Investment in equipment and leases, net

3 Months Ended

Mar. 31, 2025

Investment in equipment and leases, net [Abstract]

Investment in Equipment and Leases, Net

3. Investment in equipment and leases, net:

The Company’s investment in equipment and leases consists of the following (in thousands):

	Balance		Additions/		Depreciation/		Balance
		December 31,	Dispositions/		Amortization			March 31,
	2024		Reclassifications		Expense		2025
Equipment under operating leases, net	$	3,824	$	-	$	(222)	$	3,602
Assets held for sale or lease, net		148		-		-		148
Initial direct costs, net		9		-		(2)		7
Total	$	3,981	$	-	$	(224)	$	3,757

Impairment of equipment:

As a result of impairment reviews, management determined that no impairment losses existed for the three-month periods ended March 31, 2025 and 2024.

The Company utilizes a straight line depreciation method over the term of the equipment lease for equipment under operating leases currently in its portfolio. Depreciation expense on the Company’s equipment totaled $222 thousand and $319 thousand for the respective three months ended March 31, 2025 and 2024. Total depreciation for the three months ended March 31, 2025 included $11 thousand of additional depreciation recorded to reflect respective quarter-to-date and year-to-date changes in estimated residual values of certain equipment generating revenue under month-to-month

extensions. The estimated residual values of equipment associated with leases on month-to-month extensions are evaluated at least semi-annually, and depreciation recorded for the change in the estimated reduction in value. Such additional depreciation was deemed de minimis during the three months ended March 31, 2024.

IDC amortization expense related to the Company’s operating leases totaled $2 thousand and $5 thousand for the three months ended March 31, 2025 and 2024.

All of the Company’s lease asset purchases and capital improvements were made during the years from 2016 through 2022.

Operating leases:

Property under operating leases consists of the following (in thousands):

	Balance						Balance
	December 31,				Reclassifications		March 31,
	2024		Additions		or Dispositions		2025
Construction	$	3,218	$	-	$	-	$	3,218
Mining		1,829		-		-		1,829
Aviation		2,327		-		-		2,327
Transportation, rail		1,723		-		-		1,723
Materials handling		754		-		-		754
Paper processing		1,058		-		-		1,058
Transportation, other		118		-		-		118
		11,027		-		-		11,027
Less accumulated depreciation		(7,203)		(222)		-		(7,425)
Total	$	3,824	$	(222)	$	-	$	3,602

The average estimated residual value for assets on operating leases was 24% and 25% of the assets’ original cost at March 31, 2025 and December 31, 2024, respectively. There were no operating leases in non-accrual status at March 31, 2025 and December 31, 2024.

At March 31, 2025, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):

	Operating
	Leases
Nine months ending December 31, 2025	$	639
Year ending December 31, 2026		570
2027		502
2028		340
2029		159
2030		156
	$	2,366

The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of March 31, 2025, the respective useful lives of each category of lease assets in the Company’s portfolio are as follows (in years):

Equipment category	Useful Life
Transportation, rail	35 - 50
Aviation	15 - 20
Mining	10 - 15
Paper processing	10 - 15
Construction	7 - 10
Materials handling	7 - 10
Transportation, other	7 - 10