UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 20172019

OR

FOR THE TRANSITION FROM __________ TO __________

COMMISSION FILE NUMBER: 333-211626

SQN AssetArboretum Silverleaf Income Fund, V, L.P.

(Exact name of registrant as specified in its charter)

Issuer’s telephone number: (603) 294-1420

SQN Asset Income Fund V, L.P.

(Former name, former address and former fiscal year, if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [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 [  ] No [X]

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

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

At November 12, 201714, 2019 there were 1,103,351.252,535,672.53 units of the Registrant’s limited partnership interests issued and outstanding.

SQN AssetArboretum Silverleaf Income Fund, V, L.P. and Subsidiary

INDEX

PART I – FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

SQN AssetArboretum Silverleaf Income Fund, V, L.P. and Subsidiary

(A Delaware Limited Partnership)

Condensed Consolidated Balance Sheets

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

SQN AssetArboretum Silverleaf Income Fund, V, L.P. and Subsidiary

(A Delaware Limited Partnership)

Condensed StatementConsolidated Statements of Operations

Three and Nine Months Ended September 30, 20172019 and 2018

(Unaudited)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

SQN AssetArboretum Silverleaf Income Fund, V, L.P. and Subsidiary

(A Delaware Limited Partnership)

Condensed Consolidated Statement of Changes in Partners’ Equity (Deficit) (Unaudited)

Nine Months Ended September 30, 20172019

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

SQN AssetArboretum Silverleaf Income Fund, V, L.P. and Subsidiary

(A Delaware Limited Partnership)

Condensed StatementConsolidated Statements of Cash Flows

(Unaudited)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

SQN AssetArboretum Silverleaf Income Fund, V, L.P. and Subsidiary

(A Delaware Limited Partnership)

Notes to Condensed Consolidated Financial Statements

PeriodThree and Nine Months Ended September 30, 20172019 and 2018

(Unaudited)

1. Organization and Nature of OperationsOperations.

Organization– Arboretum Silverleaf Income Fund, L.P. (f/k/a SQN Asset Income Fund V, L.P.) (the “Partnership”) was formed on January 14, 2016, as a Delaware limited partnership andpartnership. On July 19, 2019, the Partnership changed its name from SQN Asset Income Fund V, L.P. to Arboretum Silverleaf Income Fund, L.P. The Partnership is engaged in a single business segment, the ownership and investment in leased equipment and related financings which includes: (i) purchasing equipment and leasing it to third-party end users; (ii) providing equipment and other asset financing; (iii) acquiring equipment subject to leaselease; and (iv) acquiring ownership rights (residual value interests) in leased equipment at lease expiration. The Partnership will terminate no later than December 31, 2040.

Nature of Operations –The principal investment strategy of the Partnership is to invest in business-essential, revenue-producing (or cost-savings)cost-saving) equipment or other physical assets with high in-place value and long, relative to the investment term, economic life and projectother financings. The Partnership executes its investment strategy by making investments in equipment already subject to lease or originating equipment leases and loans in such equipment, which will include: (i) purchasing equipment and leasing it to third-party end users; (ii) providing equipment and other asset and project financings; (iii) acquiring equipment subject to leaselease; and (iv) acquiring ownership rights (residual value interests) in leased equipment at lease expiration. From time to time, the Partnership may also purchase equipment and sell it directly to its leasing customers. The Partnership may use other investment structures that SQNArboretum Investment Advisors, LLC (the “Investment Manager”) believes will provide the Partnership with an appropriate level of security, collateralization, and flexibility to optimize its return on its investment while protecting against downside risk. In many cases, the structure will include the Partnership holding title to or a priority or controlling position in the equipment or other asset.

The General Partner of the Partnership is ASIF GP, LLC (f/k/a SQN AIF V GP, LLCLLC) (the “General Partner”), a wholly-owned subsidiary of the Partnership’s Investment Manager. On July 8, 2019, the General Partner changed its name from SQN AIF V GP, LLC to ASIF GP, LLC. Both the Partnership’s General Partner and its Investment Manager are Delaware limited liability companies. The General Partner manages and controls the day to day activities and operations of the Partnership, pursuant to the terms of the Limited Partnership Agreement. The General Partner paid an aggregate capital contribution of $100 for a 1% interest in the Partnership’s income, losses and distributions. The Investment Manager makes all investment decisions and manages the investment portfolio of the Partnership.

The Partnership’s income, losses and distributions are allocated 99% to the Limited Partners and 1% to the General Partner until the Limited Partners have received total distributions equal to their capital contributions plus an 8% per year, compounded annually, cumulative return on their capital contributions. After such time, all income, losses and distributable cash will be allocated 80% to the Limited Partners and 20% to the General Partner. The Partnership expects to conduct its activities for at least six years and divide the Partnership’s life into three distinct stages: (i) the Offering Period, (ii) the Operating Period and (iii) the Liquidation Period. The Offering Period began on August 11, 2016 will terminate no later than two years after this date, unless extended by the General Partner, from time to time, in its sole discretion, by up to an additional 12 months.and concluded on March 31, 2019. The Operating Period will commencecommenced on October 3, 2016, the date of the Partnership’s initial closing, and will last for four years unless extended at the sole discretion of the General Partner. During the Operating Period, the Partnership will invest most of the net proceeds from its offering in business-essential, revenue-producing (or cost-saving) equipment, other physical assets with substantial economic lives and, in many cases, associated revenue streams and project financings. The Liquidation Period, which follows the conclusion of the Operating Period, is the period in which the Partnership will sell its assets in the ordinary course of business and will last two years, unless it is extended, at the sole discretion of the General Partner. The General Partner may extend the Offering Period, from time to time, in its sole discretion, by up to an additional 12 months. The General Partner may also extend the Operating Period and subsequent Liquidation Period in its sole discretion.

SQN Securities,American Elm Distribution Partners, LLC (“Securities”American Elm”), a Delaware limited liability company, is affiliated with the General Partner. Securities will act initiallyAmerican Elm acted as the initial selling agent for the offering of the units.units (“Units”). The unitsUnits are offered on a “best efforts,” “minimum-maximum” basis. Unless extended by the General Partner, from time to time, in its sole discretion, for up to an additional 12 months, the offering will terminate on the date that is two years from the date of August 11, 2016.

During the Operating Period, the Partnership plans to make quarterly distributions of cash to the Limited Partners, if, in the opinion of the Partnership’s Investment Manager, such distributions are in the Partnership’s best interests. Therefore, the amount and rate of cash distributions could vary and are not guaranteed. The targeted distribution rate is 6.0% annually, paid quarterly as 1.5%, of each Limited Partner’s capital contribution (pro-rated to the date of admission for each Limited Partner). Since June 30, 2017, our distribution rate has been 6.5% annually, paid quarterly at 1.625%, of capital contributions. Beginning as of March 31, 2018, we increased our distribution to 7.0% annually, paid quarterly at 1.75% of capital contributions. Beginning as of June 30, 2018, we increased our distribution to 7.5%, paid quarterly at 1.875% of capital contributions. Beginning as of September 30, 2018 we increased our distribution to 8.0%, paid quarterly at 2.00% of capital contributions. The amount and rate of cash distributions could vary and are not guaranteed. During the nine months ended September 30, 2017, the Partnership declared and accrued2019, we made quarterly distributioncash distributions to itsour Limited Partners totaling $289,058$1,292,674, and accrued $511,323 for distributions due to Limited Partners which resulted in a distributions payable to Limited Partners of $142,638$511,323 at September 30, 2017. The Partnership did not make a cash distribution to the General Partner during the nine months ended2019. At September 30, 20172019, the Partnership declared and accrued $2,890a distribution of $5,113, for distributions due to the General Partner which resulted in distributions payable to the General Partner of $3,291$30,898 at September 30, 2017.2019.

On September 11, 2018, the Partnership formed a special purpose entity SQN Lifestyle Leasing, LLC (“Lifestyle Leasing”), a limited liability company registered in the state of Delaware which is wholly owned by the Partnership. On May 24, 2019, the Partnership terminated Lifestyle Leasing.

From August 11, 2016 through September 30, 2017,2019, the Partnership admitted 206617 Limited Partners with total capital contributions of $10,509,039$25,371,709 resulting in the sale of 1,050,903.882,537,170.91 Units. The Partnership received cash contributions of $10,059,849$24,718,035 and applied $449,190$653,674 which would have otherwise been paid as sales commission to the purchase of 44,919.0365,367.46 additional Units.

2. Summary of Significant Accounting PoliciesPolicies.

Basis of Presentation — The interim condensed consolidated balance sheets, statementstatements of operations, statement of changes in partners’ equity and statementstatements of cash flows of the Partnership at September 30, 20172019 and 2018 and for the three and nine months ended September 30, 20172019 and 2018 are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the SEC with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements furnished reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The results reported in these interim condensed consolidated financial statements should not necessarily be taken as indicative of results that may be expected for the entire year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in the Partnership’s annual report on Form 10-K, as filed with the SEC on March 31, 2017.28, 2019.

Principles of Consolidation— The condensed consolidated financial statements include the accounts of the Partnership and its entity, where the Partnership has the primary economic benefits of ownership. The Partnership’s consolidation policy requires the consolidation of entities where a controlling financial interest is held as well as the consolidation of variable interest entities in which the Partnership has the primary economic benefits. All material intercompany balances and transactions are eliminated in consolidation.

Variable interests are investments or other interests that absorb portions of a variable interest entity’s (“VIE”) expected losses or receive portions of the Partnership’s expected residual returns and are contractual, ownership, or other pecuniary interests in a VIE that change with changes in the fair value of the VIE. An entity is considered to be a VIE if any of the following conditions exist. (1) The total equity investment at risk is insufficient to permit the legal entity to finance its activities without additional subordinated financial support; or (2) As a group, the holders of equity investments at risk lack any of the three characteristics of a controlling financial interest: (a) The direct or indirect ability through voting or similar rights to make decisions that have a significant effect on the success of the legal entity. The equity holders at risk are deemed to lack this characteristic if: i. the voting rights of some investors are not proportional to their obligation to absorb the expected losses of the legal entity or rights to receive expected residual returns; and ii. substantially all of the legal entity’s activities are either involved with or are conducted on behalf of an investor that has disproportionately few voting rights (b) The obligation to absorb the expected losses of the legal entity or (c) The right to receive the expected residual returns of the legal entity. An entity that is determined to be a VIE is required to be consolidated by its primary beneficiary. The primary beneficiary of a VIE is determined to be the party that has both the power to direct the activities that most significantly affect the VIE’s economic performance (“Power”) and the obligation to absorb losses of, or the right to receive benefits from the VIE, that could potentially be significant to the VIE (“Benefits”). The determination of whether a reporting entity is the primary beneficiary involves complex and subjective analyses.

Use of Estimates — The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the General Partner and Investment Manager to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the interim condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates primarily include the determination of allowances for doubtful lease, notes and loan accounts, depreciation and amortization, impairment losses, estimated useful lives, and residual values. Actual results could differ from those estimates.

Cash and Cash Equivalents — The Partnership considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist of funds maintained in checking and money market accounts maintained at financial institutions.

The Partnership’s cash and cash equivalents are held principally at one financial institution and at times may exceed federally insured limits. The Partnership has placed these funds in a full service commercial financial institution in order to minimize risk relating to exceeding insured limits.

Restricted Cash— Restricted cash primarily consisted of cash held in an escrow account from subscriptions received in advance which was released as a result of the receipt and acceptance by the General Partner.

Credit Risk — In the normal course of business, the Partnership is exposed to credit risk. Credit risk is the risk that the Partnership’s counterparty to an agreement either has an inability or unwillingness to make contractually required payments. The Partnership expects concentrations of credit risk with respect to lessees to be dispersed across different industry segments and different regions of the world.

