 

Equity

Equity decreased $4,667,771, from $54,396,115 at December 31, 2011 to $49,728,344 at September 30, 2012.   The decrease  was primarily the result of cash distributions paid to our members, which were partially offset by net income in the 2012 Period.

 

Liquidity and Capital Resources

Summary

At September 30, 2012 and December 31, 2011, we had cash and cash equivalents of $904,740 and $6,171,596, respectively.  During our operating period, which ended on April 30, 2010, our main sources of cash were the collection of rental payments pursuant to our non-leveraged operating and finance leases and proceeds from sales of equipment. Our main uses of cash during our operating period were investing in equipment and leasing it to third parties and distributions to our members. During our liquidation period, which we entered on May 1, 2010, our main sources of cash remain the same and our main use of cash is distributions to our members.

 

On May 1, 2010, we entered our liquidation period. During this period, cash generated by our investing activities has become a more significant source of our liquidity as we sell assets in the normal course of business. We believe that cash generated from the expected results of our operations will be sufficient to finance our liquidity requirements for the foreseeable future, including distributions to our members and general and administrative expense. We

13

 


 

 

 

anticipate that our liquidity requirements for the remaining life of the fund will be financed by the expected results of our operations, as well as cash received from our investments at maturity.

 

We anticipate being able to meet our liquidity requirements into the foreseeable future. However, 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’ and borrowers’ businesses that are beyond our control.

 

Cash Flows

Operating Activities

Cash provided by operating activities increased $1,689,175, from $127,820 in the 2011 Period to $1,816,995 in the 2012 Period.  The increase was primarily due to the scheduled increase in bareboat charter payments and the continued reduction of expenses paid in the 2012 Period as compared to the 2011 Period as a result of being in our liquidation period. The increase was partially offset by the termination of two leases held by joint ventures and the sale of Pretel during the year ended December 31, 2011.

 

Investing Activities

Cash provided by investing activities decreased $4,324,384, from $4,715,351 in the 2011 Period to $390,967 in the 2012 Period. The decrease was primarily due to the absence of sales of equipment or unguaranteed residual values in the 2012 Period and a decrease in the amount of distributions received from joint ventures in excess of profits in the 2012 Period as compared to the 2011 Period.

 

Financing Activities

Cash used in financing activities increased $4,560,927, from $2,913,891 in the 2011 Period to $7,474,818 in the 2012 Period. The change was primarily due to an increase in the amount of cash distributed to our members in the 2012 Period as compared to the 2011 Period. The increase was partially offset by the elimination of distributions to noncontrolling interests following the sale of Pretel during the year ended December 31, 2011.

  

Distributions

We, at our Manager’s discretion, paid monthly distributions to our members starting with the first month after each additional member’s admission following the commencement of our operations through the end of our operating period, which was on April 30, 2010. Distributions made during our liquidation period will vary, depending on the timing of the sale of our assets and our receipt of rental and other income from our investments. We paid distributions to our Manager and additional members of $74,748 and $7,400,070, respectively, during the 2012 Period.

 

Commitments and Contingencies and Off-Balance Sheet Transactions

Commitments and Contingencies

At the time we acquire or divest our interest in an equipment lease or other financing transaction, we may, under very limited circumstances, agree to indemnify the seller or buyer for specific contingent liabilities. Our Manager believes that any liability of ours that may arise as a result of any such indemnification obligations will not have a material adverse effect on our consolidated financial condition or results of operations taken as a whole.

 

Off-Balance Sheet Transactions

None.

14

 


 

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk  

There are no material changes to the disclosures related to this item since the filing of our Annual Report on Form 10-K for the year ended December 31, 2011.

 

Item 4. Controls and Procedures  

Evaluation of disclosure controls and procedures

In connection with the preparation of this Quarterly Report on Form 10-Q for the three months ended September 30, 2012, as well as the financial statements for our Manager, our Manager carried out an evaluation, under the supervision and with the participation of the management of our Manager, including its Co-Chief Executive Officers and the Principal Financial and Accounting Officer, of the effectiveness of the design and operation of our Manager’s disclosure controls and procedures as of the end of the period covered by this report pursuant to the Securities Exchange Act of 1934, as amended.  Based on the foregoing evaluation, the Co-Chief Executive Officers and the Principal Financial and Accounting Officer concluded that our Manager’s disclosure controls and procedures were effective.

 

In designing and evaluating our Manager’s disclosure controls and procedures, our Manager recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.  Our Manager’s disclosure controls and procedures have been designed to meet reasonable assurance standards. Disclosure controls and procedures cannot detect or prevent all error and fraud. Some inherent limitations in disclosure controls and procedures include costs of implementation, faulty decision-making, simple error and mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based, in part, upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all anticipated and unanticipated future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with established policies or procedures.  

 

Evaluation of internal control over financial reporting

There have been no changes in our internal control over financial reporting during the three months ended September 30, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

15

 


 

 

 

PART II - OTHER INFORMATION

 

Item 1.  Legal Proceedings

In the ordinary course of conducting our business, we may be subject to certain claims, suits and complaints filed against us.  In our Manager’s opinion, the outcome of such matters, if any, will not have a material impact on our consolidated financial position, cash flows or results of operations.  We are not aware of any material legal proceedings that are currently pending against us or against any of our assets.