Asset Impairments — Assets in the Partnership’s investment portfolio, which are considered long-lived assets, are periodically reviewed, no less frequently than annually or when indicators of impairment exist, to determine whether events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. An impairment loss is recognized only if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value. If there is an indication of impairment, the Partnership estimates the future cash flows (undiscounted and without interest charges) expected from the use of the asset and its eventual disposition. Future cash flows are the future cash inflows expected to be generated by an asset less the future outflows expected to be necessary to obtain those inflows. If an impairment is determined to exist, the impairment loss is measured as the amount by which the carrying value of a long-lived asset exceeds its fair value and is recorded in the statement of operations in the period the determination is made. The events or changes in circumstances that generally indicate that an asset may be impaired are, (i) the estimated fair value of the underlying equipment is less than its carrying value, (ii) the lessee is experiencing financial difficulties and (iii) it does not appear likely that the estimated proceeds from the disposition of the asset will be sufficient to recover the carrying value of the asset. The preparation of the undiscounted cash flows requires the use of assumptions and estimates, including the level of future rents or receipts from the sale of the investment, estimated downtime between re-leasing events, and the amount of re-leasing costs. The Investment Manager’s review for impairment includes a consideration of the existence of impairment indicators, including third party appraisals, published values for similar assets, recent transactions for similar assets, adverse changes in market conditions for specific asset types, and the occurrence of significant adverse changes in general industry and market conditions that could affect the fair value of the asset.

Lease Classification and Revenue Recognition— The Partnership records revenue based upon the lease classification determined at the inception of the transaction and based upon the terms of the lease or when there are significant changes to the lease terms.

The Partnership leases equipment to third parties and each such lease may be classified as either a finance lease or an operating lease. Initial direct costs are capitalized and amortized over the term of the related lease for a finance lease. For an operating lease, initial direct costs are included as a component of the cost of the equipment and depreciated.

For finance leases, the Partnership records, at lease inception, the total minimum lease payments receivable from the lessee, the estimated unguaranteed residual value of the equipment upon lease termination, the initial direct costs, if any, related to the lease and the related unearned income. Unearned income represents the difference between the sum of the minimum lease payments receivable plus the estimated unguaranteed residual value, minus the cost of the leased equipment. Unearned income is recognized as finance income over the term of the lease using the effective interest rate method.

For operating leases, rental income is recognized on the straight line basis over the lease term. Billed and uncollected operating lease receivables will be included in accounts receivable. Accounts receivable are stated at their estimated net realizable value. Rental income received in advance is the difference between the timing of the cash payments and the income recognized on the straight line basis.

The investment committee of the Investment Manager approves each new equipment lease, financing transaction, and lease acquisition. As part of this process it determines the unguaranteed residual value, if any, to be used once the acquisition has been approved. The factors considered in determining the unguaranteed residual value include, but are not limited to, the creditworthiness of the potential lessee, the type of equipment being considered, how the equipment is integrated into the potential lessee’slessees’ business, the length of the lease the industry in which the potential lessee operates and the secondary market value of the equipment. Unguaranteed residual values are reviewed for impairment in accordance with the Partnership’s policy relating to impairment review.

The residual value assumes, among other things, that the asset will be utilized normally in an open, unrestricted and stable market. Short-term fluctuations in the marketplace are disregarded, and it is assumed that there is no necessity either to dispose of a significant number of the assets, if held in quantity, simultaneously or to dispose of the asset quickly. The residual value is calculated using information from various external sources, such as trade publications, auction data, equipment dealers, wholesalers and industry experts, as well as inspection of the physical asset and other economic indicators.

Finance Lease Receivables and Allowance for Doubtful Lease, Notes and Loan Accounts — In the normal course of business, the Partnership provides credit or financing to its customers, performs credit evaluations of these customers, and maintains reserves for potential credit losses. These credit or financing transactions are normally collateralized by the equipment being financed. In determining the amount of allowance for doubtful lease, notes and loan accounts, the Investment Manager considers historical credit losses, the past due status of receivables, payment history, and other customer-specific information, including the value of the collateral. The past due status of a receivable is based on its contractual terms. Expected credit losses are recorded as an allowance for doubtful lease, notes and loan accounts. Receivables are written off when the Investment Manager determines they are uncollectible. At September 30, 2017,2019 and 2018, an allowance for doubtful lease, notes and loan accounts is not currently provided since, in the opinion of the Investment Manager, all accounts recorded are deemed collectible.

Equipment Notes and Loans Receivable— Equipment notes and loans receivable are reported in the interim condensed consolidated financial statements as the outstanding principal balance net of any unamortized deferred fees, and premiums or discounts on purchased loans. Costs to originate loans, if any, are reported as other assets in the interim condensed consolidated financial statements and amortized to expense over the estimated life of the loan. Income is recognized over the life of the note agreement. On certain equipment notes and loans receivable, specific payment terms were reached requiring prepayments which resulted in the recognition of unearned interest income. Unearned income, discounts and premiums, if any, are amortized to interest income in the condensed consolidated statements of operations using the effective interest rate method. Equipment notes and loans receivable are generally placed in a non-accrual status when payments are more than 90 days past due and all unpaid accrued interest is reversed. Additionally, the Investment Manager periodically reviews the creditworthiness of companies with payments outstanding less than 90 days. Based upon the Investment Manager’s judgment, accounts may be placed in a non-accrual status. Accounts on a non-accrual status are only returned to an accrual status when the account has been brought current and the Partnership believes recovery of the remaining unpaid receivable is probable. Revenue on non-accrual accounts is recognized only when cash has been received.

Income Taxes — As a partnership, no provision for income taxes is recorded since the liability for such taxes is the responsibility of each of the Partners rather than the Partnership. The Partnership’s income tax returns are subject to examination by the federal and state taxing authorities, and changes, if any, could adjust the individual income tax of the Partners.

The Partnership is subject to the Bipartisan Budget Act of 2015 (“BBA”), which, among other requirements, stipulates that any tax liability incurred based on an IRS tax examination will become due by the Partnership versus the partners of the Partnership. The Partnership, at its discretion, will be able to seek repayment from its partners or treat as a distribution of the individual partners’ account to satisfy this obligation. The Partnership will treat any liability incurred as a deduction to equity. As of September 30, 2019, there were no expected liabilities to be incurred under the BBA.

The Partnership has adopted the provisions of Financial Accounting Standards Board’s (“FASB”) Topic 740,Accounting for Uncertainty in Income Taxes.This accounting guidance prescribes recognition thresholds that must be met before a tax position is recognized in the interim condensed consolidated financial statements and provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Additionally, an entity may only recognize or continue to recognize tax positions that meet a “more likely than not” threshold. The Partnership has evaluated its entity level tax positions for the yearyears ended December 31, 2016,2018 and 2017, and does not expect any material adjustments to be made. The tax yearyears 2018, 2017 and 2016 remainsremain open to examination by the major taxing jurisdictions to which the Partnership is subject.

Per Share Data — Net income or loss attributable to Limited Partners per weighted average number of limited partnership interests outstanding is calculated as follows; the net income or loss allocable to the Limited Partners divided by the weighted average number of limited partnership interests outstanding during the period.

Foreign Currency Transactions — The Partnership has designated the United States of America dollar as the functional currency for the Partnership’s investments denominated in foreign currencies. Accordingly, certain assets and liabilities are translated at either the reporting period exchange rates or the historical exchange rates, revenues and expenses are translated at the average rate of exchange for the period, and all transaction gains or losses are reflected in the condensed consolidated statements of operations.

Depreciation— The Partnership records depreciation expense on equipment when the lease is classified as an operating lease. In order to calculate depreciation, the Partnership first determines the depreciable equipment cost, which is the cost less the estimated residual value. The estimated residual value is the Partnership’s estimate of the value of the equipment at lease termination. Depreciation expense is recorded by applying the straight-line method of depreciation to the depreciable equipment cost over the lease term.

Recent Accounting Pronouncements

In AugustJune 2016, the FASB issued ASU No. 2016-15,2016-13,StatementFinancial Instruments - Credit Losses (Topic 326): Measurement of Cash Flows: Classification of Certain Cash Receipts and Cash PaymentsCredit Losses on Financial Instruments(“ASU 2016-15”2016-13”), which provides guidancerequires credit losses on howmost financial assets measured at amortized cost and certain cash receipts and cash payments areother instruments to be presentedmeasured using an expected credit loss model (referred to as the current expected credit loss (CECL) model). Under this model, entities will estimate credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument. Current US GAAP is based on an incurred loss model that delays recognition of credit losses until it is probable the loss has been incurred. Accordingly, it is anticipated that credit losses will be recognized earlier under the CECL model than under the incurred loss model. ASU 2016-13 is currently effective for fiscal periods beginning after December 15, 2019 and classified inmust be adopted as a cumulative effect adjustment to retained earnings. Early adoption is permitted. In July 2019, the statement of cash flows.FASB decided to add a project to its technical agenda to propose staggered effective dates for certain accounting standards, including ASU 2016-13. The adoption ofFASB has approved an approach that ASU 2016-15 becomes2016-13 will be effective for Public Business Entities that are SEC filers, excluding smaller reporting companies such as the Partnership, for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. For all other entities, including smaller reporting companies like the Partnership, ASU 2016-13 will be effective for fiscal years beginning on January 1,after December 15, 2022, including interim periods within those fiscal years. For all entities, early adoption will continue to be permitted; that is, early adoption is allowed for fiscal years beginning after December 15, 2018, including interim periods within that reporting period. Early adoptionthose fiscal years (that is, permitted. An entity will apply the amendments within ASU 2016-15 using a retrospective transition method to each period presented.effective January 1, 2019, for calendar-year-end companies). The Partnership is currently in the process of evaluating the impact of the adoption of ASU 2016-15this guidance on its interim condensed consolidated financial statements.

In February 2016, the FASB issued new guidance to improve consolidation guidance for legal entities, (Accounting Standards Update (“ASU”)ASU 2016-02,Leases (Topic 842): Amendments to Leases Analysis)the FASB Accounting Standards Codification(“ASU 2016-02”), effective for fiscal years beginning after December 15, 2018 and interim periods within those years and earlyyears. Early adoption is permitted.The standard ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets, and makingmakes targeted changes to lessor accounting. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief.The Partnership is currently evaluating thehas adopted ASU 2016-02 and has determined there was no significant impact of this guidance on its interim condensed consolidated financial statements.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the interim condensed consolidated financial statements.

3. Related Party TransactionsTransactions.

The General Partner is responsible for the operations of the Partnership and the Investment Manager makes all investment decisions and manages the investment portfolio of the Partnership. The Partnership reimburses the General Partner for actual incurred organizational and offering costs not to exceed 1.5% of all capital contributions received by the Partnership. Because organizational and offering expenses will be paid, as and to the extent they are incurred, organizational and offering expenses may be drawn disproportionately to the gross proceeds of each closing. The General Partner also has a promotional interest in the Partnership equal to 20% of all distributed distributable cash, after the Partnership has provided an 8% cumulative return, compounded annually, to the Limited Partners on their capital contributions. The General Partner has a 1% interest in the profits, losses and distributions of the Partnership. The General Partner will initially receive 1% of all distributed distributable cash, which was accrued at September 30, 2017.2019 and 2018.

The Partnership pays the Investment Manager during the Offering Period, Operating Period and the Liquidation Period a management fee equal to the greater of, (i) 2.5% per annum of the aggregate offering proceeds, payable monthly in advance or (ii) $62,500 per month. For the three months ended September 30, 2019 and 2018, the Partnership paid $187,500 in management fee expense to the Investment Manager. For the nine months ended September 30, 2017,2019 and 2018, the Partnership paid $187,500 and $562,500 respectively in management fee expense to the Investment Manager.

The Partnership pays the Investment Manager during the Operating Period a structuring fee in an amount equal to 1.5% of each cash investment made, including reinvestments, payable on the date each such investment is made. For the nine months ended September 30, 2017,2019 and 2018, the Partnership paid $20,022$145,894 and $109,976, respectively, of structuring fees to the Investment Manager.

SecuritiesOn December 15, 2017, the Partnership entered into two assignment and purchase agreements with Arboretum Core Asset Finance Fund, L.P., a Delaware limited partnership, a fund managed by the Investment Manager, to purchase two seasoned and performing promissory notes for total cash of $130,559. The funds from the promissory notes with the borrower were used to acquire point-of-sale systems for multiple restaurants. The two promissory notes will be paid in 13 monthly installments of principal and interest of $7,943 and $2,870, respectively. The notes accrued interest at a rate of 18% per annum and matured on January 1, 2019. The promissory notes are secured by a first priority lien with respect to the equipment. For the three and nine months ended September 30, 2019, the promissory notes earned interest income of $0 and $4, respectively.

American Elm is a Delaware limited liability company and is majority-owneda subsidiary of an affiliate of the Partnership’s Investment Manager. SecuritiesAmerican Elm in its capacity as the Partnership’s selling agent receives an underwriting fee of 2% of the gross proceeds from Limited Partners’ capital contributions (excluding proceeds, if any, the Partnership receives from the sale of the Partnership’s Units to the General Partner or its affiliates). While SecuritiesAmerican Elm is initially acting as the Partnership’s exclusive selling agent, the Partnership may engage additional selling agents in the future.

For the nine months ended September 30, 2019 and the year ended December 31, 2018, the Partnership incurred the following transactions with American Elm:

For the nine months ended September 30, 20172019 and the period ended December 31, 2016, the Partnership incurred the following transactions with Securities:

For the nine months ended September 30, 2017 and the period ended December 31, 2016,2018, the Partnership incurred the following underwriting fee transactions:

4. Investments in Finance LeasesLeases.

At September 30, 20172019 and December 31, 2016,2018, net investments in finance leases consisted of the following:

Computer Equipment

On October 6, 2016, the Partnership funded a lease facility offor $680,020 forof Apple computers towith a private school in New York City. The finance lease requires 36 monthly payments of $17,402. The lessee made a down payment of $102,002 and the remainder amount was funded by the Partnership. The lease is secured by ownership of the equipment. At September 30, 2017, there were no significant changes to this lease.On July 11, 2019 the Partnership received cash of $136,003, and paid the outstanding broker fee of $35,148. The finance lease had a residual value of $68,001 resulting in an increase in finance income of $32,854.

Furniture and Kitchen Equipment

On October 21, 2016, the Partnership funded a finance lease offor $357,020 forof an assortment of school furniture and kitchen equipment towith a public charter school in New Jersey. The finance lease requires 36 monthly payments of $11,647 with the first and last payments due in advance. The lease is secured by a first positionpriority lien against the equipment. At September 30, 2017,2019, there were no significant changes to this lease.

Agricultural Equipment

On November 9, 2017, the Partnership funded a lease facility for $406,456 of agricultural equipment and supplies with a company based in Illinois. The finance lease requires 36 monthly payments of $13,819 with the first and last payments due in advance. On February 9, 2018, the Partnership funded a second lease facility for $48,850 of agricultural equipment and supplies with the company based in Illinois. The finance lease requires 36 monthly payments of $1,661 with the first and last payments due in advance. On April 17, 2018, the Partnership funded a third lease facility for $44,380 of agricultural equipment and supplies with the company based in Illinois. The finance lease requires 36 monthly payments of $1,509 with the first and last payments due in advance. The leases are secured by a first priority lien against the agricultural equipment and supplies and a personal guarantee from the company’s CEO. At September 30, 2019, there were no significant changes to these leases.

Infrastructure Equipment

On December 4, 2017, the Partnership entered into a lease facility for $940,000 of railcar movers with a company based in Missouri. The finance lease requires 60 monthly payments of $16,468 with the first and last payments due in advance, and an additional final payment of $350,709. The lease is secured by a first priority lien against the railcar movers. At September 30, 2019, there were no significant changes to this lease.

On June 29, 2018, the Partnership entered into a lease facility for $1,199,520 for water pumps based in North Dakota. The finance lease requires 48 monthly payments of $31,902 with the first and last payments due in advance. On October 31, 2018, the Partnership entered into a second lease facility for $529,239 for water pumps. The finance lease requires 36 monthly payments of $17,888 with the first and last payments due in advance. On January 29, 2019, the Partnership entered into a third lease facility for $67,500 for water pumps. On January 29, 2019, the Partnership funded $33,750 and on April 9, 2019, the Partnership funded the remaining $33,750. The finance lease requires 36 monthly payments of $2,282 with the first and last payments due in advance and commences on May 1, 2019. On June 19, 2019, the Partnership entered into and funded a fourth lease facility for $1,270,125 for water pumps and other equipment. The finance lease requires 36 monthly payments of $43,565 with the first and last payments due in advance and commences on July 1, 2019. On August 7, 2019, the Partnership entered into and funded a fifth lease facility for $27,351 for water pumps. The finance lease requires 36 monthly payments of $938 with the first and last payments due in advance and commences on August 7, 2019. On August 29, 2019, the Partnership entered into a sixth lease facility for $196,803 for water pumps, and on September 12, 2019 the lease facility was funded. The finance lease requires 36 monthly payments of $6,750 with the first and last payments due in advance and commences on August 29, 2019. The lease is secured by a first priority lien against the water pumps and the other leased equipment. At September 30, 2019, there were no significant changes to these leases.

On November 20, 2018, the Partnership entered into a lease facility for $33,450 for water pumps based in Texas. The finance lease requires 36 monthly payments of $1,159 with the first and last payments due in advance. On November 20, 2018, the Partnership entered into a second lease facility for $162,943 for water pumps. The finance lease requires 36 monthly payments of $5,648 with the first two months and last payments due in advance. The lease is secured by a first priority lien against the water pumps. At September 30, 2019, there were no significant changes to this lease.

On May 30, 2019, the Partnership entered into a lease facility for $3,600,000 for industrial dryers based in Kentucky. On May 31, 2019, the Partnership advanced $3,600,000 under this lease facility. The finance lease requires 48 monthly payments of $94,802 with the first and last payments due in advance and commences on November 1, 2019. The lease is secured by a first priority lien against the industrial dryers. At September 30, 2019, there were no significant changes to this lease.

On August 23, 2019, the Partnership entered into and funded a lease facility for $3,000,000 for a welding system based in Louisiana. The finance lease requires 60 monthly payments of $62,900 and a final payment of $300,000 with the first and last payments due in advance and commences on September 1, 2019. The lease is secured by a first priority lien against the welding system. At September 30, 2019, there were no significant changes to this lease.

On September 5, 2019, the Partnership entered into a lease facility for $101,828 for screen printer and dryers based in Georgia. On September 20, 2019, the Partnership advanced $101,828 under this lease facility. The finance lease requires 48 monthly payments of $2,875 and a final payment of $10,183, with the first payment due in advance. The lease is secured by a first priority lien against the screen printer and dryers. At September 30, 2019, there were no significant changes to this lease.

On September 20, 2019, the Partnership entered into a lease facility for $865,084 for LED lighting based in Texas. On September 26, 2019, the Partnership advanced $865,084 under this lease facility. The finance lease requires 60 monthly payments of $19,472, with the first payment due in advance and commences on September 25, 2019. The lease is secured by a first priority lien against the LED lighting. At September 30, 2019, there were no significant changes to this lease.

Fabrication Equipment

On January 18, 2018, the Partnership entered into a lease facility for $2,188,377 of fabrication equipment with a company based in Texas. The lease required 42 monthly payments of $57,199 with the first and last payments due in advance. The lease is secured by a first priority lien against the fabrication equipment. The lease was expected to commence on the first day of the calendar quarter following final funding, and the company was paying pre-commencement rents to the Partnership. On January 30, 2018, February 14, 2018 and on March 16, 2018, the Partnership advanced $1,079,895, $647,122 and $349,428, respectively, under this lease facility. On September 21, 2018, the Partnership issued a Notice of Default letter to the company and on October 18, 2018, the Partnership issued a Commencement of Lease and Demand for Payment letter to the company. In November 2018, the Partnership entered into a forbearance agreement with the company, whereby the company paid the outstanding October and November rent payments and then beginning in December 2018, they paid a forbearance fee of $25,000 per month for three months while the company underwent an internal restructuring. On February 28, 2019, the lease was amended and restated to a 60 month lease commencing on March 1, 2019. The lease requires 24 monthly payments of $31,000 and 36 monthly payments of $40,000, on maturity, the lessee can return the equipment or purchase it for $500,000. The lease is secured by a first priority lien against the fabrication equipment. The Partnership reclassified this lease with a value of $2,010,412 as an operating lease.

Virtual Office Software Equipment

On February 5, 2018, the Partnership entered into a lease facility and advanced $245,219 of virtual office software and equipment with a company based in Florida. The lease requires 24 monthly payments of $12,020 with the first and last payments due in advance. The lease is secured by a first priority lien against the virtual office software and equipment. At September 30, 2019, there were no significant changes to this lease.

Education and Tourism Equipment

On February 12, 2018, the Partnership entered into a lease facility for up to $1,500,000 of educational multimedia content equipment with a global company. The lease is secured by a first priority lien against the educational multimedia content equipment. On February 14, 2018, the Partnership advanced $1,015,720 as equipment lease schedule 1 (“Schedule 1”) under this lease facility. Schedule 1 of the lease required 36 monthly payments of $33,402 with the first payment due in advance, commencing on March 1, 2018. On June 29, 2018, the Partnership amended and restated the above lease facility and Schedule 1 to $1,175,720 and advanced an additional $160,000 under the amended and restated lease facility. The amended and restated Schedule 1 lease requires 32 monthly payments of $39,212 and commenced on July 1, 2018. At September 30, 2019, there were no significant changes to this lease.

Information Technology Equipment

On April 3, 2018, the Partnership funded a lease facility for $390,573 of IT server equipment with a company based in California. The finance lease requires 36 monthly payments of $13,444 with the first payment due in advance. The lease is secured by a first priority lien against the IT server equipment. At September 30, 2019, there were no significant changes to this lease.

Medical Equipment

On June 26, 2018, the Partnership entered into a lease facility for $673,706 of electrosurgical fiber, manufacturing, and testing equipment with a company based in Massachusetts. The lease is secured by a first priority lien against the equipment and a corporate guarantee of the parent company of the lessee. On June 26, 2018, the Partnership advanced a total of $455,749 as equipment lease schedule 1 (“Schedule 1”) and schedule 2 (“Schedule 2”) under this lease facility. On August 2, 2018 and September 26, 2018, the Partnership advanced a total of $71,361 and $35,680 as additional funding under equipment lease Schedule 1. Schedule 1 requires 42 monthly payments of $10,711 with the first and last payment due upon commencement, commencing on October 1, 2018. Schedule 2 requires 42 monthly payments of $9,513 with the first and last payment due upon commencement, commencing on January 1, 2019. At September 30, 2019, there were no significant changes to this lease.

On March 22, 2019, the Partnership entered into a lease facility for $493,906 of medical equipment with a hospital based in Texas. The lease is secured by a first priority lien against the medical equipment. On March 22, 2019, the Partnership advanced a total of $493,906 under this lease facility. The lease schedule requires 36 monthly payments of $16,820 with the first payment due upon commencement, commencing on April 1, 2019, on maturity, the lessee can return the equipment or purchase it at its then fair market value, not to exceed 16% of equipment cost. At September 30, 2019, there were no significant changes to this lease.

Helicopter

On October 1, 2018, the Partnership, on behalf of Lifestyle Leasing, funded $600,000 into an escrow account. On November 9, 2018, the funds were released from escrow and used to fund a helicopter lease. The lessee provided $450,000 of the $1,050,000 purchase price of the helicopter. The finance lease required 36 monthly payments of $13,423, payable in arrears, and a final payment of $284,435 on November 1, 2021. On funding, the lessee paid the November 1, 2018 rent payment and a four month security deposit of $53,692. The lease was secured by a first priority lien against the leased helicopter and against an additional helicopter. On February 14, 2019, Lifestyle Leasing, on behalf of the Partnership, received cash of $577,025 as total payoff, in connection with the helicopter lease entered into on October 1, 2018. The finance lease had a net book value of $525,063 resulting in an increase in finance income of $51,962.

5. Investment in Equipment Subject to Operating LeasesLeases.

On October 18, 2016, the Partnership funded a lease facility offor $318,882 for 16 pizza ovens to five separate lessees. Each lease has a 36 month term with various monthly payments. The lease is secured by ownership of the equipment and by a corporate guarantee of the parent of the lessees. On November 1, 2019, this lease facility was amended to extend the lease for 3 additional months.