 

Item 1A. Risk Factors

There have been no material changes from the risk factors disclosed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2011.

 

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

We did not sell or redeem any Shares during the three months ended September 30, 2012.

 

Item 3.  Defaults Upon Senior Securities

Not applicable.

 

Item 4.  Mine Safety Disclosures

Not applicable.

 

Item 5.  Other Information

Not applicable.

16

 


 

 

 

Item 6. Exhibits

 

 

 

3.1 

 

Certificate of Formation of Registrant (Incorporated by reference to Exhibit 3.1 to Registrant’s Registration Statement on Form S-1 filed with the SEC on February 28, 2003 (File No. 333-103503)).

 

 

 

4.1 

 

Amended and Restated Operating Agreement of Registrant (Incorporated by reference to Exhibit 4.1 to Pre-Effective Amendment No. 3 to Registrant’s Registration Statement on Form S-1 filed with the SEC on June 2, 2003 (File No. 333-103503)).

 

 

 

10.1 

 

Commercial Loan Agreement, dated as of August 31, 2005, by and among California Bank & Trust and ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON Income Fund Ten, LLC and ICON Leasing Fund Eleven, LLC (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated August 31, 2005).

 

 

 

10.2 

 

Loan Modification Agreement, dated as of December 26, 2006, between California Bank & Trust and ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON Income Fund Ten, LLC and ICON Leasing Fund Eleven, LLC (Incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated December 26, 2006).

 

 

 

10.3 

 

Loan Modification Agreement, dated as of June 20, 2007, between California Bank & Trust, ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON Income Fund Ten, LLC, ICON Leasing Fund Eleven, LLC and ICON Leasing Fund Twelve, LLC (Incorporated by reference to Exhibit 10.3 to Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009, filed November 12, 2009).

 

 

 

10.4 

 

Third Loan Modification Agreement, dated as of May 1, 2008, between California Bank & Trust, ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON Income Fund Ten, LLC, ICON Leasing Fund Eleven, LLC and ICON Leasing Fund Twelve, LLC (Incorporated by reference to Exhibit 10.4 to Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2008, filed May 19, 2008).

 

 

 

10.5 

 

Fourth Loan Modification Agreement, dated as of August 12, 2009, between California Bank & Trust, ICON Income Fund Eight B L.P., ICON Income Fund Nine, LLC, ICON Income Fund Ten, LLC, ICON Leasing Fund Eleven, LLC, ICON Leasing Fund Twelve, LLC and ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P. (Incorporated by reference to Exhibit 10.4 to Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, filed August 14, 2009).

 

 

 

10.6 

 

Termination of Commercial Loan Agreement, by and among California Bank & Trust and ICON Income Fund Eight B L.P.; ICON Income Fund Nine, LLC; ICON Income Fund Ten, LLC; ICON Leasing Fund Eleven, LLC; ICON Leasing Fund Twelve, LLC; and ICON Equipment and Corporate Infrastructure Fund Fourteen, L.P., dated as of May 10, 2011 (Incorporated by reference to Exhibit 10.6 to Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2011, filed May 13, 2011).

 

 

 

31.1 

 

Rule 13a-14(a)/15d-14(a) Certification of Co-Chief Executive Officer.

 

 

 

31.2 

 

Rule 13a-14(a)/15d-14(a) Certification of Co-Chief Executive Officer.

 

 

 

31.3 

 

Rule 13a-14(a)/15d-14(a) Certification of Principal Financial and Accounting Officer.

17

 


 

 

 

 

32.1 

 

Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

32.2 

 

Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

32.3 

 

Certification of Principal Financial and Accounting Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

101.INS*

 

XBRL Instance Document.

 

 

 

101.SCH*

 

XBRL Taxonomy Extension Schema Document.

 

 

 

101.CAL*

 

XBRL Taxonomy Extension Calculation Linkbase Document.

 

 

 

101.DEF*

 

XBRL Taxonomy Extension Definition Linkbase Document.

 

 

 

101.LAB*

 

XBRL Taxonomy Extension Labels Linkbase Document.

 

 

 

 101.PRE*

 

XBRL Taxonomy Extension Presentation Linkbase Document.

 

 

 

 

XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

18

 


 

 

 

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.

 

ICON Income Fund Ten, LLC

(Registrant)

 

By: ICON Capital Corp.

      (Manager of the Registrant)

 

November 9, 2012

 

By: /s/ Michael A. Reisner

Michael A. Reisner

Co-Chief Executive Officer and Co-President

(Co-Principal Executive Officer)

 

 

By: /s/ Mark Gatto

Mark Gatto

Co-Chief Executive Officer and Co-President

(Co-Principal Executive Officer)

 

 

By: /s/ Keith S. Franz

Keith S. Franz

Managing Director

(Principal Financial and Accounting Officer)

 

 

19