On February 28, 2019, the lease for fabrication equipment was amended and restated to a 60 month lease commencing on March 1, 2019. The lease requires 24 monthly payments of $31,000 and 36 monthly payments of $40,000, on maturity, the lessee can return the equipment or purchase it for $500,000. The lease is secured by a first priority lien against the fabrication equipment. The Partnership reclassified this lease from a finance lease to an operating lease.

The composition of the equipment subject to operating leases of the Partnership as of September 30, 20172019 is as follows:

The composition of the equipment subject to operating leases of the Partnership as of December 31, 2018 is as follows:

Depreciation expense for the three and nine months ended September 30, 20172019 was $23,911$99,462 and $71,690,$247,958, respectively.

Depreciation expense for the three and nine months ended September 30, 2018 was $23,912 and $71,692, respectively.

6. Collateralized Loans ReceivableReceivable.

On June 26, 2017, the Partnership entered into a Commercial Finance Agreement (“CFA”) with a borrower to provide secured financing offor $1,184,850 forof warehouse racking equipment. The CFA is secured by the racking equipment, and accrues interest at a rate of 9% per annum and matures on June 26, 2020. The borrower will make 36 monthly payments as follows: one payment of $39,083, 11 monthly payments of $69,498 and 24 monthly payments of $20,222. In connection with the CFA, on June 26, 2017, the Partnership advanced $689,552 to the vendor as a progress payment for the equipment. On July 31, 2017, the Partnership advanced $495,298 to the vendor as the final payment for the equipment. On May 31, 2019, the Partnership received cash of $222,439 as payment in full of the CFA entered into on June 26, 2017. For the three and nine months ended September 30, 2017,2019, the CFA earned interest income of $16,803$0 and $17,393,$17,601, respectively.

On June 26, 2017, the Partnership entered into a loan agreement with a borrower to refinance the borrower’s debt. In connection with the refinancing, the Partnership received a promissory note from the borrower in the amount of $150,000. The note accrues interest at a rate of 12% per annum and matures on June 26, 2021. The promissory note will be paid through 48 monthly installments of principal and interest of $3,931. The promissory note is secured by a first priority security interest in all of the borrower’s assets and a personal guaranteeguarantees of the borrower’s principals as well as a corporate guarantee of an affiliate of the borrower. For the three and nine months ended September 30, 2017,2019, the promissory note earned interest income of $3,413$1,815 and $3,585,$6,069, respectively.

On June 29, 2018, the Partnership entered into a loan agreement with a borrower to provide financing in an amount up to $7,500,000 to finance a food production facility in Georgia. The loan facility is structured as two tranches: Tranche I: $5,500,000 was funded on July 5, 2018. Tranche II: Up to $2,000,000 is available at lender’s discretion subject to the borrower achieving certain milestones. The loan facility is secured by a first priority security interest in all of the borrower’s assets. In connection with the Tranche I loan, the Partnership received three promissory notes from the borrower in the amount of $1,500,000, $2,000,000 and $2,000,000 respectively. On July 5, 2018, the Partnership funded $5,500,000 for the Tranche I loan. The Tranche I loan accrues interest at a rate of 12.75% plus 3 month LIBOR with a floor of 1.5% and matures on June 30, 2021. The Tranche I loan requires 18 monthly interest only payments upon commencement (first 12 monthly interest payments to be paid in cash at 11% and the remainder to be paid in kind (“PIK”) by adding such PIK interest to the principal balance and 6 monthly interest payments to be paid in cash) and 18 monthly payment of principal and interest payment with monthly principal paydowns of $150,000. Upon maturity of the Tranche I loan, the borrower will make a final balloon payment of approximately $3,029,000 ($2,900,000 principal plus accrued PIK interest). On June 29, 2018, the Partnership entered into an assignment agreement with a third party and sold $3,000,000 of the Tranche I loan, effective July 5, 2018, and sold $1,000,000 of the Tranche I loan, effective on or about September 1, 2018. On July 5, 2018, the Partnership returned two promissory notes to the borrower in the amount of $2,000,000 and $2,000,000 respectively and the borrower reissued one promissory note to the Partnership in the amount of $1,000,000 and one promissory note to the third party in the amount of $3,000,000. On July 5, 2018 and August 31, 2018, the Partnership received cash of $3,000,000 and $1,000,000, respectively, from the third party for the sale of those promissory notes. On November 1, 2019, the Partnership entered into an assignment agreement with a third party and purchased additional $417,675 of the Tranche I loan. For the three and nine months ended September 30, 2019, the promissory notes earned interest income of $60,107 and $180,035, respectively.

On December 11, 2018, the Partnership entered into a loan agreement with two affiliated North Dakota based firms as co-borrowers to provide financing in an amount up to $4,100,000 for oilfield services related equipment, of which the Partnership agreed to provide up to $1,700,000, with the balance funded by a third party. The loan facility is structured as two tranches: Tranche I: $3,200,000 and Tranche II: 900,000 which are available at lender’s discretion subject to the borrower achieving certain milestones. The loan facility is secured by a first priority lien on all of the borrower’s assets. In connection with the Tranche I loan, the Partnership received two promissory notes from the borrower in the amount of $1,326,830 and $1,873,170. On December 11, 2018, $1,326,830 and $1,873,170 were funded for Tranche I, in which $100,000 was held back for a security deposit and $200,000 will be funded upon completion of title work related to purchased vehicles. The Tranche I loan accrues interest at a rate of 10.6% plus 3 month LIBOR with a floor of 2.4% and matures on December 11, 2021. The Tranche I loan requires 36 monthly payments of $41,463 with one interest only payment due upon loan commencement. On December 11, 2018, the Partnership entered into an assignment agreement with a third party and sold $1,873,170 of the Tranche I loan, effective December 11, 2018. On December 14, 2018, the Partnership received cash of $1,682,842 from the third party for the sale of the promissory note. On January 25, 2019, the Partnership funded $250,000 of Tranche II. The Partnership received two promissory notes from the borrower in the amount of $103,659 and $146,341. On January 25, 2019, the Partnership entered into an assignment agreement with a third party and sold $146,341 of the Tranche II loan, effective January 25, 2019. On January 25, 2019, the Partnership received cash of $148,902 from the third party for the sale of the promissory note. On August 1, 2019 the Partnership decided not fund the $200,000 related to Tranche I upon the completion of title work related purchased vehicles. For the three and nine months ended September 30, 2019, the promissory notes earned interest income of $36,977 and $130,641, respectively.

The future principal maturities of the Partnership’s collateralized loans receivable at September 30, 2019 are as follows:

7. Fair Value of Financial Instruments

The Partnership’s carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and other liabilities, approximate fair value due to their short term until maturities.

The Partnership’s carrying values and approximate fair values of its financial instruments were as follows:

As of September 30, 2017,2019, the Partnership evaluated the carrying values of its financial instruments and they approximate fair value.

8. Indemnifications

The Partnership enters into contracts that contain a variety of indemnifications. The Partnership’s maximum exposure under these arrangements is not known.

In the normal course of business, the Partnership enters into contracts of various types, including lease contracts, contracts for the sale or purchase of lease assets, loan agreements and management contracts. It is prevalent industry practice for most contracts of any significant value to include provisions that each of the contracting parties, in addition to assuming liability for breaches of the representations, warranties, and covenants that are part of the underlying contractual obligations, to also assume an obligation to indemnify and hold the other contractual party harmless for such breaches, and for harm caused by such party’s gross negligence and willful misconduct, including, in certain instances, certain costs and expenses arising from the contract. Generally, to the extent these contracts are performed in the ordinary course of business under the reasonable business judgment of the General Partner and the Investment Manager, no liability will arise as a result of these provisions. The General Partner and Investment Manager knows of no facts or circumstances that would make the Partnership’s contractual commitments outside standard mutual covenants applicable to commercial transactions between businesses. Accordingly, the Partnership believes that these indemnification obligations are made in the ordinary course of business as part of standard commercial and industry practice, and that any potential liability under the Partnership’s similar commitments is remote. Should any such indemnification obligation become payable, the Partnership would separately record and/or disclose such liability in accordance with U.S. GAAP.

9. Business Concentrations

For the nine months ended September 30, 2017,2019, the Partnership had onetwo lessee which accounted for approximately 100%73% and 27% of the Partnership’s rental income derived from operating leases. For the periodnine months ended December 31, 2016,September 30, 2018, the Partnership had one lessee which accounted for approximately 100% of the Partnership’s rental income derived from operating leases. For the nine months ended September 30, 2017,2019, the Partnership had two leases which accounted for approximately 61%27% and 39%20% of the Partnership’s income derived from finance leases. For the period ended December 31, 2016, the Partnership had two leases which accounted for approximately 66% and 34% of the Partnership’s income derived from finance leases. For the nine months ended September 30, 2017,2018, the Partnership had three lessees which accounted for approximately 43%, 12%, and 12% of the Partnership’s finance income derived from finance leases. For the nine months ended September 30, 2019 the Partnership had two loans which accounted for approximately 83%54% and 39% of the Partnership’s interest income derived from collateralized loans receivable. For the nine months ended September 30, 2018, the Partnership had three promissory notes which accounted for approximately 46%, 26% and 17% of the Partnership’s interest income.income derived from collateralized loans receivable.

At September 30, 2017, the Partnership had two lessees which accounted for approximately 63% and 37% of the Partnership’s investment in finance leases. At December 31, 2016, the Partnership had two lessees which accounted for approximately 62% and 38% of the Partnership’s investment in finance leases. At September 30, 2017,2019, the Partnership had one lessee which accounted for approximately 100%97% of the Partnership’s investment in operating leases. At December 31, 2016,September 30, 2018, the Partnership had one lessee which accounted for approximately 100% of the Partnership’s investment in operating leases. At September 30, 2017,2019, the Partnership had three lessees which accounted for approximately 27%, 22% and 20% of the Partnership’s investment in finance leases. At September 30, 2018, the Partnership had four lessees which accounted for approximately 31%, 16%, 14% and 12% of the Partnership’s investment in finance leases. At September 30, 2019, the Partnership had two borrowers which accounted for approximately 87%56% and 13%42% of the Partnership’s investment in collateralized loans receivable. At September 30, 2018, the Partnership had two borrowers which accounted for approximately 74% and 19% of the Partnership’s investment in collateralized loans receivable.

9.10. Geographic Information

Geographic information for revenue for the three months ended September 30, 2019 and 2018 was as follows:

Geographic information for revenue for the nine months ended September 30, 20172019 and the period ended December 31, 20162018 was as follows:

Geographic information for long-lived assets at September 30, 20172019 and December 31, 20162018 was as follows:

10.11. Commitments and Contingencies

As of September 30, 2017,On May 1, 2018, the Partnership, does not have any unfunded commitments for any investments.

11. Subsequent Events

On November 7, 2017, the Partnershipas co-borrower, entered into a loan agreement with a borrower to providebank for a $5,000,000 revolving line of credit. This short term bridge financing, which funds were usedline is intended to acquirebe utilized to warehouse transactions to be invested in by the rights, title, and interest in an asset backed equipment loan (the “Underlying Loan”).Partnership as investor proceeds are received. In connection with the loan agreement, the Partnership receivedissued a promissory note fromto the borrowerbank in the amount of $2,800,000. The note accrues$5,000,000 that matures on May 1, 2020. To date, the Partnership has not drawn any funds under the revolving line of credit. In the event the Partnership draws funds, interest shall accrue at a rate of 1.5%Prime Rate plus 1% per month for the first 30 days and 1.25% per month thereafter, and matures on February 7, 2018. The promissory note will be paid monthly installments of interest of $42,000 for the first 30 days and $35,000 thereafter. The promissory note is secured by a first priority security interest in all the borrower’s right, title and interest in the Underlying Loan and the proceeds thereof; (ii) a first priority security interest in all of borrower’s right, title and interest in an unrelated, performing asset backedannum. On October 17, 2019, this loan and the equipment related thereto and (iii) a first priority security interest in Borrower’s 100% membership interests in borrower’s 100% membership interests in the special purpose entity that holds the Underlying Loan.agreement was terminated.

12. Subsequent Events

On November 9, 2017,October 18, 2019, the Partnership entered into a loan and security agreement with a third party lender for a $25,000,000 loan facility (of which $20,000,000 is a Term Loan and $5,000,000 is a Revolving Loan) with a maturity date of October 18, 2022. On October 18, 2019, the Partnership borrowed $5,000,000 under the Term Loan. Interest on the drawn funds shall accrue at a rate of 3 month LIBOR Rate plus 5.6% per annum.

On October 21, 2019, the Partnership was assigned a lease facility of $406,456 for agricultural$1,100,000 for furniture, fixtures, and equipment and supplies to a company based in Illinois.Ohio, and on October 22, 2019 the lease facility was funded. The finance lease requires 3648 monthly payments of $13,819$29,483 and commences on October 31, 2019. The lease is secured by a third priority lien against the furniture, fixtures, and equipment.

On November 1, 2019, the Partnership amended an operating lease facility entered into on October 18, 2016 to extend the lease for 3 additional months.

On November 1, 2019, the Partnership entered into an assignment agreement with a third party and purchased $417,675 of the Tranche I loan related to the loan agreement entered into on June 29, 2018.

On November 5, 2019, the Partnership was assigned and funded a lease facility for $862,087 for computer equipment based in California. The finance lease requires 30 monthly payments of $32,704, with the first and last paymentsthree due in advance.advance, and commences on November 5, 2019. The lease is secured by a first positionpriority lien against the agricultural equipment and supplies and a personal guarantee from the company’s CEO. computer equipment.

From October 1, 2017 through November 12, 2017, the Partnership admitted an additional 17 Limited Partners with total cash contributions of $507,750, total capital contributions of $524,474 and 52,447.37 Units. The Partnership paid or accrued an underwriting and commission fee to Securities and outside brokers totaling $10,155 and $9,500, respectively.

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

As used in this Quarterly Report on Form 10-Q, references to “we,” “us,” “our” or similar terms include Arboretum Silverleaf Income Fund, L.P. (f/k/a SQN Asset Income Fund V, L.P.).

The following is a discussion of our current financial position and results of operations. This discussion should 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.

Forward-Looking Statements

Certain statements within this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). These statements are being made pursuant to the PSLRA, with the intention of obtaining the benefits of the “safe harbor” provisions of the PSLRA, and, other than as required by law, we assume no obligation to update or supplement such statements. Forward-looking statements are those that do not relate solely to historical fact. They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. You can identify these statements by the use of words such as “may,” “will,” “could,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “predict,” “continue,” “further,” “seek,” “plan,” or “project” and variations of these words or comparable words or phrases of similar meaning. These forward-looking statements reflect our current beliefs and expectations with respect to future events and are based on assumptions and are subject to risks and uncertainties and other factors outside our control that may cause actual results to differ materially from those projected. We undertake no obligation to update publicly or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

Overview

We are a Delaware limited partnership formed on January 14, 2016. Our partnership operates under a structure which we pool the capital invested by our partners. This pool of capital is then used to invest in business-essential, revenue-producing (or cost-saving) equipment and other physical assets with substantial economic lives and, in many cases, associated revenue streams and project financings. The pooled capital contributions are also used to pay fees and expenses associated with our organization and to fund a capital reserve.

Our principal investment strategy is to invest in business-essential, revenue-producing (or cost-savings) equipment with high in-place value and long, relative to the investment term, economic life and project financings. We expect to achieve our investment strategy by making investments in equipment already subject to lease or originating equipment leases in such equipment, which will include: (i) purchasing equipment and leasing it to third-party end users; (ii) providing equipment and other asset financing; (iii) acquiring equipment subject to lease and (iv) acquiring ownership rights (residual value interests) in leased equipment at lease expiration. From time to time, we may also purchase equipment and sell it directly to our leasing customers.

Many of our investments will be structured as full payout or operating leases. Full payout leases generally are leases under which the rent over the initial term of the lease will return our invested capital plus an appropriate return without consideration of the residual value, and where the lessee may acquire the equipment or other assets at the expiration of the lease term. Operating leases generally are leases under which the aggregate non-cancelable rental payments during the original term of the lease, on a net present value basis, are not sufficient to recover the purchase price of the equipment or other assets leased under the lease.

We also intend to invest by way of loans, participation agreements and residual sharing agreements where we would acquire an interest in a pool of equipment or other assets, or rights to the equipment or other assets, at a future date. We also may structure investments as project financings that are secured by, among other things, essential use equipment and/or assets. Finally, we may use other investment structures that our Investment Manager believes will provide us with the appropriate level of security, collateralization, and flexibility to optimize our return on our investment while protecting against downside risk, such as vendor and rental programs. In many cases, the structure will include us holding title to or a priority or controlling position in the equipment or other asset.

Although the final composition of our portfolio cannot be determined at this stage, we expect to invest in equipment and other assets that are considered essential use or core to a business or operation in the agricultural, energy, environmental, medical, manufacturing, technology, and transportation industries. Our Investment Manager may identify other assets or industries that meet our investment objectives. We expect to invest in equipment, other assets and project financings located primarily within the United States of America and the European Union but may also make investments in other parts of the world.

We are currently in the Offering and Operating Period. The Partnership elected to close the Offering Period will expire on the earlier of raising $250,000,000 in Limited Partner contributions (25,000,000 units at $10 per Unit) or August 11, 2018, which is two years from the date we were declared effective by the Securities and Exchange Commission (the “SEC”). unless extended by our General Partner, from time to time, in its sole discretion, by up to an additional 12 months.March 31, 2019. During the Operating Period, we will invest most of the net proceeds from our offering in business-essential, revenue-producing (or cost-saving) equipment, other physical assets with substantial economic lives and, in many cases, associated revenue streams and project financings. The Operating periodPeriod began on the date we admitted our first Limited Partners, at the initial closing, which occurred on October 3, 2016 and will last for four years from that date unless extended at the sole discretion of the General Partner. At our initial closing, we reimbursed our Investment Manager for a portion of the fees and expenses associated with our organization and offering which they previously paid on our behalf and we funded a small capital reserve. The Liquidation Period, which follows the conclusion of the Operating Period, is the period in which we will sell assets in the ordinary course of business and will last two years, unless it is extended, at the sole discretion of the General Partner.

Our General Partner, our Investment Manager and their affiliates, including SecuritiesAmerican Elm in its capacity as our selling agent and certain non-affiliates (namely, Selling Dealers) receive fees and compensation from the offering of our Units, including the following, with any and all compensation paid to our General Partner solely in cash. We pay an underwriting fee of 2% of the gross proceeds of the offering (excluding proceeds, if any, we receive from the sale of our Units to our General Partner or its affiliates) to our selling agent or selling agents. While SecuritiesAmerican Elm initially acts as our exclusive selling agent, we may engage additional selling agents in the future. From these underwriting fees, a selling agent may pay Selling Dealers, a non-accountable marketing fee based upon such factors as the volume of sales of such Selling Dealers, the level of marketing support provided by such participating dealers and the assistance of such Selling Dealers in marketing the offering, or to reimburse representatives of such Selling Dealers for the costs and expenses of attending our educational conferences and seminars. This fee will vary, depending upon separately negotiated agreements with each Selling Dealer. In addition, we pay a sales commission to Selling Dealers up to 5% of the gross proceeds of this offering (excluding proceeds, if any, we receive from the sale of our Units to our General Partner or its affiliates).

Our General Partner receives an organizational and offering expense allowance of up to 1.5% of our offering proceeds to reimburse it for expenses incurred in preparing us for registration or qualification under federal and state securities laws and subsequently offering and selling our Units. The organizational and offering expense allowance will be paid out of the proceeds of the offering. The organizational and offering expense allowance will not exceed the actual fees and expenses incurred by our General Partner and its affiliates. Because organizational and offering expenses will be paid as and to the extent they are incurred, organizational and offering expenses may be drawn disproportionately to the gross proceeds of each closing.

During our Operating Period, our Investment Manager will receive a structuring fee in an amount equal to 1.5% of each cash investment made, including reinvestments, payable on the date each such investment is made.

During our Operating Period and our Liquidation Period, our Investment Manager receives a management fee in an amount equal to the greater of (i) 2.5% per annum of the aggregate offering proceeds, payable monthly in advance or (ii) $62,500 per month.

Our General Partner will initially receive 1% of all distributed distributable cash. Our General Partner has a Promotional Interest in us equal to 20% of all distributed distributable cash after we have provided a return to our Limited Partners of their respective capital contributions plus an 8% per annum, compounded annually, cumulative return on their capital contributions.

Recent Significant Transactions

Collateralized Loans Receivable

On December 11, 2018, the Partnership entered into a loan agreement with two affiliated North Dakota based firms as co-borrowers to provide financing in an amount up to $4,100,000 for oilfield services related equipment, of which the Partnership agreed to provide up to $1,700,000, with the balance funded by a third party. The loan facility is structured as two tranches: Tranche I: $3,200,000 and Tranche II: 900,000 which are available at lender’s discretion subject to the borrower achieving certain milestones. The loan facility is secured by a first priority lien on all of the borrower’s assets. In connection with the Tranche I loan, the Partnership received two promissory notes from the borrower in the amount of $1,326,830 and $1,873,170. On December 11, 2018, $1,326,830 and $1,873,170 were funded for Tranche I, in which $100,000 was held back for a security deposit and $200,000 will be funded upon completion of title work related to purchased vehicles. The Tranche I loan accrues interest at a rate of 10.6% plus 3 month LIBOR with a floor of 2.4% and matures on December 11, 2021. The Tranche I loan requires 36 monthly payments of $41,463 with one interest only payment due upon loan commencement. On December 11, 2018, the Partnership entered into an assignment agreement with a third party and sold $1,873,170 of the Tranche I loan, effective December 11, 2018. On December 14, 2018, the Partnership received cash of $1,682,842 from the third party for the sale of the promissory note. On January 25, 2019, the Partnership funded $250,000 of Tranche II. The Partnership received two promissory notes from the borrower in the amount of $103,659 and $146,341. On January 25, 2019, the Partnership entered into an assignment agreement with a third party and sold $146,341 of the Tranche II loan, effective January 25, 2019. On January 25, 2019, the Partnership received cash of $148,902 from the third party for the sale of the promissory note.

On June 29, 2018, the Partnership entered into a loan agreement with a borrower to provide financing in an amount up to $7,500,000 to finance a food production facility in Georgia. The loan facility is structured as two tranches: Tranche I: $5,500,000 was funded on July 5, 2018. Tranche II: Up to $2,000,000 is available at lender’s discretion subject to the borrower achieving certain milestones. The loan facility is secured by a first priority security interest in all of the borrower’s assets. In connection with the Tranche I loan, the Partnership received three promissory notes from the borrower in the amount of $1,500,000, $2,000,000 and $2,000,000 respectively. On July 5, 2018, the Partnership funded $5,500,000 for the Tranche I loan. The Tranche I loan accrues interest at a rate of 12.75% plus 3 month LIBOR with a floor of 1.5% and matures on June 30, 2021. The Tranche I loan requires 18 monthly interest only payments upon commencement (first 12 monthly interest payments to be paid in cash at 11% and the remainder to be paid in kind (“PIK”) by adding such PIK interest to the principal balance and 6 monthly interest payments to be paid in cash) and 18 monthly payment of principal and interest payment with monthly principal paydowns of $150,000. Upon maturity of the Tranche I loan, the borrower will make a final balloon payment of approximately $3,029,000 ($2,900,000 principal plus accrued PIK interest). On June 29, 2018, the Partnership entered into an assignment agreement with a third party and sold $3,000,000 of the Tranche I loan, effective July 5, 2018, and sold $1,000,000 of the Tranche I loan, effective on or about September 1, 2018. On July 5, 2018, the Partnership returned two promissory notes to the borrower in the amount of $2,000,000 and $2,000,000 respectively and the borrower reissued one promissory note to the Partnership in the amount of $1,000,000 and one promissory note to the third party in the amount of $3,000,000. On July 5, 2018 and August 31, 2018, the Partnership received cash of $3,000,000 and $1,000,000, respectively, from the third party for the sale of those promissory notes. On November 1, 2019, the Partnership entered into an assignment agreement with a third party and purchased additional $417,675 of the Tranche I loan.

Infrastructure Equipment

On May 30, 2019, the Partnership entered into a lease facility for $3,600,000 for industrial dryers based in Kentucky. On May 31, 2019, the Partnership advanced $3,600,000 under this lease facility. The finance lease requires 48 monthly payments of $94,802 with the first and last payments due in advance and commenced on November 1, 2019. The lease is secured by a first priority lien against the industrial dryers.

On June 29, 2018, the Partnership entered into a lease facility for $1,199,520 for water pumps based in North Dakota. The finance lease requires 48 monthly payments of $31,902 with the first and last payments due in advance. On October 31, 2018, the Partnership entered into a second lease facility for $529,239 for water pumps. The finance lease requires 36 monthly payments of $17,888 with the first and last payments due in advance. On January 29, 2019, the Partnership entered into a third lease facility for $67,500 for water pumps. On January 29, 2019, the Partnership funded $33,750 and on April 9, 2019, the Partnership funded the remaining $33,750. The finance lease requires 36 monthly payments of $2,282 with the first and last payments due in advance and commences on May 1, 2019. On June 19, 2019, the Partnership entered into and funded a fourth lease facility for $1,270,125 for water pumps. The finance lease requires 36 monthly payments of $43,565 with the first and last payments due in advance and commences on July 1, 2019. On August 7, 2019, the Partnership entered into and funded a fifth lease facility for $27,351 for water pumps. The finance lease requires 36 monthly payments of $938 with the first and last payments due in advance and commences on August 7, 2019. On August 29, 2019, the Partnership entered into a sixth lease facility for $196,803 for water pumps, and on September 12, 2019 the lease facility was funded. The finance lease requires 36 monthly payments of $6,750 with the first and last payments due in advance and commences on August 29, 2019. The lease is secured by a first priority lien against the water pumps.

On August 23, 2019, the Partnership entered into and funded a lease facility for $3,000,000 for a welding system based in Louisiana. The finance lease requires 60 monthly payments of $62,900 and a final payment of $300,000 with the first and last payments due in advance and commences on September 1, 2019. The lease is secured by a first priority lien against the welding system.

On September 5, 2019, the Partnership entered into a lease facility for $101,828 for screen printer and dryers based in Georgia. On September 20, 2019, the Partnership advanced $101,828 under this lease facility. The finance lease requires 48 monthly payments of $2,875 and a final payment of $10,183, with the first payment due in advance. The lease is secured by a first priority lien against the screen printer and dryers.

On September 20, 2019, the Partnership entered into a lease facility for $865,084 for LED lighting based in Texas. On September 26, 2019, the Partnership advanced $865,084 under this lease facility. The finance lease requires 60 monthly payments of $19,472, with the first payment due in advance and commences on September 25, 2019. The lease is secured by a first priority lien against the LED lighting.

Helicopter

On October 1, 2018, the Partnership, on behalf of Lifestyle Leasing, funded $600,000 into an escrow account. On November 9, 2018, the funds were released from escrow and used to fund a helicopter lease. The lessee provided $450,000 of the $1,050,000 purchase price of the helicopter. The finance lease required 36 monthly payments of $13,423, payable in arrears, and a final payment of $284,435 on November 1, 2021. On funding, the lessee paid the November 1, 2018 rent payment and a four month security deposit of $53,692. The lease was secured by a first priority lien against the leased helicopter and against an additional helicopter. On February 14, 2019, Lifestyle Leasing, on behalf of the Partnership, received cash of $577,025 as total payoff, in connection with the helicopter lease entered into on October 1, 2018. The finance lease had a net book value of $525,063 resulting in an increase in finance income of $51,962.

Fabrication Equipment

On January 18, 2018, the Partnership entered into a lease facility for $2,188,377 of fabrication equipment with a company based in Texas. The lease required 42 monthly payments of $57,199 with the first and last payments due in advance. The lease is secured by a first priority lien against the fabrication equipment. The lease was expected to commence on the first day of the calendar quarter following final funding, and the company was paying pre-commencement rents to the Partnership. On January 30, 2018, February 14, 2018 and on March 16, 2018, the Partnership advanced $1,079,895, $647,122 and $349,428, respectively, under this lease facility. On September 21, 2018, the Partnership issued a Notice of Default letter to the company and on October 18, 2018, the Partnership issued a Commencement of Lease and Demand for Payment letter to the company. In November 2018, the Partnership entered into a forbearance agreement with the company, whereby the company paid the outstanding October and November rent payments and then beginning in December 2018, they paid a forbearance fee of $25,000 per month for three months while the company underwent an internal restructuring. On February 28, 2019, the lease was amended and restated to a 60 month lease commencing on March 1, 2019. The lease requires 24 monthly payments of $31,000 and 36 monthly payments of $40,000, on maturity, the lessee can return the equipment or purchase it for $500,000. The lease is secured by a first priority lien against the fabrication equipment. The Partnership reclassified this lease with a value of $2,010,412 as an operating lease.

Medical Equipment

On March 22, 2019, the Partnership entered into a lease facility for $493,906 for medical equipment with a hospital based in Texas. The lease is secured by a first priority lien against the medical equipment. On March 22, 2019, the Partnership advanced a total of $493,906 under this lease facility. The lease schedule requires 36 monthly payments of $16,820 with the first payment due upon commencement, commencing on April 1, 2019, on maturity, the lessee can return the equipment or purchase it at its then fair market value, not to exceed 16% of equipment cost.

Collateralized Loan Receivable

On June 26, 2017, the Partnership entered into a Commercial Finance Agreement (“CFA”) with a borrower to provide secured financing offor $1,184,850 forof warehouse racking equipment. The CFA is secured by the racking equipment, and accrues interest at a rate of 9% per annum and matures on June 26, 2020. The borrower will make 36 monthly payments as follows: one payment of $39,083, 11 monthly payments of $69,498 and 24 monthly payments of $20,222. In connection with the CFA, on June 26, 2017, the Partnership advanced $689,552 to the vendor as a progress payment for the equipment. On July 31, 2017, the Partnership advanced $495,298 to the vendor as the final payment for the equipment. On May 31, 2019, the Partnership received cash of $222,439 as total payoff, in connection with the CFA entered into on June 26, 2017.

Computer Equipment

On June 26, 2017,October 6, 2016, the Partnership entered intofunded a loan agreementlease facility for $680,020 of Apple computers with a borrower to refinanceprivate school in New York City. The finance lease requires 36 monthly payments of $17,402. The lessee made a down payment of $102,002 and the borrower’s debt. In connection withremainder amount was funded by the refinancing,Partnership. The lease is secured by ownership of the equipment. On July 11, 2019 the Partnership received cash of $136,003, and paid the outstanding broker fee of $35,148. The finance lease had a promissory note fromresidual value of $68,001 resulting in an increase in finance income of $32,854.

Equipment Subject to Operating Leases

On October 18, 2016, the borrower in the amount of $150,000.Partnership funded a lease facility for $318,882 for 16 pizza ovens to five separate lessees. Each lease has a 36 month term with various monthly payments. The note accrues interest at a rate of 12% per annum and matures on June 26, 2021. The promissory note will be paid through 48 monthly installments of principal and interest of $3,931. The promissory notelease is secured by a first priority security interest in all the borrower’s assets and a personal guaranteeownership of the borrower’s principals as well asequipment and by a corporate guarantee of an affiliatethe parent of the borrower.lessees. On November 1, 2019, this lease facility was amended to extend the lease for 3 additional months.

Critical Accounting Policies

An understanding of our critical accounting policies is necessary to understand our financial results. The preparation of interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) requires our General Partner and our Investment Manager to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates will primarily include the determination of allowance for notes and leases, depreciation and amortization, impairment losses and the estimated useful lives and residual values of the leased equipment we acquire. Actual results could differ from those estimates.

Lease Classification and Revenue Recognition

Each equipment lease we enter into is classified as either a finance lease or an operating lease, which is determined at lease inception, based upon the terms of each lease, or when there are significant changes to the lease terms. We capitalize initial direct costs associated with the origination and funding of lease assets. Initial direct costs include both internal costs (e.g., labor and overhead), if any, and external broker fees incurred with the lease origination. Costs related to leases that are not consummated are not eligible for capitalization as initial direct costs and are expensed as incurred as acquisition expense. For a finance lease, initial direct costs are capitalized and amortized over the lease term using the effective interest rate method. For an operating lease, the initial direct costs are included as a component of the cost of the equipment and depreciated over the lease term.

For finance leases, we record, at lease inception, the total minimum lease payments receivable from the lessee, the estimated unguaranteed residual value of the equipment at lease termination, the initial direct costs related to the lease, if any, and the related unearned income. Unearned income represents the difference between the sum of the minimum lease payments receivable, plus the estimated unguaranteed residual value, minus the cost of the leased equipment. Unearned income is recognized as finance income over the term of the lease using the effective interest rate method.

For operating leases, rental income is recognized on the straight-line basis over the lease term. Billed operating lease receivables are included in accounts receivable until collected. Accounts receivable is stated at its estimated net realizable value. Deferred revenue is the difference between the timing of the receivables billed and the income recognized on the straight-line basis.

Our Investment Manager has an investment committee that approves each new equipment lease and other financing transaction. As part of its process, the investment committee determines the residual value, if any, to be used once the investment has been approved. The factors considered in determining the residual value include, but are not limited to, the creditworthiness of the potential lessee, the type of equipment considered, how the equipment is integrated into the potential lessee’s business, the length of the lease, the industry in which the potential lessee operates and the secondary market value of the equipment. Residual values are reviewed for impairment in accordance with our impairment review policy.

The residual value assumes, among other things, that the asset will be utilized normally in an open, unrestricted and stable market. Short-term fluctuations in the marketplace are disregarded and it is assumed that there is no necessity either to dispose of a significant number of the assets, if held in quantity, simultaneously or to dispose of the asset quickly. The residual value is calculated using information from various external sources, such as trade publications, auction data, equipment dealers, wholesalers and industry experts, as well as inspection of the physical asset and other economic indicators.

Asset Impairments

The significant assets in our investment portfolio are periodically reviewed, no less frequently than annually or when indicators of impairment exist, to determine whether events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss will be recognized only if the carrying value of a long-lived asset is not recoverable and exceeds its fair value. If there is an indication of impairment, we will estimate the future cash flows (undiscounted and without interest charges) expected from the use of the asset and its eventual disposition. Future cash flows are the future cash in-flows expected to be generated by an asset less the future out-flows expected to be necessary to obtain those in-flows. If an impairment is determined to exist, the impairment loss will be measured as the amount by which the carrying value of a long-lived asset exceeds its fair value and recorded in the statement of operations in the period the determination is made. The events or changes in circumstances that generally indicate that an asset may be impaired are, (i) the estimated fair value of the underlying equipment is less than its carrying value, (ii) the lessee is experiencing financial difficulties and (iii) it does not appear likely that the estimated proceeds from the disposition of the asset will be sufficient to satisfy the residual position in the asset. The preparation of the undiscounted cash flows requires the use of assumptions and estimates, including the level of future rents, the residual value expected to be realized upon disposition of the asset, estimated downtime between re-leasing events and the amount of re-leasing costs. Our Investment Manager’s review for impairment includes a consideration of the existence of impairment indicators including third-party appraisals, published values for similar assets, recent transactions for similar assets, adverse changes in market conditions for specific asset types and the occurrence of significant adverse changes in general industry and market conditions that could affect the fair value of the asset.

Equipment Notes and Loans Receivable

Equipment notes and loans receivable are reported in our condensed consolidated balance sheets at the outstanding principal balance net of any unamortized deferred fees, premiums or discounts on purchased notes and loans. Costs to originated notes, if any, are reported as other assets in our condensed consolidated balance sheets. Unearned income, discounts and premiums, if any, are amortized to interest income in the condensed consolidated statements of operations using the effective interest rate method. Equipment notes and loans receivable are generally placed in a non-accrual status when payments are more than 90 days past due. Additionally, we periodically review the creditworthiness of companies with payments outstanding less than 90 days. Based upon the Investment Manager’s judgment, accounts may be placed in a non-accrual status. Accounts on a non-accrual status are only returned to an accrual status when the account has been brought current and we believe recovery of the remaining unpaid receivable is probable. Revenue on non-accrual accounts is recognized only when cash has been received.

Recent Accounting Pronouncements

In AugustJune 2016, the Financial Accounting Standards Board (“FASB”)FASB issued ASU No. 2016-15,2016-13,StatementFinancial Instruments - Credit Losses (Topic 326): Measurement of Cash Flows: Classification of Certain Cash Receipts and Cash PaymentsCredit Losses on Financial Instruments(“ASU 2016-15”2016-13”), which provides guidancerequires credit losses on howmost financial assets measured at amortized cost and certain cash receipts and cash payments areother instruments to be presentedmeasured using an expected credit loss model (referred to as the current expected credit loss (CECL) model). Under this model, entities will estimate credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument. Current US GAAP is based on an incurred loss model that delays recognition of credit losses until it is probable the loss has been incurred. Accordingly, it is anticipated that credit losses will be recognized earlier under the CECL model than under the incurred loss model. ASU 2016-13 is currently effective for fiscal periods beginning after December 15, 2019 and classified inmust be adopted as a cumulative effect adjustment to retained earnings. Early adoption is permitted. In July 2019, the statement of cash flows.FASB decided to add a project to its technical agenda to propose staggered effective dates for certain accounting standards, including ASU 2016-13. The adoption ofFASB has approved an approach that ASU 2016-15 becomes2016-13 will be effective for Public Business Entities that are SEC filers, excluding smaller reporting companies such as the Partnership, for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. For all other entities, including smaller reporting companies like the Partnership, ASU 2016-13 will be effective for fiscal years beginning on January 1,after December 15, 2022, including interim periods within those fiscal years. For all entities, early adoption will continue to be permitted; that is, early adoption is allowed for fiscal years beginning after December 15, 2018, including interim periods within that reporting period. Early adoptionthose fiscal years (that is, permitted. An entity will apply the amendments within ASU 2016-15 using a retrospective transition method to each period presented. We areeffective January 1, 2019, for calendar-year-end companies). The Partnership is currently in the process of evaluating the impact of the adoption of ASU 2016-15this guidance on ourits interim condensed consolidated financial statements.

In February 2016, the FASB issued new guidance to improve consolidation guidance for legal entities (Accounting Standards Update (“ASU”)increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements, ASU 2016-02,Leases (Topic 842): Amendments to Leases Analysis)the FASB Accounting Standards Codification(“ASU 2016-02”), effective for fiscal years beginning after December 15, 2018 and interim periods within those years and earlyyears. Early adoption is permitted. The standardASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets, and makingmakes targeted changes to lessor accounting. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. We are currently evaluating theThe Partnership has adopted ASU 2016-02 and has determined there was no significant impact of this guidance on ourits interim condensed consolidated financial statements.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying interim condensed consolidated financial statements.

Business Overview

Our Offering periodPeriod commenced on August 11, 2016 and will last until the earlier of (i) August 11, 2018, which is two years from the commencement of our Offering Period, unless extended by our General Partner, from time to time, in its sole discretion, by up to an additional 12 months, or (ii) the date that we have raised $250,000,000.concluded on March 31, 2019. We are currently in negotiations with additional Selling Dealers to offer our Units for sale. We have beenwere approved for sale under Blue Sky regulations in 49 states and the District of Columbia. During the Offering Period, it is anticipated that the majority of our cash inflows will bewere derived from financing activities and be the direct result of capital contributions from Limited Partners.

During our Operating Period, which began on October 3, 2016, the date of our initial closing, we will use the majority of our net offering proceeds from Limited Partner capital contributions to acquire our initial investments. As our investments mature, we anticipate reinvesting the cash proceeds in additional investments in leased equipment and financing transactions, to the extent that the cash will not be needed for expenses, reserves and distributions to our Limited Partners. During this time-frame we expect both rental income and finance income to increase substantially as well as related expenses such as depreciation and amortization. During the Operating Period, we believe the majority of our cash outflows will be from investing activities as we acquire additional investments and to a lesser extend from financing activities from our paying quarterly distributions to our Limited Partners. Our cash flow from operations is expected to increase, primarily from the collection of rental and interest payments.

Results of Operations for the Three Months Ended September 30, 2017

We are currently in both our Offering Period and our Operating Period. The Offering Period iswas designated as the period in which we raiseraised capital from investors. During this period, we expect to generategenerated the majority of our cash inflow from financing activities though the sale of our Units to investors. Through September 30, 2017, we2019, the Partnership admitted 206617 Limited Partners with total capital contributions of $10,509,039$25,371,709 resulting in the sale of 1,050,903.882,537,170.91 Units. The Partnership received cash contributions of $10,059,849$24,718,035 and applied $449,190$653,674 which would have otherwise been paid as sales commission to the purchase of 44,919.0365,367.46 additional Units.

We have also entered our Operating Period, which is defined as the period in which we invest the net proceeds from the Offering Period into business-essential, revenue-producing (or cost-saving) equipment and other physical assets with substantial economic lives and, in many cases, associated revenue streams. During this period we anticipate substantial cash outflows from investing activities as we acquire leased and financed equipment. We also expect our operating activities to generate cash inflows during this time as we collect rental and interest payments from the leased and financed assets we acquire.

Results of Operations for the Three Months Ended September 30, 2019 compared to the Three Months Ended September 30, 2018

Our revenue for the three months ended September 30, 20172019 and 2018 is summarized as follows:

For the three months ended September 30, 2017,2019, we earned $27,256$688,197 in total revenue. We earned $120,256 in rental income from five operating leases of pizza ovens equipment.equipment, and one fabrication equipment operating lease. We received monthly lease payments of approximately $87,200$865,000 and recognized $16,475$469,040 in finance income from twovarious finance leases during the same period. We also recognized $20,233$98,901 in interest income which was generated by twofrom collateralized loans receivable.receivable during the same period. As we acquire finance leases and operating leases, and as we participate in additional financing projects, we believe our revenue will grow significantly during 2017.2019.

For the three months ended September 30, 2018, we earned $410,862 in total revenue. We earned $27,256 in rental income from five operating leases of pizza ovens equipment. We received monthly lease payments of approximately $630,000 and recognized $278,168 in finance income from various finance leases during the same period. We also recognized $88,820 in interest income from collateralized loans receivable during the same period.

Our expenses for the three months ended September 30, 20172019 and 2018 are summarized as follows:

For the three months ended September 30, 2017,2019, we incurred $292,176$372,240 in total expenses. We paid $187,500 in management fees to our Investment Manager during the three months ended September 30, 2017.2019. We pay our Investment Manager a management fee during the Operating Period and the Liquidation Period equal to the greater of, (i) 2.5% per annum of the aggregate offering proceeds, payable monthly in advance or (ii) $62,500 per month. We recognized $23,911$99,462 in depreciation expense and $33,175$59,922 in administration expense. Administration expense mainly consists of expenses paid to the fund administrator. We also incurred $33,076$25,317 in professional fees, which were mostly comprised of fees related to compliance with the rules and regulations of the SEC.SEC and consulting services. As the size and complexity of our activities grow, we expect that our professional fees will increase accordingly.

Net Loss

As a result of the factors discussed above, we reported a net loss forFor the three months ended September 30, 2017 of $206,579.

Results of Operations for the Nine Months Ended September 30, 2017

Our revenue for the nine months ended September 30, 2017 is summarized as follows:

For the nine months ended September 30, 2017, we earned $81,768 in rental income from five operating leases of pizza ovens equipment. We received monthly lease payments of approximately $261,400 and recognized $55,186 in finance income from two finance leases during the same period. We also recognized $21,055 in interest income which was generated by two collateralized loans receivable. As we acquire finance leases and operating leases, and as we participate in additional financing projects, we believe our revenue will grow significantly during 2017.

Our expenses for the nine months ended September 30, 2017 are summarized as follows:

For the nine months ended September 30, 2017,2018, we incurred $943,410$396,193 in total expenses. We paid $562,500$187,500 in management fees to our Investment Manager during the ninethree months ended September 30, 2017.2018. We pay our Investment Manager a management fee during the Operating Period and the Liquidation Period equal to the greater of, (i) 2.5% per annum of the aggregate offering proceeds, payable monthly in advance or (ii) $62,500 per month. We recognized $71,690$23,912 in depreciation expense and $128,254$72,914 in administration expense. Administration expense mainly consists of expenses paid to the fund administrator. We also incurred $165,852$111,867 in professional fees, which were mostly comprised of fees related to compliance with the rules and regulations of the SEC.SEC and consulting services.

Net Income

As a result of the factors discussed above, we reported a net income for the three months ended September 30, 2019 of $315,957, as compared to net income of $14,669 for the three months ended September 30, 2018.

Results of Operations for the Nine Months Ended September 30, 2019 compared to the Nine Months Ended September 30, 2018

Our revenue for the nine months ended September 30, 2019 and 2018 is summarized as follows:

For the nine months ended September 30, 2019, we earned $1,590,457 in total revenue. We earned $298,768 in rental income from five operating leases of pizza ovens equipment, and one fabrication equipment operating lease. We received monthly lease payments of $2,832,555 and recognized $956,619 in finance income from various finance leases during the same period. We also recognized $334,382 in interest income from collateralized loans receivable during the same period. As we acquire finance leases and operating leases, and as we participate in additional financing projects, we believe our revenue will grow significantly during 2019.

For the nine months ended September 30, 2018, we earned $894,103 in total revenue. We earned $81,768 in rental income from five operating leases of pizza ovens equipment. We received monthly lease payments of approximately $1,462,000 and recognized $629,057 in finance income from various finance leases during the same period. We also recognized $165,830 in interest income from collateralized loans receivable during the same period.

Our expenses for the nine months ended September 30, 2019 and 2018 are summarized as follows:

For the nine months ended September 30, 2019, we incurred $1,186,135 in total expenses. We paid $562,500 in management fees to our Investment Manager during the nine months ended September 30, 2019. We pay our Investment Manager a management fee during the Operating Period and the Liquidation Period equal to the greater of, (i) 2.5% per annum of the aggregate offering proceeds, payable monthly in advance or (ii) $62,500 per month. We recognized $247,958 in depreciation expense and $168,802 in administration expense. Administration expense mainly consists of expenses paid to the fund administrator. We also incurred $198,367 in professional fees, which were mostly comprised of fees related to compliance with the rules and regulations of the SEC and consulting services. As the size and complexity of our activities grow, we expect that our professional fees will increase accordingly.

For the nine months ended September 30, 2018, we incurred $1,050,893 in total expenses. We paid $562,500 in management fees to our Investment Manager during the nine months ended September 30, 2018. We pay our Investment Manager a management fee during the Operating Period and the Liquidation Period equal to the greater of, (i) 2.5% per annum of the aggregate offering proceeds, payable monthly in advance or (ii) $62,500 per month. We recognized $71,692 in depreciation expense and $157,375 in administration expense. Administration expense mainly consists of expenses paid to the fund administrator. We also incurred $248,912 in professional fees, which were mostly comprised of fees related to compliance with the rules and regulations of the SEC and consulting services.

Net LossIncome (Loss)

As a result of the factors discussed above, we reported a net lossincome for the nine months ended September 30, 20172019 of $763,368.$404,322, as compared to a net loss of $156,790 for the nine months ended September 30, 2018.

Liquidity and Capital Resources

Sources and Uses of Cash

Sources of Liquidity

We are currently in both our Offering Period and our Operating Period. The Offering Period iswas the time frame in which we raiseraised capital contributions from Limited Partners through the sale of our Units. As such, we expect that during our Offering Period a substantial portion of our cash inflows willwere be from financing activities. The Operating Period is the time frame in which we acquire equipment under lease or enter into other equipment financing transactions. During this time period we anticipate that a substantial portion of our cash outflows will be for investing activities. We believe that cash inflows will be sufficient to finance our liquidity requirements for the foreseeable future, including quarterly distributions to our Limited Partners, general and administrative expenses, fees paid to our Investment Manager and new investment opportunities.

Operating Activities

Cash used inprovided by operating activities for the nine months ended September 30, 20172019 was $531,150$2,828,651 and was primarily driven by the following factors; a net lossincome for the nine months ended September 30, 20172019 of approximately $763,000, and finance income of approximately $55,000. Offsetting these fluctuations was depreciation expense of approximately $72,000 and$404,000, receipt of approximately $261,000$2,833,000 in minimum rental payments from finance leases, acquired during the period.receipt of approximately $325,000 in interest income payments from collateralized loans receivable, an increase in security deposit payable of $49,000, an increase in deferred revenue of approximately $270,000 and depreciation of approximately $248,000. Offsetting these fluctuations was, finance income of approximately $957,000 and accrued interest income of approximately $335,000. We expect our accounts payable and accrued expenses will fluctuate from period to period primarily due to the timing of payments related to lease and financings transactions we will enter into. We anticipate that as we enter into additional equipment leasing and financing transactions we will generate greater net cash inflows from operations principally from rental payments received from lessees.

Cash provided by operating activities for the nine months ended September 30, 2018 was $1,002,902 and was primarily driven by the following factors; depreciation expense of approximately $72,000, receipt of approximately $1,462,000 in minimum rental payments from finance leases acquired during the period, receipt of approximately $202,000 in interest income payments from collateralized loans receivable acquired during the period, an increase to deferred revenue of approximately $88,000 and an increase to accounts payable of approximately $145,000. Offsetting these fluctuations was a net loss for the nine months ended September 30, 2018 of approximately $157,000, finance income of approximately $630,000, and interest income of approximately $166,000.

Investing Activities

Cash used in investing activities was $9,000,883 for the nine months ended September 30, 20172019, which consisted of approximately $9,537,000 that we paid for the purchase of finance leases and approximately $287,000 that we paid for the purchase of collateralized loans receivable, offset by approximately $577,000 in cash received from collateralized loan receivables, approximately $146,000 in cash received from sale of collateralized loan receivables, and approximately $101,000 in cash received from sale of leased assets.

Cash used in investing activities was $1,122,764. We$4,246,997 for the nine months ended September 30, 2018, which consisted of approximately $6,037,000 and $5,538,000 that we paid approximately $1,361,000for the purchase of finance leases and for the acquisition of ourcollateralized loans receivable, respectively, offset by approximately $3,328,000 in cash received from collateralized loans receivable and $4,000,000 in cash received approximately $238,000 from oursale of collateralized loans receivable.

Financing Activities

Cash provided by financing activities for the nine months ended September 30, 20172019 was $6,127,421$4,281,265 and was primarily due to cash proceeds received of approximately $6,966,000$5,916,000 from the sale of our Units to Limited Partners. Offsetting this increase were payments for distributions to our Limited Partners of approximately $187,000,$1,293,000, payments of approximately $370,000$10,000 for organizational and offering costs and underwriting fees of approximately $281,000.$333,000.

Cash provided by financing activities for the nine months ended September 30, 2018 was $4,466,196 and was primarily due to cash proceeds received of approximately $5,537,000 from the sale of our Units to Limited Partners. Offsetting this increase were payments for distributions to our Limited Partners of approximately $637,000, payments of approximately $121,000 for organizational and offering costs and underwriting fees of $308,000.

Distributions

During our Operating Period, we intend to pay cash distributions on a quarterly basis to our Limited Partners at 1.5% per quarter, the equivalent rate of 6.0% per annum, of each Limited Partners’ capital contribution (pro-rated to the date of admission for each Limited Partner). Since June 30, 2017, our distribution rate has been 6.5% annually, paid quarterly at 1.625%, of capital contributions. Beginning as of March 31, 2018, we increased our distribution to 7.0% annually, paid quarterly at 1.75% of capital contributions. Beginning as of June 30, 2018, we increased our distribution to 7.5%, paid quarterly at 1.875% of capital contributions. Beginning as of September 30, 2018 we increased our distribution to 8.0%, paid quarterly at 2.00% of capital contributions. The amount and rate of cash distributions could vary and are not guaranteed. During the nine months ended September 30, 2017,2019, we declared and accruedmade quarterly cash distributions to our Limited Partners totaling approximately $289,058$1,292,674, and accrued $511,323 for distributions due to Limited Partners which resulted in a distributions payable to Limited Partners of $142,638$511,323 at September 30, 2017. The Partnership did not make a cash distribution to the General Partner during the nine months ended2019. At September 30, 20172019, the Partnership declared and accrued $2,890a distribution of $5,113, for distributions due to the General Partner which resulted in distributions payable to the General Partner of $3,291$30,898 at September 30, 2017.2019.

Commitments and Contingencies and Off-Balance Sheet Transactions

Commitment and Contingencies

Our income, losses and distributions are allocated 99% to our Limited Partners and 1% to our General Partner until the Limited Partners have received total distributions equal to each Limited Partners’ capital contribution plus an 8%, compounded annually, cumulative return on each Limited Partners’ capital contribution. After such time, income, losses and distributions will be allocated 80% to our Limited Partners and 20% to our General Partner.

We enter into contracts that contain a variety of indemnifications. Our maximum exposure under these arrangements is not known.

In the normal course of business, we enter into contracts of various types, including lease contracts, contracts for the sale or purchase of leased assets, loan agreements and management contracts. It is prevalent industry practice for most contracts of any significant value to include provisions that each of the contracting parties, in addition to assuming liability for breaches of the representations, warranties, and covenants that are part of the underlying contractual obligations, to also assume an obligation to indemnify and hold the other contractual party harmless for such breaches, and for harm caused by such party’s gross negligence and willful misconduct, including, in certain instances, certain costs and expenses arising from the contract. Generally, to the extent these contracts are performed in the ordinary course of business under the reasonable business judgment of our General Partner and our Investment Manager, no liability will arise as a result of these provisions. Should any such indemnification obligation become payable, we would separately record and/or disclose such liability in accordance with accounting principles generally accepted in the United States of America.

On May 1, 2018, the Partnership, as co-borrower, entered into a loan agreement with a bank for a $5,000,000 revolving line of credit. This short term line is intended to be utilized to warehouse transactions to be invested in by the Partnership as investor proceeds are received. In connection with the loan agreement, the Partnership issued a promissory note to the bank in the amount of $5,000,000 that matures on May 1, 2020. To date, the Partnership has not drawn any funds under the revolving line of credit. In the event the Partnership draws funds, interest shall accrue at a rate of Prime Rate plus 1% per annum. On October 17, 2019, this loan agreement was terminated.

Off-Balance Sheet Transactions

None.

Contractual Obligations

None.

Subsequent Events

On November 7, 2017,October 18, 2019, the Partnership entered into a loan and security agreement with a borrower to provide short term bridge financing,third party lender for a $25,000,000 loan facility (of which funds were used to acquire the rights, title,$20,000,000 is a Term Loan and interest in an asset backed equipment loan (the “Underlying Loan”). In connection$5,000,000 is a Revolving Loan) with the loan agreement,a maturity date of October 18, 2022. On October 18, 2019, the Partnership received a promissory note fromborrowed $5,000,000 under the borrower inTerm Loan. Interest on the amount of $2,800,000. The note accrues interestdrawn funds shall accrue at a rate of 1.5%3 month LIBOR Rate plus 5.6% per monthannum.

On October 21, 2019, the Partnership was assigned a lease facility for $1,100,000 for furniture, fixtures, and equipment based in Ohio, and on October 22, 2019 the first 30 dayslease facility was funded. The finance lease requires 48 monthly payments of $29,483 and 1.25% per month thereafter, and maturescommences on February 7, 2018.October 31, 2019. The promissory note will be paid monthly installments of interest of $42,000 for the first 30 days and $35,000 thereafter. The promissory notelease is secured by a firstthird priority security interest in alllien against the borrower’s right, titlefurniture, fixtures, and interest in the Underlying Loan and the proceeds thereof; (ii) a first priority security interest in all of borrower’s right, title and interest in an unrelated, performing asset backed loan and the equipment related thereto and (iii) a first priority security interest in Borrower’s 100% membership interests in borrower’s 100% membership interests in the special purpose entity that holds the Underlying Loan.

equipment.

On November 9, 2017,1, 2019, the Partnership amended an operating lease facility entered into on October 18, 2016 to extend the lease for 3 additional months.

On November 1, 2019, the Partnership entered into an assignment agreement with a third party and purchased $417,675 of the Tranche I loan related to the loan agreement entered into on June 29, 2018.

On November 5, 2019, the Partnership was assigned and funded a lease facility of $406,456 for agricultural$862,087 for computer equipment and supplies to a company based in Illinois.California. The finance lease requires 3630 monthly payments of $13,819$32,704, with the first and last paymentsthree due in advance.advance, and commences on November 5, 2019. The lease is secured by a first positionpriority lien against the agricultural equipment and supplies and a personal guarantee from the company’s CEO.computer equipment.

From October 1, 2017 through November 12, 2017, the Partnership admitted an additional 17 Limited Partners with total cash contributions of $507,750, total capital contributions of $524,474 and 52,447.37 Units. The Partnership paid or accrued an underwriting and commission fee to Securities and outside brokers totaling $10,155 and $9,500, respectively.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not Applicable for Smaller Reporting Companies.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures

In connection with the preparation of this Quarterly Report on Form 10-Q for the quarter ended September 30, 2017,2019, our General Partner and Investment Manager carried out an evaluation, under the supervision and with the participation of the management of our General Partner and Investment Manager, including its Chief Executive Officer, of the effectiveness of the design and operation of our General Partner’s and Investment 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. Based on the foregoing evaluation, the Chief Executive Officer concluded that our General Partner’s and Investment Manager’s disclosure controls and procedures were effective.

In designing and evaluating our General Partner’s and Investment Manager’s disclosure controls and procedures, our General Partner and Investment 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 General Partner’s and Investment 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

Our General Partner is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended, as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of condensed consolidated financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Partnership; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of condensed consolidated financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Partnership are being made only in accordance with authorizations of management and directors of the Partnership; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Partnership’s assets that could have a material effect on the condensed consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our General Partner and our Investment Manager have assessed the effectiveness of their internal control over financial reporting as of September 30, 2017.2019. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control—Integrated Framework.”

Based on their assessment, our General Partner and our Investment Manager believe that, as of September 30, 2017,2019, its internal control over financial reporting is effective.

Changes in internal control over financial reporting

ThereBeginning January 1, 2018, we implemented ASU 2014-09Revenue from Contracts with Customers (Topic 606)and ASU 2015-14,Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date. Although the adoption of the new revenue standard had no significant impact on our results of operations, cash flows, or financial position, we did implement changes to our controls related to revenue. These included the development of new policies based on the five-step model provided in the new revenue standard, enhanced contract review requirements, and other ongoing monitoring activities. These controls were designed to provide assurance at a reasonable level of the fair presentation of our condensed consolidated financial statements and related disclosures.

Beginning January 1, 2019, we implemented ASU 2016-02Leases (Topic 842), although the adoption of the new leases standard had no additionalsignificant impact on our results of operations, cash flows, or financial position, we did implement changes to our controls related to leases. As part of the implementation process, we assessed our lease arrangements and evaluated practical expedients and accounting policy elections to meet the reporting requirements of this standard. We also evaluated the changes in controls and processes that were necessary to implement the new standard, and no material changes were required. The new standard provides a number of optional practical expedients in transition. We elected the ‘package of practical expedients’ which permitted us not to reassess under the new standard the prior conclusions about lease identification, lease classification and initial direct costs. There was no other change in our General Partner’s or our Investment Manager’s internal control over financial reporting during the quarter ended September 30, 2017,2019, that has materially affected, or areis reasonably likely to materially affect, theirour internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

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

Not applicable.

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

Our Registration Statement on Form S-1, as amended, was declared effective by the SEC on August 11, 2016. Our Offering Period commenced on August 11, 2016.2016 and concluded on March 31, 2019. From August 11, 2016 through September 30, 2017,March 31, 2019, the Partnership admitted 206617 Limited Partners with total capital contributions of $10,509,039$25,371,709 resulting in the sale of 1,050,903.882,537,170.91 Units. The Partnership received cash contributions of $10,059,849$24,718,035 and applied $449,190$653,674 which would have otherwise been paid as sales commission to the purchase of 44,919.0365,367.46 additional Units.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacity and on the dates indicated.

File No. 333-211626

ASIF GP, LLC (f/k/a SQN AIF V GP, LLCLLC)

General Partner of the Registrant

November 13, 2017Date: November14, 2019